COVID-19 Vaccine: Potential Impacts on the Cargo Supply Chain

COVID-19 Vaccine: Potential Impacts on the Cargo Supply Chain

As pharmaceutical companies around the world race to develop COVID-19 vaccines that could receive emergency regulatory approvals by as early as December 2020, logistics providers are preparing to build the supply chain needed to deliver these drugs to billions of people as rapidly as possible.

Once a vaccine is approved, manufactured at scale, and ready for distribution, the high-stakes supply chain will require additional logistics capacity and specialized equipment, as well as cold-storage facilities and processing capabilities by ground handlers. The timing of the start of the distribution efforts is particularly critical as shipment capacity – notably for air freight, which is likely to serve as the main mode of transportation for the vaccines – remains 20-25 percent lower than in the same period of 2019 due to unavailable belly cargo on passenger flights. As of November 2020, air cargo rates remained up to 60 percent higher year-on-year on some major trade lanes, with the year-end holiday season likely to push up rates even further in the coming weeks.

Amid the uncertainty of when a potential vaccine may start to be distributed, industries from technology and automotive to engineering and medical devices relying on the continuous availability of air cargo capacity for their day-to-day procurement and distribution operations are facing the challenge of anticipating the potentially disruptive impact on their supply chains. Particular concerns revolve around the impact the global distribution efforts could have on air cargo capacity and rate levels on the three major air cargo trade lanes between Asia, Europe, and North America as well as on secondary trade lanes.

This report lays out a detailed overview of the various challenges as they relate to logistics capacity, airport cargo handling, and congestion. To gain actionable insights and recommendations on how to prepare your supply chain for the upcoming vaccine distribution, read the report.

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