How to distribute a coronavirus vaccine will severely test the already stretched global air cargo supply chain. Photo credit: Shutterstock.com.
A severe lack of air cargo capacity will greatly hamper efforts to rapidly distribute a vaccine against coronavirus disease 2019 (COVID-19) once the medicine becomes available, airline executives and forwarders are warning.
Frantic efforts are being made to develop a vaccine, with medical trials identifying four front runners in the United Kingdom, United States, Germany, and China. But once a vaccine is ready for public use — possibly as early as the end of this year — the logistics of transporting huge volumes of the highly temperature-sensitive medicines around the world in a severely capacity-constrained environment will present a daunting challenge for the air freight supply chain.
“We are not prepared for when this vaccine will come to market and need to be distributed,” Neel Jones Shah, executive vice president and global head of air freight for online forwarder Flexport, told an air cargo webinar this week run by the STAT Times and Messe Munich.
The scale of the distribution effort required can be seen in rough estimates by the industry that vaccines for 1 billion people would fill 1,000 Boeing 777 freighters. For perspective, fewer than 200 B777F aircraft have been produced by Boeing since the first freighter version entered service in 2009.
A surge in demand from vaccine shippers will be accompanied by rising freight rates that have only recently fallen off record highs. Rates soared following the grounding of almost 90 percent of the global passenger fleet when travel bans were imposed around the world in March to try to limit the spread of the coronavirus. The grounded planes removed half of the available air cargo capacity from the market.
While rates have declined since mid-May highs, the Shanghai-North America rate is currently 55 percent higher year over year at $4.65/kg, while the Shanghai-North Europe rate is 40 percent above the same week last year at $3.40/kg, according to the TAC Index.
Product launches portend peak season
Michael Steen, chief commercial officer of charter and leasing at Atlas Air Worldwide, said most of the passenger capacity remains grounded. He predicted that would lead to a traditional peak season this year, with several smartphone and electronics product launches scheduled for the fourth quarter.
“In the near-term, we will have to get the vaccines to the market,” Steen told the webinar. “We will see spikes driven by commercial demand, and the vaccines would be layered on top of that. The good news is that we, as an industry, and manufacturers and governments, have the chance now to gain an understanding of how to secure the very scarce capacity to transport those vaccines to support the economies and make people healthy again.”
But how the distribution would play out required industry-wide proactive planning, with many questions still unanswered, he said.
“When will the vaccines be produced, where will they be produced, how will they be distributed? If the vaccines have to be refrigerated, how many refrigerated containers are available to transport the freight and where will it go to? We are not having these discussions,” Steen said.
Another element that increases the distribution difficulty of vaccines is that they are extremely sensitive to temperature fluctuations and can be ineffective or even dangerous if not transported or stored correctly.
According to the US Center for Disease Control and Prevention (CDC), vaccines require a storage temperature of between 2 to 4 degrees Celsius (35.6-39.2F) that must be maintained throughout the transport chain. The complexity of the cold chain requires handlers of pharmaceuticals to hold International Air Transport Association (IATA) CEIV Pharma Certification, a globally recognized pharmaceutical product handling accreditation.
“Vaccine supply chains are exponentially more complex than personal protective equipment [PPE] supply chains, and need to move very quickly and in a very coordinated effort,” Shah said. “It can take five to seven days for air cargo to reach its destination, and vaccines can’t deal with that sort of a supply chain.”
Industry data from IATA show the average pick-up to delivery time for traditional air cargo is 6.5 days, a level that has improved only marginally over the past few years. Although actual flights are measured in hours, delays are created in the ground handling process both at origin and destination.
Struggle with a surge
Emir Pineda, manager of aviation trade and logistics at Miami International Airport, told the STAT Times webinar that 60 percent of its cargo was perishable, but even though the airport was a pharmaceutical handling hub, he expressed concern at its readiness to handle a sudden surge as vaccines become available.
“I don’t think we are ready because we don’t know what to expect,” he said. “If all of a sudden, 30 charter flights arrive with vaccines to be distributed across the Americas, we are going to have a challenge. It will be difficult.”
Large-scale global transportation of vaccines will remain necessary even as pharmaceutical companies produce the medicine in plants around the world, with researchers warning that several doses may be required before immunity is reached. That will keep manufacturing capacity under pressure as countries build up stock and will likely require the importing of vaccines to make up any shortfall.
Steven Polmans, chairman of The International Air Cargo Association (TIACA), said the organization was maintaining regular contact with vaccine producers to discuss distribution options.
“The pharma companies are looking at other ways to transport the vaccine, such as in bulk, because if it is transported in the traditional air cargo way, there will not be enough capacity,” he told the webinar.
Despite the temperature-sensitive nature of vaccines, transporting by ocean was a viable alternative, said Helge Neumann-Lezius, the Europe, Middle East, and Africa vice president of product and capacity management for DHL Global Forwarding. He told JOC.com there was a trend of pharmaceutical companies shifting their cargo from airlines and consolidating it into less-than-container-load (LCL) for transport by ocean.
“We already ship insulin in full container reefers to several destinations, so sending sensitive pharmaceuticals by ocean is absolutely a possibility,” he said. “On the trans-Atlantic there are some connections that have a port-to-port transit time of seven days, and that is an opportunity to consolidate some of the vaccines.”
Initially, however, the rapid deployment of vaccines to key hubs around the world will require air transport, and Shah highlighted the critical need to find a workable solution. “The vaccine is the catalyst that will allow us to get back our lives and get the economies on track,” he said.
Contact Greg Knowler at [email protected] and follow him on Twitter: @greg_knowler.
