Take note of the Dutch: collaboration is the best medicine for logistics

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Joined-up thinking. Collaboration. Cooperation. These are the buzz words of 2012, but few companies  – or countries – truly put them into action.

Not so in the Netherlands. The Loadstar has often mentioned the enviable logistics strategy of this small trading nation, and it never ceases to impress. And it has lessons that could be learned by others throughout the global industry.

The latest example of common sense and pragmatism is from Schiphol Airport. For readers that don’t know well the typical marketing strategy of airports, it’s this: a map, with the airport right in the middle, showing how central the location is. It is always about the location – and when things don’t go well, airports tend to blame their geography. “There’s nothing we can do,” they say. “We are stuck here.”

The people of Amsterdam, though, don’t seem to feel the same way. If the trade lanes aren’t there, they create one. And that is what they are doing with their new pharmaceutical strategy.

Amsterdam Airport Area, Schiphol Airport, Amsterdam Business and Amsterdam Innovation Motor  – a group of some 6,000 companies which promotes the knowledge economy of the area – have joined forces, in effect bringing together government, transport, warehousing and property, as well as a growing number of life science companies settling in the area, to develop a coordinated strategy to improve the pharma-logistics trade in the region. The aim is to create pharma corridors and trade lanes between Schiphol and key markets with a view to making pharma logistics a core economic driver.

So how does it work? How do you create a trade lane that doesn’t necessarily already exist?

Well, first off, you find out what the shippers need – and then how it can be achieved, by talking to the forwarders, airlines, everyone involved, in fact, for inbound and outbound flows.

At the other end, the group is first targeting India, an up-and-coming pharmaceutical manufacturing country, with clusters of pharma activity in Delhi, Mumbai and Hyderabad. It, with support from the Dutch Embassy and Ministry of Transport, approached shippers, forwarders, airports and cool chain experts, in roundtable discussions, to discover what is needed in India, and how Amsterdam can support that.

“We’ve had a commitment from industry and forwarders, after meetings over a number of months, to see how we can match their needs,” said Bart Pouwels, director business development for Schiphol.

It’s not an easy brief, to ensure a best practice pharmaceutical chain from India to Amsterdam, and of India’s 500 or so pharma companies, only about 40 are currently up to international standards. But, said Mr Pouwels, the infrastructure is generally good. “The airports have a good product and service and facilities are good. Of course, we can only guarantee quality at the Amsterdam end.”

Amsterdam is already a centre for perishables, with the majority of the flower trade passing through it, so the cold chain infrastructure is essentially there. But to ensure compliance with all the complex and stringent requirements surrounding the transport of pharmaceuticals the group is inviting the Food and Drug Administration (FDA) to do a whole audit of its facilities and practices. It is also talking with trucking companies to ensure that they will be compliant. Panalpina, meanwhile, has built a Good Distribution Practice warehouse, certified by the Dutch Ministry of Health, at Schiphol.

“We are seeing that the forwarders are focusing at a certain level, but it can be hard to find the warehousing that they need,” said Mr Pouwels. “So we are looking at the inventory of warehouses and compliance.”

India is just the first step in what could become a global strategy.

“North America is very important in terms of life sciences as well,” noted Mr Pouwels. “KLM would be able to combine the US with Asia, transiting through Schiphol. We don’t yet know what the American market wants, or whether we will manage it in the same format as we have worked in India. We are also looking at Brazil.”

Next year, he said, the group will also start to look at how it can combine operations with the ports of Amsterdam and Rotterdam. “We’d like some integration with ocean freight.”

And what has the result of all this activity been, two years in the making so far?

“When we started we commissioned a study looking at the pharma trade flows in Europe. We found that about 3-5% of the airport’s volumes come from pharma, of a total of 25% perishables. We know it’s changing, but it’s hard to say whether the other perishables business is shrinking or pharma is growing at the moment.”

There has already been one tangible success, in the form of a KLM freighter flight between Mumbai and Amsterdam, which didn’t exist before the group began to talk to its Indian counterparts. But what are the costs of this project?

“We are just working out now what our funding needs to be,” explained Mr Pouwels. “I need to be able to justify my time, and we need to prove it will create volumes. We need to get all the stakeholders to support us – if we don’t we can’t do it. We’re going to do a tour of the Netherlands to find out who can commit.”

He thinks it will take another two to three years for the project to come to fruition, and for the pharma corridors to begin to take effect. But with all the stakeholders at both ends on board, it seems more of a guarantee than those companies going it alone. Lufthansa, for example has invested in its pharma product, as has Brussels Airport. But it’s a piecemeal approach. “I don’t think anyone else is doing this as a community. But cooperation is in our genes.”

There’s certainly a lesson there – not just for airports, but for logistics communities the world over.