An Ultimate Guide to Cold Chain Shipping in Healthcare and Life Sciences
Shipping is a complex practice consisting of a multitude of modes, lanes, and methods, but it’s even more so in healthcare and life sciences when you’re trying to move life-saving products through cold chain shipping.
At Trax, we’ve worked with six of the top 10 life science companies. In this guide, we’ll share our decades of experience to discuss the importance of cold chain shipping, challenges, and best practices.
What is Cold Chain Shipping?
Cold chain shipping is the transportation, handling, storage, and delivery of temperature-sensitive products, such as foods and pharmaceuticals. This complex supply chain relies heavily on advanced shipping equipment—including freezer containers, specialized warehouses, and cold boxes—to ensure product quality for consumer safety.
Importance of Cold Chain Shipping
Cold chain shipping is critical in healthcare and life sciences supply chains—biopharmaceutical products are highly sensitive to temperature, humidity, and other environmental conditions. The number of products susceptible to temperature conditions is constantly increasing, as we’ve seen with the COVID-19 vaccine doses, many of which require stringent and extreme temperature shipping conditions. Tight controls are critical to shipments safely reaching the destination and protecting customers. For example, if an antibiotic isn’t kept at the proper temperature, it could become ineffective or unsafe, thereby actually harming the consumer.
The demand for cold chains will continue to grow, thanks to technology and medical advancements. The large-molecule biologics market is expected to grow to a CAGR of 11.9% by the year 2026. Healthcare and life sciences supply chains must expand, innovate, and become more agile, not just in the future—the COVID-19 pandemic has taught us that the time for evolution is now. Companies that don’t will fall behind and struggle to survive.
Challenges in Cold Chain Shipping
The importance and complexity of cold chain shipping bring an abundance of challenges to navigate. Here are some of the most common ones.
- High rate of damage claims—Cold chain shipments are highly susceptible to damages, as one mishap during transit could ruin the shipment. Such damages could come from equipment malfunctions during shipping or even high humidity in a warehouse. Government regulations also play a role in the rate of claims, as in many countries if a container is damaged, the entire shipment must be discarded even if the medicine inside is unharmed.
- Shipping delays—Delayed cold chain shipments put products in danger of expiration or damages. The longer the shipments are delayed, the higher the chance of something going wrong, such as loss of temperature or humidity control or even misplacing a shipment delayed at port.
- Increasing quality standards—Heightened environment control and elaborate quality regulations are evolving in modern medicine: 80% of pharma products in the EU now require temperature control. State-of-the-art products, such as personalized gene therapy, are extremely sensitive to atmospheric conditions and require greater care and specific handling procedures. Equipment, protocols, and SOPs are evolving to meet the requirements of cold chain shipping.
- High costs—Cold chain shipping comes with higher costs by virtue of necessary protections and equipment. Special packaging for temperature and humidity control, expedited shipping for time control, heightened security measures, and other precautions all lead to a higher payout compared to standard shipping.
- Poor visibility—There’s a higher holding cost in cold chain products than standard products. Because such sensitive products are at greater risk of damage, proper inventory management and forecasting are crucial to avoid costly mistakes like overstocking or understocking that run the risk of products expiring, lost sales and market share, and the inability to deliver life-saving products to customers when they need them.
The Power of Data in Cold Chain Logistics
The complexity of cold chain logistics means that data plays a colossal part in streamlining and optimizing the process. Integrating data in a centralized rate management platform allows you to access relevant information and make data-driven, informed decisions that positively impact your supply chain. Let’s look at the benefits of optimizing your cold chain data management.
Improve carrier management
It’s necessary to identify carriers that can meet your shipping requirements. You need to balance carrier performance and rates to find that sweet spot, getting the best value for money. By choosing the correct carrier through tailored RFPs and monitoring carrier performance, you can successfully navigate the landmine of ever-increasing quality standards and ensure your shipments make it on time to customers in need.
Centralizing and standardizing contract rate management while simultaneously boosting automation to reduce human errors is a great start toward optimization. Trax’s Rate Manager centralizes carrier rates and delivers real-time visibility into carrier bids for better planning and contract management. Combined with our freight audit and Carrier Management Services, you receive a constant influx of high-quality, relevant data to inform your decisions and optimize your logistics network for performance and budgetary compliance.
When you have increased visibility into your transportation spend, you gain greater control over your cold chain logistical network, ensuring your supply chain budget aligns with your business budget and that costly mistakes are eliminated. It also helps mitigate the risk of damages. An optimized claims management process can eliminate losses and prevent freezing funds while carriers sort out delays at port.
Being able to constantly choose the suitable carrier at the best rate, monitoring their performance, having visibility into spot rates, and accessing all relevant information regarding your cold chain allows you to control your global shipping with a proactive mindset. By creating a constant stream of high-quality data and robust analytics, you can overcome visibility issues and accurately forecast and manage inventory.
To help our clients gain unparalleled visibility, Trax has perfected our freight audit and data management to create a funnel of data that is expertly filtered and analyzed to produce user-friendly analytics. The peak of your visibility, however, comes as you journey through Trax's Transportation Spend Management Maturity Model. Our model transforms your supply chain’s agility and optimizes processes so you can become a leader in the global market and deliver life-saving products to more customers around the world.
Mitigating the high risks involved in cold chain management is crucial—human lives are at stake and errors can be detrimental to your profit margins, thus your ability to deliver products to those in need.
Eliminating errors via automation and digital transformation is the first step in mitigating cold chain risks. By optimizing your carrier management processes and reducing the effort, resources, and ultimately, error margin, you minimize risk throughout your logistical network.
Optimizing freight audit is another significant risk mitigator, as unwarranted, costly errors can be eliminated. And by outsourcing freight audits to specialists, you can focus your internal resources on making the world healthier.
Centralizing and normalizing your data in one locality enables process optimization. When all the information is collected, normalized, organized, and presented in an efficient manner, you can make instant, objective decisions that drive your supply chain forward. Controlling costs through enhanced Transportation Spend Management protects your profit margin while simultaneously helping you ship within the required parameters. Finding the best carrier rates, avoiding unwarranted costs, and optimizing your supply chain processes to increase efficiencies all play a major part in cold chain financial prosperity. Trax's Transportation Spend Management Maturity Model enables you to do all of that.
Maturing through the model helps you optimize your data collection and management process, evolving your decision-making from being reactive to proactive. At the peak of the maturity model, you’ll have a fully optimized supply chain and can make informed decisions that set you up as a leader to drive innovation and change within your industry, as well as the scope of cold chain shipping.
Best Practices in Healthcare and Life Sciences
In addition to tenacious data management, the best way to master cold chain shipping is to adopt best practices in healthcare and life sciences. Here are some of those best practices to take your Transportation Spend Management to the next level.
- Establish and optimize standard operating procedures—By establishing a standard of excellence for your operating procedures, you can monitor the efficiency of your processes and assign greater accountability throughout. Robust SOPs allow for comprehensive monitoring and evaluation.
- Leverage technology for end-to-end visibility—Adopting top-tier solutions that integrate and centralize information gives you greater insight into your cold chain. You can eliminate data silos, redundancies, and human errors while gleaning the information you need to make impactful decisions.
- Identify shipping requirements with a tailored RFP—Customize your RFPs to meet your shipping and budget requirements. By optimizing your RFP process and utilizing tools that help simplify bid comparisons, you can quickly eliminate carriers that can’t meet your needs. There’s no more need to learn the hard way who isn’t the right fit.
- Partner with the right carrier—Choosing the right carrier is the most vital part of cold chain shipping. Complex, cold chain shipping requirements may be too much for some carriers. Having insight into carrier performance and rates allows you to always find the right carrier for the job.
- Know your total cost of ownership (TOC)—TOC is exceptionally high in healthcare and life sciences. Having unhindered visibility into your transportation spend and TOC allows you to forecast, plan, and budget more successfully so you can go after new opportunities to help more customers.
- Continuously review compliance—Constantly reviewing carrier and process compliance enables you to identify where issues are so you can get to the root cause and course correct in real-time.
- Establish an agile network—The COVID-19 pandemic highlighted that an agile and resilient supply chain is vital to overcome unforeseen challenges in the market. Enhancing your supply chain agility means you can use these situations to your advantage, widening the gap between you and the competition.
The Future of Cold Chain Shipping is Here
The COVID-19 pandemic has forced the supply chain industry to evolve years ahead in a matter of months. This rapid advancement, coupled with scientific advancements, means cold chain shipping is expected to increase in both demand and complexity. The future is here, and healthcare and life sciences supply chains need to future-proof themselves.
While there remain challenges to overcome in cold chain shipping, a mixture of robust data management and best practices can surpass those challenges and take your supply chain to the next level. To learn more about optimizing your cold chain shipping, contact Trax today.
Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.