Francisco Cruz
Director
Hubble Logistics México
/
Insight

Logistics for the Pharmaceutical Industry at a Competitive Cost

Fri, 11/02/2018 - 17:24

The complex pharmaceutical supply chain can be a challenge for inexperienced logistics operators, which in turn can lead to higher operational costs, says Francisco Cruz, Director of Hubble Logistics México, which banks on its historical ties to give it an advantage. “Providing services tailored to the demands of the pharmaceutical industry is not easy, laboratories battle to find 3PLs that will follow the sector’s standards to the letter at a competitive cost,” he says. “Hubble Logistics was built on the foundations of an older family company from which we gained significant experience and strategic alliances.”
Hubble Logistics, launched in 2014, is a Mexican logistics operator specializing in the pharmaceutical industry. Cruz says success in the sector is determined by quality of delivery. “For a retail company distribution is key, especially for the pharmaceutical industry where some products demand specific conditions in order to preserve their properties during distribution.” He adds that Hubble Logistics’ function is to become an extension of the laboratory for the proper management and conservation of inputs in both operational and normative aspects.
Compliance with existing regulations is another key to success, including NOM-059, which dictates the set of measures that must be adopted in a systematic manner, in order to guarantee that medicines have the quality required for the use to which they are intended. “Our fleet incorporates temperature monitoring systems to demonstrate that the cold chain is being maintained throughout the trip,” Cruz says.
Hubble Logistics initially provided services for Grupo Neolpharma but now works with many other laboratories, including Grupo Valeant, Bausch Health México, Laboratorios Andrómaco and Medix. It transports both raw materials and finished products to pharmaceutical companies, hospitals, pharmacies, medical representatives and distribution centers. The company delivers mainly in central and south east Mexico but has the capacity to work across the country. However, farther destinations are becoming more expensive due to the increase in tolls and fuel prices. “Our operational costs are not only hit by inflation but also constant increases in fuel prices, rising tolls, maintenance and insurance policies. Contracts and fares with clients are negotiated on a year basis and any unexpected operational expense such as fuel surcharge has to be absorbed by the operator.” As a logistics company based in Mexico City, traffic jams are another significant issue. “Traffic jams in large cities put pressure on the transport system, generating logistic problems for those working within these urban centers.”
Cruz explains that the transportation industry in Mexico faces big challenges such as insecurity, high taxes, transport fleet renovation and high fuel prices. “I believe the sector could use some governmental incentives for small and medium companies. Tax breaks could work as an escape valve, since many expenses that are essential for the operation add in costs and are nontax deductible; this could also impact on employment generation.”  To address this matter, Hubble Logistics is an associate of the Consejo Nacional de Ejecutivos en Logística y Cadena de Suministro (ConaLog), a nonprofit organization seeking to boost integration, development and competitiveness within the logistic community in Mexico.
Insecurity in Mexico is a particular threat that the company takes seriously, employing security elements during transportation and maintaining good communications with the police. “Our fleet is equipped with several security mechanisms and we also train our staff in safety protocols which allow them to react properly against danger situations. We are also allied with local and federal police to monitor the status of the vehicles in case a situation presents itself.”
Since its launch, Hubble Logistics has done well in Mexico’s pharmaceutical market. It grew by 35 percent in 2018 in terms of volume of deliveries and expects 30 percent growth in 2019 due to market opportunities. “Mexico produces around 2 billion units of medicine per year; 10 percent of these medications expire in the same year of distribution due to displacement problems in the national territory,” Cruz says.