The Pandemic May Have Accelerated Demand For Reliable Cold Chains
Global cold logistics systems have been of particular interest since vaccines for COVID-19 surfaced, as stakeholders raced to distribute vaccines in a chaotic supply chain environment
A hearty welcome to the 32nd edition of The Logistics Rundown, a weekly digest that aims to put some perspective on what’s brewing within the logistics industry. This is a space where we religiously dissect market trends, chat with industry thought leaders, highlight supply chain innovation, celebrate startups, and share news nuggets.
Europe is in trouble with a new wave of COVID-19 infections. Rising cases are choking countries like Austria, Germany, and the Netherlands, with governments pushing for partial or complete lockdowns depending on the severity of the spread. Vaccination rates are obviously a focal point, as political leaders collectively push for compulsory vaccinations before the situation gets out of control.
But across most developed countries, there is an observable deep-seated distrust with vaccines amongst a section of the population — a situation that witnessed much polarization over the last year. In America, 77% of the people are reportedly concerned about the safety and efficacy of vaccines. A sizable chunk of this apprehension demands transparency and accountability from vaccine supply chain stakeholders to ensure vaccines aren't compromised from the laboratory to the syringe.
In America, 77% of the people are reportedly concerned about the safety and efficacy of vaccines.
A flawless cold supply chain system is of critical importance in the context of vaccine logistics. That said, this concern extends to pretty much any healthcare product that needs to be stored at specific temperatures and in a consistent environment. While developed countries have reasonably spread out cold storage facilities, the same cannot be said of emerging economies.
Cold storage facilities apart, there's the issue with finding freight capacity. Healthcare freight, including vaccines, is usually transported via air freight, as it is the fastest means of transport available today. Environmental conditions can also be controlled much better in flights, and so it makes sense to send sensitive freight onboard aircraft.
However, air freight — much like other transport modalities — has been under mounting pressure as high demand constricts available supply. Unlike overroad or maritime transport, the air freight industry operated with a fundamental disadvantage.
"A high percentage of air freight gets transported in the belly hold of passenger aircraft. Since the pandemic, the airline industry has suffered incredible losses as they kept their assets grounded for several months, and are still operating below pre-pandemic capacity. This means there are fewer passenger flights in the air around the world, which reduces overall available air freight capacity," said Niko Polvinen, the CEO of Logmore, a data-logging company.
A high percentage of air freight gets transported in the belly hold of passenger aircraft, which aren’t flying as often as pre-pandemic — reducing overall air freight capacity availability.
Then, there is also the pressure coming in from freight that was supposed to move via the sea but cannot — thanks to an impossibly-tight maritime market for a considerable part of the year. This meant a portion of the freight intended as maritime cargo was instead moved via air, further stifling supply chains that traditionally move as air cargo.
In the context of tracking vaccine provenance and guaranteeing transparency within end-to-end supply chain operations, stakeholders have to ensure they are transported in tamper-proof packaging — and, more importantly, identify signs of tampering, if any. Polvinen mentioned that vaccine shipment is stored securely inside vials and thermal boxes, which are again protected by placing them within containers that are then sealed.
"There could be different levels of tampering, like just having the outer container reveal signs of disturbance or having the entire setup opened with the vaccines unmistakably tampered with during transport. In either of these cases, the entire shipment that is damaged will be abandoned," he said. "We are now getting closer to technology where there could be individual detection mechanisms that trigger unique identifiers on the package. Light sensors on these shipments can help detect different events."
RFID chips can now track virtually any shipment, as they are a small and inexpensive setup, enabling real-time geo-visibility. While RFID chips have limited functionalities, computers that can record and relay more data have also shrunk considerably over the years.
In 2018, IBM launched what it called the 'world's smallest computer.' Smaller than a grain of salt, the tiny computer is definitely a technology to marvel at. Such technology can go a long way in ensuring every shipment stays safe in the entirety of its journey. Aside from building this computer chip, IBM also advocates for blockchain to be leveraged to pursue transparency in vaccine supply chains, which in IBM's words, will allow manufacturers to 'proactively monitor adverse events and improve recall management.'
IBM believes blockchain can be leveraged across vaccine supply chains to proactively monitor adverse events and improve recall management.
When asked about blockchain's utility in improving the existing status quo, Polvinen said it was only an alternative database model and is not revolutionary in terms of transparency. However, he is definitely piqued by the impact the pandemic and its affiliated vaccine distribution logistics have on cold supply chains.
"This will help establish some standards and protocols for cold supply chains as a whole, rather than having a patched, quickly put-together model that is currently the norm," he said. "Pharma companies will now continue to demand more specific and reliable cold chains to preserve the integrity of their product lines, which will end up adding value to the industry in the long run."
The Weekly Roundup
Rail freight volumes between China and Europe have surged over the last year, thanks to the high demand for overall freight capacity. China Railway announced that there has been a 26% increase in the number of train trips and a 33% increase in shipment year-on-year, registering 1.22 million TEUs between January to October this year. While the intercontinental rail connection struggled to find enough shipment to haul pre-pandemic, the situation has changed spectacularly since then.
The ports of Los Angeles and Long Beach have pushed back the collection of incremental penalties for storage at the port premises for the second time, with them not commencing the fees at least until Nov. 29. Port authorities see a combined 33% decline in the number of long-dwelling containers at the dock over the last couple of weeks, prompting the management to delay levying the fines.
Chinese legislation on data privacy might be at the center of a tracking blackout to ships moving in Chinese waters. Global shipping data provider VesselsValue stated that the number of vessels sending signals from the Chinese waters has fallen by 90% over the last few weeks. The company saw an industry-wide reduction in terrestrial AIS signals in China. This could further strain supply chains that are centered around the country.
Brexit-related supply chain pressure still continues, with trade policy bodies warning that drivers leaving their trucks for biometric checks would create chaos at the border. The checks will be implemented in April 2022, and it is proposed for non-EU citizens entering the bloc. An increase in two minutes of processing for each truck would result in a 17-mile delay at the Dover border, which controls movement between the UK and France through the English Channel.
...said who?
"Amazon had space on ships, and I couldn't say no to anyone. If Kim Jong Un had a container, I might take it, too. I can't be idealistic."
- David Knopfler, who runs a Brooklyn-based home décor company, commenting on working with Amazon as it offers freight space in an industry where finding capacity is a struggle
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