The worldwide delivery of a COVID-19 vaccine will represent a massive air freight undertaking and one that would create serious disruption in the sector if it began during the approaching peak season, a leading forwarder has warned.
“I think we’re talking about the biggest logistics project ever here (with the vaccine) but it would be a nightmare if it kicked off in Q4 (the fourth quarter 2020), with demand for several hundred flights at very short notice, given the capacity squeeze the market is faced with at the moment and the strong end to the year we are heading towards,” Jan Kleine-Lasthues, Chief Operating Officer Airfreight, at Hellmann Worldwide Logistics, told Lloyd’s Loading List in an interview.
“We would very likely have a situation where states would hoover up all of the available air capacity in seeking to obtain supplies of the vaccine as soon as possible, with the price being no object. There would also be the prospect of space on aircraft carrying the vaccine not being fully utilized as the urgent delivery timeframes would override everything else, including capacity optimization. The knock-on effect on regular air freight traffic at a critical time of the year would be significant, sending rates skywards.
“But personally, I don’t see it happening in Q4. I think the first quarter of next year is a more plausible date for the launch of the delivery of the vaccine around the world, which would give logistics services providers more room for maneuver to handle an operation that is set to keep them busy throughout 2021.”
Earlier this month, a DHL study highlighted that the global delivery of 10 billion doses of a COVID-19 vaccine will require “scaled-up” medical supply chains, with 15,000 flights needed to ensure worldwide distribution over the next two years.
“15,000 flights estimated has captured the attention, but it’s debatable whether as many as this would be required, as around one half of the distribution of the vaccine will be probably carried out, end-to-end, by truck,” noted Kleine-Lasthues. “For example, one of the large US pharma companies has a production plant in Switzerland which could serve the European market and one in the US covering North America. Both facilities could supply markets by road on a continental scale.”
Pressure on airports
Kleine-Lasthues underlined that the COVID-19 vaccine delivery will not only place significant demands on air freight but also exert pressure on airports to up their game to provide enough capacity and active cooling facilities to handle an ultra-sensitive product like a vaccine.
“Capacity requirements will be at unprecedented levels and the whole of the ‘cold’ supply chain must be ready to respond,” he added. “Preparations to handle the vaccine are very high on Hellmann’s current agenda and we are actively working on packaging and storage solutions with our pharma customers.
“With our device ‘Smart Visibility’, we have a tracking system in place which does not only allow us to determine the precise location of goods, but also to constantly monitor temperature and shocks. This is extremely helpful when it comes to transporting hypersensitive goods such as a vaccine.”
Turning to the approaching peak season, Kleine-Lasthues said September has been affected by corona-related delays of 2-4 weeks in the launch of some major high-tech products which represent several hundreds of flights per month.
Strong peak expected
“But everybody is expecting a very strong October, November, and early-December in the FMCG segment, including fashion,” he noted. “We were able to secure some capacity for our clients. In general, we have observed a run on full charter flights for the October-November period which saw prices going up to US$100,000-200,000 (per flight) in the space of a few days.
“And the feedback we were getting from the airlines as they were starting to get sold out. Certainly, if you haven’t secured capacity out of Asia by now, it’s probably too late.
“Into Asia, even in the peak season, it’s a different matter. Volumes ex-Asia are bigger than on the eastbound leg and with so many widebody freighters operating into Europe and the USA now, there is capacity available on the way back.
“The rates out of the Middle East, Southeast Asia and China remain volatile; but out of Europe and the US, we have seen more stability over the past couple of months.
“As we enter the peak season, there are some ex-Asia rates which remain several hundred percent above pre-COVID levels, whereas into Asia the difference is more moderate.”