After a difficult year of deaths and lockdowns, hope is finally on the horizon as the first COVID-19 vaccines appear on the market. The very first doses of the COVID-19 vaccine have already been administered, but full distribution of the vaccine to the global population—which will represent the largest vaccine procurement and supply operation in history—is yet to begin in earnest.
This operation will greatly impact every aspect of the global supply chain. There are a number of expected vaccine logistics shortages from COVID-19, from shipping container availability to cold chain supplies. And that’s not counting the many COVID-19-related challenges the supply chain is already facing, such as route disruptions and skyrocketing cargo rates.
This article will discuss the impact of the global COVID-19 vaccine distribution on supply chain logistics, including anticipated COVID-19 vaccine logistics, unique distribution challenges of COVID-19 vaccines, development of the COVID-19 supply chain, and how the vaccine could impact pharmaceutical supply chain logistics.
Anticipating COVID-19 vaccine logistics
The COVID-19 vaccine distribution effort is not yet in full swing, but it’s possible to anticipate how the logistics of the effort will work. Both national and global agencies have discussed putting into place coordinated distribution initiatives on an unprecedented scale, which will require the cooperation of supply chain agents and logistics providers.
The vaccine supply chain before COVID-19
Pre-COVID-19, the vaccine supply chain was an end-to-end system that was meant to ensure effective vaccine storage and handling, as well as strict temperature control in the cold chain. It has always been essential for the vaccine supply chain to run smoothly to ensure uninterrupted vaccine delivery to populations in need.
However, even before COVID-19, the World Health Organization (WHO) reported that national supply chains were struggling to manage the volume of new vaccines and to take advantage of improved vaccine supply chain technology like updated cold chain materials.
Necessary changes to the vaccine supply chain due to the COVID-19 vaccine
Moving forward, the vaccine supply chain cannot afford to get bogged down in supply chain issues like inadequate storage, transportation, and personnel capacity. This creates bottlenecks, and in the past has led to spoilage of many vaccines. A global coordination effort will be needed to optimize the supply chain for this crucial operation. Possible steps include the following:
- Standardization of all COVID-19 vaccine packaging to ensure proper fit within containers
- Coordination of vaccine deliveries based on the two necessary doses of the COVID-19 vaccine
- Maintenance of the COVID-19 accessory supply chain for supplies such as needles and alcohol swabs
- Open communication across all agents within the supply chain
How the COVAX initiative will affect the logistics of the COVID-19 vaccine
COVAX is the vaccines pillar of the Access to COVID-19 Tools (ACT) Accelerator, launched by the WHO, the European Commission, and France in April 2020. It is leading efforts to procure vaccines and distribute them to ninety-two lower-income countries, while also supporting procurement for more than ninety-seven upper-middle-income and high-income nations.
According to UNICEF, the United Nations agency responsible for providing humanitarian and developmental aid to children worldwide, these represent more than four-fifths of the world’s population. UNICEF, a COVAX member, is responsible for the transportation and supply chain piece of the COVID-19 vaccine distribution.
COVAX will allocate vaccine doses to participating countries, proportional to their total population size. To distribute the vaccines, UNICEF is working with manufacturers and partners in procurement, freight, logistics, and storage. UNICEF is well suited to handling the distribution, because it is the single largest buyer of vaccines in the world and already has longstanding expertise in procurement and logistics.
How large a project is the COVID-19 vaccination effort expected to become?
The COVID-19 vaccination effort will be the largest vaccine procurement and supply operation in history. The World Economic Forum (WEF) expects approximately six to seven billion doses of COVID-19 vaccines to be consumed in 2021. This accounts for nearly the entire global population of 7.8 billion people.
Europe, North America, and Asia are expected to consume the largest shares of the 2021 doses. The WEF projects that the largest inflows of vaccine doses will be to Asia, excluding China and India (820 million doses), and Africa (450 million doses).
How the COVID-19 vaccination effort will affect other health care logistics
The health care and pharmaceutical industries will experience logistical challenges as a result of the COVID-19 vaccination effort, because of the vaccine effort itself and also because of disruptions to the medical and pharmaceutical supply chain due to COVID-19 and vaccine distribution.
Air shipments to Africa and parts of Asia-Pacific will lead to an imbalance in normal air freight trade and diversion of aircraft to routes leading to hubs in those regions, which may impact other supply chains, including medical and pharmaceutical supply chains.
In addition, shipping and freight prices are high and volatile due to the impact of COVID-19 on the entire shipping industry: global air cargo capacity remains about 20 percent below prepandemic levels, mainly due to reduction in passenger flights and resulting shortage of widebody belly capacity, which is down nearly 70 percent. Also putting pressure on rates is the lack of natural backhaul cargo from Africa and other southern hemisphere destinations.
To improve the COVID-19 vaccine supply chain, the pharmaceutical industry could consider combining a distributed manufacturing approach with multiple manufacturing sites in different regions in order to minimize distribution needs. Shipment in less-than-container loads for transport by ocean could be a possibility. In addition, the pharmaceutical industry may also be able to save time by shipping the vaccines in bulk.
Unique distribution challenges of COVID-19 vaccines
Vaccines are among the most difficult cargo to transport due to their very particular temperature requirements, so we can expect significant challenges in shipping the COVID-19 vaccine. In addition, associated shipping materials may become in short supply, while the unprecedented scale of the vaccine distribution effort will strain the entire global supply chain. Logistics providers will need to strategize carefully to effectively transport vaccines to their destinations.
The role of cold chain logistics in the distribution of the COVID-19 vaccine
“Cold chain logistics” refers to the process of safely transporting temperature-sensitive products in the supply chain. Vaccines are among these cold chain products: according to Supply Chain Dive, they must be shipped at a temperature between -50 degrees and -15 degrees Celsius if frozen, or 2 to 8 degrees Celsius otherwise. Temperature stabilization is tricky in shipping, and unfortunately, a quarter of all vaccines are degraded by the time they reach their destination.
Eighty-three percent of COVID-19 doses will be normal cold chain products requiring storage at 2 to 8 degrees Celsius; roughly 17 percent will be ultra cold chain products requiring storage at lower temperatures.
Temperature-sensitive shipping often relies on dry ice. One significant challenge in the COVID-19 vaccine supply chain is that different types of passenger aircraft are limited in the amount of dry ice they can carry. The range is 180 to 950 kilograms, with most aircraft types limited to the lower end of the range.
Materials in demand for the successful distribution of the COVID-19 vaccine
As discussed above, temperature-controlled shipping materials are essential in the vaccine supply chain and thus will be highly in demand.
There are two options when it comes to cold chain shipping: active containers and passive containers. An active container has active temperature control, while a passive container is an insulated container with no active temperature control. Cooling packaging must be used in passive containers, and cooling materials such as dry ice may soon be in short supply due to high demand.
In addition, requirements for related cargo could be significant: one pallet of vaccine doses requires one truckload of syringes and related equipment. Shipping space will be even more in demand because of this additional cargo.
How will the sheer size of the COVID-19 vaccination effort impact logistics?
The COVID-19 vaccination effort will make the entire logistics landscape look very different than usual. COVID-19 vaccines will represent five times the air freight volumes for all vaccines in 2019, and the vaccines will represent 12 percent of the pharmaceutical industry’s total air freight volume in 2019. Industry groups estimate that global COVID-19 vaccine distribution will require the equivalent air freight capacity of 928 Boeing 747-400 aircraft.
To prepare for the coming changes in the logistics industry, Agility’s COVID-19 Response Team & Charter Desk has done detailed analysis of carriers for capacity, frequency, scheduling, routing, cost, flow type, dry ice constraints, lead time requirements, cancellation rules, and types of agreements (HB, SB, ad hoc/spot). We are also evaluating carriers based on their performance records, flexibility, and risk, as well as the likelihood they will increase rates.
Since major shipping hubs on the ground will certainly feel the strain in the supply chain as well, we have evaluated their ground handling capabilities, airport requirements and constraints, and nearby cold storage availability and options.
Agility has expanded its network of life sciences centers to thirty-two locations worldwide. In addition, we are leveraging our parent company’s global footprint and logistics assets, which include aviation and ground handling expertise and facilities, truck fleets, and workforce, as well as international-standard logistics parks in Asia-Pacific, the Middle East, and Africa.
Developing the COVID-19 vaccine supply chain
Agencies involved with vaccine distribution are aware that developing the vaccine was just half the battle; the other half is effective distribution, a massive challenge in itself. Task forces have been appointed for just this purpose, and these groups will need to address safety precautions in the vaccine supply chain, as well as ways to streamline the process.
The role of the WHO’s COVID-19 Supply Chain Task Force
The WHO’s COVID-19 Supply Chain Task Force is addressing shortages in essential supplies, including personal protective equipment, diagnostics, and medical equipment. It is taking a three-pronged approach to this challenge in the following ways:
- Establishing a global strategy to provide access to essential supplies
- Bringing together public and private partners to help meet those needs
- Ensuring the distribution of essential supplies and cargo
The WHO is pursuing these goals through the following methods:
- Consolidating demand to avoid overlap and demand amplification
- Coordination of procurement to aggregate volumes and get better access and pricing
- Forming allocation agreements based on need, country capacity, and vulnerability levels
- Forming a singular distribution network that allows movement of deliveries through established hubs around the world and to designated ports of entry worldwide
Safety precautions in the coronavirus vaccine supply chain
The biggest vulnerability in COVID-19 vaccine distribution is the possibility of temperature excursions. Vaccine manufacturers must use only temperature-regulated shippers and containers that are certified to meet the international regulations for temperature-controlled products.
At the same time, manufacturers will need to prepare for risks that arise during the shipping process. Companies will need to have a plan for rescuing vaccine shipments that are delayed in delivery, so that temperature excursions do not occur. Companies will also need to plan for a certain inevitable level of vaccine spoilage and damage incurred in the shipping process.
How the coronavirus vaccine supply chain can be streamlined
As a logistics expert, Agility recommends the following strategies for helping the COVID-19 vaccine shipping process go more smoothly:
- Identify and evaluate key lane pairs based on value and importance
- Engage in forward planning, forecasting, and building of stock levels
- Examine possible changes to shipping solutions to reduce volume and weight
- Increase cold chain packaging availability and develop backup plans with key suppliers
- Tighten alliances with strategic partners
How the COVID-19 vaccine could change pharma supply chain logistics
The COVID-19 vaccine distribution will have an unparalleled impact on pharmaceutical supply chain logistics. The vaccine will strain the supply chain more than perhaps any other pharmaceutical product in history. Due to the COVID-19 vaccine, the pharmaceutical supply chain will face certain geopolitical issues and a changed market outlook, at least in the near future.
How will the COVID-19 vaccine rollout change supply chain logistics for pharmaceutical companies and products?
Agility has been talking to various industry stakeholders, including clients, airlines, ground handlers, and packaging providers about the market outlook for pharma supply chain logistics. In short, no one yet has a clear picture.
These stakeholders are looking closely at the following factors:
- Timeline/duration and shipping cycles
- Vaccine availability/expected shipping volumes
- Vaccine transport requirements, including variation in temperature requirements for different vaccines
- Beyond temperature control requirements, the product has a relatively low monetary value, yet a high criminal value. The aspect of product safety cannot be neglected.
- The air market situation and the COVID-19 pandemic impact on equipment and capacity
Agility foresees challenges in equipment and supplies of containers, dry ice shippers, and dry ice itself. We also anticipate imbalances and return logistics challenges for containers. On the road freight side, capacity and drivers will become an issue.
What can the pharmaceutical industry learn from the global distribution of COVID-19 vaccines?
In addition to being a challenge, the COVID-19 vaccine distribution effort can also represent an opportunity for the pharmaceutical supply chain, especially in terms of future vaccine distribution. Never has there been such an impetus for the pharma supply chain to optimize and coordinate its operations on a global scale.
After the COVID-19 pandemic, the pharma supply chain will be able to take advantage of optimized operations that were developed out of necessity for COVID-19 vaccine distribution. It can continue to coordinate pharmaceutical packaging to ensure it fits optimally within containers. It can also utilize strategies developed for COVID-19 vaccine distribution to push more pharmaceuticals to hard-to-reach areas. Finally, it can keep the lines of communication open to ensure better transparency across the supply chain, which will help keep products at the necessary temperatures, leading to less vaccine wastage overall.
How could the pharma industry prepare for future disruptions to its supply chain?
In the future, pharmaceutical manufacturers can make their supply chains more resilient by diversifying their sources and suppliers. In many cases, this will mean lessening dependence on China, which accounts for 28 percent of manufacturing worldwide. Regional supply chains will emerge, reducing the dependency on a limited number of suppliers located in one geography.
The other major way to “future-proof” pharmaceutical supply chains is to rely more on digital capabilities such as predictive modelling, big data, and partner integration. The increased information and flexibility afforded by these technologies can make all the difference in a crisis situation.
The supply chain’s role in conquering COVID-19
The COVID-19 disease and vaccine will continue to impact the entire global supply chain for the foreseeable future. The supply chain is crucial to distributing the vaccine and finally seeing an end to the pandemic. For the sake of human health and safety worldwide, it’s essential for every party involved to understand the logistics issues inherent in COVID-19 vaccine distribution and to strategize properly for an organized, effective approach.
Agility is committed to helping agents at all points of the supply chain navigate the unique logistics challenges presented by COVID-19. Receive the latest COVID-19 global shipping updates here.