The Supply Chain Matters blog provides a bi-weekly summary capsule of news reports that have implications for various industry supply chains directly related to the ongoing COVID-19 coronavirus pandemic.
With both virus and associated vaccine related 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 November 30 and a prior capsule was published on November 16.
Included in this update include:
COVID-19 Coronavirus Global Wide Status
Second COVID-19 Vaccine Approved
Vaccine Distribution Glitches Already Reported
U.S. Wide Package Delivery Networks at Maximum Capacity
Global Deaths Attributed to COVID-19 Coronavirus Nearing 1.3 Million
According to the Johns Hopkins Coronavirus Resource Center, since the first data was recorded by Johns Hopkins earlier this year, global wide COVID-19 infections have now surpassed 75.8 million positive cases, an increase of 12.8 million since our last bi-weekly update. The top five countries for infection rates remains the same as our last update:
United States– 17.5 million cases
India– 10 million cases
Brazil– 7.2 million cases
Russia- 2.8 million cases
France– 2.5 million cases
The global death toll attributed to this virus is now exceeds 1.7 million victims. The United States continues to lead and trend upwards. The top five countries with reported deaths include:
- United States– 313,984
- Brazil– 185,650
- India– 145,136
- Mexico– 117,249
- Italy- 68,447
Daily infection and hospitalization rates in the United States continues at record highs. As of this writing, across the U.S. there are now more than 114,000 hospitalizations with over 21,000 patients in intensive care units, and with many hospitals reaching maximum capacity. The situation remains particularly acute in the state of California with over 200,000 cases reported in the last two days. With the upcoming Christmas holiday being celebrated next week, healthcare officials are pleading people to not congregate for celebrations and to restrict travel.
Likewise, concerns are rising relative to increasing infection rates across Europe and other continents. Today, the United Kingdom imposed an emergency lockdown of the entire city of London as well as Southern England as a reported new stain of the virus has health officials highly concerned because of a believed 70 percent higher infection rate. Italy has imposed a total lockdown that extends from December 24 to January 6 as a concerning new outbreak is reported in the southern region of Campania, which includes the city of Naples.
Second COVID-19 Vaccine Approved
Yesterday, the vaccine developed by Moderna and the National Institute of Health became the second vaccine granted emergency use approval by the U.S. Federal Drug Administration (FDA). Pfizer and its German partner BioNTech became the first developers to seek emergency clearance in the United States. Similar to the Pfizer vaccine, two shots are required to achieve immunization.
Shipments of this vaccine are expected to begin in 24 hours with initial shipments of this vaccine arriving in U.S. hospitals by Monday. As we have noted in prior updates, the cold temperature requirements for the Moderna vaccine are far more manageable that that of Pfizer, the equivalent of a normal freezer.
U.S. health officials expect to ship enough doses of both of the now approved vaccines to able to vaccinate upwards of 20 million people by the end of December.
Moderna itself is planning to supply between 100 million and 125 million doses globally in the first quarter of 2021, with 85 million to 100 million being made available in the U.S.. According to published reports, the vaccine will be shipped from manufacturing sites to “fill and finish” facilities where the vaccine is placed into individual vials as well packaged for distribution. New Jersey based Catalent is reportedly contracted for the fill and finish process.
Unlike the Pfizer vaccine, U.S. wide distribution of the Moderna vaccine will be coordinated by McKesson Corp., a large global pharmaceutical distributor. The distributor will be coordinating shipments to include both the vaccine and needed syringes and other supplies in kits. Parcel carriers FedEx and UPS will similarly be involved in the logistics and shipment to designated U.S. destinations, and two new cold chain facilities located outside both of these carrier hubs are being brought online for the distribution effort.
Vaccine Distribution Glitches Already Reported
This week, Operation Warp Speed officials elected to quarantine a reported several thousand doses of the Pfizer developed vaccine after in-transit “anomalies” were detected. In package temperature sensors were obviously instrumental in alerting to the condition.
Two separate shipments, one that arrived in a site in California and the other to a site in Alabama, were both flagged because temperature monitors indicated an environment colder than the specified minus 70 degree Celsius. In both shipments the ambient in-package temperature was recorded as minus 92 degrees Celsius.
According to Operation Warp Speed officials, both shipments never left their trucks and were returned immediately to Pfizer’s U.S. distribution facility for further analysis. Replacement shipments were immediately dispatched. Officials indicated they were taking no chances and trust that Pfizer can determine what might have caused this condition, and whether the vaccine was still safe at such temperature levels.
There has also been miscommunication regarding planned supply levels for the next planned shipment of the Pfizer vaccine schedule for distribution this week. Certain U.S. states have complained they are now being informed that scheduled shipments are 30 percent to 40 percent lower than originally planned. U.S. Army General Gustave Perna, responsible for overall logistics in Operation Warp Speed, has today indicated that the confusion was due to a “planning error” and apologized for the error.
Early modeling by global tech market advisory firm ABI Research indicates the need for at minimum of 857 temperature-controlled trucks departing the Pfizer and Moderna manufacturing or distribution facilities each month. Producers of dry ice among various nations have been fielding calls from transportation companies, hospitals and numerous healthcare facilities seeking added supply of this now in-demand commodity. Both Pfizer and UPS have been boosting their own capabilities to produce added dry ice at respective facilities. Because the commodity has a short shelf-life, just-in-time inventory management will be critical over the coming months.
Like many large-scale initiatives, glitches are to be expected but the question is how many and how frequent. Time will tell.
U.S. Wide Package Delivery Networks at Maximum Capacity
Approaching the final week before the Christmas holiday it is now abundantly clear that U.S. wide package delivery networks are at maximum capacity. The combination of significantly high volumes of online orders associated with the holiday, and now the priority shipments of COVID-19 vaccine, have forced major parcel carriers to continue to either meter or refuse pickup of packages from retailers and shippers.
Many retailers are now warning shippers of elongated delivery times while carriers FedEx and UPS continue to enforce preset capacity limits among individual retail shippers. This week, multiple reports indicate that the U.S. Postal Service is completely swamped with parcel volumes with delivery times delayed to excessive levels.
The Chief Marketing Officer for FedEx told investors this week that; “All available capacity across the entire industry has been severely constrained.”
Regarding vaccine distribution, Business Network CNBC reported that the U.S. Federal government delivered 2.9 million doses of the Pfizer vaccine this week with next week’s plan being delivery of an additional 2 million doses of Pfizer and upwards of 6 million doses of the Moderna vaccine. These volumes are all prioritized on both FedEx and UPS parcel delivery networks, adding to network demands.
At the same time, carriers are striving to maintain their contracted service levels, given the series of rate hikes and surcharges occurring during this period.
According data prepared by ShipMatrix and made available to media outlets, between the two weeks of November 22 and December 5, on-time service levers were noted as being 94.9 percent for FedEx, 96.3 percent for UPS and 92.8 percent for the USPS. All were reportedly better than the same period last year but keep in-mind that carriers had, as they have done in prior years, elongated their contracted committed transit times by several days leading into this surge period.
This week, FedEx reported financial performance for the quarter ending November 30 that was headlined with a 29 percent surge in overall volumes for it FedEx Ground business unit, primarily driven by online order growth. Despite a near doubling of profitability, higher costs related to the pandemic and needs for additional contracting of equipment and resources were reported as much higher than previous peak periods.
This concludes our December 19, 2020 COVID-19 Industry Supply Chain News Capsule.
As the news cycle warrants we will continue such updates initially on a bi-weekly cycle.
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