Over $500K a year saved shifting international air shipments from active to passive pallets

Cold Chain Logistics International air Pharmaceutical
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WHO

Business model

A multi-billion dollar pharmaceutical manufacturer shipping temperature-sensitive products internationally, with drug product stored in vials that has to be maintained at 2 to 8°C.

Industry

Pharmaceutical cold chain, where there is little tolerance for temperature variation and the cost of getting it wrong is the product itself.

PROBLEM

What they felt

The company wanted to evaluate the potential to cut international freight costs by changing shipping methods for temperature-sensitive products, and asked Trans-solutions to recommend the best shipping method to reduce costs while ensuring product integrity.

What we found

The dominant shipping method for such products is active pallets that plug into an outlet for cooling. Envirotainer and CSafe are examples of active pallet suppliers.

Passive pallets are less expensive but use PCMs and gel packs for cooling and are not practical for extended ship times.

WHAT WE DID

Prep and analysis

To determine if passive shipping systems could reliably sustain 2 to 8°C, it was necessary to analyze dozens of different factors, including all storage and transport legs and method of cooling at each building, flight and truck; time for each leg; efficacy of holding the temperature; and every cost element to ensure an accurate cost comparison. Larger-sized passive pallets are relatively new, so significant data had to be gathered from vendors on packing methods and materials.

Execution

Trans-solutions determined that, for the specific lane examined, annual savings of $203,000 was possible with a shift from active to passive pallets for a percent of shipments.

  • Regional smaller asset based carriers on short haul runs
  • Lanes aligned to larger national carriers, where complementary freight yielded lower pricing
  • Backhaul matching, dedicated fleet optimization and continuous move alignment
  • Increased volume to some incumbent carriers, which produced savings beyond sourcing lower rates alone

We left them a rule, not a recommendation

The analysis clearly indicated the criteria required, product type, origin, airport used and transit time, to trigger use of a passive pallet option. That means the client can apply the decision themselves on lanes we never looked at.

RESULTS

What they got

Over $500,000 a year on international air, with 100% temperature control maintained

Applied across this company's global supply chain, the strategy would save over $500,000 annually for just international air shipments, with 100% temperature control maintained.

The durable value is the methodology. They hold a tested trigger for when passive is safe and when it is not, lane by lane, rather than a one-time answer for one lane.

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