Developments in air cargo: some data on the transport of pharmaceuticals

Transcription

1 Developments in air cargo: some data on the transport of pharmaceuticals CCA Pharmaceuticals in the Cool Chain Milan September 17th, 2014 Gerard de Wit Managing Director WorldACD Market Data The Netherlands 1

2 Demand for pharmaceuticals continues to grow due to changes in healthcare spend and demographics (1) Healthcare spend per capita (US$ 2012) Change in spend per capita CAGR 2000 to 2012 Change in population CAGR 2010 to 2020 Africa % 2.5% Middle East & South Asia % 1.3% Central & South America % 1.0% Asia Pacific 1, % 0.7% Europe 2, % 0.1% North America 5, % 0.9% Forecast UN Source: WorldACD analysis of Worldbank and United Na:ons data 2

3 Demand for pharmaceuticals continues to grow due to changes in healthcare spend and demographics (2) Healthcare spend as % of total GDP (2000) Healthcare spend as % of total GDP (2012) Africa Middle East & South Asia Central & South America Asia Pacific Europe North America 5.2% 4.8% 6.3% 4.5% 7.3% 9.2% 6.3% 5.0% 7.0% 5.4% 8.5% 11.7% Source: Worldbank 3

4 Pharmaceutical sales are expected to increase with high single digit growth rate Value Global Pharmaceuticals Market (US$ billion) 1,600 1, % 1,571 1, % 1,145 1,170 1, % % forecast Source: IMS Health and PWC (2020 figure only) 4

5 Demand for pharmaceutical products is expected to shift further 1,500 Global Consumption of Pharmaceuticals (US$ billion) 29% USA Some production developments - In China pharma patent applications increased almost 10 fold (2000 to 2009) - In China the foreign company production output for pharma more than tripled from 2005 to 2010 (US$ 47 b) - Pharma FDI in India is expected to reach US$25 b between 2013 and ,000 36% 20% Europe 9% Japan 42% % 21% Other 0 44% 26% 19% 11% 12% 23% 42% Rest of World 17% 4% China India Source: VFA Germany, IMS Health, PWC (2020 figure only), EYE for Pharma (China figure) and (Demrich for India) 5

6 Top pharma commodities travelling by air Top-20 commodities by volume air share between Europe and USA ( ) Air Sea share of pharma by air Medicaments containing alkaloids (not in measured dose) 97% 3% 0.1% Vaccines for human medicine 96% 4% 5.1% Dental fillings 80% 20% 1.4% Medicaments containing alkaloids (in measured dose) 69% 31% 0.8% Medicaments containing insulin 66% 34% 1.6% Waste pharmaceutcals 65% 35% 0.1% Sterile surgical materials 64% 36% 2.6% Medicaments containing antbiotcs (not in measured doses) 62% 38% 0.2% Reagents for blood groups 59% 41% 0.3% Vaccines for veterinary medicine 47% 53% 1.0% Human blood 46% 54% 3.9% Medicaments containing penicillins 45% 55% 4.0% Medicaments containing hormones 45% 55% 2.4% Medicaments for therapeutcs purposes 44% 56% 52.8% Medicaments containing antbiotcs (in measured doses) 40% 60% 4.8% Source: WorldACD analysis of Eurostat 6

7 Growth of bio-pharma and generics will influence demand for pharma air freight in size & traffic flows Breakdown of Pharma sales per product type Worldwide Bio-Pharmaceutical Sales (US$ billion) Other 12% 12% 100% 250 CAGR +6% 228 Generics 27% 36% % Branded 61% 52% % forecast forecast Source: IMS Health 7

8 Logistics industry response to pharma 8

9 What is included in WorldACD s PIL/TEMP category? 9

10 Evolution of worldwide pharma trade shows a dominant role for Europe so far Commodity Value (US$ billion) Export Rest of World Japan N11* North America Europe BRIC CAGR (Jan 2011 through Jul 2014) PIL/TEMP volume 18% 12% 12% 18% 7% 14% Import N11* Japan North America CAGR (Jan 2011 through Jul 2014) PIL/TEMP volume BRIC Rest of World Europe 13% 23% 17% 18% 10% 6% Source: Tradecom and WorldACD (PIL/TEMP only) *Next 11 (Goldman Sachs) = Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey & Vietnam 10

11 EU pharmaceutical market: evolution of export and import EU Pharma total trade (volumes ton) Export: air vs. sea 0.2% all commodites 900, % pharma 6.6% all commodites 600,000 30% 26% 27% Import 6.7% pharma 300,000 70% 74% 73% Export 70% 72% 73% Sea % % % 2013 Air Source: Eurostat 11

12 PIL/TEMP shows similar pattern as all pharma by air, but higher growth Jan 2013 = J PIL/TEMP (WorldACD) Pharma Air Trade (Eurostat) Air Volume Index Europe Outbound F M A M J J A S O N D J F M A M J Air Volume Index Europe Inbound Source: Eurostat & WorldACD 12

13 In all origin regions PIL/TEMP growth outpaces growth of General Cargo... CAGR (Jan 2011 through Jul 2014) Worldwide 14% 3% PIL/TEMP All Other Cargo Europe 14% North America 1% 18% 7% 0% 7% Asia Pacific 13% 4% Middle East & South Asia 15% 4% Central & South America 10% 1% Africa Source: WorldACD 13

14 ...with half of the top-10 growth markets originating in Western Europe Western Europe - Asia Pacific PIL/ TEMP Absolute Volume Growth (from 2011) PIL/TEMP CAGR (Jan 2011 through Jul 2014) 16% All Other Cargo 3% Western Europe - Middle East & South Asia 20% 1% Western Europe - Central & South America 18% - 5% South Asia - North America 22% 2% Western Europe - North America 5% 0% South Asia - Europe Western Europe - Africa 13% 12% 1% 5% South Asia - Asia Pacific 209% 9% USA - Asia Pacific 39% 1% South America - Europe 213% - 1% Source: WorldACD 14

15 Only Europe and MESA are net exporters of PIL/TEMP % outbound % inbound PIL/TEMP Imbalance (% of volume) 2011 Last 12 months Jul 2014 Africa 5% 95% 5% 95% Asia Pacific 14% 86% 12% 88% Central & South America 22% 78% 16% 84% Europe 73% 27% 78% 22% Middle East & South Asia 57% 43% 56% 44% North America 38% 62% 36% 64% Worldwide more than half of PIL/TEMP volumes originate in Europe. Source: WorldACD 15

16 Position of Top-20 Forwarders in the Cool Chain Volume shares of Global Top-20 Forwarders 2011 Last 12 months Jul % 68% 45% 66% Top- 20 Forwarders All other Agents 55% 32% 55% 34% General Cargo PIL/TEMP General Cargo PIL/TEMP PIL/TEMP - Last 12 months Jul % 72% 72% 45% 35% 33% 66% 24% 28% 28% 55% 65% 67% 34% Europe Central & South America North America Asia Pacific Middle East & South Asia Africa Worldwide Source: WorldACD 16

17 Yield distribution of PIL/TEMP vs. PER & General Cargo % of volume 20% Yield distribution H Europe to North America 15% Perishables PIL/TEMP General Cargo 10% 5% 0.0 Yield Source: WorldACD 17

18 Yield distribution of PIL/TEMP vs. PER & General Cargo % of volume 20% Yield distribution H North America to Europe 15% Perishables PIL/TEMP General Cargo 10% 5% 0.0 Yield Source: WorldACD 18

19 Yield premium of PIL/TEMP has increased since 2011 and now stands at 56% on average worldwide... Yield premium (%) PIL/TEMP vs. General Cargo Western Europe - Asia Pacific 51% 60% YtD Jul 2011 YtD Jul 2014 Western Europe - Middle East & South Asia Western Europe - Central & South America South Asia - North America Western Europe - North America 20% 20% 28% 43% 57% 45% 51% 81% NOTE: Percentages shown are averages, based on individual airline AWB- records reported to WorldACD and categorized under PIL/TEMP Source: WorldACD 19

20 but does pharma premium cover the additional cost? Cool chain shipment example (in US$) Shipment from US West Coast to Switzerland Note Source General Cargo revenue 1,700 Cool Chain Pharma Revenue Premium 2,400 Chargeable weight: 950 kg WorldACD Total revenue incl. charges 4,100 Cool chain container cost 1,236 4,100 Efficiency effects? Rent of RKN t2 for Lower? 9 days = $1,236 Envirotainer website Pharma Revenue - /- additonal cost Other cost 1,164 1,700?? Higher? Lower? Express ULD, build- up & breakdown, export charges, training, admin, container return etc. WorldACD assumptons 0? 20

21 Modal shift: USA to EU28 Air tons as % of Air+Sea tons All commodity groups % 0.87% 0.71% 0.65% 0.70% Air Sea CAGR 2010 to % +10.6% % Selected commodity groups (min. air share of 10%*) 22.8% 22.0% * Represents 61% of air volume in % 42.8% 36.2% Pharma 22.2% 33.5% 21.2% 30.6% Air Sea Air Sea - 2.9% - 0.7% - 1.3% +5.3% Source: WorldACD analysis of Eurostat data H

22 Modal shift: EU28 to USA Air tons as % of Air+Sea tons All commodity groups % 1.64% 1.43% 1.41% 1.36% Air Sea CAGR 2010 to % +1.1% % Selected commodity groups (min. air share of 10%*) 30.0% 28.4% * Represents 41% of air volume in % 42.4% 36.0% Pharma 29.5% 35.0% 29.6% 33.0% Air Sea Air Sea +1.9% +4.8% +2.4% +7.5% Source: WorldACD analysis of Eurostat data H

23 Modal shift: EU28 <> USA (both directions together) Air tons as % of Air+Sea tons All commodity groups % 26.2% 1.18% 25.5% Source: WorldACD analysis of Eurostat data 0.99% 24.5% 0.94% 25.1% 0.97% Selected commodity groups (min. air share of 10%*) * Represents 50% of air volume in 2013 Pharma 24.5% Air Sea Air Sea Sea CAGR 2010 to % +6.6% - 0.8% +1.2% 38.2% 42.6% 36.0% 34.4% 32.1% Air +1.0% H % 23

24 Modal shift: USA to EU28 Air tons as % of Air+Sea tons As % of Air tons 2012 Aerospace 64.1% 64.5% 67.2% 6% Base material Electrical Equipment 11.9% 10.3% 10.2% 25.6% 25.3% 26.1% H % 13% High tech 38.6% 38.7% 38.6% 18% Industrial Machinery 16.1% 16.2% 15.4% 35% Perishables and Food 9.5% 16.7% 17.3% 1% Pharma 36.2% 33.5% 30.6% 4% TexTles and Fashion 34.6% 35.3% 34.3% 2% Other 23.9% 25.8% 25.4% Source: WorldACD analysis of Eurostat data 16% 24

25 Modal shift: EU28 to USA Air tons as % of Air+Sea tons As % of Air tons 2012 Aerospace 49.5% 61.4% 54.9% 3% Base material 13.9% 14.5% 17.7% % Electrical Equipment 19.2% 21.5% 20.4% H % High tech 51.5% 49.9% 50.3% 18% Industrial Machinery 13.1% 15.0% 13.7% 3% Perishables and Food 36.8% 36.6% 44.4% 22% Pharma 36.0% 35.0% 33.0% 9% TexTles and Fashion 36.4% 36.6% 35.2% 11% Other 23.8% 21.7% 21.2% Source: WorldACD analysis of Eurostat data 6% 25

26 Modal shift: EU28 <> USA (both directions together) Air tons as % of Air+Sea tons As % of Air tons 2012 Aerospace 59.3% 63.5% 62.7% 4% Base material Electrical Equipment 12.0% 10.6% 10.6% 21.1% 22.7% 22.1% H % 20% High tech 43.6% 43.2% 43.1% 18% Industrial Machinery 15.9% 16.1% 15.2% 20% Perishables and Food 33.7% 33.7% 38.3% 11% Pharma 36.0% 34.4% 32.1% 7% TexTles and Fashion 36.0% 36.3% 35.0% 6% Other 23.9% 24.7% 24.2% Source: WorldACD analysis of Eurostat data 11% 26

27 Concluding remarks Modal shim: yes, but accompanied by absolute growth for pharma by air, partcularly in bio pharmaceutcals Likely to remain one of the top growth segments in air cargo Transport requirements are such that top positon in the market calls for highly specialized equipment / service Yield premium does not necessarily lead to higher margins for airlines, given additonal cost factors ProducTon to go to new places: pharma- by- air flows likely to shim 27

28 Further Information Ken de Witt Hamer Director Market Analysis & Commercial Development Mob WorldACD Market Data BV Rubensstraat MZ Amsterdam The Netherlands Tel