COVID-19 vaccines are likely to be a reality very soon, and the world lives in the belief that it will help vanquish the coronavirus. Yet, as experts rightly point out, ensuring universal access to these vaccines will be a very crucial aspect in the battle strategy against the wily virus which has disrupted lives and livelihoods worldwide. And, supplying billions of COVID-19 vaccine doses efficiently across the globally, with utmost care for their efficacy, when they are approved and available for distribution is going to be the ultimate logistics challenge witnessed until now.
A few weeks earlier, DHL along with McKinsey, published a white paper on ‘Delivering Pandemic Resilience’, which highlights, “To provide global coverage of COVID-19 vaccines, up to ~200,000 pallet shipments and ~15 million deliveries in cooling boxes as well as ~15,000 flights will be required across the various supply chain set-ups.”
The DHL-McKinsey whitepaper also identifies key hurdles in COVID-19 vaccine logistics. Take a look at some of the pain points that the report highlights (Check out Fig 1).
Hence, Express Pharma spoke to a few players in the pharma logistics space to gain more insights into the three biggest challenges that the logistics sector will be faced with and the preparations underway to tackle them. Because after all, aren’t we only as strong as our weakest link?
Ultra-low transport and storage temperatures
Generally, vaccines are stored and transported between the temperatures of 2°C to 8°C range. However, with over 250 vaccines are being developed and tested across the world, the temperature requirements for at least some of them are likely to be considerably lower. And, as the development of most of these vaccines has been fast-tracked looking at their urgent need to control and end the pandemic, experts also feel that more rigorous procedures will be imposed to maintain and protect their efficacy during transportation and storage. This may necessitate temperature-controlled transport and warehouses at ultra-low temperatures (up to -80°C).
While India does have considerable expertise in vaccine production and distribution, the scale and scope of COVID-19 vaccines could pose a serious problem. So, how are the Indian players in this sphere optimising and ramping their capacities before the COVID-19 vaccines become available?
Vikash Khatri, CoFounder, Aviral Consulting informs, “Indian logistics players have already started preparations to handle the volume surge. Since this demand is not permanent, companies are looking for coordinated efforts to ramp up short term competencies.”
He adds, “For surface transportation and storage, we don’t foresee a major gap in the available infrastructure and the required infrastructure. A large quantum of infra will be used out of the existing setup, for which logistics companies are getting ready with necessary upgrades for the pharma industry.”
The flurry of measures on varied fronts by the different players corroborates Khatri’s views. To cite a few examples;
DHL opened its first temperature-controlled facility in India in July near the Hyderabad airport for pharma shipments. The company informed that the new facility offers “conditioning of packaging materials in different chambers for varying temperatures up to -20°C.” The facility offers online temperature monitoring and SMS alerts with all data available for download from a cloud-hosted service as well.
Similarly, Kool-ex, a pharma cold chain logistics service provider has partnered with IndoSpace, a developer and manager of industrial real estate and warehousing in India, to build GDP/GWP compliant, temperature-controlled, pharma distribution centres across the country. They plan to jointly design and set up three warehouses with 42,000 pallet positions in each warehouse, in the first phase by 2021 near Mumbai, Delhi and Bengaluru. Koolex also intends to set-up 10-11 warehouses by 2023. These also include cold room facilities which will offer -20° C, if required for COVID-19 vaccines.
Blue Dart, an express logistics provider and part of the Deutsche Post DHL Group (DPDHL) is also ramping up its infrastructure with its pre-existing specialised temperature-controlled logistics (TCL) to transport critical shipments such as vaccines, medical samples and more. The company informed through a statement that it can handle various temperature requirements be it frozen: (-80° C to -20° C), deep chilled (2° C to (8° C) or ambient (15° C to 25° C)
“With an agile response team overseeing the upscaling of our current capabilities, a strong fleet of dedicated Boeing 757 aircraft and robust infrastructure for our temperature-controlled logistics solutions, we are capable and prepared to meet any immediate large-scale demand,” informs Ketan Kulkarni, CMO & Head – Business Development, Blue Dart through a statement.
A few players also suggest that the cold chain facilities which are used to transport cell and gene therapies, as well as the capabilities in the food and agro-based industries, can also be redeployed with suitable upgrades to undertake and successfully execute this huge task. This could be a good idea but given how vital is the endeavour and the implications it will have on the wellbeing of populations across the country, putting strict protocols in place and ensuring that they are adhered to will be paramount.
The air cargo industry will obviously have a very pivotal role to play in the whole vaccine delivery chain given the nature of the cargo, need for speedy delivery with temperature compliance for safety and efficacy, handling capability of the stakeholders and operational specialisation etc. But, this would translate into mammoth capabilities.
Recently, IATA, an airline industry body had said that transporting the COVID-19 vaccines will be the “largest transport challenge ever” and the equivalent of 8,000 Boeing 747s will be needed to execute this mammoth task assuming that each person will require only one dose of the vaccine.
Giving more understanding about the scenario, Khatri points out, “COVID-19 vaccine will be required for each human being leading to the overall requirement of 7.8 billion units of doses, while the overall estimated market of vaccines was 3.5 billion doses, in 2018. Once we include booster doses for COVID-19 vaccines, this requirement will be double than this. Air cargo plays a key role in the supply chain of vaccines in normal times and it has a well-established global time- and temperature-sensitive network to cater to routine requirement. But such a high volume requires extraordinary capabilities.”
“Even if we consider that 25 per cent of volume can be connected by surface mode in and around manufacturing countries, the demand of air cargo capacity will be approximately 12000 large freighters for primary and booster dose of vaccines,” he adds.
Bharat Thakkar, Co-Founder & Joint MD, Zeus Air Services admits, “Air cargo will be the primary initial solution that governments and pharma companies will engage to deliver the vaccines. Therefore, yes, the demand for vaccine deliveries will overtake the demand for regular cargo by quite a margin.”
Giving some more clarity into the whole issue, Rajiv Hariramani, VP–Air Freight, Skyways Air Services informs that in the months since the onset of COVID-19, air cargo from India has touched about 65000 tonnes per month of which 70 per cent is pharma exports. This is only likely to increase once the vaccines become available.
However, both, Thakkar and Hariramani are upbeat about India’s air cargo sector’s abilities to handle exports of COVID-19 vaccine delivery because they believe that there is ample untapped capacity that could be galvanised to deal with a spurt in demand.
Thakkar updates, “Currently, AAI and private airport operators are building capacity and implementing solutions which should be ready by the time vaccines are approved. It is also pertinent to point out that a lot of passenger aircraft have been drafted into carrying cargo, which will increase carrying capacity and therefore reduce delays in shipping.”
He says that our airports already have a certain amount of infrastructure which can be upgraded to create short-term competencies. To explain his point, he informs that per month 20000 tonnes of cargo is flown from only Mumbai, and since the time a new facility was launched in January 2020, the capacities have doubled. The Mumbai airport can keep almost 100 pallets at any given time on any given day.
Likewise, all major cities have air cargo terminals with cold storage facilities, be it Mumbai’s Cargo Service Centre and Air India’s APEDA; Delhi Cargo Service Centre and Celebi Delhi Cargo Terminal Management in Delhi; AISATS and Menzies Aviation Bobba (Bangalore) in Bengaluru or GMR Hyderabad Air Cargo in Hyderabad. These terminals can customise to meet ultra-low storage requirements.
Moreover, he promises, “Indian cargo agents will be ready to meet the increased demand for vis-à-vis transport from factories and onwards. Cargo agents, such as ourselves, have had experience in moving mission-critical cargos across the world for aid in times of natural disasters, famines and even in times of war.”
He discloses that he is also working to optimise the processes to make them more efficient and cost-effective with the existing resources.
Hariramani also assures, “Most important aspect is the air capacity. We are working to create enough air cargo capacity to handle large volumes of vaccine with the type of service that would be required – active/ passive along with the provision for end-to-end tracking of the shipment.”
He explains, “Warehouses being a dominant aspect, we have partnered with reputed organisations having exclusive facilities pan India for various temperature ranges, besides our warehouse close to the cargo terminal in Delhi which serves packing stations, temperature zones, dangerous goods handling arena, general and courier screening as well as storage zones.”
He updates that Skyways’ warehouse in Delhi has a cold room of 20 cubic metres and they are currently constructing a cold room in their warehouse in Bangalore of the same capacity. In Mumbai and Hyderabad too, the company is working to expanding its GDP-compliant warehousing capabilities.
“Understanding the need for reefer transportation, we have joined hands with a few reputed GDP/ISO certified vendors who can cater to Pan India transportation with their dedicated fleets. Besides, our subsidiary Phantom Express owns a fleet of 35 trucks in Delhi NCR and we are further mapping across South and West of India,” adds Hariramani.
“Considering the various aspects involved in vaccine handling, we have appointed a dedicated team that has been trained by GDP certified authorities and will act as a central control tower,” he apprises.
The industry stakeholders also share the belief that vaccine delivery will be carried out in phases and not as a one-time activity since the vaccines need to be produced in massive quantities.
Another report from PwC Health Research Institute, titled, ‘Developing a COVID-19 vaccine may not be enough,’ also states that “vaccination is likely to occur in waves as the federal and state governments make decisions about which groups should be the highest priority and how the criteria for vaccine recipients are broadened as more doses become available.” While the report refers to the US scenario, it stands true for India as well.
The stakeholders hope that this, in turn, will help them to plan out a more co-ordinated approach, thereby avoiding sudden spikes and unanticipated glitches.
Ensuring that the COVID-19 vaccines reach every nook and corner of India, no matter how far-flung and remote they are, will require a robust infrastructure for a green corridor to transport COVID-19 vaccines, along with a large number of trained personnel and monitoring capabilities.
Combining all this to create a blueprint that is fail-safe will require all our famed ingenuity and expertise gained as one of the major global exporters of pharma products.
A Herculean task indeed! Thakkar points out, “The challenges will be in proper planning of the movement of the vaccines, which will need to be synchronised between pharma companies, logistics solutions provider, airlines and distribution channels.”
“It will be prudent for pharma companies to work with their cargo handlers to define daily production capabilities. The cargo handlers, in turn, can build capacity (if need be) and also advise their respective clients as to cold chain solutions required to move the cargo from their factories to the airport and onwards to their eventual distribution channels,” advises Thakkar.
Khatri outlines, “Creation of capability for short term demand is one of the key challenges, where logistics players can’t justify huge CAPEX. To mitigate this risk, the industry is adopting a two-way strategy. First is around mobilisation of resources from other pre-existing setups for short term and second is about improving operating efficiency, so that same infra can handle more volumes with faster turnaround.”
So, all stakeholders of the supply chain are stepping up their game and getting ready to collaborate on a level unseen before.
For instance, Rahul Agarwal, Director, Kool-ex Warehousing, enlightens that the private sector is not sure to what extent the government will control the supply and distribution of the vaccines and price-control of these vaccines are also likely. So, they are slightly wary of making huge investments at their end which might not get utilised and are looking for partners in this exercise.
He says that several pharma companies are talking to Kool-ex to create end-to-end supply capabilities. After discussions with these players, the company has worked out a per vial costing, which ranges between Rs 10 to Rs 25 for end-to-end distribution based on different scenarios and conditions. This includes two legs of warehousing and three legs of transportation.
“We are not giving them (pharma companies) a Capex model, but a pay-per-use rental model. It will be viable for them because it will help them benchmark an end-to-end cost, right from the beginning,” explains Agarwal.
So the company is building portable storages which can be rented. Once the need is over, these storage facilities can be put to other uses.
Khatri also states, “Industry is working with government agencies, freight forwarders, port operators for quick turnaround of aircraft and speedy border clearances.”
At the same time, industry players like Hariramani emphasise on the huge role that the government will have to play in this whole exercise. He points out that as the private players plan and prepare for this massive endeavour, the government will have to be in the forefront of facilitating a smooth path for the supply and distribution of these vaccines to all nook and corners of the country as well as worldwide.
“Governments of vaccine producing nations have been requested by world bodies to take the lead in facilitating seamless logistics across borders whilst providing security since this will be a highly valuable commodity,” reminds Thakkar as well.
To explain his point, he calls attention to a snag in the current scenario that needs to be smoothened and states, “Another challenge that has come to the fore recently is the fact that Ministry of Civil Aviation has announced a change in the rule of open sky policy of 1990. The new rules have restricted non-schedule freighter operators to operate from six metro airports rather than operating pan India. This will lead to delays in the transportation of the vaccines. Due to this policy, we will need to move cargo on scheduled operators from non-metro locations and load it on to a cargo plane of non-scheduled operators in metros. This will have to be reviewed for vaccines movement and other exports to cut down on lead times.”
The DHL-McKinsey whitepaper also outlines the most important measures that the government should take to ensure adequate supplies. The paper highlights that these aspects will form the “pillars of successful crisis response management” and “will be key to meeting the supply chain challenges of future global health emergencies”. They are as follows:
(1) Developing and disseminating a clear and pre-defined emergency response plan
(2) Building a partnership network of both public-private and public-public partnerships
(3) Identifying and ensuring access to required physical logistics infrastructure
(4) Establishing IT-enabled supply chain transparency
(5) Creating organisational structures and allocating resources to institutionalise and coordinate the entire response management including plan, partners, infrastructure and IT
The stakes are very high and the margin for error is very low. The Indian government must consider the recommendations by industry stakeholders while formulating its blueprint.
On a hopeful note, Dr Harsh Vardhan, Union Minister of Health and Family Welfare, recently informed that the Centre is also working on plans for building capacities in HR, training, supervision etc., on a massive scale and roughly estimates to receive and utilise 400-500 million doses covering approximately 20-25 crore people by July 2021.
He said that there is a high-level committee headed by Dr VK Paul, Member (Health), Niti Aayog is drawing up the entire process. Vaccine procurement is being done centrally and each consignment will be tracked real-time until delivery to ensure it reaches those who need it most. He added that these Committees are working on understanding the timelines of availability of various vaccines in the country, obtaining commitments from vaccine manufacturers to make available maximum number of doses for India inventory and supply chain management and also on prioritisation of high-risk groups. States are being closely guided to submit details about cold chain facilities and other related infrastructure which will be required down to the block level.
Impact and implications
Thus, preparations are on in full swing but their result will be seen only in the days to come. However, it is to be hoped that this entire venture will not only be successful in ending this pandemic but also be instrumental in creating a structure which will bring in better efficiencies in the supply chain and fasten access to medicines and vaccines.