Covid-19 vaccine rollout calls for Supply-Chain collaboration, Logistics Chief says
Capacity-strained shipping networks should be able to manage the rush to distribute Covid-19 vaccines if governments, logistics providers and pharmaceutical companies coordinate their efforts, the head of a top global logistics operator says.
“It will be a wave, but it’s nothing where we will say, ‘It’s impossible,’” said Detlef Trefzger, chief executive of Switzerland-based Kuehne + Nagel International AG. “The partners have to collaborate. If you don’t…you might run into a capacity shortage or equipment shortage.”
Kuehne + Nagel has signed warehousing and distribution contracts with several drugmakers working on vaccines. The company, which is the world’s second-largest global logistics provider by 2019 revenue, according to research firm Armstrong & Associates Inc., is also working with manufacturers of vials and syringes to build inventories ahead of the expected surge.
The planning is part of the broad array of increasingly urgent preparations that are taking place around the world as pharmaceutical companies advance development of potential vaccines while transportation and logistics providers set up high-stakes supply chains to get the doses to anxious populations.
Airlines have been ramping up airfreight capabilities, bringing on more freighters and converting passenger aircraft for cargo use after plunging travel demand sharply curtailed the amount of available space in the bellies of planes. Mr. Trefzger said freighter and “freighter-like” air transport capacity might have increased by between 25% and 50% over the last six months as a result.
The International Air Transport Association, a trade group, has estimated it would take the equivalent of 8,000 fully laden Boeing Co. 747 flights to deliver a dose to everyone around the world, based on dimensions for vials and packaging provided by pharma companies.
Mr. Trefzger pegs the capacity demand considerably lower, saying that based on the company’s projected estimate of the number of doses and the packaging, “less than 1,000 747 freighters” would be needed. If each freighter loaded 100 tons of shots, that would come to between 650 and 700 planes, he said, “less than 1% of the annual global air cargo demand,” and “about 10% of the annualized pharma demand for airfreight.”
Strict temperature controls needed to ensure the vaccines work will be a challenge across transportation channels. Logistics operators and pharmaceutical companies are hustling to expand refrigeration capabilities, assembling “freezer farms” near global air hubs. Pfizer Inc. has designed a suitcase-sized reusable container that can keep doses cold for up to 10 days.
Kuehne + Nagel is already moving airfreight shipments of vaccines that are in Phase 2 and Phase 3 trials, Mr. Trefzger said, using temperature-controlled air cargo containers the size of walk-in freezers that can be loaded directly on freighters, as well as packaged pallets and smaller boxes. The company has coolers at all 230-plus sites in its pharma and health network, which includes warehouses and smaller cooling facilities at airports.
Dry ice can also be used to control temperatures during layovers for long-haul flights. “So demand for dry ice, for sure, will spike next year,” he said.
Kuehne + Nagel typically uses a dedicated network of carriers for pharmaceutical distribution to warehouses and distribution sites. In this case, the last mile would likely be handled by the military or government-selected distributors, the company said.