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The Logistics Challenges of COVID-19 Vaccine Distribution Prove the Need for Data Integrity

covid vaccine

The Logistics Challenges of COVID-19 Vaccine Distribution Prove the Need for Data Integrity

Logistics companies are often described as being in the business of moving goods from points of origin to end-use destinations, and that is, of course, true — but they are also in the business of data collection, processing, and analysis. That’s because efficient transport and delivery require data from sources such as real-time navigation systems, enterprise resource planning systems, transportation management solutions, analytics solutions, and more, as well as from sensors that track internal and external environment factors: location, the temperature of shipping containers, vibration, speed, sudden stops and starts, and so on.

But just having this data isn’t enough. To successfully navigate the intricacies of the global supply chain, logistics companies must also ensure data integrity — and the challenges of COVID-19 vaccine distribution are proving just how critical that is.

What is Data Integrity, and Why Does it Matter?

Transporting mission-critical supplies around the globe is innately challenging, but successful COVID-19 vaccine distribution is proving particularly tricky for a number of reasons. A high volume of vaccines must be quickly moved from a handful of pharmaceutical manufacturing facilities to tens of thousands of global locations ranging from government facilities to private pharmacies, and deliveries must be coordinated around cold-storage availability at the receiving end. Timing is critical, because the vaccines have a limited shelf life, and the stakes are sky-high. Any vaccines that don’t make it from port to end destination on time and in compliance with certain metrics, such as appropriate temperature thresholds, represent a lost battle in the ongoing war against the pandemic.

That’s why logistics companies need to ensure data integrity, which comprises:

Quality: Vaccine shipment data must be complete, unique, valid, timely, and consistent. For example, most vaccines, that must be kept frozen, can be shipped and stored between -58°F and +5°F (-50°C and -15°C), but Pfizer’s COVID-19 vaccine must be stored at -94°F (-70°C) to remain stable. Sensors must provide real-time, accurate readings of shipping container temperatures to ensure vaccines remain at the optimal temperature throughout transport, so they can be administered to people. About 25% of shipped vaccines are compromised due to poor temperature management, according to a 2019 report from the International Air Transport Association — an untenable figure for a vaccine on which global population health and economies depend.

Location intelligence: Location data, is often used, to help identify connections between people, places, or things at specific geographic places, and what exists or occurs there. The critical need for efficient last-mile delivery of vaccines, especially to rural and remote healthcare facilities, shows why location intelligence is so important. It takes more than an accurate delivery address to complete the last mile; logistics providers also need up-to-date data on weather, road conditions, road restrictions, and traffic along the route to the destination, as well as site-specific information such as loading dock location. Location data that is outdated, inaccurate, or lacking in context can make the difference between a community that receives viable vaccines, and one that doesn’t.

Enrichment: This gives context, nuance, and meaning to the logistic firms internal data by supplementing it with data from outside sources. For example, a logistics company must supplement its own routing and scheduling data with external data on cold-storage availability at end destinations. Without this context, drivers may arrive at facilities that have no room to store the vaccine shipments, and the vaccines go to waste.

Integration: All of the systems and technologies logistics organizations use to get shipments to the right place at the right time collect and provide their own data, but none of it is much good if the systems can’t talk to each other. Seamlessly integrated data provides complete situational awareness to support decision-making at each link in a supply chain. This helps companies get time-sensitive, mission-critical supplies like the COVID-19 vaccine where they need to go, exactly when they need to be there, using the most efficient path.

Data Integrity is the Key to Logistics Success

Accurate, consistent and relevant data, integrated across all platforms and enhanced by location intelligence and enrichment, help logistics companies achieve data integrity. This elevates data’s usefulness and usability, helping companies react quickly and in real-time to any issues, and make better overall business decisions.

The need for data integrity has never been more clear — and more urgent — than it is now, and lessons learned from vaccine distribution may redefine the way the logistics industry thinks about data. By achieving data integrity, logistics organizations are better equipped to get shipments to the right destination on time — and, in scenarios such as this vaccine distribution, play an integral role in saving lives and protecting global population health.

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Clarence Hempfield is the Vice President, Product Management, Location Intelligence at Precisely. Clarence has been with Precisely through the Syncsort and Pitney Bowes days and first joined Pitney Bowes in 2006. He holds degrees from the University of Pittsburgh and the University of Maryland. Clarence is based in the Washington D.C. area.

cargo

Air Cargo Trends in a Pandemic World

Previous predications in pharmaceutical transportation trends, highlighting declining air passenger numbers and air freight demand increasing, have been pandemic propelled. Coronavirus continues causing worldwide disruption, as it is anticipated its industry impact will continue throughout 2021 and beyond.

Pandemic Response – Preighters Take Off

Pre-pandemic passenger numbers were already on the downturn, however, the COVID-19 crisis significantly accelerated that trend.

The crisis capacity crunch came as passenger flights plummeted and the ensuing scramble to transport pandemic payloads saw the deployment of hundreds of passenger planes as freighters, known as preighters, take off.

Pioneering Portuguese charter operator Hi Fly led this trend and was the first to convert an A380 for freight, taking out the majority of seats to provide more cargo capacity.

Despite the sector seeing the grounding of hundreds of passenger planes, earlier than had been initially forecast, which led to a reduction in the availability of cargo space in the bellies of these passenger aircraft, we’ve seen more planes undergo conversions to freighters.

The preighters prevalence looks set to continue throughout 2021 and beyond. Although the air cargo industry faces continuing challenges, IATA predicts an anticipated 25% rise in freight tonne-kilometers this year.

Boeing projects growth in the global freighter fleet with the number of cargo aircraft in service forecast to increase more than 60% over the next two decades, resulting in 3,260 operational aircraft by 2039. (1)

However, the ongoing drastic downturn in travel means the loss of a lot of capacity in passenger aircraft and while freighter aircraft are still present and working hard, fleet growth takes time, so there will be a slower response to replacing some of the capacity lost from the passenger side of the industry.

Some of the 747s which have comparatively low hours on their airframes will undoubtedly become 747 converted freighters and will be flying as freighters just to try to backfill some of that loss in capacity from the passenger numbers.

Large Widebody Aircraft – Grounded or Retired

Before COVID-19, it was predicted airlines would start cutting flights from schedules, mothball larger aircraft, decline production options, and look to utilize smaller, more efficient aircraft in the future for environmental and economical reasons. All of those decisions have been massively accelerated.

The forecast to park some of the larger, widebody aircraft has been brought forward significantly, due to the COVID-19 crisis.

The ongoing impact of the pandemic has meant the majority of all 747 freighter aircraft have or are being retired. The A380, which Airbus had previously announced it would stop deliveries of in 2021, has also been retired across the board by numerous airlines, except Emirates.

Increasingly airlines are globally grounding their A380s in favor of more modern, smaller jets, which can fly more efficiently than their four-engine aviation counterparts.

With far fewer passengers flying in a pandemic world, the travel downturn has ramped up decisions to park planes, some permanently, further impacting the already dwindling resource of global air freight capacity.

What we will continue to see is a lot more interest in leaner aircraft, like the A220, the Canadian Bombardier aircraft Airbus produced in North America.

Sea Change in Modes of Transport

There will be ongoing developments in the sea freight sector, which has an estimated 17 million TEUs (Twenty-foot Equivalent Unit) serviceable globally, of which six million containers are routinely turning and carrying freight.

Put in perspective, at its lowest level of trading during the onset of coronavirus, there were 135,000 TEUs a month traveling from China to the US. However during peak months, when the US retail sector’s stocking up for Thanksgiving and Christmas, this increases to 900,000 TEUs a month. This equates to 8% of the global free flow of sea containers just crossing the Pacific from China to the States.

Any delays will see a huge build-up of sea containers, which lead to availability issues, and rate rises, as seen during the pandemic when China stopped producing. What we saw with the initial emergence of COVID-19, China stopped producing, so wasn’t pushing out those sea containers so there were availability problems in the rest of the world because all the sea containers were piling up in China.

When China returned to approximately 98% of its production output in April other countries were then in lockdown, with some like the US, holding containers for two weeks in ports to quarantine them, compounded by shorthanded workforces operating in the docks.

As sea containers started to pile up in their markets and with exports to China impacted, shipping lines cut sailings from schedules, which saw sea freight prices spike by up to 50%.

Uncertainty in sea freight and air freight availability saw pharma companies initially ship everything they could, by any mode of transport available, to get it out to the markets.

Following months of disruption passenger airlines eventually started flying passenger aircraft with cargo in the lower decks and loose load cargo on the upper decks.

We are now back in the situation where that backhaul from the US and Europe, following seasonal shipments for Christmas retail demands, China now has availability issues again with reduced sailings, so there will not be any kind of normal flows until March 2021, at the very earliest.  However as the UK is currently back in another national lockdown, with all non-essential retail effectively closed and production affected, and if this trend spreads further into Europe and possibly the US, then that will further affect the backhaul. So whereas I was hoping things might be back to some kind of normality in March, I am now inclined to add another quarter to that. So, I now think there will be exacerbated sea freight and sea container availability issues throughout the first half of 2021.

Given the sea freight situation, we will continue to see the utilization of air freight to transport pandemic payloads. When it comes to economics, without the passengers on the main deck it is a much more expensive operational option, however pharma customers are prepared to pay those premiums to move their product.

The volumetric efficiency of air craft is critical at the moment because it is such a scarce resource we need to ensure the best use is made of it.  With air freight capacity a dwindling resource, it is even more important to have the very efficient packing density of temperature-controlled products on such limited air freight resources.

Vaccines vs. Virus – Rapid Response

As the development of successful COVID-19 vaccines continues at a rapid rate, the world’s first approved vaccines are already being administered as part of ongoing mass vaccination programs worldwide.

Temperature-controlled packaging manufacturers continue to play a pivotal part in the global deployment of these approved vital vaccines, including those developed by Pfizer/BioNTech, Oxford University/AstraZeneca, and Moderna.

As COVID-19 vaccines fall into different families of technology, some have frozen and deep-frozen temperature requirements, leading to a scramble to qualify existing solutions for shipping at those specific lower temperatures.

In a rapid response to the logistical cold chain challenges involved in the deployment of these potentially life-saving vaccines, we have adapted our shippers to meet those temperature requirements, as have other providers in the market.

There has been an impetus for innovation to support these temperatures in volume. Suppliers stepped up to meet the vaccine temperature requirements by adapting existing shipping solutions and the capacity is there, so I don’t anticipate it will be an issue going forward.

The focus is reverted back to the capacities in the transport modes and given the nature of these drugs people are paying whatever it costs to ship them, with rates rising sharply from $2.5 a kilo to $23; however, that’s starting to calm down.

Beyond all of the current vaccines being approved, there will be the need to provide boosters. It is going to create a recurring step up in the volume of vaccines being shipped, alongside the flu vaccines being transported and other pharmaceutical payloads every year.

There will not be a continuous crisis, it will be a continuing trend of smaller aircraft, with reduced airfreight capacities, moving that pharma product at temperatures that sea freight cannot do. It really can only fly.

However, there’s not going to be a modal shift from air to sea because sea cannot meet the temperature requirements necessary for these shipments. You get a displacement, whereby COVID-19 shipments, whether vaccines, test kits, and reagents or some of the therapies which help with recuperation, like Remdesivir, are flying at almost any cost on a dwindling resource.

The pharmaceuticals which have more normal temperature shipping requirements, like 2 – 8C degrees or 15 – 25C degrees, get displaced and in that situation, when the air freight rates get so high, sea freight would normally be seen as a shipping solution.

However, with all of the sea freight challenges, coupled with the fact that their transportation rates have also doubled, there has been some displacement but not as much as pharma companies would have liked, which is what has kept pushing the prices up in the region of the $23 a kilo figure for air freight we had seen previously in the market.

Sea freight will improve in the first six months of 2021 so some of that displacement can take place more efficiently. But aircraft will still be full of COVID-19 related products.

2021 will see the industry learning to operate in the new norm with everyone getting used to that new norm. Next year we might start to see some improvements and efficiencies but I think this year is about adjusting our planning, our capacities, and our operations around this spike in demand and the gradually improving capacity picture. Almost like wearing in a new pair of shoes.

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Dominic Hyde is Vice President Crēdo™ On Demand at Pelican BioThermal

new year

Ringing in the New Year: 2021’s Global Logistics Outlook

It’s safe to say that 2020 will not be a year easily forgotten. This past year has been full of adjustment. Around the globe, our personal and work lives were upended with very little warning. As the pandemic spread, spending time with friends and family, water cooler conversations with co-workers, and even dependence on a resilient supply chain turned out to be necessities we had taken for granted. And normal has yet to return.

As the New Year approaches, it’s time to look at ways you can make a smart plan for global shipping in 2021. But, before I share what the outlook for 2021 looks like, I want to say thank you to the ocean and air carriers, port and airport operators, truck drivers, customs agents, and the many other logistics professionals who work hard to bring a little normal to our doorsteps and grocery store shelves.

Current events impacting global shipping in 2021

“By staying on top of supply chain management trends and issues, you can make sure that your company can readily adapt to changes”. — FinancesOnline

Headlines and news can significantly impact trade—either regionally or globally. While it’s impossible to predict all that 2021 has in store, you can at a minimum prepare for the following:

The ongoing Brexit situation

If you export from the EU to the UK and vice-versa, Brexit will mean extra administration chores and delays for your shipments. It is also to be expected that new customs charges and other fees will be introduced as of January 1, 2020.

For more information about Brexit and the impact it may have on your business, read our recent blog on the topic.

Global trade and tariffs

There are several things that may influence trade and tariffs in the coming year.

For example, some significant changes were made to the Generalized System of Preferences (GSP) recently, most notably that certain Thailand-origin goods are no longer GSP eligible as of December 1, 2020. More broadly, the entire GSP is scheduled to expire on December 31, 2020 if Congress does not renew.

Check out our Trade & Tariff Insights for more details on these and other updates.

Global demand for coronavirus vaccines

Of course, similar to 2020, the pandemic may be the largest disruptor on the shipping market again in 2021. Vaccines have started hitting some markets already and full global rollouts are expected in early Q1 2021.

The initial vaccine distribution will also coincide with the Chinese New Year when we historically see a large influx of retail merchandise ahead of the weeklong holiday in China.

With vaccines likely moving via air freight, we expect peripheral products, such as syringes, gauze, cotton to move via ocean, which could mean tightened capacity for both air and ocean shipments.

Expect challenges from 2020 to continue in 2021

Looking at the ongoing events around the world, many of the challenges we’ve experienced in 2020 are not going away—and there are potentially new challenges on the horizon. If there is one thing the supply chain industry needs to learn from these ongoing challenges, it is agility. Supply chains need to be flexible enough to absorb these shocks, major or minor, that comes on its way.

Through our technology and global suite of service offerings, including ocean, air, customs brokerage, trade compliance, and surface transportation, we help customers mitigate the unplanned risks and changes of global shipping. Our people are willing and eager to help you plan for shipping in the coming year.