An interview with the managing directors of Hanse Service GmbH
A large proportion of goods are now produced in the Far East, for example active ingredients for the pharmaceutical industry or medical protection products – globalization makes it possible. The lifelines of free cross-border trade are the major sea & air freight lines between Europe and the rest of the world. 90 percent of world trade alone is conducted across the oceans. But even globalization is not immune to pathogens, as the Covid 19 pandemic shows. The manufacturing and supply chains were disrupted in the corona lock-down, and the consequences for medical care throughout the country were felt: a lack of medical protective clothing, scarce resources for blood pressure reducers or antibiotics. Companies like the international logistics specialist Hanse Service and Pharmalogisticspartner from Hamburg keep the cycle of globalization stable – even in times of crisis. After all, good logistics management, tight organization and high storage capacities create supply security. An interview with the managing directors of Hanse-Service Intern. Fachspedition GmbH and the pharma logistics partner Internationale Fachspedition GmbH: Jörg Brinkmann and Thorsten Eckel.
Mr. Brinkmann, what is the status quo in the field of pharmaceutical logistics?
JB: The unexpected supply bottleneck with the onset of the corona crisis poses a major challenge to every supply chain management. In pharmaceutical logistics, the supply chains that procured active pharmaceutical ingredients predominantly or even exclusively from China, where entire cities and regions were sealed off, were particularly susceptible. Nevertheless, it must be said that pharmaceutical supply chains are much better secured than other industries. This is due to the comparatively high stocks of active ingredients and finished pharmaceuticals in this country.
At present, we still see challenges in the air and sea freight sector. But the supply chains are not as disrupted as they were at the height of the pandemic in China. There are now significantly more aircraft on the route between Asia and Europe. The availability of reefer containers in the sea freight sector for temperature-controlled pharmaceutical transports has also improved again. However, we are closely monitoring the incidence of infections worldwide in order to be prepared in case the expected second wave comes in autumn.
Mr. Eckel, your company is, among other things, a specialist in pharmaceutical logistics. What measures are needed now to counteract a shortage of medical products as in the spring?
TE: Supply chain risk management is required here. In addition, we need the greatest possible international transparency about the disruptions caused by Corona. Another success factor for logistics is close cooperation between suppliers, logistics service providers and authorities. Furthermore, storage capacity is currently the key – especially in the area of cold storage. Because I assume that the experience gained with Corona will lead to more pharmaceutical products being produced, stored and distributed in Europe in the future via refrigerated transport in order to increase our independence from overseas.
JB: Up to now, the pharmaceutical industry has always had a hard time with outsourcing warehouse logistics because they thought they could do it better than a logistics provider. In the meantime, a rethink has taken place. In the future, authorities will also be able to order the storage of certain preparations in accordance with the new pharmaceutical law. This poses new challenges for the European logistics industry.
Why is warehousing so complex, even in the cold storage sector?
JB: The quality standards for human medicine are very high with regard to transport, storage and delivery. Pharmaceutical logistics companies have to meet high standards for this. For example, temperature and humidity control of vehicles and warehouses, as well as the IT-based networking of cold chains with serial number tracking. Drivers and warehouse employees must also be trained and sensitized to the special requirements of handling pharmaceuticals. Throughout the entire supply chain, the due diligence obligations of both the customer and the contractor must be documented and checked.
TE: This means that in future we will need considerably more qualified companies in the field of pharmaceutical logistics that are certified according to the EU guidelines for Good Distribution Practice (GDP). According to experts, there are currently still too many weak points in storage and transport, for example temperature-controlled transport of pharmaceuticals in unsuitable vehicles with inadequate safety precautions. Medicines are sometimes not protected from heat and cold during transport. In addition, there are structural and technical defects in warehouses and cold storage facilities.
The new demand for GDP-certified storage capacity and GDP refrigerated warehouses in pharmaceutical logistics will attract new players to the established markets. Do you not need to fear an increase in competition?
TE: Pharma logistics is a complex business. New players have to act professionally, need know-how and innovative strength to avoid getting a bloody nose. We have twenty years of experience in this business and stable customer relationships based on professionalism and trust. In addition, we are qualified by the Hamburg health authority, we could trade with drugs and even act as a pharmaceutical wholesaler (GDP).
Our warehouse in Hamburg is in great demand and working to capacity. We also want to further expand our storage capacities and our cold storage facilities; even though suitable land in Hamburg is a rare commodity. But we are currently experiencing double-digit growth in the pharmaceutical sector and intend to continue to drive our business successfully in the future.
Corona has taken a heavy toll on the logistics sector. What impact did the outbreak of the Corona virus have on your business?
JB: Nobody foresaw such a crisis and there was no blueprint for which measures would be promising. The uncoordinated policies of the individual countries brought transport operations to a standstill for a short time. No transport could be realized in this time without a multiple of effort and expense. Accordingly, there was great uncertainty.
I have never in my 36 years as a freight forwarder had to bring so many truckloads back to Germany or reroute them via other routes. Despite all the initial chaos, we are proud that we were able to get every shipment to its destination properly and in compliance with the high pharmaceutical standards. This was only possible because we worked closely and trustfully as a team and our customers and entrepreneurs participated. This is also where the many years of trustful cooperation between the parties involved paid off.
Wouldn’t it be desirable if more medical products were to be manufactured in Europe instead of Asia in the future?
JB: That would certainly be better for patient care and security of supply, even though long distances are naturally more lucrative for us than short ones. However, I am skeptical about the extent to which a shift back is economically viable at all. Governments imagine it would be so easy, but in the end, market and competitiveness work through price. Subsidies for the pharmaceutical industry will not be enforceable. Furthermore, it remains to be seen how sustainable the effects of Covid-19 will be. After all, we humans tend to forget: once the storm has passed, the sun will shine again.
TE: Corona has shaken up the structures and processes in pharmaceutical logistics. While international transports were difficult, national shipping has experienced an upswing. In the supply of hospitals, wholesalers and pharmacies alone, there was a 25 percent increase. Politicians and the pharmaceutical industry have an interest in becoming less dependent on disruptions in global supply chains.
If Europe sets quotas for the stocking of pharmaceutical products in the future, there will be a high demand for transport and storage capacity that is GDP certified. Just think about it if there is a vaccine against Covid-19. It would have to be kept in cold storage and distributed and delivered via temperature-controlled pharmaceutical transports. As a GDP certified and audited pharmaceutical logistics company, we can rely on the high quality of our services along