WHO faces ‘outrageous’ air freight rates for vaccine-related shipments
WHO logistics chief, Paul Molinario, said rates for moving dry ice have jacked up 20-fold, with some charging at $105 a kilo.
December 14, 2020
By PLA Editor
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The World Health Organisation’s logistics chief last week complained about “outrageous” airfreight charges for vaccine-related consignments as lack of capacity has driven prices up amidst the pre-holiday rush.
Paul Molinaro, WHO chief of operations support and logistics, told Reuters that “across the board” increases in airfreight rates could make the movement of vaccines to emerging nations more difficult.
He cited rates for the movement of dry ice needed to maintain vaccines at cold temperatures, which have jacked up 20-fold.
“I just had a quote from a cargo company—a big one that shall remain nameless—Dallas, Texas, USA to Sierra Leone, Freetown—at sort of $105 a kilo, which is outrageous actually,” he said, noting that the ‘normal price’ would be $4 to $6 per kilo.
As far as the state of the market goes, Transport Intelligence’ believes this is perhaps not very surprising as consumer demand in the US remains strong and shippers opt for air transport given by the level of congestion in container shipping.
“Combined with the huge shift towards internet retailing, airfreight is experiencing a moderately robust recovery in demand,” Ti added.
But it did say the supply-side is a mess. IATA’s October data showed cargo capacity (available cargo tonne-kilometres) down 22.6 percent year on year, cargo traffic (in cargo tonne kilometres) down 6.2 percent, but with load factor up at 57.6 percent.
In Asia Pacific, lack of passenger flights have resulted to belly capacity shortage which hampered the month on month recovery of air cargo since the pandemic started, AAPA reported on its October figures.
A greater than usual pre-Christmas increase in e-commerce, cited by WHO’s logistics chief, is just one of the factors driving up prices, and after the holidays in January, capacity might increase, he says.
IATA’s chief economist Brian Pearce told reporters last week that Christmas demand “exaggerates the problem” of soaring cargo rates, which should ease early next year in time for the ramp-up in vaccine shipments. “That’s the low season for the cargo business—that will free up a lot of capacity,” he said.
Transport Intelligence suggests that the state of the market will be one of recovery, however, the swings in prices may be as volatile as those seen in March or April, which could bring further concern to the WHO.
“The impact on the ability of pharmaceutical shippers to access this capacity however is very uncertain. Indeed, as the various vaccines are deployed in nations such as the UK and US, economic demand is likely to recover very quickly.
“This may include demand for air services leading to near-moribund airlines reviving their fleets.
“However, there is likely to be a difference in the timing of recovery between different parts of the world and this will affect both demand for and the supply of air services,” according to Ti.
The WHO hopes to have half a billion doses of COVID-19 vaccines available for distribution by the COVAX initiative in the first quarter of 2021, according to its chief scientist.
With UNICEF taking much of the lead on delivering COVID-19 vaccines to developing countries, WHO may help arrange delivery of COVAX vaccine supplies to ‘hotspots’ such as Somalia or Yemen or to sanctions-hit Iran or North Korea, Molinaro said.
“It will be areas where it is not necessarily straightforward using the regular passenger/cargo network,” he said. “Syringes will be sea freight, you wouldn’t have air capacity to move that, no way,” he said.
UNICEF in pre-crisis 2019 said it spent $35-$40 million on international vaccine freight when it procured 2.43 billion doses for immunisation campaigns against polio and other diseases.
Since then, prices have gone “through the roof,” the agency’s transport chief Pablo Panadero said. But UNICEF is negotiating lower rates with airlines for the airlift.