The global rollout of the COVID-19 vaccine has not only taxed the pharmaceutical supply chain but placed it under a magnifying glass, generating concerns about supply chains of non-COVID-related pharmaceutical products. To gain data-driven insights around these questions, FreightWaves’ Zach Strickland interviewed Christopher Engel, the commercial supply chain service director for World Courier, an AmerisourceBergen company.
“The global rollout of the vaccine is estimated to generate about 60,000 tons of airfreight and that’s basically enough to fill 11,200 Boeing 777 airplanes,” said Engel. “On the face of it, this seems like a massive number. However, it isn’t a huge concern, especially when we put this number in context of total airfreight volumes. It only represents about 0.3% of all airfreight in the year 2019. It is a substantial undertaking, but even given the 2020’s airfreight volumes, it’s one that we still have capacity for as an industry.”
As a result of COVID-19’s scrutinizing effect on pharma supply chains, the flaws and disruptions are more visible. Engel talks about globalization’s consolidating effect on the drug market, leading to an overreliance on a few countries — mainly India and China — for the sourcing of pharmaceutical ingredients.
“We will surely see more local manufacturing in the future due to reshoring activities and those activities can already be observed in Europe, where governments are starting to give incentives for local manufacturing as a countermeasure to the overreliance on certain countries,” said Engel. “Future pharma supply chains shouldn’t only focus on efficiency and driving down costs, but actually supply chains should be built on patient-centricity.”
Michael Fallon
Its a bold claim to say that the COVID vaccine roll out won’t affect other medical supply chains when the resources in the logistics industry have dwindled and changed. Do we use a refrigerated truck as a morgue or vaccine transport? Who gets priority in a pandemic over a previous resource? It’s not about volume and capacity. It’s about volume, capacity, and the seismic shift in logistics practices.
It’s one thing to contextualize specialty pharmaceutical as airfreight volume against 2019 levels when the air transit resource was not affected by a global pandemic. That relies on the premise that things will “return to normal”. The may, but it will be a new normal for sure—who is accounting for that in the big picture?
The airline and ground trucking industry has changed. Where is the accounting for the “new normal”? When one only discusses the macro in logistics it is a red flag that corporate ego is involved. When ego drives the car, we wind up in a ditch.
In the near future at least, a “new normal”—will include not just reduced lane capacity, but changes in outsourced vendor logistics practices that will need to be absorbed by freight forwarders. Tighter chain of custody procedures, non- contact deliveries, exceptionally communicated and detailed timed deliveries to specific players. This all has a bottom line on how much and how fast volume is moved. This is all a part of a post pandemic capacity adjustments which is the new normal.
Employees are demanding companies enact policies to protect them from transmissible viruses-in general, not just COVID 19. This affects the bottom line in goods movement, handling, and delivery. When we focus solely on the macro level of logistics with volume and numbers it fails to account for all the non-volume heft at the micro level that actually makes the volume move.
Successful logistics in a post COVID era will rely on expert communications with vendors and clients which it always has. Capacity and changing where API source material comes from and where it is transported to in the world I s a customer reaction to the pandemic that affects freight forwarding. It’s only an observation on the client.
I’d like to hear more about freight forwarder’s actionables in terms of trying to communicate industry stability and reliability in a time of great uncertainty. Are their vendors changing with them? Are their vendors changing practices and they are unaware…all of these are huge questions affecting the bottom line. Getting back to moving a certain volume is complicated.
Clients need reliable data metrics from COVID era deliveries and detailed information on their shipment transit and chain of custody in a post Covid System, not general observations about volume.
What was your vendor’s average delivery time during Covid? How are contactless deliveries being arranged? With the extra time involved in providing a logistics solution and delivering under COVID restrictions, what is your vendor’s new volume capacity like? It going to go back to 2019 normal? Really?
These are all details that good risk managers should be teasing out of their vendors. Numbers and the logistics context of 2019 is just simply old news.