DHL Express delivers by air Covid-19 vaccines to Europe

DHL Express has operated more than 50 flights carrying Covid-19 vaccines to European destinations.

The company said it is "perfectly equipped" and prepared to transport Covid-19 vaccines in Europe and beyond, thanks to its hub and gateway network spanning 60 countries and territories in Europe, as well as its fleet of more than 100 aircraft.

The express giant has already delivered vaccines to Austria, Bulgaria, Croatia, Greece, Finland, Italy, Lithuania, Norway, Romania and Sweden.

Apart from Europe, it has transported vaccines to Bahrain, Chile, Costa Rica, Israel, Mexico, Oman and Singapore, according to London's Air Cargo News.

Chief executive at DHL Express Europe, Alberto Nobis, commented: "Our Express network has already proven its strong resilience during the first weeks of the pandemic. While almost all nations went into lockdowns, none of our operations had stopped.

"It is in our DNA to deliver, even in times of global crisis. With international express deliveries of Covid-19 vaccines we are supporting numerous governments in their fight against the pandemic. In Europe our strong presence allows us to move medical goods from country to country within up to 24 hours."

DHL's global healthcare portfolio includes more than 9,000 specialist staff working, 150 pharmacists, 20 clinical trials depots, 100 certified stations, 160 GDP-certified warehouses, 15 GMP-certified sites and 135 medical express sites. It also has a fleet of 260 freighters, numerous partner airlines and a hub and gateway network spanning more than 220 countries.

Cathay develops fast and effective global vaccine distribution solution

CATHAY Pacific Cargo has come up with a new quality-assured solution aimed at the fast and effective import and transshipment of Covid-19 vaccines worldwide.

The cargo carrier said it has built on its many years of experience in transporting pharmaceutical shipments to develop the vaccine solution.

Cathay Pacific director Cargo Tom Owen said: "With our 20 dedicated freighters and cargo bellies of passenger aircraft supporting our extensive freighter network, we stand ready to assist with what will be the biggest humanitarian response to a situation involving civil aviation that anyone has ever seen."

Cathay Pacific Cargo is progressively rolling out Ultra Track as a key part of the vaccine solution. The next-generation track-and-trace system monitors information including temperature, GPS location, and humidity, using low-energy Bluetooth readers. This gives shippers and forwarders near real time visibility, and ensures vaccines will remain within their transportation temperature ranges.

In addition, shipments using Ultra Track will also be monitored by the newly established Operations Control Centre. Based in Hong Kong, and staffed by dedicated cargo professionals 24/7, the team can instruct ramp and cargo terminal staff to take proactive steps to ensure the various storage requirements of vaccines are maintained.

Mr Owen said: "Ultra Track will allow forwarders to monitor the condition of their vaccine shipments in near real time. It will be progressively rolled out through the first quarter of this year, and we will be offering the service free of charge for any COVID-19 vaccine shipments."

The combined approach follows on from an airport-wide recertification of IATA's CEIV Pharma accreditation at Hong Kong International Airport. Cathay Pacific Cargo, the Cathay Pacific Cargo Terminal managed by Cathay Pacific Services Limited (CPSL) and ground-handling subsidiary Hong Kong Airport Services (HAS) have all been re-certified, offering a complete level of quality assurance at every stage of the import and transshipment journey.

Airport Authority Hong Kong General Manager Aviation Logistics Alaina Shum said: "Hong Kong International Airport advocates and supports the airport community in its CEIV Pharma recertification, which helps to cement its status as the world's leading and busiest cargo airport."

The Cathay Pacific Cargo Terminal is being expanded to offer more temperature controlled capacity. While it is currently able to temporarily hold and transit 6.6 million doses of vaccine a day, there is more to come. Mr Owen said: "We have just expanded so that it can handle more than seven million doses, and there will be more cold storage coming online soon. This new cold room storage will be able to handle a further 1.6 million doses."

"With the vaccine being so valuable and in such limited supply, it's critical that we get it right at every stage of the journey. We are confident about meeting the challenge, and we stand ready to play our part."

Airfreight rates likely to remain elevated and volatile in 2021

WITH the outlook of airfreight demand remaining uncertain and belly capacity slowly being re-introduced in the market, airfreight rates are expected to remain elevated this year.

Bruce Chan, vice president - global logistics at investment bank Stifel, said in a Baltic Exchange market update that airfreight rates are likely to remain elevated and volatile for some time, and those looking for reprieve in 2021 may have to be patient.

He said that a lack of bellyhold capacity would drive the high rates as passenger airlines will only slowly re-introduce international widebody services.

"By the second half of 2021, we do anticipate passenger flights to resume, especially as vaccinations pick up," Mr Chan said. "But we caution against over-exuberance, as the first flights to come back are likely to be short-haul, domestic, and leisure, which align less favourably with cargo.

"Core long-haul international travel and the belly capacity that comes along with it will be slower to return, in our view, so capacity relief for cargo should lag the recovery in airline passenger activity."

Mr Chan said that extra freighter and PAX-freighter flights would help alleviate some of the capacity pressure, but there were limits.

He explained that in the short term rates may not always be high enough to justify PAX-freighter flights, while in the long term companies may be cautious about investing in freighter conversions because of concerns about what will happen when belly capacity is eventually ramped up.

On the demand front, Mr Chan said that a faster than expected rise in e-commerce demand, Covid-19 vaccine supply chains and PPE demand would all drive the airfreight market over the coming year, reports London's Air Cargo News.

However, he added: "The full impact of vaccine distribution on air freight capacity may not be as severe as some anticipate, due to the disbursed nature of production and, quite simply, the form factor of the doses - we believe the bottlenecks are more likely to come from container availability, storage, handling, and road distribution."

With an uncertain rate outlook, shippers are looking to index-linked contracts and ad hoc agreements, according to Peter Stallion of air cargo derivatives broker Freight Investor Services.

"Much of the calendar 2021 pricing (full calendar year contracts) has reverted to a toss-up between the old normal for annual pricing and block-space agreements, to the new normal of high market-based price heavily focused on ad-hoc agreements.

"Unsurprisingly, a renewed focus has been placed on both index-linking of contracts in 2021, and dynamic pricing fed through and driven by airlines and forwarders to try to operate more efficiently to the elapsing market. Both of these factors have been driving [derivatives] interest."

Air cargo carriers extend space guarantees, but at premium prices

THE air cargo industry is slowly rebuilding the block space agreement (BSA) structure scrapped by airlines when travel bans grounded half the available capacity in late March, but shippers looking for fixed rates out of Asia this year will pay premium prices for such guarantees.

Airlines are beginning to extend the rate validity offered on some major trades to three months, a huge improvement from the price and space guarantees of one week or even less when all the passenger belly capacity was pulled out of service overnight at the end of the first quarter of 2020.

Although much of that passenger capacity remains on the ground, forwarders are beginning to get on top of the demand flows, locking in space through the extensive use of charter flights and entering strictly controlled BSAs with airlines that are deploying passenger aircraft in greater numbers as all-cargo carriers.

"At the start of this crisis, maximum validity of the rates was only one week, then it increased to two weeks, and now we are getting to months," Jan Kleine-Lasthhues, chief operating officer for air freight at Hellmann Worldwide Logistics, said. "It depends on the carrier and trade lane, but we are at the point where we can negotiate longer rate validity. But the market remains unpredictable, so on longer fixed contract rates, carriers will price risks in."

Passenger aircraft grounded by travel restrictions introduced at the end of the first quarter to slow the spread of the Covid-19 pandemic will not be back at scale until at least 2024, according to the International Air Transport Association (IATA), and major airlines have slashed the size of their fleets to accommodate a long-term decline in demand, reports IHS Media.

With so much capacity out of the market and volumes remaining elevated due to sustained demand for personal protective equipment (PPE) and electronics, air cargo has essentially been operating under what would normally be considered "peak season" conditions since March. This imbalance of supply and demand pushed spot rates up to record highs in April and May on both the trans-Pacific and Asia-Europe trades, as well as on the trans-Atlantic. While the rates declined sharply in June as PPE demand dropped off, the tight capacity kept rates elevated compared with last year before rising into the end-of-year peak season.

With air freight capacity in such short supply, shippers have few options at the moment, Mr Kleine-Lasthhues said. "If you want guaranteed capacity for next year, the only way is to negotiate a BSA or charter. On some charter trades, you can negotiate long-term rates with customers that want to be on the safe side during the [Covid-19] vaccine rollout and are willing to buy fixed allocations."

The limited available air cargo capacity will be even more constrained as Covid-19 vaccines are distributed around the world. The Pfizer-BioNTech COVID-19 vaccine was approved in the UK in early December, and approvals for other vaccines are expected to follow. However, Niall van de Wouw, managing director of CLIVE Data Services, said the additional demand could be a positive development for shippers, because it will force airlines to deploy additional capacity.

IATA issues guidelines to transport Covid-19 vaccines

IATA has published guidance for the air cargo industry to follow when transporting Covid-19 vaccines to ensure that they are moved safely and securely in what it says is the "largest and most complex global logistics operation ever undertaken".

The Guidance for Vaccine and Pharmaceutical Logistics and Distribution addresses how key challenges can be dealt with when moving the vaccine.

Such challenges include the availability of temperature-controlled storage facilities and contingencies when such facilities are not available; and defining the responsibilities of parties involved, such as government authorities and non-government organisations.

"The guidance includes a repository of international standards and guidelines related to the transport of vaccines and will be updated regularly as information is made available to the industry," IATA said.

It added that guidance was created with the support of numerous partners, including: the International Civil Aviation Organization, International Federation of Freight Forwarders Associations, International Federation of Pharmaceutical Manufacturers and Associations, Pan American Health Organization, UK Civil Aviation Authority, World Bank, World Customs Organization and the World Trade Organization.

Alexandre de Juniac, IATA's director general and chief executive, commented: "Delivering billions of doses of a vaccine that must be transported and stored in a deep-frozen state to the entire world efficiently will involve hugely complex logistical challenges across the supply chain.

"While the immediate challenge is the implementation of Covid-19 testing measures to re-open borders without quarantine, we must be prepared for when a vaccine is ready. This guidance material is an important part of those preparations."

The guidance recommends that governments and stakeholders consider: capacity and connectivity; facilities and infrastructure; border management; and security.

"The global route network has been reduced dramatically from the pre-Covid 24,000 city pairs," IATA said. "Governments need to re-establish air connectivity to ensure adequate capacity is available for vaccine distribution."

It added: "Vaccine needs to be shipped and stored in temperature-controlled environment. Some types of refrigerants are classified as dangerous goods. Considerations include availability of infrastructure, facilities and equipment and trained staff to handle time-and temperature-sensitive vaccines.

On border management: "Timely regulatory approvals and storage and clearance by customs and health authorities will be essential. Priorities for border processes include introducing fast-track procedures for overflight and landing permits for operations carrying the Covid-19 vaccine and considering tariff relief to facilitate the movement of the vaccine."

Finally, on security IATA warned that vaccines are highly valuable commodities and therefore arrangements must be in place to ensure that shipments remain secure from tampering and theft, reports London's Air Cargo News.

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