The difference is in the dynamic: Transport volume is particularly dynamic in pharmaceutical and medical product wholesaling, as well as in the production of health care items. Daily problems in the supply chain include last-minute requests from diverse product lines, multiple delivery, and a nationwide, consistent supply of temperature-sensitive health supplies, pharmaceuticals, and hygiene items. Healthcare is one of the industries that is crucial to the operation of an economy all around the world, and this isn’t just because of the Corona pandemic. As a result, logistics play an important part in the sector.
However, how do healthcare logistics fare? In the conversation, Dr. Michael Nutto draws out the existing and future circumstances. He is an adept in deciphering difficult activities and simplifying them to provide customer-focused logistics and transportation services.
What is the state of healthcare logistics providers right now?
There’s no doubt about it: There has been a specific focus on the healthcare business since the beginning of the pandemic. People continue to visit pharmacies in large numbers. They are a vital link to clients all across the world. Also on the upswing is the mail-order sector in healthcare products. As a result, the pressure on transportation service providers in this area is increasing. They are under growing pressure to offer quick delivery and preserve the claimed quality, and they are bound by EU Good Distribution Practice guidelines for medicine shipments.
Are there winners and losers among the transportation businesses for the industry after two years of Corona?
Both are present. Of course, Amazon and other huge internet retailers are among the winners. Overall, internet services have increased by 18 percent, including consumer goods, courier, express, and package services, and food delivery services.
In the pharmaceutical industry, drug stores and internet retail, as well as pharmacies, are benefiting from the situation: demand for hygiene and safety supplies, medicine, speedy testing, and advice continues to rise. And the pandemic isn’t over yet. Virus mutations are likely to keep us busy for a bit longer. An increase in the need for advice, additional waves with more persons afflicted, and successive rounds of vaccine are all linked to the pandemic. The health-care market is expected to grow at an annual rate of around 8%. As a result, healthcare logistics companies must help meet rising demand for pharmaceuticals and medical devices, as well as maintain continuous refrigeration chains. As a result, the order books are completely full.
In the transportation industry, there are also pandemic losers: the automobile industry, tourism, and eateries. Almost every business that is significantly reliant on global supply chains has incurred losses, including furniture, mechanical engineering, steel, the event industry, and aviation. In 2020, European freight traffic will shrink by 8% to 9%, while existing price indexes will continue to rise. Often, delivery times are excessively protracted. This has impacted every business, including healthcare logistics.
Is the shortage of drivers affecting healthcare logistics as well?
To quote Dirk Engelhardt, President of the German Federal Association of Road Haulage, Logistics, and Disposal (BGL): “Great Britain is but a foretaste of things to come.” In Germany, there is now an 80,000-driver shortage. Every year, 30,000 drivers retire. And the average number of younger drivers who take their place is only 15,000 people. As a result, it’s apparent that the shortage of drivers affects healthcare logistics as well.
What does the future hold for us?
Things need to be reconsidered: New innovations are needed in the logistics industry, whether in healthcare or other industries.
Of course, in the short term, the focus is on providing incentives for drivers, such as in-house training, specific driving training, and, most importantly, better working circumstances. There are currently legislative restrictions and principles in place for new parking and overnight lodgings, as well as the option for drivers to return home on a regular basis to better balance work and family life. It is also important to have a fleet that is up to date. Pay must, however, improve, according to studies; in Germany, the average hourly income is EUR 14.21, which is just slightly more than the EUR 12.00 minimum wage. However, the industry’s terrible reputation also deters new drivers. In addition, using foreign drivers to alleviate the shortfall has significant hurdles in terms of integration, language, culture, and safety regulations.
The path will bring us to multimodal solutions in the medium term. This necessitates a shift in transportation to rail and inland waterways. In addition, when rail and waterways cannot replace it, the road network must be fixed and expanded. This is the only method to avoid traffic congestion and keep transportation chains working in the future. Such policies are unpopular, yet they are important for Germany’s business location. In the long run, we’ll have to contemplate a rising number of self-driving vehicles, which might be on the roads as early as 2030.
Is there a role for innovative drive systems and mixed fleets in this?
The EU’s Green Deal is requiring businesses to utilize alternative, CO2-free driving systems, which is a really good thing. The utilization of electric automobiles is a current option that is in high demand right now. However, when choosing a trip, you must consider the actual range, which according to manufacturers should be up to 400 kilometers.
Furthermore, hydrogen is gaining popularity as a fuel, and by 2024, it should be widely available. The present maximum range of 400 kilometers is also a limiting issue in this case. That is why using a mixed fleet of vehicles with different propulsion systems and combustion engines is the most sensible answer. Combustion engines are expected to play a minor role starting around 2030. Otherwise, we will not be able to meet the European Union’s objectives. This is especially significant for nations like Austria and Switzerland, which have important transit routes.
In the short term, what can be done?
The same is true for healthcare logistics service providers as it is for other types of service providers: Optimization of the route! Companies can plan more cost-effectively and cut CO2 emissions by using digital and automated processes. There are already solutions to this problem.
If a transportation company wishes to be CO2-neutral, it must prioritize the following in its business strategy: optimize, prevent, shift, and compensate!
Pharmacies’ suppliers are caught in the middle in the healthcare industry: on the one hand, they have many regularly scheduled excursions every day. On the other hand, they are required to produce last-minute and hence time-critical deliveries that must meet the highest quality standards. Digitalization is the key word once again. Regularly planned and dynamic operations can be integrated using appropriate software, allowing businesses to respond rapidly to crucial supply queries.
The focus in the era of the Corona waves is on vaccine supply. Kühne und Nagel, for example, manages distribution of the Moderna vaccine to a network of 230 locations across the world and a fleet of 200 air-conditioned trailers — all at a transport temperature of -20 degrees Celsius, according to its own assertions. The company is a large service provider with its own transportation section that caters to these needs in the healthcare industry. However, with the right software, even medium-sized businesses can take into account local requirements and particular features optimally and individually, contributing significantly to overall supply.
What’s your take on the future of healthcare logistics?
Healthcare items will continue to be essential in the future. A changing culture, as well as the handling of illnesses and pandemics, necessitate a wide range of hygienic items and medicines, which are regularly transported under particular conditions. Healthcare logistics is a big part of overall logistics, and it’s expected to increase a lot.
The need for highly high-quality service providers who can manage a constantly changing infrastructure will continue to rise, resulting in a need for extremely high-quality service providers who can manage a constantly changing infrastructure. Simultaneously, an increasing number of people will place orders with mail-order pharmacies. In addition, I believe that production will return to Europe.
In healthcare logistics, speed and safety may not be mutually exclusive. Companies must, however, keep a close watch on costs and operate efficiently.
That is why digitalization, as well as process harmonization across the entire supply chain, should be prioritized. We must also consider the issue of sustainability. Artificial intelligence also aids in the improvement of quality and performance.