Saturday, July 28, 2012

Even healthcare products are shifting from air to ocean

First it was the high oil prices that prompted many shippers to shift from air to ocean freight, now it appears the slowing global economy is the reason to shift to less expensive modes of transport. The healthcare industry seems to not be immune to this trend as many medical device and pharmaceutical companies are using ocean freight transport more and more.
For example, according to news articles, Siemens Healthcare, a customer of DHL’s, has shifted a significant part of its sensitive cargo movement from air to ocean between its plants in Germany and the US.
This led DHL’s innovation team to introduce a tracking device that provides real-time alerts through e-mails/SMS on temperature and location for its ocean shipments. The device has a battery life of 30 days.
By shifting their cargo from air to ocean, the company saves up to 90%, according to DHL which designed this device to meet pharmaceutical customers’ requirements.
Indeed, looking at US import tonnage data from 2009 to date for x-ray apparatus, tubes, panels, screens etc. it is interesting to note that this commodity appears to be sensitive to economic changes. For example, during the last economic downturn in 2009, 53.1% of the total x-ray tonnage imported into the US was by way of ocean versus 47% for air. In 2010, as the global economy was improving, it shifted in favor to air - 55% to 45% ocean. However, as oil prices increased and the economy began to show signs of faltering in 2011, it shifted back in favor towards ocean freight (52.4%) and remains in favor of ocean through May 2012 (58%).
 Besides tracking and real-time alerts, logistics providers have also introduced Less-than-Container (LCL) solutions as well as Sea-Air options to attract more business. As the economy continues to falter, expect more Ocean freight solutions and more competition among logistics providers.