The Supply Chain Matters blog provides a bi-weekly summary capsule of news reports that have implications for various industry supply chains.
With COVID-19 coronavirus news once again on the rise, we provide this feature to assist our readers in their efforts to keep updated on noteworthy developments. For reference, our previous capsule update was published on October 27.
Companies, institutions and product categories included in this update include:
Johns Hopkins- Coronavirus Global Wide Status
Two Promising COVID-19 Vaccine Candidates
Shortage of Shipping Containers Adds to COVID-19 Challenges
Select Consumer and Cleaning Staples Once Again Placed on Purchasing Limits
Global Deaths Attributed to COVID-19 Coronavirus Nearing 1.3 Million
According to the Johns Hopkins Coronavirus Resource Center, the global death toll attributed to this virus is now exceeds 1.3 million victims with the United States leading and clearly continuing to trend upwards. The top five countries with the highest reported reported deaths include:
- United States– 246,684 (An increase of nearly 21,000 deaths since our last update)
- Brazil– 165,798 (An increase of 8,401 deaths since our last update)
- 3. India– 130,070 (An increase of 10,568 deaths since our last update)
- Mexico– 98,542 (An increase of 9.371 deaths since our last update)
- United Kingdom– 52.208 (An increase of 6,938 deaths since our last update.
As of this week, since the first data was recorded by Johns Hopkins earlier this year, over 54 million positive cases have been recorded globally, an increase of 11 million since our last update. The global wide COVID-19 infection rate now exceeds 624,000 cases daily. Indeed as the Northern Hemisphere nations transition to the fall and winter months when more people reside indoors, there remains increased concerns for added outbreaks in the coming weeks.
Daily infection and hospitalization rates in the United States are now at record highs as individual U.S. States continue to impose mandatory face mask use, along with added restrictions for travel, nighttime curfews and group assemblies. As of this writing, across the U.S. there are reported to be in excess of 68,000 hospitalized with the virus, more than at any time during the pandemic and pushing many medical care facilities to their limits. The situation is particularly acute in the U.S. Upper Midwest and Plains states where rural hospital facilities are being overwhelmed with hospitalizations and consequent critical cases.
Likewise, concerns are rising relative to increasing infection rates across Europe and other continents. Regarding the former, lockdown conditions and added restrictions are now being more widely imposed and there are growing concerns that the upcoming holiday period may add to infection rates if family groups are allowed in congregate indoors without adequate protections.
Two Promising COVID-19 Vaccine Candidates
Since our last update, there has been news of two rather promising vaccines on the development front.
Last week, development partners Pfizer and BioNTech reported preliminary Phase 3 test trial results of 90 percent effectivity on the named BNT162b2 vaccine. The vaccine reportedly requires two doses that are given 21 days apart.
Today, vaccine developer Moderna indicated that preliminary phase trial data shows its coronavirus vaccine mRNA-1273 is more than 94 percent effective in preventing COVID-19 — a result that the company’s CEO indicated was a “game changer.” Moderna’s collaboration was with the U.S. government.
Both vaccines stem from mRNA T-cell immune response technology, a relatively new approach never previously used before for disease immunity. Both were developed with direct funding from the U.S. government’s Operation Warp Speed initiative. These two candidate vaccines have reportedly mild or moderate side effects, mostly pain at the injection site, fatigue and aching muscles and joints.
Both candidates must now undergo independent analysis as well as review from the U.S. Federal Drug Administration (FDA). According to reports, the FDA is expected to an issue an emergency use authorization for the Pfizer/BioNTech vaccine before the end of this year.
Vaccine Supply, Logistics and Administration
Regarding initial supplies, Pfizer has indicated it will have as much as 50 million doses of its vaccine produced by the end of this year, and another 1.3 billion in 2021. Moderna indicated today that it will have 20 million doses available by the end of this year and another 500 million to 1 billion next calendar year. Initial doses are anticipated to be prioritized for healthcare workers and first responders, with availability for broader populations not expected until mid to late 2021.
Major challenges remain in the logistics and administration of these and other candidates.
The Pfizer vaccine reportedly requires temperatures of nearly minus 100 degrees Fahrenheit (negative 70-80 degrees Centigrade) to remain effective. Experts warned that the U.S. lacked the necessary ultra-cold storage trucks and cargo planes needed to ship hundreds of millions of doses at sub-sub-zero temperatures and U.S. individual U.S. states currently lack the financial and infrastructure resources to support wider-scale vaccine administration. Pfizer has reportedly developed specially built ultra-low temperature “suitcases” packed with special dry ice that can be tightly sealed and shipped even in non-refrigerated trucks. But while this approach to ship the frozen vaccine may address transport needs, challenges still remain for local hospitals, pharmacies and outpatient clinics that will have to administer individual vaccinations to hundreds of millions of citizens with on-site cold infrastructure. Reportedly, these “suitcases” can only be opened twice a day for less than three minutes at a time while maintaining specified temperature standards.
A further consideration is the precise scheduling of the timing of both of the shots required in the Pfizer-BioNTech vaccine within the prescribed 21-day window.
Today, Moderna reported that its vaccine remains stable at 2 to 8 degrees Centigrade (36° to 46 degrees Fahrenheit ), the temperature of a standard home or medical refrigerators, for upwards of 30 days. Stability testing reportedly supports this extension from an earlier estimate of 7 days. Further reported was that mRNA-1273 remains stable at -20 degrees C (-4 degrees F) for up to six months, at refrigerated conditions for up to 30 days and at room temperature for up to 12 hours. In its release Moderna indicates:
“We are pleased to submit these extended stability conditions for mRNA-1273 to regulators for approval. The ability to store our vaccine for up to 6 months at -20° C including up to 30 days at normal refrigerator conditions after thawing is an important development and would enable simpler distribution and more flexibility to facilitate wider-scale vaccination in the United States and other parts of the world.”
Supply Chain Matters would venture to state that Moderna may have taken a more “design for supply chain” approach to its vaccine development. That could help ease cold-chain challenges for this particular vaccine.
Glenn Richey, Harbert Eminent Scholar and Chair of the Department of Supply Chain Management at Auburn University’s Harbert College of Business points out 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 percent to as much as 20 percent because of inadequate temperature control, getting cold storage shipping control just right is critical to the expansion of availability.”
Regarding the sheer overall volumes, Richey noted:
“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.”
Shortage of Shipping Containers Adds to COVID-19 Challenges
Multiple industry publications indicate that a large imbalance of empty ocean containers are plaguing global shipping and export needs especially among trans-Pacific routes. According to a Bloomberg published report, the dearth is causing the purchase price of new containers and lease rates to rise by 50 percent, along with added surge charges and slowing deliveries.
Most of the shortage is attributed to the recent surge in ocean container shipment volumes of exports from China destined to the U.S. and Europe. Hapag-Lloyd’s director of global container logistics recently dubbed this condition as a “black swan” moment for shipping.
Shipping lines are now prioritizing the return of empty containers back to China and other Asian ports where the lack of available containers has increasingly delayed shipments. The Wall Street Journal indicates that various U.S. based agricultural exporters are now facing a deep shortage of containers needed to export their products. With shipping lines prioritizing returns of available containers back to Chinese ports, leaves fewer containers available for inland loading and for commodity shipments that fetch lower revenue yield rates. The report noted that the Port of Long Beach processed 80,000 more empty outbound containers in the month of October than it experienced in 2019, while exports declined almost 13 percent in that same month.
Select Consumer and Cleaning Staples Once Again Placed on Purchasing Limits
The Wall Street Journal reports that some supermarket and grocery chains in the U.S. are reinstating purchase limits on items such as paper towels, soap, frozen food and cooking staples as consumers again conduct pantry and household loading purchases.
While some supply chains have recovered from the U.S.-wide shortages that occurred in March, inventories are noted as far from full recovery.
In our COVID-19 news capsule of October 2, we highlighted that consumer goods companies were accelerating production of what they considered to be the most popular items including those related to the upcoming Thanksgiving and Christmas holiday. Noted was that food sellers were attempting to stock in “months” rather than “weeks” of supplies in preparation of what is expected to be a long winter of people restricted to their residences. However, in spite of such efforts, producers have not had the ability to rebuild overall inventories especially for online channels.
On a related note, the Consumer Brands Association holiday forecast estimates that consumer product goods purchases will rise between 9.5 to 11.5 percent for the months of November and December and that COVID-19 has pushed year-over-year sales volumes up more than 10 percent.
The association’s CPG Pulse: 2020 Holiday Survey indicates that at-home consumption is already occurring at record levels and purchases will increase between $134 billion to $162 billion over 2019 levels. Online grocery has reportedly expanded with 42 percent of Americans reporting they used some form of online ordering of grocery products in the last six months. A further interesting statistic- while 46 percent of consumers expressed concern about access to food and beverage products, 57 percent are more concerned about household cleaning products. This difference is perceived by the survey authors to be likely driven by the panic buying that created shortages earlier this year.
This concludes our November 16, 2020 COVID-19 Industry Supply Chain News Capsule.
As the news cycle warrants we will continue such updates initially on a bi-weekly cycle.
© Copyright 2020, The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.
