Meeting new market requirements to Life Sciences & Healthcare distribution in Latin America


Meeting new market requirements to Life Sciences & Healthcare distribution in Latin America

Latin America (LATAM) is an important region for Life Sciences & Healthcare (LSH) companies; opportunities include a fast ageing population and a burgeoning middle class to name just two. However, in its current shape distribution in LATAM will become challenging due to changes in the industry, such as personalized medicine and direct-to-patient shipments.

In this article, I want to give an overview of the current situation and explain how LSH companies operating in LATAM can successfully optimize their distribution network to reduce complexity and improve their service offerings.

LSH supply chains are complex; they span pharmaceuticals, generics and medical devices, which have very different needs. In addition to this, the growing focus on delivering pharmaceuticals and medical devices direct to patients adds a layer of complexity previously not seen before – albeit one with great potential and growth opportunities if it can be done successfully.

Further challenges for distribution in LATAM are:

•            Demographics e.g. the availability of skilled labor

•            Regulations e.g. complex tax codes

•            Political complexity e.g. changing political majorities

•            Volatility due to commodity price dependencies

•            Geography e.g. infrastructure challenges, difficult topography

•            Scale e.g. many rather small markets

The key to mastering these challenges in LATAM lie in the distribution network. If companies can strip away the layers of complexity in distribution, they have the potential to reduce costs, streamline their processes and implement more customer-centric service offerings.

Decisions LSH companies have to take in LATAM around distribution

When devising a distribution strategy in LATAM, LSH companies have to consider multiple questions.

  • Where to keep inventory in the region, in which country or whether to use regional inventory in a free trade zone?
  • Should their business units’ products be distributed separately or in a joint consolidated distribution network?
  • Should they operate their own warehouses or rely on logistics service provider run warehouses or stay out of the country all together and rely solely on distributors?
  • From which locations and with which providers can direct-to-patient shipments be offered?

How LSH companies are currently distributing in LATAM

As of now, most companies manage distribution in large markets, such as Brazil, Mexico, Argentina, Chile and Colombia from owned or outsourced warehouses within the countries themselves.

Smaller countries are served either from a regional warehouse to distributors (e.g. Central America) or via direct shipments from manufacturing origin to distributors in South America (e.g. Paraguay, Bolivia). On average, LSH companies have inventory in 10 warehouses in LATAM with the vast majority of their warehouses being outsourced to logistics service providers.

Most LSH companies also have one regional warehouse in a free trade zone, to serve as a hub, mostly Panama for Central America and Caribbean (although other locations in Central America are also used for legacy reasons) and Uruguay for the southern cone and some southern Brazilian states.

Changing distribution requirements are impossible to achieve with status quo

LSH companies are increasingly interested in offering direct-to-patient shipments for various reasons such as bypassing distributors, accounting for new personalized medicine requirements or offering compassionate use drugs. However, the above status quo makes implementing such services difficult.

Logistics service providers in LATAM are ready to offer direct-to-patient shipping, as the processes do not differ from other industries’ clients established processes (e.g. Technology). However, direct-to-patient shipping from a regional warehouse can still take a long time due to health authority clearance times, and be complex due to prescription requirements. In some cases, LSH companies are tied up in long-term distributor contracts that do not allow for a second direct distribution channel.

How LSH companies should prepare for future LATAM distribution

To succeed in implementing a distribution network in LATAM that has the agility to keep up with future developments in medical technology and increasing customer expectation, companies should examine if a hub in a free trade zone could result in cost benefits, better market access and reduced complexity for them. LSH companies that find a hub in a trade free zone to be a viable solution for them, usually benefit from:

  • Transport consolidation and transport mode shift benefits (air to ocean) on the inbound
  • Demand peak smoothing effects when late stage labeling for each local market is applied
  • Lead time reduction on the outbound (in case of direct-to-patient shipments)
  • Inventory carrying cost reduction
  • Duty payment deferral benefits

When thinking about a hub LSH companies should be aware of the following:

  • Panama and Uruguay complement each other as hub locations given their favorable free trade zone legislation, superior infrastructure, stable political and economic environment and logistics service provider presence
  • Their coverage does not overlap and together spans all of LATAMs markets
  • While Panama is widely known as a hub location, Uruguay’s potential is not as well known yet, but equally proven to meet the needs of the LSH industry

To evaluate the potential of a hub, supply chain executives should conduct rigorous end-to-end cost component analysis including inbound and outbound transport, warehousing, inventory carrying and management costs as well as duty / tax implications. This analysis will prepare them to answer their business units’ likely questions around a hub’s compliant airlift capacity, secure road connectivity, customs clearance processes, transit time and cost implications.

Conclusion

LSH companies that can successfully manage the transition from legacy grown distribution structures in LATAM to more flexible, less complex ones, that allow them to implement customer centric, personalized healthcare solutions will find themselves at a huge advantage. By taking steps to make this transition now they will be able to build trust and establish themselves as leaders in the industry.

 

For complete article: https://www.linkedin.com/pulse/meeting-new-market-requirements-life-sciences-latin-america-behncke/?trackingId=hbinrZSHRRSGCNSFYhCR8A%3D%3D17:02

Montevideo, November 8th 2019

MVD Airport’s Begins Construction of state-of-the-art, automated cargo reception area

 

Carrasco International Airport has begun its multimillion dollar investment in security and logistic infrastructure. Its new, state-of-the-art reception area aims at enhancing the security standards as well as significantly reducing transit times for both passengers and cargo. In its regional distribution center, the construction will create a fully automated reception & dispatching area that includes x-raying and photographing 100% of inbound and outbound cargo.  The underlying mission is to find an optimal balance between process seamlessness and security.

“Being selected by global players for regional distribution is a responsibility we are taking very seriously,” said Bruno Guella, Managing Director at MVD Free Airport.  “Ensuring the safeguard of the cargo in accordance with GDP compliance is something that is embedded in our DNA; however, being able to provide additional traceability to the entire distribution chain is taking our commitment a step further. Clients will be able to see, with photographic and x-ray evidence, the conditions in which their cargo was received and dispatched, providing transparency and contributing to the accountability of all the players in the distribution chain”, he added.

The investment for the cargo terminal of the airport includes a new reception area fully sheltered from climatic conditions, automated x-ray capabilities, automated photographic documentation from three angles and a seamless integration to the WMS, providing real time accessibility to clients around the globe. The estimated implementation date is Q2 2019.

In the passenger terminal the investments include fully automated biometric identification, electronic passport scanning, automated migration terminals, amongst other components that place the Montevideo Airport at the forefront in terms of process automation and state-of-the-art security.

MVD Free Airport is a business unit of Corporación America, the largest airport operator in the world with a network of over 50 airports and cargo terminals across 3 continents. It is a multimodal distribution center specialized in temperature-controlled supply chain, operating as the first and only free airport in South America.

 

 

MVD Free Airport is part of Corporación America, the parent Company that also manages the concessions of the Carrasco International Airport and Punta Del Este Airport in Uruguay, alongside over 50 airports and 10 cargo terminals in 10 countries across 3 continents.

MVD Free Airport is a business unit of Corporación America, the largest airport operator in the world with a network of over 50 airports across 3 continents.

For more information, please contact us at info@mvdfreeairport.com

October, 28th 2019

MVD Free Airport incorporates new RDC operations in Medical Devices and Biotechnology

MVD Free Airport continues to innovate in regional distribution and mold its solution design to fit even the most specific needs of global organizations with stakes in the region. Throughout 2019 it has incorporated new operations in the pharma industry including several additional managed access programs to South America.

Additionally, it has placed significant focus in the medical device and biotechnology fields, commencing new operations to distribute to Chile, Brazil, Argentina, Paraguay, Bolivia and Uruguay.

“We are very excited about the commencement of these operations”, mentioned Carla Sarti, Head of Client Advisory at MVD Free Airport. “Every client is a world of its own and a fountain of learning and continuous improvement. We gain significant insights into entire industries that help us continuously mold our operations and standards to incorporate additional requirements”, she concluded.

MVD Free Airport has undergone significant growth in pharmaceutical and related fields throughout the past 3 years, reason why it is currently undergoing the construction of its new temperature-controlled warehouse providing additional capacities in +15+25 and +2+8 temperature ranges as well as new facilities for conditioning activities and office space.

 

MVD Free Airport is part of Corporación America, the parent Company that also manages the concessions of the Carrasco International Airport and Punta Del Este Airport in Uruguay, alongside over 50 airports and 10 cargo terminals in 10 countries across 3 continents.

MVD Free Airport is a business unit of Corporación America, the largest airport operator in the world with a network of over 50 airports across 3 continents.

For more information, please contact us at info@mvdfreeairport.com

Montevideo, October 14th 2019

Pharma.Aero Puts Focus on the Development of Pharma Corridors

 

MVD Free Airport is proud to be a founding member of Pharma.Aero, a powerful cross-industry collaboration for Pharma Shippers, CEIV certified cargo communities, airport operators and other air cargo industry stakeholders.  With its vision to achieve excellence in reliable end-to-end air transportation for pharma shippers and foster collaboration between CEIV certified airport communities dedicated in developing and leading when it comes to handling pharmaceutical, it is now putting focus on translating that vision to the development of pharmaceutical corridors in order to provide traceability and certainty when accessing different emerging markets around the globe.

“We understand the challenges the airfreight industry has, particularly in highly volatile, heterogeneous regions”, said Bruno Guella, Treasurer at Pharma.Aero and Managing Director at MVD Free Airport. “We need to provide certainties to shippers who need guarantees that the premium they are incurring in airfreight are translated to quality processes and measurable results”.

Nathan De Valck, Pharma.Aero Chariman and Cargo & Product Development Manager at Brussels Airport Company added that “Our experience developing the BRU-HK corridor was quite challenging, yet we were able to see the results materialized in tangible value for the air cargo community”. “We are grateful to all the stakeholders that contributed in making this a reality and a success story that can be replicated in other regions around the globe”, he concluded.

Pharma.Aero’s General Assembly and Project Update meeting will be held this upcomming November 19th in Budapest, Hungary, during TIACA’s Executive Summit.

Montevideo, October 4th 2019

MVD Free Airport’s Pharma Hub 2 to begin construction Q1 2019

Given the official confirmation of the commencement of several regional distribution projects throughout 2019, MVD Free Airport has begun the construction of phase 2 of its Pharma Hub Masterplan. This will include additional capacities in +15+25, +2+8 temp ranges as well as additional areas for secondary conditioning and office space.

“We are very satisfied with the rate in which global shippers have confirmed interest and are commencing and validating pilots”, mentioned Bruno Guella, Managing Director at MVD Free Airport. “When we built phase 1 of the Pharma Hub we were confident it would be well accepted, but the reality exceeded expectations what makes us feel proud considering the high level of demand of an industry such as pharma”, he concluded.

Today, the pharma hub is utilized by a number of global pharma players for cross docking operations to the large regional markets such as Brazil/Argentina, for late customization and conditioning activities, as well as for their managed access distribution to South America.

Karina Sales, Head of Quality Assurance at MVD Free Airport added that “Being up to the global quality standards of leading pharmaceutical companies has been an arduous challenge, yet we’ve been able to live up to expectation primarily by understanding as an organization the underlying implications of pharma distribution”, she mentioned.  It’s not only a matter of infrastructure, information systems and processes, it’s a matter of caring for the product and the patient. Understanding that is key to building a total quality culture in the organization”, she concluded.

The estimated completion date of the project is August 2020.

MVD Free Airport is a business unit of Corporación America, the largest airport operator in the world with a network of over 50 airports and cargo terminals across 3 continents. It is a multimodal distribution center specialized in temperature-controlled supply chain, operating as the first and only free airport in South America.

 

MVD Free Airport is a business unit of Corporación America, the largest airport operator in the world with a network of over 50 airports and cargo terminals across 3 continents. It is a multimodal distribution center specialized in temperature-controlled supply chain, operating as the first and only free airport in South America.

For more information: www.mvdfreeairport.com

Montevideo, August 19th 2019

LATAM Cargo launches new freighter route Montevideo-Copenhagen

 

LATAM Cargo, cargo airline based in Latin America, has become the first cargo airline to offer direct service between Scandinavia and Latin America by adding Copenhagen, Denmark’s capital, as a new destination to its network.

The new route cuts the transit time by up to 48 hours by significantly reducing the need for land transportation.

The route will be operated with a Boeing 767-300 freighter. Initially, approximately 20-25 tonnes will be transported on each weekly flight and over time, if necessary the capacity and/or frequencies can be increased.

The round trip will increase connectivity between Scandinavia and different markets in Latin America with an outbound route that includes Copenhagen (Denmark), Viracopos (Brazil), Montevideo (Uruguay), Santiago (Chile), and Quito (Ecuador). The return will be via Miami (USA), Brussels (Belgium) and Copenhagen.

The main beneficiaries in the Scandinavian industry are pharma companies, car makers, and the oil and the paper sectors, although in the short term machinery and other businesses are also expected to play a major role.

“With the new route LATAM Cargo is now connecting Scandinavia to Latin America with a direct link. This will provide Scandinavian shippers and freight forwarders with a smooth and efficient air freight operation directly to Latin America.

“Adding a direct link is not only important to the handling and shipping of pharmaceutical products, it is equally important to the food ingredients industry and automotive parts industry which also requires stringent and efficient transportation. Being a CEIV certified carrier LATAM Cargo will now offer a unique pharmaceutical solution to South America, together with fast and reliable general cargo solutions,” commented Kaspar Andreas Nissen, air cargo specialist at Copenhagen Airports.

 

MVD Free Airport is part of Corporación America, the parent Company that also manages the concessions of the Carrasco International Airport and Punta Del Este Airport in Uruguay, alongside over 50 airports and 10 cargo terminals in 10 countries across 3 continents.

MVD Free Airport is a business unit of Corporación America, the largest airport operator in the world with a network of over 50 airports across 3 continents.

For more information, please contact us at info@mvdfreeairport.com

Montevideo, April 2nd 2019

Global Managed Access companies continue to choose MVD Free Airport as their distribution hub for South America

 

MVD Free Airport continues to innovate in managed access distribution in the region, providing a GDP compliant platform for international players to ensure medication reaches the consignee safely. In the past quarter it successfully implemented 3 additional programs for managed access distribution to South America.

 

“We understand the implications of being part of the logistics of managed access programs”, mentioned Karina Salles, Head of Quality Assurance at MVD Free Airport. “Each one of the boxes that we handle are critical to the health of patients with serious or life-threatening diseases that cannot be treated under the current regulatory framework in their countries.  We need to treat each one of those boxes as if it were meant for one of our very own family  members and this is the culture that has permeated in every level of our organization” she concluded.

 

The current methodology is tailored to each shipper’s commercial activity in the region. “Frequently single units arrive, minor conditioning under strict SOPs is performed and the product is dispatched the same day”, mentioned Salles. “In other instances, the entire yearly dosage for a patient may be shipped in a single haul, and it is picked and shipped on a monthly basis and upon request from the shipper. Other shippers opt to keep bonded stock at our airport free zone and upon market requirements pick, pack and ship achieving same day delivery to the majority of South American cities”, she added.

 

When asked as to whether MVD Free Airport performs additional conditioning activities if need she mentioned “We currently source, stock and condition +2+8 packaging material, prepare shipments, insert country specific documentation such as invoices or leaflets, sticker, amongst others. All these activities are performed in a standardized fashion and are audited regularly both by our internal Quality Assurance department as well as the client, upon their request”, finalized Salles.

 

Today MVD Free Airport has several managed access operations on premises distributing to Brazil, Argentina, Uruguay, Peru, Colombia and Venezuela.

 

 

MVD Free Airport is part of Corporación America, the parent Company that also manages the concessions of the Carrasco International Airport and Punta Del Este Airport in Uruguay, alongside over 50 airports and 10 cargo terminals in 10 countries across 3 continents.

MVD Free Airport is a business unit of Corporación America, the largest airport operator in the world with a network of over 50 airports across 3 continents.

For more information, please contact us at info@mvdfreeairport.com

Montevideo, April 2nd 2019

 

Lufthansa Continues to Strengthen its Connectivity with Uruguay

 

MVD Free Airport, Carrasco International Airport’s business unit that operates a multimodal distribution center in Uruguay’s largest airport, received an additional Lufthansa Cargo Boeing 777 freighter, a new and modern aircraft that helps improving the current cargo capacity to tackle the growing demand of connectivity to Uruguay by the main global pharmaceutical shippers.

The B777 Freighter will be complementing the already existing 777 Freighter currently transporting cargo to MVD Free Airport, in one of the two weekly frequencies that Lufthansa Cargo operates.  The freighter is substituting one of its current aircrafts, the MD11F (McDonnell Douglas) in a strategic move to provide the route with augmented capacity to tackle the connectivity needs of Montevideo airport. This upgrade takes place at a very special moment for the airport, currently incrementing its participation in the transit of pharmaceutical cargo proceeding from the largest markets in Europe, Asia and North America, with destination in some of the larger countries in the region.

“It is pivotal to continue strengthening Uruguay’s routes with Europe, and with Germany in particular, this step is a confirmation of the global carrier’s recognition of Uruguay’s recent growth as a gateway for South American distribution”, said MVD Free Airport’s Managing Director, Bruno Guella.

“The new B777F is the biggest cargo aircraft currently moving cargo from Europe to Montevideo, we expect that the market will keep on supporting this strategic route” ”, complemented Eduardo González, Lufthansa’s Cargo Manager in Uruguay.

“The capacity will be augmented by 25% in comparison to the MD11F, allowing for the transportation of 27 containers in the main deck (AMJ) and 32 containers in the lower deck (LD3)”, Gonzalez commented.

MVD Free Airport has been undergoing significant growth in the provision of distribution services for global pharmaceutical companies in the region and has in the past two years been selected by several leading global pharma companies reaching the main South American markets.

 

MVD Free Airport is part of Corporación America, the parent Company that also manages the concessions of the Carrasco International Airport and Punta Del Este Airport in Uruguay, alongside over 50 airports and 10 cargo terminals in 10 countries across 3 continents.

For more information, please contact us at info@mvdfreeairport.com

Brussels, March 19th 2019

 

Brussels Airport and MVD Free Airport Sign MOU for cooperation

 

In order to continue sharing know-how, best practices and working together in the development of new pharma certified lanes, Brussels Airport and MVD Free Airport have signed a memorandum of understanding that formalizes their relationship of friendship and cooperation.

 

Given that MVD Free Airport and Brussels Airport Company are both operators of international airports with similar missions to be the best in the accommodation of passengers and cargo and operate as air cargo hubs of regional relevance, they see eye-to-eye with regards to the challenges that global pharma distribution is facing, and have worked on several initiatives including the launching of a GDP compliant route between Brussels and Montevideo to facilitate regional distribution to Brazil, Argentina and the rest of South America via Uruguay.

 

“We’ve felt identified with what Brussels Airport Company has been doing for quite some time” mentioned Bruno Guella, Managing Director at MVD Free Airport. “The way they’ve positioned themselves as a pharma gateway with state-of-the-art infrastructure, pharma-oriented processes and internal quality standards up to par with the most demanding has definitely helped shape our mission and vision. We are happy to be in continuous collaboration with Brussels Airport Company and very excited for what is to come.”

 

“It is great to see companies such as MVD Free Airport who operate in very challenging regional contexts strive for greatness and help pave the way for a safer, reliable and standardized pharma distribution. When we first started exchanging ideas and information we were very pleasantly surprised to learn we were speaking the same language and that a lot could be accomplished together and also being part of Pharma.Aero as well. Today, we are very satisfied with the road we’ve traveled and looking forward to all that is yet to come” mentioned Nathan De Valck, Cargo Development Manager at Brussels Airport Company.

 

MVD Free Airport is part of Corporación America, the parent Company that also manages the concessions of the Carrasco International Airport and Punta Del Este Airport in Uruguay, alongside over 50 airports and 10 cargo terminals in 10 countries across 3 continents.

MVD Free Airport is a business unit of Corporación America, the largest airport operator in the world with a network of over 50 airports across 3 continents.

For more information, please contact us at info@mvdfreeairport.com