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        Featured, Supply Chain Management

        COVID-19 Vaccine Delivery Brings Unique Supply Chain Management Challenges

        October 20, 2020 By Harbert College of Business

        All News

         

         
        USPS freezer farm

        USPS "freezer farms" are capable of holding pharmaceuticals requiring storage at minus 80 degrees Celsius.

        In a recent Wall Street Journal article entitled “COVID-19 Vaccine Delivery Will Challenge Cargo Airlines” Doug Cameron, the WSJ’s Deputy Bureau Chief in Chicago, lays out what pharmaceutical makers, cargo shipper and the entire medical services industry will face in delivering yet-to-be-approved vaccines to hospitals, medical offices and pharmacies across the United States and around the globe. Cameron’s article focuses on the air cargo segment of this specialized supply chain, which is already suffering from a shortage of planes equipped with the carefully controlled refrigeration transport and storage these vaccines will require. His findings in that segment of the vaccine supply chain raise real concerns and beg the question of what else needs to be done to ensure virtually every step in this critical health care delivery process succeeds.

        Glenn Richey

        Glenn Richey


        Glenn Richey, Harbert Eminent Scholar and Chair of the Department of Supply Chain Management at Auburn University’s Harbert College of Business, points out that the air transport leg is only one link in this complex supply chain—and far from the most challenging. In a recent interview, Richey identifies a host of supply chain issues embedded in the forthcoming delivery of approved COVID-19 vaccines and offers insight into what needs to be done to ensure success.

        HCOB: Let’s start with what makes vaccines different from other cargo, even other refrigerated cargo, when it comes to ensuring the safe, reliable delivery of hundreds of millions of doses like what’s coming for COVID-19.

        Richey: The refrigeration requirements for these vaccines will go beyond traditional cold shipping and storage capabilities. The most promising vaccines under development will have to be kept at an extremely low constant temperature from production to the patient in order to prevent spoiling. Experts expect there to be two temperature ranges depending on the vaccine: around freezing and minus 70 degrees Celsius. Each of these two ranges presents a significantly different challenge to transport and storage planners working to ensure the safety of vaccines delivered to health care providers and their patients. That’s number one.

        Number two is that the issue of spoilage goes beyond patient safety—these vaccines are expected to be in scarce supply early on, there may not be enough to go around. With pharma executives reporting typical spoilage rates for other vaccines during transport at 5% to as much as 20% because of inadequate temperature control, getting cold storage shipping control just right is critical to the expansion of availability.

        And finally, we’re talking huge volumes—Pfizer and one of their manufacturing partners, BioNTech, are among a handful of companies in advanced stages of testing their vaccine. These two companies alone are contractually committed to supplying over 450 million doses to U.S. and foreign governments once they have completed trials showing the vaccine to be safe and effective. High volume shipments of millions of doses will trim down to deliveries of 100 or less by the time they reach your local provider.

        So, to be clear, it’s a whole new ball game.

        A graphic detailing the steps of the vaccine supply chain.

        HCOB: So where does the transportation component of supply chain management come into all of this, and where does it rank in terms of “must do” priorities?

        Richey: According to the IFPMA (International Federation of Pharmaceutical Manufacturers & Associations), the transport and storage component of the supply chain is at the top of their list of concerns. The IFPMA recently reported that optimization of supply chain is extremely important to reduce the cold chain footprint, limit waste, and increase vaccination coverage and safety. And the public’s trust in these vaccines may be eroded if people fear the vaccines have been mishandled. So, this is a uniquely challenging endeavor.

        Workers at Fedex using dry ice to ship vaccines

        Workers at FedEx use dry ice to ship vaccines.


        HCOB: In his article, the WSJ’s Doug Cameron focuses on the air cargo phase of the vaccine delivery process, commenting on everything being done to ensure high volume quantities of approved vaccines get to major airports and the refrigeration storage facilities being built nearby to hold them. But that’s just the first leg of transport, right? What happens to these vaccines once they land?

        Richey: That’s correct—and ensuring delivery through that first leg is no small feat. But pharmaceutical companies and their shippers are experienced in this, and they appear to be building contingency plans for the bulk transport and storage capabilities necessary to get vaccines into large metropolitan areas and even to regional airports that serve surrounding populations. It is the next phase of the distribution process where it can get tricky—on the ground. From long-haul truckers to short-route delivery vans, fleets with specialized refrigeration capabilities will have to be allocated to get vaccines to where they are needed: hospitals, medical offices and even drug stores like CVS and Walgreens.

        HCOB: Let’s start with long-haul truckers, those with refrigerated semi tractor-trailers—“reefer trucks”, as they’re called—are they in as high demand as refrigerated air cargo planes?

        Richey: I’d say perhaps even higher. For one thing, reefer trucks are already in tight supply due to the shifts in ground transportation of produce and other foods during COVID-19. There simply aren’t enough to meet demand, especially over the time frame when the first vaccines are expected to become available—the coming holiday season. The growth of e-commerce—already on a steep ramp before the pandemic—has scooped up capacity from retailers struggling from severe declines in brick-and-mortar foot traffic. Savvy businesses have already worked to reserve ground shipping capacity for the next three months, just when vaccine makers are expected to begin delivery.

        And truck manufacturers are responding to the coming uptick in demand. FTR Transportation Intelligence, which tracks orders of semis and trailers, recently reported a tremendous uptick in orders. According to FTR, “Dry van orders were particularly robust, with refrigerated vans also displaying strength…Backlogs are expected to rise to near pre-pandemic levels.”  While these recent orders are encouraging, deliveries of this new capacity are at least four months out.

        FedEx using proprietary shipping containers to ensure cold chain delivery of vaccines.

        FedEx uses proprietary shipping containers to ensure cold chain delivery of vaccines.


        HCOB: What about local delivery fleets, those serving the “last mile” leg needed to reach smaller medical facilities and drug stores—how equipped are major delivery providers like FedEx, UPS and even the US Postal Service to provide the tightly monitored delivery of cold chain vaccines to all these points of care?

        Richey: That’s going to be complex as well. Think of the sheer number of certified refrigeration units that will need to be manufactured, purchased, delivered, and brought into operation by a wide variety of regional and local shippers—that alone will be a challenge. Then consider all the processes and procedures that will need to be put into place—how often are the vaccine shipments tested to ensure vitality and sterility? Who is responsible for ensuring the chain isn’t broken—and if it is, who is liable? All the large shippers have access to specialized liability insurance to cover these circumstances, but smaller shippers may not, further compounding the coming squeeze.

        HCOB: That all sounds ominous, are all these efforts bound to fail? Can nothing be done?

        Richey: No, there’s still time to act. But it will likely take an all-hands-on-deck, tightly coordinated effort by federal, state, and local government working hand in hand with private industry to pull it off. From what I’ve read, some of that is already happening through Operation Warp Speed.

        HCOB: What advice would you give the members of Operation Warp Speed as the plan for the coming roll-out of vaccines?

        Richey: I assume the members of Operation Warp Speed are pulling together the very best in pharmaceutical development and delivery and are well into their planning process. Among the “advice” I would give them would include the following major considerations and steps:

        • Map it out—How many vaccines need to go where, when and by which routes and carriers? Prioritizing the most vulnerable—doctors, nurses, hospital staff and other first responders—will be key, and documenting the successes and failures of the initial roll-out to them before ramping up volume shipments to patients themselves can help refine best practices going forward.
        • Reserve space now—It is better to have sufficient capacity contracted now rather than to wait until a more definitive estimate of vaccine availability emerges and cold storage capacity is harder to find. It is not a matter of “if” but “when.”
        • Engage Defense Department and other government logistics expertise—The military has decades of proven expertise getting medical supplies into some of the most forbidding places on earth, surely those skills, procedures and equipment can serve a valuable role in the delivery of these vaccines. FEMA, too, has a place in this process—they have extraordinary capabilities to act in a crisis like the one we face in the coming months. These resources are typically called upon in an emergency—and this pandemic certainly counts as one.
        • Finally, tap into American ingenuity—we lead the world in medical device technology, and our businesses have the ability to create new products and services to meet the needs of cold chain vaccine delivery, to pivot design skills and manufacturing capacity of new technologies, new methodologies. Auto manufacturers and others responded to the need for ventilators, we can do it again with cold storage and transport.

        Learn more about Auburn University's Supply Chain Management Department.