Tuesday, December 8, 2020

Vaccine Airlift | Backbone to the Global Economic Recovery


The imminent FDA approval and recent British government approval of Covid-19 vaccines marks the beginning for the upcoming Herculean logistical effort required to inoculate billions of citizens worldwide. For this reason a robust global supply chain will be required at each stage from manufacturing to final delivery.

This global inoculation effort is unprecedented. Past inoculation efforts have been country-specific or regional to combat epidemics, not pandemics, and not without its share of complexities and inevitable difficulties. Even if one uses those earlier efforts as case studies, the sheer depth & breadth of the forthcoming global distribution effort is far more overwhelming logistically, economically and politically. It’s one thing to have an approved and safe product, it’s another to manufacture it to scale and safely distribute it globally.

Just imagine trying to supply vaccines to one city, akin to the 1947 Berlin airlift which took place over many months and saved German citizens from starvation. A similar logistical effort but on a global scale will be required to save the world from economic collapse.

This is why air cargo is a key component in the critical path of this supply chain/distribution process. However, here are the aviation logistical challenges that will hamper transport and delivery.

Air Cargo Freighter Shortage

Securing the numerous mothballed aircraft configured and certified for air cargo (cargo freighters) is easier said than done. Even if all the available air cargo freighters were in operation right now, their numbers fall far short of what is required for the global transport of the vaccine.

To offset this shortage air companies are converting passenger jets to cargo freighters, the best suited being wide-bodied, long haul models. One such example is the conversion of the new but economically disappointing passenger A-380 which has a 50-ton cargo capacity.

An important logistical note is that these large aircraft can only fulfill cargo flights between major hubs with long runways that can handle this type aircraft. Smaller air cargo aircraft will be required to transport the vaccine to secondary urban areas, non-urban areas and more remote areas.

Qualified Pilot Shortage

Another challenge is the severe shortage of pilots. Because of lockdowns and an almost cessation of air travel, many pilots were either furloughed, let go (younger pilots) or offered early retirement packages (senior pilots).

The next step is to hire pilots who are experienced flying air cargo freighters and train those who haven’t. Unlike a truck driver who can learn quickly on a different model truck without passing a regulatory-mandated check ride, pilots must be certified on the particular type of air cargo aircraft. The shortage of air cargo freighters and qualified/certified pilots compounds the problem to distribute the vaccine at scale.

Air Safety

During this logistical aviation ramp-up the FAA has already relaxed and waived safety measures to transport the vaccine in bulk. For example the vaccine requires plenty of dry ice to maintain its chemical integrity which can emit carbon dioxide. Because aircraft do not have carbon dioxide detectors installed on board, this poses a danger to the air crew. However because of the urgency, the FAA has allowed five times the normal amount of dry ice on air cargo flights.

Stress Test for Global Supply Chain

Air cargo comprises less than one percent of transported goods with pharmaceuticals being one of those goods that are usually air shipped. Pharmaceutical companies have established supply chains but they are not designed for mass global distribution. For this reason its architectural structure must be heavily modified, expanded and made a priority over the shipment of prescription drugs such as those for high cholesterol, high blood pressure, and anti-depressants.

Ironically these are the same drugs that keep many people relatively healthy especially during these unprecedented times of stress. These people are heavily dependent on these prescription drugs because of health-related problems resulting from obesity, sedentary lifestyle, poor diet and a rapidly aging demographic. In a perverse possibility some people could die from lack of access to their prescription drugs before receiving the Covid vaccine because of supply chain priorities.

Tough Choices

The pharmaceutical companies are under high-level governmental and societal pressure. They face this mutually exclusive choice between the vaccine combatting a viral pandemic that is an existential threat to the global economy and prescription drugs. For the purposes of the overall public good the pharmaceutical leadership will probably give top priority to vaccine shipments, a decision that follows the adage of priorities of the fictitious hedge fund owner Bobby Axelrod of the TV series Billions in which he states, “The greats never sacrifice the urgent for the important. They handle the immediate problem and make sure to secure the future.”

Security

Aside from maintaining its chemical integrity during transport, the physical security of the vaccine is paramount at each stage of the supply chain. Because of the myriad of transport and exchange points it will be impossible to provide the same level of high security at each stage. Criminal elements are already probing these vulnerabilities such as the cyber-criminals who have already launched aggressive probes into any vaccine-related company.

Other nefarious parties are already salivating at the opportunity to capitalize and sell a high-demand and valuable commodity on the black market or worse, dilute the product and sell at a discount. The more violent methods range from truck hijackings and storage theft to more silent and insidious insider chicanery.

End Result

The initial public euphoria for a spring 2021 delivery of the vaccine to the general population will rapidly dissipate because of the aforementioned extreme aviation logistical challenges. I forecast that these transport equipment and professional services shortages will push back distribution and inoculation well into the late summer and fall of 2021.

Ironically the approval of additional vaccines in late winter and spring will not ease the distribution problem. The addition of new vaccines will offset the difficulties in the mass production of newly-approved vaccines which will create an even larger ready-to-ship inventory. However the increase of transport equipment and professional services will not be enough to offset this larger inventory.


© Copyright 2020 Cerulean Council LLC

The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.

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