Sea freight can be an effective alternative to air freight for shipping pharmaceuticals internationally when certain conditions are met. The document discusses the modal characteristics, benefits, and risks of sea versus air or road freight. Key benefits of sea freight include much lower costs compared to air freight, enhanced security during transport, and a lower risk of temperature excursions. However, reliability of schedules and quality of equipment are potential drawbacks. Having the right insurance is also important to cover risks like temperature excursions. Partnering with experienced freight forwarders is important to successfully utilizing sea freight for pharmaceutical shipments.

1. Cold Chain Distribution
London, 3rd December 2013
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2. SEA FREIGHT –
An Evaluation Of The Opportunities
& Risks When Moving Pharma
Shipments By Sea Instead Of Air
Mark Edwards – Global Freight
Manager - Actavis

3. What will we look at today?
• Modal characteristics
• When to use seafreight
• Benefits of seafreight
• Drawbacks of seafreight
• Temperature excursions
• Insurance
• Roles and responsibilities
• Summary

4. Modal characteristics
Road
• Typically used for trans-continental
movements
• Well set up hub and spoke systems
• Temperature-controlled “groupage” services
becoming widely available
• Security risk higher than other modes –
primarily through theft

5. Modal characteristics
Air
• Typically used for inter-continental
movements
• Primarily point-to-point operations but some
hub and spoke systems
• Varying degree of “pharma” services offered
by airlines
• Ground handling often of a poor quality
• Fast transit times
• Commensurately expensive

6. Modal characteristics
Sea
• Typically used for inter-continental movements
• Primarily hub and spoke systems through
“feeder” and “mother” vessels
• Slow transit times
• Commensurately less expensive

7. When to use sea freight
Transit time is less important
• India to Europe 22 to 24 days
• Air freight 1 week – sea freight 4 weeks
• Transportation costs need to be minimised
• Air freight +1000% the cost of seafreight
• Regular supply of larger volume products
• Sea freight container takes 23 to 24 pallets
single-stacked

8. When to use sea freight
Enhanced security required
• Few parties are involved
• Containers can be loaded and sealed at your
own site
• Containers stay sealed through to unloading
destination
• Negotiable documentation

9. Benefits of sea freight
Cost
• Typically over 1000% lower than airfreight
costs
• More secure mode of transport
• Air freight involves multiple hand offs & regular
trans-shipment
• Air freight handling is a low-skill environment

10. Benefits of sea freight
Lower risk of temperature excursion
• Units are sealed throughout journey
• No physical handling of product
• Possibility to defer inventory
• Take advantage of the longer transit
• Use of the right Incoterm

11. Drawbacks of sea freight
Variable quality & availability of equipment
• Use containers less than 5 years old
• Communicate requirements in advance

12. Drawbacks of sea freight
Reliability of shipping schedules
• Partner with high quality forwarder and
shipping line
• Construct reliable supply chain to take
account of such factors

13. Temperature excursions
Equipment quality is the key factor
• Use containers less than 5 years old
• Ensure containers are pre-conditioned to
your required temperature
• Load and seal containers at your
temperature-controlled warehouse
• Unload containers at your temperature-
controlled warehouse

14. Insurance
Sea freight is governed by very old rules
• All parties with product on a ship are deemed
to have an “interest” in the voyage
• This means you are proportionately
responsible for serious incidents where a
“general average” is declared
• Typically this would be a serious
collision or pollution incident
• SO………..

15. Insurance
Always have marine cargo insurance
• Most policies do not cover temperature
excursions - ensure yours does
• Ask your broker to investigate a “risk of loss”
clause

16. Insurance
Shipping lines and freight forwarders have a
very small, limited liability
• All work to internationally agreed
amounts
• All will reject your claim and point you to your
own insurance

17. Roles and responsibilities
Shipping lines
• Provision of equipment – container and ship
Freight forwarders
• Liaison with shipping line
• Customs & documentation services
You
• Liaison with your supplier / own factory
• Temperature information
• No different to current supply chain

18. Summary
Sea freight is an excellent solution in the right
circumstances
Have a full understanding of your current supply
chain before making any changes
Finding the right freight forwarder is a critical
success factor