Loss and Damage Analysis in International Transport of Pharmaceutical Products

Magdalena, Klopott
European Research Studies Journal, Volume XXIV, Issue 4B, 799-807, 2021
DOI: 10.35808/ersj/2772


Purpose: The purpose of the article is to investigate the main causes and factors of loss or damage of pharmaceutical cargoes in international transport, and brief analysis of trade flows and transport trends in pharmaceuticals provides a background for consideration. Design/Methodology/Approach: Claims data derived from surveyor company and handled by insurance brokers have been scrutinized. The study sample consisted of 2168 cases examined between 2015 and 2020, and of reports drawn up at the end by a surveyor, that have been systematically analysed every six months to identify the dominant types of damage and the main causes that contributed to the loss or damage of pharmaceuticals. Findings: The research clearly shows that between 2015 and 2019 trade in pharmaceuticals grew from USD 502 billion to USD 636 billion in 2019, i.e., by 26.7%. In parallel with the increase in global trade, the global pharmaceutical transport and logistics market is also developing and is expected to grow at a CAGR of 4.1% in the period of 2019-2024. Despite advancements in cooling technology and logistics, there are still loss and damage plaguing the industry. The prevailing causes for the frequency of losses have been divided into six categories: 1) refrigerating equipment breakdown or malfunction, 2) unsuitability of packaging and preparation of cargo for transit, 3) delays not only to the destination, but also during transport, 4) human failure, 5) careless handling, 6) Acts of God. However as far as value of loss and damage is concerned, it is the refrigerating equipment breakdown or malfunction that resulted in more than half of the claims. Practical Implications: The research findings and proposed recommendations can be used by risk management professionals, as understanding factors responsible for cargo loss and damage is a prerequisite for effective risk management throughout the entire transport chain. Originality/Value: Given the scarcity of information on the reasons for the loss and damage of pharmaceutical cargoes, each study in this field can be considered valuable.

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