1 Dec 2020
Vaccine poses jumbo distribution challenge
As pharmaceutical giants announce COVID-19 vaccine breakthroughs, the logistics industry is grappling with the challenge of distributing doses to the world’s 7.8 billion people in a matter of months.
As delegates gathered at their screens for the digital Asian Logistics, Maritime and Aviation Conference (ALMAC) on 17 and 18 November, one industry player estimated that providing a dose for each of the world’s people would require cargo capacity equivalent to 8,000 Boeing 747 cargo aircraft.
The 10th ALMAC, jointly organised by the Government of the Hong Kong Special Administrative Region (HKSAR) and the Hong Kong Trade Development Council (HKTDC), concluded its two-day live-streamed programme on 18 November. More than 60 leaders from the logistics, maritime and aviation sectors around the world shared their insights in 35 topical sessions at the event.
ALMAC had its debut as an online event (ALMAC Online) this year and industries continued to show their support, with the digital conference attracting more than 10,000 viewers from nearly 60 countries and regions, including many from Hong Kong, Mainland China and nine out of 10 countries in the Association of Southeast Asian Nations (ASEAN) bloc, along with newcomers from Austria, Brunei, Brazil, the Czech Republic, Egypt, Hungary, Rwanda, Slovakia and Uzbekistan and more. This highlighted how the online format offered networking opportunities spanning the globe.
Distance no barrier
The ALMAC opening session was officiated by Carrie Lam, Chief Executive of the HKSAR, as Margaret Fong, Executive Director of the HKTDC, welcomed international delegates to the conference.
“While the global pandemic has necessitated the conference to be held online, it will not impede our ability to provide a platform for learning, sharing and networking. In fact, the online format allows the conference to move beyond the limits of a physical location to connect global participants to a world of industry insights and expertise,” said Ms Fong.
Also new this year is a strengthened focus on “aviation”, which has been added to the conference name to highlight the industry’s importance.
ALMAC Online provided several interactive channels to connect different industry players, helping expand business connections and build opportunities. Attendees could pair up with business partners easily through one-on-one virtual meetings and exchanging business contacts. The service created easy communication between potential business partners, generating more than 5,300 connections. Insight Exchange, Meet the Experts and Meet the Shippers sessions helped participants seek leading service providers of innovation technology and solutions. Representatives from key trade associations provided complimentary advisory services, covering areas such as regional supply chains under the pandemic, changing trade flows and logistics technology.
The HKTDC worked with 100 international chambers of commerce and other organisations to set up 10 sub-conference venues (including Ningbo, main picture) in areas with a low COVID-19 risk, connecting global logistics groups simultaneously. Numerous business-matching meetings and virtual roundtable sessions were organised for delegations from France, Germany and Italy, connecting them with industry players from Hong Kong and Mainland China to capture business opportunities.
COVID-19 vaccine air logistics
Frédéric Léger, Director APCS Products, International Air Transport Association (IATA), said the major issue the industry faces is reduced air-cargo capacity. Globally, the grounding of about two-thirds of passenger fleets and absence of non-stop freighters in some regions had a significant impact on the air freight industry. Hong Kong has been less impacted by the capacity crunch because of its hub status and the continued flow of freighter traffic.
Mr Léger also spoke about preparing for the shipment of COVID-19 vaccines. About 80 potential vaccines are currently in development, with some ready for shipping by the end of the year. Vaccine shipment will create significant supply-chain challenges since it is estimated that providing one dose for each of the world’s 7.8 billion people would require cargo capacity equivalent to 8,000 Boeing 747 cargo aircraft.
“The key factors depend on where the vaccines will be produced, where they are going, where they will transit, how many doses per person, and the time between injections,” Mr Léger explained. Infrastructure and staffing requirements should also be considered. For example, transporting some forms of vaccine requires storing at ultra-low temperatures of minus 80C, and there must be appropriate tracking and handling procedures, facilities, equipment, packaging and extra capacity on the ground. At the same time, air crews and ground staff must be authorised to support vaccine transport, with sufficient training on risk, quality and handling procedures to deal with time- and temperature-sensitive pharma products. Mr Léger said collaboration between governments would be crucial, suggesting authorities work to arrange fast-track vaccine delivery, expediting the release and clearance of goods to avoid bottlenecks at borders.
Alaina Shum, General Manager, Aviation Logistics, Airport Authority Hong Kong, said COVID-19 vaccines would generate about 65,000 tonnes of air freight but with challenging requirements such as ultra-cold storage, cool dollies, apron shelters and airport-wide IATA certification. She said Hong Kong International Airport (HKIA) was already fully equipped to meet these requirements well before the pandemic outbreak.
Nevertheless, Ms Shum said strict procedures to reduce risks during the pandemic would affect airlines’ ability to efficiently deploy crews, leading to additional costs and, in some cases, flight cancellations. She said Hong Kong authorities and HKIA had launched relief measures to help airlines keep flying, while HKIA was working with the Civil Aviation Department to increase capacity out of Hong Kong by expanding slot approvals for chartered flights, especially on high-demand routes carrying medical supplies. This resulted in a 25% year-on-year increase in freighter capacity from March to September this year, with some airlines refitting passenger aircraft to operate them for all-cargo services.
Expanded e-commerce role
Ms Shum said the pandemic had led to rapid growth in medical-supply shipments, including personal protective equipment, while the increase in work-from-home arrangements had boosted demand for e-commerce electronic products. Overall, she said, the pandemic had accelerated the shift to online shopping.
William Xiong, Chief Strategist and General Manager for Export & Global Logistics, Cainiao Network, discussed the growth of e-commerce during the pandemic. He said Cainiao, a mainland logistics firm, could handle 400 million packages a day with its global delivery network and has also helped international brands and companies leverage the power of big data to allocate inventories intelligently and cut costs. Demand for such services had increased more than 10-fold in recent months, he explained.
Mr Xiong said the company had already handled more than 130 million medical-supply shipments this year, serving about 150 countries and regions as well as many international organisations such as the United Nations.
He said freight prices had fluctuated heavily during the pandemic, and Cainiao looks forward to prices stabilising in the future. The company is expanding capacity and building connections in cooperation with partners to boost existing capacity and expertise. By 2021, the firm intends to add 3,000 more chartered flights and expand scheduled aviation services with a 72-hour turnaround time. With this move, Cainiao aims to cut costs through digitisation and optimisation for more affordable and accessible services that contribute to Industry development.
International maritime centre
The COVID-19 pandemic has also created concerns for the maritime industry. During the Maritime Forum, held in the afternoon on day one of the conference, Kitack Lim, Secretary-General, International Maritime Organization, discussed business prospects and said the industry faces two major challenges – digitisation and carbon-dioxide emissions reduction. In his keynote address to the forum, Mr Lim said the industry could not avoid the issue of energy transition and reduction of greenhouse-gas emissions and had to meet the Paris Agreement target of halving fossil-fuel usage. He said investment in research and development and infrastructure is one of the solutions, adding that innovations through digitisation and artificial intelligence (AI) were also necessary.
Several leading maritime industry players gave their insights at the forum’s “A Catalyst for Change” session. Vincent Clerc, CEO of Ocean and Logistics, A.P. Moller –Maersk, said the shipping industry had begun to rebound at the end of the second quarter of 2020 and demand from October to November had even exceeded expectations. Mr Clerc said most relevant services and technologies had been digitised for some time but the COVID-19 pandemic had accelerated the process with customers also seeking more digital solutions. Digitisation standards in the industry presented problems and digitisation involved large investments – and not all corporations could afford to adopt such solutions. Mr Clerc said A.P. Moller – Maersk was working hard to establish related standards for the industry. The company has decided to make full use of digitisation as it benefits both corporates and customers and opens up more possibilities.
Mr Clerc believed the industry has already achieved higher standards than required by the International Maritime Organization in terms of sustainable development and carbon emissions reduction. He added that A.P. Moller – Maersk would fulfil more commitments in response to customers' requirements and expectations, resolving climate change and carbon emission issues gradually.
On the rails
Chaired by Patrick Lau, Deputy Executive Director, HKTDC, ALMAC Online’s Power Dialogue session "Asian Connectivity under the ‘New Normal’” featured such speakers as Grom Alexey Nikolaevich, CEO, Chairman of the Board, United Transport and Logistics Company – Eurasian Rail Alliance (UTLC ERA), and Zheng Shuangli, Director of Operations, Chengdu International Railway Port Investment & Development (Group) Co., Ltd. Mr Nikolaevich said the pandemic had shown that railway was the most reliable means of transport because of the absence of delays, and the present situation made this advantage obvious. His company, for example, had seen a significant increase in transport volume to 500,000 20-foot equivalent units (TEUs) this year, with an average of one railway service departing from Mainland China or European borders every 45 minutes.
WTO addresses recovery
“There is an unusually high level of economic uncertainty right now. If the second wave of COVID-19 is better managed and vaccines are available soon, it could add three percentage points to trade growth,” Dr Agah said. “The pandemic has also accelerated economic and lifestyle changes, from working from home to booming e-commerce, that can accelerate trade reforms.”
Dr Agah’s address was followed by a series of panel discussions. Leaders from different sectors shared views on the topic "Leading Through a New Paradigm of Global Logistics Risks under Uncertain Trading Environment and Cyber Disruptions”, exploring the challenges confronting globalisation in an era of geopolitical tensions and trade protectionism. “Better transport connectivity results in better trade and increased productivity. Intra-regional benefits from trade agreements have been bolstered further by the pandemic,” remarked Jan Hoffmann, Chief, Trade Logistics Branch, United Nations Conference on Trade and Development.
ALMAC Online hosted two Supply Chain Management Forums, covering “Adopting Automation, Robotics and AI in Logistics and Supply Chains” and “Shaking up Supply Chain Management from E-commerce to Social Commerce”. Power Dialogue sessions examined Asian connectivity under the new normal, the digitisation of the supply chain, digital cargo and other topics. Launched last year, InnoTalks and MarketTalks both returned in 2020. The InnoTalks sessions featured innovative solutions to keep conference participants abreast of technological developments in the logistics industry and help generate new impetus in their business. MarketTalks featured key industry players from Mainland China, India, Malaysia, Thailand and the United Arab Emirates, who led attendees in exploring regional opportunities through logistics ecosystems.