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Written by: Yang Yingwei
2021-03-08 17:30
The last update date: 2021-03-08 17:33
With the global outbreak of the new crown epidemic, cold chain logistics throughout the entire process of pharmaceutical research and development has become one of the industries that have explosive growth under the epidemic.
"In terms of business in 2020, our company's drug cold chain (business) has increased by 3,000% compared to last year." Gu Bocheng said, "Affected by the epidemic, the shipment of samples, reagents and vaccines at home and abroad has increased significantly."
To undertake the above:
-70 degrees of Fubitai vaccine transportation, is Hong Kong ready?
Regardless of the epidemic factor, as the consumption level of urban residents in mainland China rises, the demand for imported fresh food has also seen a strong growth, driving the demand for cold chain logistics.
According to data from the Cold Chain Logistics Professional Committee of the China Federation of Logistics and Purchasing (hereinafter referred to as the "China IOT Cold Chain Committee"), from 2017 to 2019, the scale of China's cold chain logistics market continued to expand, with an average annual compound growth rate of 15.3%. In 2019, the market size of the cold chain logistics industry reached RMB 339.1 billion, a year-on-year increase of 17.5%.
Wu Yaorong sighed: "I hope that the opportunity of vaccines can be used to build Hong Kong's cold chain brand. When it comes to market value, Hong Kong may not be high, but the cold chain market in the Mainland is "stretching" hundreds of billions!"
Wu Yaorong, an associate professor in the Department of Supply Chain and Information Management of Hang Seng University, emphasized that Hong Kong should use the opportunity of vaccines to build a "Hong Kong brand" for cold chain logistics, and target the hundreds of billions of cold chain markets in the Mainland.
The traditionally recognized "logistics" only undertakes the function of cargo transportation. It is not a high-tech, high-value-added industry.
Cold chain logistics is a "scientific engineering", because it involves various system knowledge such as management, Internet of Things, physics, chemistry, geography, etc., to ensure that products are produced, warehousing or transportation and sales processes, all the way to the pre-consumption process. All links are always in the best low temperature environment specified by the product to ensure product quality and reduce product loss.
Where is the "high" of high value-added logistics?
Cold chain logistics faces a wide range of products, mainly including agricultural products, poultry meat, aquatic products, flowers, processed foods, frozen or quick-frozen foods, ice cream and egg dairy products, fast food ingredients, alcoholic beverages; special commodities include medicines ( Vaccines, blood), chemicals, etc.
Many high-end products, such as wines and medicines, face greater quality risks. They need to maintain more stringent conditions, use more technology, and deploy higher quality of human resources. The risk premium in the transportation process is also high.
Secondly, the high-end product market is also less sensitive to logistics costs, so high-cost cold chain logistics will have a broader market space.
Simply put, both manufacturers and customers are willing to pay higher prices to cold chain freight forwarders to ensure quality.
On February 27, the first batch of BioNTech vaccines arrived in Hong Kong.
(Provided by Information Services Department)
Wu Yaorong analyzed, "From the perspective of supply chain management, there is a "total quality cost management method", that is, how to invest in packaging and transportation to make the quality of the product better, which can actually reduce the cost." He gave an example, if the vaccine is being transported There was a problem in the process, "Discarding it after discovery is a waste of precious resources. If it is not discovered, it is more expensive to penetrate into the human body. These costs due to "poor quality" are higher than the cost of transportation." Wu Yaorong emphasized, "From the perspective of quality management, Hong Kong can play the role of "quality assurance" and optimize the entire logistics industry to provide high value-added services."
How high can the value-added point of cold chain logistics be?
Gu Bocheng explained by taking the pharmaceutical raw materials transported by his company as an example, “Before the epidemic, we also made a lot of waybills for shipping API (active pharmaceutical ingredient) products from the mainland to overseas. The Dongguan company that we negotiated recently sold one. A test tube and a few milliliters of products cost thousands of dollars." API products are the main ingredient for medicines to function. "Without them, medicines cannot be produced." Gu Bocheng emphasized that China has a vast land and resources, and there are many API raw materials needed. Exporting internationally, "It requires high temperature control technology and is an industry with a high gold content."
API products are the main ingredient for medicines to function. "Without them, medicines cannot be produced." Gu Bocheng said.
(Volodymyr Hryshchenko/Unsplash)
In addition, the cold chain logistics market in the Asia-Pacific region has huge growth potential, and the new crown pneumonia epidemic has stimulated market demand in this sector.
According to data from Allied Market Research, an international market research organization, the Asia-Pacific cold chain logistics market in 2018 was approximately US$61.1 billion, and is expected to grow to US$162.7 billion in 2026, with a compound growth rate of 13.2%.
The agency pointed out that the main factors that can sustain the growth of the market after the epidemic are the increase in the number of consumers and the increase in demand for fresh food and advanced drug treatments.
Hong Kong is far less competitive than Singapore
The “cake” of cold chain logistics is so attractive, and it has naturally become the goal of many traditional logistics hubs to transform and upgrade. Singapore is one of the successful examples of high value-added.
"Singapore’s pharmaceutical cold chain has at least more than 25 years (history)." Gu Bocheng said, "It is very important that the Singapore government vigorously promotes the world’s well-known pharmaceutical companies, including their R&D and production companies, to Introduced to Singapore."
Why does the pharmaceutical industry promote the upgrade of the logistics industry?
Take the new crown vaccine industry chain as an example (Figure 1). The upstream industry is pharmaceutical packaging materials, the midstream industry is the research and development and production of vaccines, and the downstream industry is medical equipment and medical waste treatment, linking the entire upstream, middle and downstream industry chain. Yes, it is the cold chain logistics industry.
According to the Singapore Bureau of Statistics, the output value of the country’s pharmaceutical and bioscience product manufacturing industry has increased from US$1.3 billion in 1995 to US$14.7 billion in 2019. The output value has doubled more than ten times, of which it reached US$23.2 billion in 2012. (Figure II).
With the rapid development of Singapore's pharmaceutical technology industry, the demand for pharmaceutical transportation has also increased sharply, which has led to the development of cold chain logistics in Singapore and stimulated the upgrading of infrastructure in the logistics industry.
Colliers International's research report "New Directions for Asia-Pacific Logistics" released in 2020 pointed out that "Singapore is one of the most well-served Asian logistics markets. Its Grade A Warehouse (Grade A Warehouse, which refers to the most efficient and most efficient) The area of warehouses that can reduce storage costs is nearly eight times that of the Hong Kong Special Administrative Region.” According to the report, the area of Grade A warehouses in Singapore is 4.56 million square meters, while the area of Grade A warehouses in Hong Kong is only 580,000 square meters.
The report also pointed out that Singapore’s cold storage accounts for 10% of its A-class warehouse area, about 457,000 square meters, and "cold storage rent is one to two times higher than that of ordinary warehouses."
In contrast, Hong Kong was included in the list of regions with the worst logistics and warehousing services by Colliers International.
The average history of warehouse construction in Hong Kong is more than ten years, and its monthly rent has reached US$18.6 per square meter. In contrast, not only are warehouses and other facilities newer in Singapore, the average rent is less than half of Hong Kong's (Table 1).
Similarly, with "re-export" as the main business of the logistics industry, Singapore's cold chain logistics industry is obviously more competitive than Hong Kong.
Outdated regulations stop eating "cakes" in the Greater Bay Area
Hong Kong’s pillar industries are mainly service industries, with a very low proportion of manufacturing, not to mention cutting-edge manufacturing such as biomedicine. Therefore, it is normal for the pharmaceutical cold chain industry to be less developed than Singapore, which has mature industries and high-quality services.
However, does this mean that Hong Kong's cold chain industry has no chance?
of course not.
Gu Bocheng expanded his vision to the Greater Bay Area market: "I recently went to visit the Shenzhen Pingshan District government. They now have more than 600 biotech companies and many pharmaceutical factories."
Shenzhen Pingshan is just one of the industrial clusters developing biomedicine in Guangdong Province.
The Guangdong Provincial Government clearly stated in the "Thirteenth Five-Year Plan for the Development of Strategic Emerging Industries in Guangdong Province" that it is necessary to accelerate the gathering of a group of biotechnology companies with Guangzhou and Shenzhen as the leaders, and strive to achieve a breakthrough in the output value of the province's bioindustry by 2020 600 billion yuan.
According to the "Analysis Report on Market Outlook and Investment Strategic Planning of China's Biopharmaceutical Industry" by Shenzhen Qianzhan Industry Research Institute, in addition to Guangzhou and Shenzhen, Zhongshan and Zhuhai have also planned to build pharmaceutical technology industrial parks (Table 2).
With the vigorous development of the biomedical industry in Guangdong Province, the demand for drug cold chain logistics will inevitably increase.
Although the prospects are good, it does not mean that Hong Kong can easily eat "cakes."
"The Pingshan District government told me that Shenzhen Airport had already obtained the CEIV (Cold Chain Certification for Medicines) two months ago." Gu Bocheng sighed, "We unilaterally hope that the pharmaceutical factory can transit through Hong Kong, but it may not be possible now. The goods need to be "pulled down." If we no longer promote the cold chain industry, in fact, we will really "push the waves behind the Yangtze River."
Chevalier Meiya MRT Holdings Co., Ltd. has obtained CEIV as early as two years ago. It is the first logistics company in Hong Kong to obtain CEIV certification. Hong Kong airports and cargo terminals have obtained CEIV certification before Shenzhen Airport.
Having said that, Gu Bocheng said frankly that Hong Kong's cold chain logistics still failed to form a brand effect. "Depending on a few of our companies, no one knows." He hopes that the government can integrate and promote Hong Kong's cold chain services to the world. , To further enhance the advantages of Hong Kong's cold chain.
In addition, outdated regulations have also restricted the development of pharmaceutical cold chain logistics.
At present, as one of the logistics hubs in the Asia-Pacific region, nearly 40% of the cargo is transit cargo.
"If we want to transfer controlled drugs (such as morphine) to other countries via Hong Kong, it is not possible." Gu Bocheng said, "It's only transit, not entry, but the regulations require import and export of some drugs to apply for a license."
According to the First Schedule of Hong Kong's "Dangerous Drugs Ordinance", common dangerous drugs include stimulants, hypnotics, tranquilizers and tranquilizers.
Such drugs must have an import license and import certificate issued by the Department of Health when they are imported, and they must also have a valid export authorization or transshipment certificate from the exporting country.
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According to the First Schedule of Hong Kong's "Dangerous Drugs Ordinance", common dangerous drugs include stimulants, hypnotics, tranquilizers and tranquilizers.
Such drugs must have an import license and import certificate issued by the Department of Health when they are imported, and they must also have a valid export authorization or transshipment certificate from the exporting country.
"They are not imported goods, why do they need a certificate?" Gu Bocheng pointed out, for example, if an overseas shipper wants to transfer controlled drugs in Hong Kong via a Hong Kong company, but if the shipping company does not have a local company registered, it is impossible to apply for a license. The goods are naturally unable to enter the country.
"This is the Hong Kong-British ordinance in the 1970s and 80s!" Ku Bocheng said helplessly. "In the ordinance, it is necessary to "remove the wall and loosen the ties" so that the industry can strengthen its existing advantages and compete with mainland cities and foreign countries. The rules are all the same. If they don’t, they will choose to transit to Singapore instead of Hong Kong because they don’t need a permit.” He also emphasized that if the government wants to build Hong Kong into a medical cold-chain transit port in the future, the industry must fully cooperate with the government. , Make changes at different levels.
Gu Bocheng, Chief Executive Officer of Chevalier Meyer Express, said that if the government wants to build Hong Kong into a pharmaceutical cold chain entrepot in the future, the industry must fully cooperate with the government and make changes at different levels.
The above is excerpted from the 255th issue of "Hong Kong 01" Weekly Report (March 8, 2021) "Looking at the Cold Chain from Vaccines: Prospects for the Government to Untie the Academic Circles". If you want to read the full text, please
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Highlights of the 255 issue of "Hong Kong 01" Weekly News:
[Cover story] Don’t let suspicion ruin "One Country, Two Systems" Hong Kong needs to become another "Hong Kong"
Hong Kong Housing Policy Strange Talk-Home ownership may not be able to live and work in peace
From the cold chain transportation of the new crown vaccine, how can Hong Kong's logistics industry move towards high value-added?
Observation of the Two Sessions: Resetting the GDP Target Shows Confidence Beijing's Economic Roadmap for the Post-Pandemic Era
Ten years of opening up, five years of democracy, don’t let Myanmar lose time again
Interrogation from children What is the sense of mission of Hong Kong politicians?
The crux of the 20-year U.S.-China 5G technology war in the three-stage competition
New Coronary Pneumonia New Coronary Vaccine Vaccination Vaccination BioNTech/Fosun Vaccine Logistics Industry Hong Kong Economic Greater Bay Area 01 Weekly Report In-depth report
