If there were ever a year that underscored the importance of supply chain logistics, 2020 has been it. First, the pandemic’s stay-at-home orders drove online ordering to new heights, with demand for final-mile delivery rising right along with it. Then, as consumers reacted to the global event by purchasing en masse essential supplies like toilet paper, hand sanitizer, and disinfecting wipes, many manufacturers scrambled to deliver. Add to that the sharp decrease in passenger flights, which led to an air cargo capacity crunch. Stir in increasing consumer preference for online holiday shopping, and you’ve got a year that delivered a significant number of logistical challenges.
However, in December, one final, much-anticipated ingredient got added to the mix: worldwide distribution of the emerging COVID-19 vaccines. The size, scale, and complex distribution needs of these vaccines will offer the logistics industry perhaps its biggest—and one of its most important—challenges yet. In this article, we’ll take a look at the moving parts of the vaccine distribution effort, including all the hurdles the players will encounter along the way.
The Cold Chain Industry Comes into Focus
As you likely heard, both of the COVID-19 vaccines currently in distribution require constant temperature control. However, moving goods and supplies that need to be kept at specific temperatures is nothing new. Many pharmaceutical companies have relied on cold chain logistics to maintain the integrity of their products during shipping. For example, the measles, mumps, and rubella (MMR) vaccine that’s commonly given to children must be kept cool in transit.
That said, in recent years, many new products requiring temperature control have emerged. For example, in 2019, the FDA approved licenses for 22 new vaccines and blood products, 21 of which necessitate cold-chain handling. Cold chain logistics currently make up 18% of all biopharma logistics spending, and it’s only expected to grow.
The pharmaceutical industry isn’t the only one responsible for a spike in demand for cold chain logistics. The rise of online grocery sales is also creating demand for additional cold storage facilities and equipment, according to a report from commercial real estate firm CBRE. Their research estimates that an additional 75 to 100 million sq. ft. of industrial freezer/cooler space will be needed to meet demand in the next five years.
Along with the wide-scale distribution of the COVID-19 vaccine—and the rise in pharmaceutical products requiring cold chain logistics—experts project that the
demand for temperature-controlled facilities and equipment will only rise.
Now that we’ve got a sense of the overall trends in cold chain logistics, let’s take a look at the specific requirements of the two COVID-19 vaccines currently in distribution.
Transporting the Pfizer/BioNTech & Moderna Vaccines
Because they both utilize cutting-edge mRNA technology, which uses the molecule to synthesize proteins in the body, both the Pfizer/BioNTech and the Moderna vaccines need to be kept at constant cold temperatures. mRNA molecules are delicate and can fall apart easily, so freezing the vaccines helps the molecules retain their integrity.
Interestingly enough, though, due to their different formulations, the vaccines have different requirements, which means the logistics for distributing them will differ, as well:
- The Pfizer/BioNTech vaccine will be distributed in custom-designed containers from Pfizer’s manufacturing plant in Michigan via road and air. These temperature-controlled thermal shippers use dry ice to keep the vaccine doses at -70°C (-94°F), for up to 10 days unopened. Additionally, the containers are equipped with GPS-enabled thermal sensors to track the temperature and location of these shipments.
- The Moderna vaccine, in contrast, can remain stable at 2° to 8°C (36° to 46°F), the temperature of a standard home or medical refrigerator, for 30 days. The vaccine can also retain stability at room temperature for up to 12 hours. That said, for shipping, temperatures will be maintained at -20°C (-4°F).
To aid in distribution, Moderna will be working with McKesson, the health care, medical supply, and pharmaceutical distribution company selected by the U.S. Government’s Operation Warp Speed initiative. In addition to being the largest seasonal flu vaccine distributor in the U.S., McKesson also has an existing contract in place with the CDC to support distribution as part of the CDC’s Vaccines for Children Program (VFC). In other words, the company has a significant amount of experience in this arena to assist Moderna in moving the vaccine where it needs to go in the U.S.
Because of their vaccine’s unique needs for extremely low temperatures, Pfizer will not use McKesson but, instead, distribute the vaccine directly from its Michigan facility via UPS and FedEx.
The Next Leg of the Journey
UPS and FedEx, despite reporting capacity crunches related to both this year’s pandemic and the holiday season, will play key roles in distributing the Pfizer/BioNTech and Moderna vaccines.
Prior to the approval of the vaccines, both carriers collaborated with officials at Operation Warp Speed to anticipate potential vaccine release dates and model the logistics to deliver them globally. Wes Wheeler, president of UPS Healthcare, said, “This is the moment of truth we’ve been waiting for at UPS. We have spent months strategizing . . . on efficient vaccine logistics, and the time has arrived to put the plan into action.” UPS began amping up its production of dry ice in November, and it can now produce as much as 1,200 lbs. in an hour in its U.S. facilities to help keep vaccines at the right temperatures for transit.
Despite stating that they’re ready to assist with the vaccine distribution effort, it’s worth noting that both UPS and FedEx have announced surcharges for 2021, which will remain in place “until further notice.”
As we mentioned earlier, the vaccine will be transported both by road and by air, distribution efforts are getting a boost from federal regulatory bodies, which have eased a few restrictions to grease the skids:
- On the trucking side, the Federal Motor Carrier Safety Administration has extended its hours-of-service waiver for drivers providing emergency assistance during the pandemic to cover drivers transporting the vaccine, offering road carriers additional flexibility.
- Additionally, although there are usually weight limits associated with dry ice in air cargo, the Federal Aviation Administration has agreed to raise the weight limit to allow for faster vaccine transport. Previously, planes were allowed to carry up to 3,000 lbs. of dry ice, but the FAA has agreed to allow up to 15,000 pounds for flights carrying the COVID-19 vaccine.
Despite the lifting of restrictions, air cargo capacity will still likely remain a challenge. The International Air Transport Association (IATA) estimates that distributing a single dose of a vaccine to the global population of 7.8 billion people would require 8,000 747s for delivery.
However, many airlines are stepping up to the challenge. American Airlines started trial runs in November, using Boeing 777 aircraft out of Miami. It flew its first load of vaccines on December 13 from Miami to an unidentified U.S. territory, likely Puerto Rico, St. Thomas, or St. Croix, with likely many more to follow.
2020: A Year of Supply Chain Challenges
2020 was a challenging year on many fronts, both personal and professional. For those who work in supply chain management and logistics, the year was one full of unexpected problems, issues, and, hurdles—all of which hopefully came with valuable lessons for the future. As the industry gains momentum on its biggest challenge yet, we know we’ll be watching to see what else we can discover from this unprecedented response to an unprecedented year.
In these tumultuous times, many companies have realized that they need to make some shifts in their supply chains. If you find yourself in this position and want to talk with an expert, we’re here to help! Just request a complimentary consultation to get started, and we’ll walk you through a full analysis to position your company well for a solid future.