The distribution network is complex and involves global government parties. So far the vaccines have been manufactured in the Netherlands and Belgium, as well as in 23 sites in Michigan, Massachusetts and Missouri in the US. It is reported that five potential vaccines are being manufactured in China, and other manufacturers are considering locations in Germany. Given the global scope of the distribution, it is expected airlines will reposition planes to cope with demand for the distribution. Note that this does not include the distribution of the supplies needed to manufacture and administer the vaccine. Of course increased demand for cargo space for these items tightens capacity and will increase rates.
Carriers are already tightening capacity as the global surge of the virus has revived purchasing of test kits and PPE. For example, some shippers are being bumped from flights due in Amsterdam this week to accommodate vaccine distribution. As cases surge, shippers also felt the pinch this week due to an outbreak at the Los Angeles airport that lead to the cancellation of 38 cargo flights.
Final Mile Presents Capacity Concerns
The vaccines developed will all need to be refrigerated, with some frozen at sub-zero temperatures. This creates unique demand for refrigerated and freezer trucks, something that is not in overwhelming supply. If supply of these trucks is shifted to vaccine distribution, this will affect the movement of other goods including foods, flowers and other temperature-sensitive products. Either carriers will not be able to accommodate these goods for handling the vaccines, or they will need to add more capacity – which is expensive.
Some vaccine manufacturers have already developed freezer-boxes that it can be transported in. These should enable small-package carriers to make the final delivery of the vaccine, but will also affect the bandwidth of these carriers, as they are already stretched thin due to the increased demand in deliveries for online shopping as well as the peak holiday season.
Many questions remain for the distribution such as – will manufacturers turn to expedited ocean freight for distribution when air cargo is stretched thin? One thing is for certain: we expect all facets of the global supply chain, already stressed by unprecedented demand, to continue as the world takes on the distribution of what is being dubbed, “the largest product launch of humankind.”