The IATA Label - Will it stick? Part II: The Path Forward

What is the path forward?

A label alone will not guarantee trained personnel to handle the cargo or is it a substitute for a program that supports GMP and GDP practices. Training programs and records, airport audits, facility inspections, a single SOP (among shipper, freight forwarders and airlines) and other tools will ensure the cargo is managed properly so collaboration is critical. Anyone of the supply chain links can take the lead to engage the others. It is not easy to break the silos and be in someone else's shoes. I recommend the healthcare logistics person to lead the effort because he or she is more familiar with the product, its storage and distribution temperatures and have tools to work with such as SOP, audits, service level, training, etc.

I recommend you work with your consignee, freight forwarder and airline(s) to determine the best set up. In general, AWB, Booking, Label and SOP must be aligned to the requirements but communication is fundamental before assuming that matching the storage temperature requirements is a bullet-proof solution. Collaborating with your consignee or affiliates (Regulatory, Quality, Logistics, etc) will provide the feedback to define the best way to handle the cargo downstream.

In my opinion, there are many excellent airline temperature-controlled programs available and airlines that have these programs in place are doing a great job in compiling the requirements of the biotech and pharmaceutical industry. These airline programs are designed to prevent mishandling by setting up SOP’s, training personnel, auditing and upgrading facilities. I believe that is why the IATA label has had a very slow or no implementation by the IATA airlines members. Unfortunately, most of the upgrading is taking place in EU and US airports but I think the bigger needs are at destination (downstream), when the shipping container performance is compromised by delays at the customs and sanitary inspections. Airlines are working in difficult conditions with fuel prices rising and cargo demand contracting so they are very conscious that what drives the service level is the price you pay for booking your cargo, not the IATA label, or the labels your warehouse or freight forwarder attached to the cargo; not even on what's written in the AWB (Air Waybill). Airlines will code your cargo in their system according to the service level you paid and most airlines already have time and temperature-sensitive labels and training associated to the service level you paid. Simply… you get what you pay for.

There are mixed comments posted in many websites or groups stating that the risk for delay or even declining to move the cargo is higher unless the label is adopted. In today's business environment where the air cargo capacity is shrinking, most airlines are hungry for business and have their own time and temperature labels (temperature controlled programs) so I expect the airlines to keep showing flexibility to move the cargo as long as you are paying the service level. My advice is to request your freight forwarder to confirm with the airline at the moment of booking and ensure the booking is done to the service level you need. Airlines will certainly work hard to meet your needs.

As of today, the IATA label is mandatory and I do commend the IATA TTTF group for taking such a big step and somehow forcing the collaboration among the supply chain links. IATA has provided many caveats in the label implementation to increase the flexibility for complying with its mandate but also to prevent disruption in the supply chains. Based on these caveats the word “mandatory” could be interpreted as voluntary in many cases because:

1) It only applies to cargo booked as temperature and time sensitive. Not every airline has a time and temperature program in place and may not call it that way.

2) It is up to each airline to accept or reject the use of the label. IATA recognizes that the Booking, AWB and SOP are the drivers and the label is just a reminder that the other three components must be in place.

3) If an incomplete IATA label is applied, then the AWB, SOP and booking complement the information for the cargo handling.

What is my proposal?

My proposal to IATA to create a voluntary certification program (not just a label) that certifies the airlines’ temperature controlled programs so these airlines can carry the IATA-certified program logo (similar to the Envirotainer certification program or the ISTA certification program for containers). IATA can standardize booking practices, SOP structure and contents, recommend infrastructure, training, auditing methods, etc for the temperature controlled programs available. I strongly believe IATA made a great effort to standardize labels and bring GDP awareness to the airlines. I recommend contacting IATA and sharing your experience because the more feedback the better aligned will be the freight forwarder and airlines to the industry needs. An IATA representative will be speaking at the IQPC’s 10th Annual Cold Chain & Temperature Control Global Forum in Chicago this September, so it may be a good opportunity to hear what IATA strategy and results behind the label effort are up to today. Unfortunately only a few IATA airlines or freight forwarders attend these events so I would encourage freight forwarders, airlines, shipping container suppliers and other supply chain links to attend the conference. This will also ensure a plurality of the feedback and ensure that we get new, fresh and perhaps different opinions because the cold chain supply pool is small yet.

Please feel free to reach to me directly if you have more questions.

Until the next post,

Carlos

References:
(1) http://www.iata.org/whatwedo/cargo/Documents/time-and-temperature-label-industry-communication.pdf
 (2) http://www.iata.org/whatwedo/cargo/Documents/time-and-temperature-label-faq.pdf
(3) http://en.wikipedia.org/wiki/International_Air_Transport_Association
(4) http://en.wikipedia.org/wiki/Air_waybill
(5) http://www.worldtek.com/wp-content/uploads/2011/03/Time-and-Temperature-Oliver-Evans-Removed.pdf
(6) http://www.cnsc.net/events/Documents/kevin-o%27donnell-presentation.pdf

The IATA Label - Will it stick?

It's been more than 2 months since the IATA (International Air Transport Association) announced (June 2012) the status change of the IATA Time and Temperature Sensitive Label from voluntary to mandatory with an effective date of July 1, 2012. The IATA label is to be affixed on the shipping containers to ensure the carriers handle the cargo within the temperature range expected by the shipper. The IATA label status switch had a very short notice (about 30 days) so it took many people by surprise, even to those (including me) who were aware of the label since its debut in the first quarter of 2010. When I learned about this change I rushed to open and read the IATA letter announcing the status change. IATA Time and Temperature Task Force (TTTF) also included a FAQ (Frequently Asked Questions) section to support the status change which I also read a few times. We need to remember that IATA only regulates its members (i.e. most airlines) and does not regulate pharmaceutical or biotech companies, freight forwarders, ground handlers, customs inspectors, etc. Today the application of the IATA label is still unclear because it states shipments "booked as time and temperature sensitive" need the label but it concedes many exceptions to its use. If a freight forwarder does not book your cargo as time and temperature sensitive then the IATA label mandate does not apply. We also need to keep in mind that perishable is not the same as "time and temperature sensitive".

Source: http://www.iata.org/whatwedo/cargo/tracker/june-2012/pages/tt-label.aspx

I do have experience working in cold chain supply and have been using GMP (Good Manufacturing Practices) and GDP (Good Distribution Practices) strategies to actively manage temperature controlled chains for over 10 years so here it is my take on the IATA label.

Do we need the IATA label?

This is not a black and white situation and I can think of arguments for keeping as well as for dismissing the label. A label attached to the shipping container supports the need for communication and when used correctly it can help manage the temperature-controlled requirements in a supply chain, end to end. The value of GMP (Good Manufacturing Practices) and GDP (Good Distribution Practices) is to establish a framework to operate and manage healthcare supply chains that goes much deeper than labels so I believe that the standardized IATA label is the beginning of a bigger project.

On the other hand, there are already many labels and it is frequent to find the shipper (Warehouse) attaching multiple shipping labels, the freight forwarders adding labels too (tamper evident, security, etc), and finally the carriers (i.e. airlines) affixing labels linked to the service level purchased. Adding another label to shipping containers may increase confusion and the new label may become lost among the existing labels. I believe that most labels attached today have a function and they are intended for certain supply chain links (trucking, customs, airlines, receiving warehouse, etc). The IATA label may only be recognized by airlines and ground handlers at the airports but there are more supply chain steps outside the airport environment. Standardizing these multiple “airport” labels seems like a great idea but each airline has specific training and procedures associated to the temperature controlled service offered which is also constantly evolving to differentiate an airline from its competitors.

What are the benefits of a single (IATA) label?

The expected benefits of the label were forecasted and grouped in 4 categories by the IATA TTTF. Below I list the expected benefits:

1) Better identification by providing one unique, universally accepted and recognized label that displays the temperature range during transportation.

2) Faster supply chain transit handling by increasing visibility and awareness.

3) Greater reliability and accuracy by reducing delays due to inaccurate or inconsistent handling information.

4) Decreases risk by reducing mishandling and adverse exposure.

Currently, the IATA label may not be delivering the expected benefits because:

1) The label is not universally accepted and recognized by all cargo stations yet. The message has not cascaded down to all the airlines and even for those airlines that got the message, not all their stations are aware of the label. This effort could take many months if not years. Creating awareness outside the airport environment so other supply chain links recognize the IATA label may require an enormous amount of energy, resources and time.

2) In my experience, the visibility is not provided by any label but rather by the booking (paid service level) which sets the service level. Airlines will flag the cargo in their system, add an airline specific label and treat the cargo accordingly to the mutually agreed (by all supply chain links) SOP (Standard Operating Procedures). Airlines offer many service levels and they are not likely to confuse a priority cargo in the same way they do not confuse first class and coach passengers. The AWB (Air Waybill) service level is linked to the booking and the AWB text must support the booking. The booking (purchased service) defines how the cargo is moved throughout the airline network and everyone in the airline organization is trained to recognize the flagged cargo (first class passenger).

3) Standardization of handling temperature range in Air Waybill, Booking and Label and SOP may not be the best practice. The handing temperature depends on the country regulations you are dealing with and the temperature range in the AWB for some countries may need to match the country product registration and the same applies to some labels affixed to the shipping container. In these cases, the booking (annotations in the airline system) and SOP need to be aligned on the temperature range to handle the shipping container (different from the AWB).

4) The label may also cause delays because if the temperature range written in the IATA label cannot be supported by the facilities at the origin, transfer or destination airports, some Customs or Sanitary officers may stop and place the cargo in quarantine for non-compliance. One country that comes to mind is Brazil, where the Customs can hold the cargo at the customs warehouse (administered by INFRAERO - Empresa Brasileira de Infra-Estrutura Aeroportuária) and request the Sanitary Organization (ANVISA - Agência Nacional de Vigilância Sanitária) to review discrepancies between actual handling conditions and AWB instructions to make sure that the product quality has not been compromised. For some other countries, the AWB must match the storage temperature included in the product country registration (usually the range +2°C to +8°C) and not the transit temperature range so the transit temperature is managed at the SOP level and is flagged in the airline systems. In these cases, the IATA label may not be reducing the mishandling or delay risks or increasing the visibility or accuracy but have the exact opposite effect.

I suspect that the IATA label may not fully deliver the benefits planned by the TTTF group unless some changes are made to support the complex global supply chains. A benefit not accounted for is that the IATA label created communication and collaboration among the supply chain links because each participant was shaken from its comfort zone and forced to work together to understand this new label requirement. This is especially true for the people who do not actively manage their logistics and stay in their comfort zone (silos).

Part II - Coming soon ...

References:
(1) http://www.iata.org/whatwedo/cargo/Documents/time-and-temperature-label-industry-communication.pdf
 (2) http://www.iata.org/whatwedo/cargo/Documents/time-and-temperature-label-faq.pdf
(3) http://en.wikipedia.org/wiki/International_Air_Transport_Association
(4) http://en.wikipedia.org/wiki/Air_waybill
(5) http://www.worldtek.com/wp-content/uploads/2011/03/Time-and-Temperature-Oliver-Evans-Removed.pdf
(6) http://www.cnsc.net/events/Documents/kevin-o%27donnell-presentation.pdf