Now that multiple pharmaceutical companies have stated that they have COVID-19 vaccines ready to go to help end the myriad troubles and travails that have been in full effect in the United States since mid-March, eyes are locking in on the logistics sector, and for good reason.
For starters, there are more than a few challenges related to vaccine distribution, including: securing capacity, related temperature-controlled needs, as the Pfizer vaccine needs to be kept at -70 Celsius; security, and seasonal challenges, among others. What’s more, both Pfizer and Moderna have publicly stated that their respective vaccines are 95% effective, which further increases the onus on efficient logistics distribution.
And timing will also be key, too, with Vice President Mike Pence stating at an early December press conference when the vaccines are ready to be administered to the first grouping of Americans whom qualify for the vaccine within 24 hours of approval.
Various logistics industry observers painted a clear picture of what the sector is up against, in order to make sure things go smoothly in this generational task.
“Most of the leading vaccines must be transported and stored at cool/cold temperatures,” said John Larkin, Operating Partner, Clarendon Capital. “This complicates matters as refrigerated capacity of containers, trailers, and warehouses are already in short supply. To make matters more complex, various vaccines must be transported and stored at different temperatures.
Larkin also touched upon other key vaccine distribution-related aspects to monitor, including: supply chain security being of critical importance to ensure product integrity and to enable the inoculation of the most needy people first; labor supply potentially being a gating factor, as truck drivers, warehousemen, and supply chain security personnel are already tough to recruit and retain; and the traditional retail/e-tail season will be in high gear as the vaccine distribution effort ramps up, which he said may further exacerbate the supply/demand imbalance for freight handing/transportation services.
The linehaul component of vaccine distribution is another key aspect of what lies ahead, according to Brooks Bentz, a supply chain consultant and LM contributing editor.
“With the vaccine being manufactured in Europe and it moving it by air, in regards to the linehaul capacity piece of it—obviously, there is a lot of air capacity out there right now, given what is going on with the pandemic—a big challenge is once it lands on the ground in the U.S., what do you do with it?” said Bentz. “Capacity is going to be tight obviously and the vaccine will get priority but there will not be any home delivery of it, at least right away. And it will end up having to go through some kind of distribution network, starting first with hospitals and places like CVS and Walgreens, and to me that is likely to be on FedEx- or UPS- type of delivery…so things are going to get tight for a while probably until mid-to-late January, when things will loosen up.”
But then that leads to question of if there will be sufficient ground capacity to deliver the vaccine quickly and, should there not be, what are the next steps?
“There is not a big backlog for capacity right now so do you enlist smaller parcel carriers to do it as one option or LTL?” said Bentz. “I think the big challenge is going to be capacity constraints in the short term and what the distribution flow is. Capacity constraints are the top concern at this point and given that through the short run at end of the year, looking at alternatives to augment capacity, whether it is through courier services or smaller parcel carriers or regional LTL carriers and making sure you have enough time in the SC to get it through so you don’t have to disrupt the packaging to re-cool it—I don’t even know if you can do that—if it is even possible.”
While over-the-road ground capacity is expected to loosen up into the new year, former Robert W. Baird & Co. Ben Hartford explained that capacity, as it relates to the specific needs of the cold chain and storage and general pharmaceutical-related distribution will be key.
“As the vaccine is transported, all eyes will go to airfreight and the lift capacity needed to move this sensitive product in an expedited manner, and we are starting to see air charter and lift capacity consumed on that front.
Looking ahead, Harford explained that that any of the specialty equipment that pertains to housing the vaccine in a temperature-controlled setting—specifically airfreight and lift capacity—will be at a premium well into 2021 amid the global rollout of the vaccine, and he added that the models that are going to play the most direct role, as they relate vaccine distribution, will be the global integrators on the parcel side [FedEx, UPS, and DHL] and international freight forwarders.
About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman