Global air freight impacts of COVID vaccine distribution likely to be modest

Inoculating the world’s population against COVID-19 may require up to 12.6 billion doses of a vaccine. So far, we count preorders of 8.1 billion doses with more than 10 different companies. By contrast, annual vaccine production is normally on the order of about 2.4 billion doses, mostly related to the seasonal flu vaccine. Producing and distributing vaccines in a timely manner has the potential to create bottlenecks along the supply chain. However, we think the impact on airfreight on a global scale will be relatively modest at around 50,000 tonnes of additional intercontinental traffic spread unevenly over a two-year period, depending on how production capacity ramps up in the next four to five months. While there is additional opportunity in regional networks, particularly for express carriers, most vaccines will be distributed by ground. Based on production sites and demand, we estimate that about 41% of all vaccines will be moved by air.

Vaccine Candidates and Preordered Doses

As of today, there are 52 vaccine candidates in clinical evaluation and more than 160 vaccines in pre-clinical evaluation from over 30 countries worldwide. Our analysis focuses on vaccines that have been approved for limited use or are in Phase III of the clinical stage, seeking final approval. We have also included some Phase II candidates with large orders announced by countries. Most vaccines listed are being developed and produced by research institutions and corporations in China, Europe and the United States. Table 1 shows the list of the most advanced vaccines, their production sites and phase of clinical trials. Table 1 – Advanced vaccines in clinical evaluation as of Dec. 9, 2020

Sources: Cargo Facts Consulting, Duke Global Health Innovation Center, Johns Hopkins University, U.S. National Institutes of Health and the World Health Organization

It is important to note that most of the vaccines listed are administered in two doses, with the exception of the Johnson & Johnson-Janssen vaccine that has trials for one and two doses, and the single-dose Chinese CanSino vaccine. The vaccine that was developed by Anhui Zhifei Longcom Biopharma in conjunction with the Institute of Microbiology at the Chinese Academy of Sciences is expected to be administered in three doses.

It is estimated that the major vaccine developers could produce around 5.5 billion doses by the end of 2021, covering 35% of the world’s population. This number is based on the estimated distribution quantities planned by Pfizer, Moderna and AstraZeneca, the closest contenders to widespread distribution.

Gavi, the International Vaccine Alliance founded by the Bill & Melinda Gates Foundation, is a public-private partnership focused on facilitating vaccine access in developing countries. Along with Gavi, the World Health Organization (WHO) and the Coalition for Epidemic Preparedness Innovations (CEPI) are running Covax , a joint fund organization, to develop and distribute the vaccine. So far, the alliance has raised over $2 billion, secured about 1.2 billion COVID-19 vaccine doses, and committed to equitable access to all participants. Most of the participants are developing countries in the Caribbean, Africa, Oceania and Central and South Asia. Neither China nor the United States have agreed to participate in the Covax program.

Our research shows that of the 8.1 billion total vaccine doses ordered worldwide, the United States, Canada, the European Union, China, Japan and the U.K. account for about half of the planned vaccine orders. Furthermore, China and Russia have not disclosed much information regarding the orders of their domestically produced vaccines. Some countries, like South Korea for example, are still evaluating the safety, distribution requirements and efficacy of the vaccine candidates; although South Korea is relying on Covax for 20 million doses, it has not yet ordered a vaccine. Figure 1 – Confirmed orders of COVID-19 vaccine doses by country, as of Dec. 9, 2020

Airfreight Impacts

Our research shows that about 41% of the global distribution of the vaccine will be transported by air, resulting in a total of 50,000 tonnes of freight in the next two years. That is a blip on the airfreight radar as last year the industry moved more than 60 million tonnes. These estimates could change based on vaccine approvals, new orders and distribution requirements. In number of flights, this equates to the equivalent of 454 Boeing 747-400 freighters, assuming 110 tonnes per aircraft. This is a far cry from the 8,000-20,000 747-400 freighters previously quoted by other sources. Assuming that volumes are spread across multiple flights at about 8 tonnes per flight, we would be looking at about 6,000 flights carrying COVID vaccines. Volume will depend on packaging and requirements, but our initial findings result in high-density cargo.

Table 1 above shows where the various vaccine candidates are being produced, allowing us to map distribution by air across the globe. Figure 2 below maps the air trade flows worldwide and shows the vaccine quantities produced and distributed locally, in millions. Most vaccine production sites are located in the United States, Europe and Asia (India and China), so most air trade lanes originate in those regions. According to our research, the demand for air freight will be greater across Japan, South America, South Asia and Africa, so carriers with existing operations and equipped facilities in these areas will be in a much better position to transport vaccines.

The thickness of the arrow in Figure 2 represents the number of orders confirmed by each country or region. Note that not all vaccine air trade flows are displayed here (see notes for details). Figure 2 – Estimated global distribution of COVID-19 vaccine pre-orders in millions

Notes: Intra-Europe accounts for all EU, Swiss and U.K. production; Intra-North America accounts for all U.S. and Canada production; Of the 500 million doses from Europe to Asia, 300 million are destined for China and 200 million for Southeast Asia; Vietnam and India have placed orders for 100 million doses each for Gamaleya, the Russian vaccine, and these air flows are not shown in Figure 2; An estimated 200 million doses via Gavi (Covax) will be produced in India and distributed by air in Central and Southeast Asia, an air flow not shown in Figure 2. U.S. distributor McKesson, which distributed the H1N1 vaccine back in 2009, has become the centralized distributor of the vaccine in the United States. Once vaccines are allocated to authorized partners, McKesson will deliver doses to locations where vaccines will be administered. Most U.S. distribution will be via truck, with some segments requiring airfreight. Figure 3 maps the air trade flows worldwide and shows the weights distributed locally and shipped via air. Figure 3 – Estimated global distribution of COVID-19 vaccine pre-orders in thousand tonnes

Assumptions

Cargo Facts Consulting has made several assumptions to estimate the total airfreight required to distribute the COVID-19 vaccine. Table 2 shows our own research assumptions, which include a 70% population coverage to achieve herd immunity across the world, and a vaccine waste rate of 15% as not all vaccines produced will be successfully administered. The weight data for the vaccines and accessories are calculated based on data by UNICEF for previous vaccines. Table 2 – Cargo Facts Consulting research assumptions and results

Source: UNICEF, WHO and the World Trade Organization

Vaccine transport by air so far

Traditionally, approximately two-thirds to three-quarters of worldwide vaccine production has taken place in Europe, with the rest mainly produced in the United States, India and, to a lesser extend, Japan. Given the value of vaccines, most move by air. Europe usually exports some 500-700 tonnes of vaccines per month, the United States exports around 300-400 tonnes per month, and India about 200 tonnes per month. Actual shipments vary by month with peaks driven by shipments of seasonal flu vaccines and other vaccination campaign related spikes.

Figures 4, 5 and 6 show vaccine imports and exports in tonnes since the beginning of 2019 and through the end of Q3 2020 for the United States, the European Union and Japan. This data shows, there hasn’t been an upsurge in vaccine imports or exports across theses three regions so far. However, given that authorizations and vaccination campaigns are starting now, we expect this to change. Figure 4 – Vaccine Trade Flow Development in the United States

Figure 5– Vaccine Trade Flow Development in the European Union

Figure 6 – Vaccine Trade Flow Development in Japan

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