COVID-19 vaccine traffic to be 'blip on the radar'

As carriers start transporting their first shipments of COVID-19 vaccines around the world, much attention has focused on the numbers needed to be shipped and the challenge that represents. While air cargo capacity is undeniably tight given the continuing weakness in the passenger sector, the need to deliver these vaccines — whether approved, awaiting approval, or under development — may not result in a major impact on overall airfreight traffic in the next couple of years, according to Cargo Facts Consulting. In this Industry Pulse video, Cargo Facts Consulting Analyst Guillermo Ochovo discusses how air cargo volume could be affected by vaccine traffic. For more on the effects of vaccine traffic, see Cargo Facts Consulting’s full analysis . A transcript is available below. This transcript has been generated by software and is being presented as is. Some transcription errors may remain. Jeff Lee Welcome to this cargo facts industry pulse webinar. I'm Jeff Lee, your host and associate editor of cargo facts. The cargo facts team is proud to deliver actionable information and insights through our premier aircraft symposiums presented regularly throughout the year. But we don't want the conversation to end at the close of each event. Each monthly webinar is designed to give you keen insights into crucial industry trends and developments and be a reference for you as you move your business forward. It is now my pleasure to welcome our guest presenter today, Guillermo Ochovo analyst at cargo facts consulting. Guillermo holds a Bachelor of Science in materials engineering with a specialization in nanotechnology and Molecular Engineering from the University of Washington in Seattle. With more than six years of experience in the aviation industry, Guillermo has worked closely with government agencies OEMs, airport operators MRO service providers and the source has experienced areas of expertise include industry research, market and financial analysis and project engineering Guillermo, I'll add it over to you today, we'll be taking a look at the impact of COVID-19 vaccine shipments on global airfreight demand, the trend that is very much on the minds of many as the first vaccines begin to ship. Guillermo Ochovo Hi, Jeff. Thank you. Thank you for the opportunity. So just a few items that we are going to be talking about today, we'll be presenting overview on the development orders and distribution status of the most advanced COVID-19 vaccines, we'll be looking at a map that shows the global distribution of the COVID-19 vaccine, and also how these is going to be distributed in the US. We'll also be looking at the trade flow, the historical trade flow for vaccines and how that has looked like in the past couple of years. And we'll end up with some q&a and key takeaways from from the presentation. So let's get started. As of today, there are about 50 vaccine candidates in clinical evaluation, and more than 160, in preclinical evaluation from over 30 countries in the world. So our analysis is focused on the vaccines that have been approved for limited use, or are actually in phase three of the clinical stage. We have also included a couple of vaccines here that are in phase two, but but have large orders confirmed and announced by some countries. As you can see in the table, the production sites of these vaccines are likely by research institutions and corporations. They're being developed by big institutional corporations in China, Europe and under us. And so far, we have counted about a billion of doses with with more than than 10 different companies. And it is important to note that the vaccines that we're looking at, will be administered in two doses, with the exception of a couple that that will be administered in one dose, or or in three. So, one one of the of the key things that we wanted to show here is that more than half of the of the vaccine orders that we that we have counted have actually been ordered by by the US, the European Union, Canada, Japan, China and the UK. Now, China and Russia have not disclosed much information regarding the orders of their produced vaccines, the ones that they're producing domestically. And there are some countries that were missing in these in this table, such as South Korea, but are still evaluating the safety, the distribution and the efficacy of the different vaccines before placing A large order there. Now, here here in the table we have, we have callbacks, and I'm going to explain what that is. And covas callbacks is actually a joint fund organization. And, and has been created by, by looking at private partnerships and public corporations. And this this kovax joint has been created with, with the goal of facilitating vaccine distribution and access in in developing countries. So far, this alliance has actually raised over $2 billion, securing about 1.2 billion doses of the vaccine. So, these these joint fund is committed to equal access to all the participants. And, and we have a lot of countries as part of the callbacks initiative. And a lot of them are also developing countries in in Africa, Central and South Asia and, and the Caribbean. Guillermo Ochovo our research shows that about 41 of the global distribution of the vaccine will be actually transported by by air, resulting in a total of about 50,000 tons of freight in the next couple of years. So, just to compare the the amount of air freight and that that was moved last year was more than 16 million times. So this is just a blip in the in the air freight rater. Now, these estimates could change based on vaccine approvals, new orders and and the different distribution requirements. But the the map that we're showing here shows the the Eric trade flows worldwide, and it shows the vaccine quantities that are being produced and distributed locally on those that will be moving by air. So the circles on the map that you see showed the the vaccines that will be that will be produced and and distributed locally. So, most production sites are actually located in Europe, North America, or the US, India, and China. So as you can see, most air trade lanes actually originated in in these different regions. Now, according to our research, the demand for for air freight will be greater across regions, such as South America, South Asia, Africa and Japan. So, carriers we have existing operations and facilities in these areas will be in a much better position to transport the vaccine. Now, the thickness of the arrows that you see in these map actually represent the number of orders confirmed by by each country. So a larger arrow will mean a much larger quantity of vaccines. So as you can see here, there will be for instance, a significant amount of vaccine doses moving from the South Asia region, specifically India, over over to Africa. And take a closer look at how vaccines will be produced and distributed in the in the US. Our research shows that so far, around 90% of all vaccine doses that that have been ordered by the US will actually be produced domestically, except for the 10% exception is there is the GSK vaccine that he's actually manufactured in in Europe. So, something that that we know as of today is the the requirements for one of the of the first vaccines that has been approved for for limited use, and this is the Pfizer vaccine. So these packaging requirements are are are available and everyone knows about them. But we do not have a lot of information on the remaining vaccines. We believe that we'll be seeing more in the next few days and week, but, but we don't have a lot of information regarding packaging requirements outside the Pfizer vaccine. Now, there are, we have listed here the manufacturing sites for for the different vaccines that will be produced in the US. And what we know so far is that in the past few weeks, most of these vaccine quantities have been moved by the Express carriers, mainly ups and, and FedEx. So we have seen very limited activity from the US carriers from United, delta. And American, they have they have been moving some of it. But these has been has been very, very limited. And these chart, we put together a chart showing what vaccine imports and exports have looked like during the past couple of years. to give you an idea, the US exports around three to 400 tons of vaccines per per month. And these these charts shows all vaccine imports and exports in tons since the beginning of of 2019. And through the end of q3 of 2020. And, and the result of these analyses is that there hasn't been an upsurge in in vaccine imports or exports across these region. However, knowing that, that there are some vaccines that are close to to being authorized, we believe that these these will change in the in the short term. Guillermo Ochovo great for some questions. Jeff. Jeff Lee Thank you again, for your research. I am curious, what what what are some of the variables that cargo facts consulting has taken into account when looking at and predicting these vaccine related traffic flows? Guillermo Ochovo Good. So we we've taken some some assumptions to to come up with with with a torn number with a with weight number. And these include vaccine or a number of two doses per vaccine. There again, there are some that will require one some that will require three but most of the ones that we have seen will require two doses per vaccine. We've also included a wastage rate of 15%, since not 100% of the vaccines will be administered efficiently to to the population. And we've also taking we'd have a closer look at weight of vaccines that have been transported by air in the in the last three, four years by different companies. And we came up with with a number of nine for 9.4 grams per vaccine dose and these includes packaging and other accessories. We've also looked at all the orders that have been confirmed so far by by the countries worldwide. And also the production sites, are these orders going to be produced and distributed? By by ground? Or that are they actually going to be moving by air? We've also estimated a 70% of vaccine coverage to to achieve immunity in the world. Jeff Lee Right. Um, you mentioned weight there. What about when it comes to the volume is that the average volume that you expect to be carried on on many of these flights. Guillermo Ochovo Right, so, so far we've we've taken a closer look at weight and we've done some initial analysis on on volume and how much space space would these vaccine transportation take. However, we only know we only know a little about this packaging requirements of of these vaccines, we have a lot of information about the Pfizer vaccine. But we don't have a lot of information about the others. So, we we do need to wait the Pfizer vaccine requires dry eyes and ultra cold temperatures to be to be transported in a safely manner. So we do need to wait and see what the other vaccine packaging and transportation requirements are before we can come up with an accurate number. For for volume, this is something that we are constantly monitoring. So, we will be looking at a volume analysis in the next in the next few weeks. However, our initial findings have shown that these these cargo is a he's a high density cargo. So that's, that's something important to highlight. Jeff Lee Interesting. And lastly, you you said though, that you expect around 90% of the US vaccines to be produced domestically. And obviously the the US vaccine imports and exports picture hasn't really changed yet, I mean up to October, but how do you expect that to change given that most of the vaccines used in the US will be produced within the US. Guillermo Ochovo So, as of today, with the orders that have been confirmed, confirmed by the US we we know that that about 90% of them will be produced locally. So, we believe that there is going to be an increase in both imports and exports, but on the export side, this increase is going to be larger and more significant, since there is demand from some countries in Latin America, some countries in in Asia that have bought and have confirmed orders from vaccines that will be produced and manufactured in the US. So we believe that the exports number the monthly exports number will will be increasing significantly, much more than than the imports for the US. Jeff Lee Right? That makes sense. So we've touched on a number of interesting topics that one of the different key points that we should take away from this Guillermo Ochovo right. So, based on on production sites and on demand, we are estimating that less than half of all the vaccines that will be produced will actually be be moving by by air and the impact on on air freight. When we look at these from from a global scale, will will be motorist at around 50,000 tons of of additional traffic, additional intercontinental traffic spread and evenly over over a period of two years. So all our assumptions are look at the end of 2022. And we look at when we look at a number of flights. This is actually equivalent to 500 Boeing 747 400 traders, if we assume full load of 110 tons per aircraft. But if we assume that volumes are spreaded across multiple flights, may be at about eight tonnes per flight. We're only looking at 6000 flights carrying vaccines over over two years. So we do not expect a large bottleneck in the in the air freight industry when it comes to the transportation of the COVID-19 vaccine. Jeff Lee Great. Thank you so much for your time and your research into this. And I know you'll be continuing to look at this closely. And we'll be interested to see what your findings are. So thank you to our audience for joining us on this episode of industry pulse. With this video. You will also see a full transcript of the conversation Guillermo and other members of the cargo facts consulting team body back regularly to share insights and analysis. You can learn more about cargo facts consulting at CFC insights.com until next time, we will see you online at Cargofacts.com

COVID-19 vaccine traffic to be ‘blip on the radar’

YYZ sees record freighter activity ahead of vaccine shipments

UPS to begin delivering Moderna COVID-19 vaccine

UPS to begin delivering Moderna COVID-19 vaccine

Cargo Facts Free Newsletters

Cargo Facts Connect Podcast

Follow Us

Welcome Back!

Retrieve your password