Will a COVID-19 vaccine lead to an air freight surge?

Based on our calculations so far, the answer is no. As of the beginning of August, commitments were made for approximately 2.18b doses, with about two-thirds of those, or 710 million doses, by the United States, and 700 million by the European Union. A further 300 million doses were ordered by the WHO-led Covid-19 Vaccine Global Access (COVAX) facility. In addition, 250 million doses have been ordered by Britain, 120 million by Japan and 100 million by Brazil. The biggest pharmaceutical company beneficiaries are AstraZeneca at 1.2 billion doses and Sanofo/GlaxoSmithKline at 460 million, with the balance of orders placed with Pfizer/BioN Tech, Novavax, Johnson & Johnson and Valneva. By contrast, total global vaccine demand in 2017 was approximately 2.4 billion doses, according to the WHO 2019 Global Vaccine Market Report . U.S. demand for the seasonal flu vaccine was already 175 million doses last season. In general, two-thirds of global vaccine production typically takes place in Europe, which is also the largest exporter of vaccines; monthly export numbers of drugs and vaccines are usually in the order of 4,000-5,000 tonnes per month. The U.S. imports about 9,000-10,000 tonnes of drugs and vaccines a month and exports around 4,000-5,000 tonnes. While that is substantial, it is hardly a blip on the air freight radar, and most of that number consists of stock standard pharmaceutical products. A number of reports have indicated more than 10,000 flights would be necessary to meet global demand for a vaccine. We think this number is too high and our initial estimates point to a number closer to around 1,500 -747 equivalents, or about 160,000 tonnes. This represents about 48% of the above 2.18 billion doses. What this actually means for the air freight business will depend on a range of highly uncertain factors: When the shipments start, the time period during which they take place, where they come from and where they go. Even though the approval and development process for vaccine candidates has been fast-tracked, we do not expect shipments to start in earnest until early 2021. And then, it is unlikely that they will all happen within a month's time, as there will be production constraints. We think an eight-month time period is more realistic. Who in the industry will benefit from these shipments? We think it will be carriers with CEIV and GDP certification that have already established relationships with pharmaceutical shippers and their logistics providers, such as Cargolux, AirBridgeCargo or Lufthansa Cargo, to name a few.

Will a COVID-19 vaccine lead to an air freight surge?

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