Business Trends in Shipping Logistics for Medical Equipment

Challenges exist when shipping equipment such as x-ray machines, computed tomography scanners, magnetic resonance imaging (MRI) devices, analytical devices, and medical dispensing machines. Machinery and hospital

equipment is often large, heavy, sensitive, and extremely valuable. Regardless of the method of transportation, there is the risk of shock, vibration, rolling, pitching, and yawing of the transport vessels, along with bumping and knocking up against docks. It is possible to mitigate jostling with the use of floating foam bases and internal foam bumpers, but all too often there must be a plan to recalibrate the device after delivery. Proper packaging (interior and exterior) and crating techniques must be employed if the equipment is expected to survive the rigors of transportation.

Equipment destined for foreign countries is usually sent over water and must be protected against the hazards of corrosion, oxidization, dirt, dust, and other contaminates that can affect instrumentation through the proper use of desiccants, vapor barrier bags, and vapor corrosion inhibitors. Damage is time consuming and costly. One must not only consider the cost of the equipment but the exorbitant costs associated with having the equipment out of service for a considerable amount of time. Properly engineered packaging and crating designs are crucial.

Some medical equipment is shipped to the end customer on a trial basis for testing and assessment purposes and if rejected, it must be returned (thus creating a need for a second expensive transit). Reusable crates designed with link locks and ramps are a little more expensive but alleviate the need for constructing a second crate. When the equipment is destined for a doctor’s office or laboratory that does not have necessary dock facilities or equipment to facilitate the delivery or uncrate the shipment, provisions must be made. The use of wooden crates with link locks and ramps provide for easy ingress and egress of the goods.

The good news is that solutions to all of these rigors of shipment exist. Associating with a professional logistics firm that is knowledgeable in packaging, crating, shipping, insuring, and logistics can help solve these transportation problems.  

Asset Relocation and Reverse Logistics

In today’s economy, asset relocation has become a financial strategy to survive the downturn; people consider their assets more carefully than ever. As medical equipment consumers build plans to sell or eliminate equipment, they can use current tax strategies or advantages to purchase new equipment.

Companies are bombarded daily with multiple logistical challenges as they respond to industry strategies such as automatic replenishment, speed-to-market, and customer service. Asset relocation, often referred to as reverse logistics, has taken on a new level of importance in today’s marketplace. It plays an integral role in corporate competitiveness and profitability. From the creation of an asset relocation plan to management, packaging, and transportation of products through the supply chain, there are many trends, best-in-class strategies, and challenges to consider when managing assets in reverse.

Asset relocation is more than opening return shipments to be restocked to inventory. It can be moving 1,500 servers to a new data site or sending a recycled MRI machine to South America. A solid asset relocation program encompasses a wide range of product recovery options in addition to return or exchange. Other programs could be initiated for repairs, refurbishment, remarketing, and the final disposition of products.

Accounting for nearly 1% of the U.S. gross national product, asset relocation is an essential component when it comes to being competitive. It crosses over many industry sectors and is an emerging area of focus for businesses. This process is a recognized source for additional revenues, marketing positioning, and meeting market product demands.

A growing number of companies are seeking a total solution when it comes to their asset relocation programs. Their logistical needs often include high-value, time-critical, and multiple pick-up and delivery requirements around the world. These needs demand a solution that includes pick-up, packing, crating, shipping, real-time tracking, insuring, delivery, and unpacking.

When implementing an asset relocation program, choosing the right partner is essential to a company’s success. The process is everything. Every link must operate quickly, efficiently, and effectively. A solution is not complete unless it is end-to-end and has contingencies for any problems that may arise.

Companies with internal logistics teams can also benefit from the use of an outside partner. Project management should oversee both the internal and external logistics team as one force working on a common solution. The solution should be built on good policy, be consistent, and have well-defined features. A solid program is a vital part of a company’s growth strategy, because it generates additional revenues by extending lifecycles, supports the market demands by putting assets in the right places, and retains customer loyalties by being timely.

When asking for a quote for an outside logistics provider, make sure that it includes everything that the company needs for the asset relocation project, including packaging specs, transit time requirements, insurance needs, delivery, and unpacking. It is very common for a company’s assets to be decommissioned for a period of time while waiting for redeployment. If this is the case, storage is required and those costs should be included in the allocation plan or request for quotation.

Timeliness means money saved and customer satisfaction earned. The company and the logistics provider should have a clear understanding of lead times to make sure that products get to their destination on time. It is often a challenge and if a breakdown occurs, it could cost thousands or even millions of dollars. Imagine the money lost if a server is not in place to handle credit card transactions during the holiday season. Or, if a computer contract expires at the end of the month and there is not enough time to get the equipment back to the leasing company. The company pays for another month to lease it.

One of the greatest challenges in relocation logistics is the packaging process. Most relocation assets do not have the original containers they came in and might not be suitable for use anyway. The proper use of skids and pallets, as well as boxes or crates of the appropriate size and materials for their contents, will minimize damage. Containers should be properly cushioned, braced for shock and vibration mitigation, and adequately sealed and filled when possible, with the weight evenly distributed.

Containers and inner pack material going out of the country should be used in conjunction with moisture-resistant material such as desiccant and barrier bags. Use a logistics company that is certified in International Standards for Phytosanitary Measures No. 15 (ISPM-15), which requires that all solid wood-packing material for international shipments be heat treated and stamped with an official mark. Straps, seals, and shrink wrapping help minimize pilferage. Some insurance companies will deny a claim if there is inadequate packaging or improper packing.

It’s important to understand your service provider’s certificate of insurance and coverage limits. Learn what damages are covered, how a complete loss is handled, and what the coverage is for bodily injury. Some insurance carriers only pay so much per freight pound regardless of its value. Policies can contain numerous exclusions, so it is better to put them in the declaration to eliminate confusion. A company may have some transit coverage included in their general liability policy, so check on your company’s current insurance coverage before buying more from your service provider.

Asset relocation is a dynamic moving process. By learning a few strategies and overcoming some challenges, asset relocation offers companies a new opportunity to minimize inventory risk, reduce cost, extend product life cycles, and improve customer service by moving assets forward.

Today’s Technology Trends

Today, businesses are using global logistics to relocate business equipment, move assets around the world, and transport specialty freight. These companies continually look for more information regarding their shipments and want it instantaneously. Advanced logistics and shipping providers are taking advantage of Internet technology-based platforms. These platforms give clients real-time status reports throughout a shipment’s lifecycle, providing access to instant information. The workflow milestones that are monitored typically include quote, booking, pick-up, pack complete, routed, in transit, delivery, and invoicing.

Benefits for the client include shipment visibility, time savings, seamless transactions, and peace of mind. The speed of information to the consumer has vastly increased, saving them time that would have otherwise been spent researching and calling for shipment updates. Instantaneous tracking information allows clients to control their inventory and costs associated with their assets.

The industry is seeing increasing ability through various smartphone applications that enable real-time data collection for a myriad of customer-driven requests. Condition reports, photos, real-time upload of critical pickup and delivery information, transport data, and site survey data are some of the applications. The barriers to this integration have been a common platform and technology. With the advent of the smartphone, the capabilities now exist at a relatively minor expense.

These technologies improve efficiencies and help save on transportation costs like fuel and labor while also reducing the carbon footprint through more efficient routing of pickups and deliveries. The use of alternate vehicles, such as cargo vans or Sprinter vans instead of tractor-trailer trucks further reduces gas consumption.

Environmental Awareness in Packaging Methods

According to Bureau of Transportation statistics, 43 million tons of goods, valued at about $29 billion, are moved nearly 12 billion ton-miles domestically on an average day. And as every shipment is moved, tracked, delivered, and confirmed at its final destination, there is far too much packing and shipping material used to ensure that the contents of each delivery arrive safely. While there’s no doubt that these materials are necessary, companies want logistics vendors that use cutting-edge technology to maximize efficiencies throughout the distribution channel and create green supply chains.

As fuel prices rise, it becomes more essential to analyze shipping methods and logistical transportation tactics. Logistical planning can improve environmental effect, customer relations, and a company’s bottom line. Today almost all businesses, including medical device suppliers, are taking a serious look at environmental conservation and its effect on the environment through corporate policies and buying behavior.

The packaging and transportation industry historically has not always been the greenest industry, but there is opportunity for radical improvement. Reusable packaging and crating materials can be used, and new crates can be engineered for reuse for multiple transits. Crating companies can repair packaging rather than tossing damaged materials into landfills. This action extends the lifecycle of a crate and reduces the demand for new lumber.

Crating companies are recycling wood, corrugated cardboard, and other packaging materials to minimize materials that might otherwise be discarded. For example, Craters & Freighters is involved in research and development of eco-friendly packaging and shipping methods. A growing number of the company’s customers request such packaging and shipping, especially manufacturers in the technology field.

Reusable Crates. Some crating companies offer reusable crates that are engineered specifically to withstand the rigors of multiple trips. Specs for such crates include those with hinges and link locks that allow multiple entries into the crate without tearing it apart with a crowbar. For example, tradeshow booth crates can be built to be more rigid and contain an interior structural design that is specific to the products they will contain. The process makes the crates more expensive at the outset but it ultimately saves the cost of having to buy multiple crates. In addition, crates can be refurbished and repaired at little or no cost to extend the life of the crate.

Another trend involves the shipping of computer server racks to data centers. Many companies shipping this type of content are using racks that can facilitate multiple visits (up to four transits a day instead of one), which saves money and resources.

Biodegradable Materials. Some of the biggest changes to packing materials include the replacement of petroleum-based products such as polyethylene, Styrofoam, and foam-in-place packaging that are extremely slow to degrade with materials that are more biodegradable. Packing peanuts made from potato starch is a potential replacement for Styrofoam packing peanuts. Inner-packaging materials made from recycled corrugated or crumpled Kraft paper are other biodegradable options to bubble wrap or expanded polystyrene foam.

Recycling of Wood and Other Packing Material. Not only are Kraft paper, crimped paper, recycled shredded cardboard, and plastic pallets more biodegradable, they can also be recycled a number of times depending on their usage. If polyethylene and polyurethane products are necessary for cushioning, they may be obtained from a recycling company. Air bags can also be used to replace petroleum-based packaging materials if the goods are not weight sensitive.

Corru-fill is another example of a recycled packaging material. It’s made from recycled corrugated boxes. One of the benefits to using Corru-fill is that it doesn’t settle to the bottom of the shipping container like traditional foam peanuts.  Corru-fill stays put offering protection of the piece during shipping. The drawback to using Corru-fill is that it is heavier and about 50% more expensive than foam peanuts.

Well-Engineered Container. The need for packaging materials can be reduced by the efficiencies of crate and container designs. Containers need to be designed so that as much product can be shipped within the container as possible without compromising the structure and jeopardizing the protection of the goods. If this type of consolidated packing is done correctly, it eliminates the need for more wood and excessive cushioning materials. Depending on the nature of the goods being placed in a container, experts can consider a blocking and bracing technique to secure the goods inside the container. Employing this method requires that any sensitive components are cushioned and braced in the crate with cushioned wood blocks and braces. Various medical equipment requires specialized packaging and handling including medical lasers, MRI machines, dialysis machines, and blood analyzers, to name a few.

Eco-Friendly Shipping. Ground and ocean cargo is less expensive than air cargo. Bulk shipping is cheaper than individual parcel delivery. By strategically bulk-shipping large-quantity inventories to warehouse facilities close to the end-buyer, companies can significantly reduce many overhead expenses. Eliminating a large centralized warehousing facility and outsourcing many of the warehouse functions can also save the expenses such as rent, staffing, insurance, and utilities as well as drastically reduce the carbon footprint.

Intermodal transportation solutions can drastically reduce the carbon footprint currently produced by long-haul trucking. A train car can transport a ton of freight more than 400 miles on one gallon of gas and is more efficient than a hybrid car. Consideration should be given to transportation companies that use alternative fuels such as biodiesels, flex fuels, and ethanol. 

Conclusion

Although companies that ship medical equipment and supplies have many factors to consider, today they have many options that did not exist a few years ago. Industry leaders must make it a priority to look at new, green products and services to keep up with the environmental expectations of customers. Companies must continuously seek efficiencies regarding waste management, recycling, and energy consumption. The benefits include cost savings, process efficiency, and doing what we can to help protect the environment. 

Diane Gibson is CEO and founder of Craters & Freighters (Golden, CO).