Under the contract, K + N will facilitate the transportation one of AstraZeneca's statins, as well as an oncology drug and an anaesthetic, among other medicines, and some active pharmaceutical ingredients (APIs), from production sites in the UK, Sweden, France, Italy and Germany, to destinations in the Middle East, Japan, Africa and the USA. The pharmaceutical products it has been charged with are in both emulsion and solid form and must be maintained within a stipulated temperature range, said K + N. The firm indicated it will continue using the current methods of cold chain delivery, but it has also developed "robust, cutting-edge cold chain packaging solutions that will deliver product integrity and compliance in line with the MHRA's [European medicines regulator] good distribution practice". Robert Kayum, head of cold chain for K + N said the firm will begin using the new packaging towards the end of the year, although declined to provide any details on the nature of the new technology at this stage. AstraZeneca said K + N "emerged as one of our preferred suppliers" after a tendering process and was eventually selected "based on the pricing offered, their company culture and the speed with which we could implement together our new way of working". DHL had been previously providing this function for AstraZeneca, as an extension of logistics services it has been carrying out for the company for many years. K + N has worked for AstraZeneca providing logistics services in the US, although its support of the company in the movement of products exiting Europe is a new development in their relationship, said Kayum. Since the beginning of the year AstraZeneca has been undertaking a cost-cutting and productivity-increasing drive, part of which included "the continued pursuit of external opportunities." In its 2006 annual report, the firm gave specific reference to a new three year "asset rationalisation programme" for its global supply chain, expected to save the company $500m (€376). "This means we will be looking at our manufacturing supply chain to drive through efficiencies," company spokesperson Chris Dalton told Outsourcing-Pharma.com in an earlier interview. "Whether we will involve third party logistics (3PL) providers in this will depend on what opportunities arise over the next three years." So far this is exactly what they have been doing. Aside from the new K + N deal, in May AstraZeneca awarded UK-based NYK Logistics a two-and-a-half-year contract for the distribution of its drugs throughout Europe, worth £6m (€8.9m). NYK said at the time that the arrangement would bring together the distribution operations of AstraZeneca's European manufacturing facilities for the first time, as until now, each plant operated independently and was responsible for its own transportation. Under the terms of the contract, NYK will use its pan-European network of road transport partners to provide AstraZeneca with the temperature-controlled distribution of almost 50,000 pallets of product per year from AstraZeneca's 10 manufacturing facilities across the UK, Belgium, France, Germany, Italy and Sweden to 30 delivery points throughout Europe. The European contract logistics market is currently flourishing, and recent research from Analytiqa revealed that spending on outsourced logistics services in the European pharma industry is likely to exceed $2bn in 2011 as more and more opportunities arise for 3PL providers.