ZURICH (Reuters) – Joern Schneemann thought he would be helping manage logistics for the Tokyo 2020 Olympics this year. Then, the COVID-19 crisis intervened, pushing the event back to 2021.
Instead, the head of Swiss logistics company Kuehne + Nagelâ€™s European Expo & Events unit has been setting up vaccination centres in convention and sporting venues in Germanyâ€™s North Rhine-Westphalia state, the nationâ€™s most-populous with 18 million residents.
Schneemannâ€™s pandemic pivot illustrates how logistics firms like Kuehne + Nagel, Germanyâ€™s Deutsche Post DHL, Denmarkâ€™s DSV Panalpina and Spainâ€™s Grupo Logista have turned COVID-19 disruption into opportunity, grabbing a share of the burgeoning â€œvaccine economyâ€ while managing record demand in traditional businesses.
â€œBecause of the pandemic, things turned out quite differently than we had planned,â€ Schneemann told Reuters from his German offices. â€œAnd it turned out well.â€
Neither North Rhine-Westphalia, which kicks off its vaccination programme in nursing homes on Sunday in line with the rest of Germany, nor Kuehne + Nagel disclosed the contractâ€™s value.
The company, which has secured other, undisclosed government contracts, will manage the rollout of millions of vaccines including Pfizer and German partner BioNTechâ€™s, which won European approval on Monday.
It must coordinate deliveries to halls filled with refrigerated containers that can handle the vaccineâ€™s minus 70 degrees Celsius storage requirement at 53 sites around the state.
Europe is due to get 12.5 million doses of the Pfizer/BioNTech vaccine by Dec. 31, with Germany expecting up to 4 million doses through January, enough to inoculate 2 million people with the two-shot treatment.
â€œThe temperature will also be electronically monitored and recorded during transport,â€ said Axel Birkenkaemper, a spokesman for North Rhine-Westphaliaâ€™s health ministry.
Rival Deutsche Post DHL has secured similar contracts in Lower Saxony and Baden-Wuerttemberg states to store and deliver part of the first tranche of the 300 million potential doses Germany has ordered.
â€œItâ€™s more urgent and complex, certainly,â€ said John Pearson, chief executive officer of DHL Express. â€œBut weâ€™re accustomed to handling these kind of deliveries. We do this everyday.â€
In general, the shippers have survived the pandemic in good shape after online sales soared during lockdowns.
Kuehne + Nagelâ€™s third-quarter profit easily beat expectations, DSV called market conditions â€œbetter than anticipatedâ€, and Deutsche Post DHL, which is also delivering COVID-19 vaccines to Israel, is benefiting from a fresh surge in ecommerce in the run up to Christmas.
Billions of doses are needed to inoculate the world over the next 12-24 months but COVID-19 shots will still make up only a fraction of global shippersâ€™ volumes in 2021.
And they are optimistic about the ability of logistics networks to handle the load, despite major challenges like the Antarctic chilling demands of Pfizer/BioNTechâ€™s shot, deliveries of which are also underway in the United States, Britain, Switzerland and parts of the Middle East.
Geneva-based global trucking organisation the International Road Transport Union (IRU) estimates 8 billion vaccine doses could be moved by fewer than 100,000 truck transports, or less than 0.00001% of the annual total.
â€œWe donâ€™t foresee problems,â€ IRU spokesman John Kidd said. â€œRoad already carries over 80% of all goods transported overland, including…volumes of food and medicine to retail outlets.â€
Still, delivery of COVID-19 vaccines may yet give a boost to airlines where passenger numbers have collapsed, as they augment cargo fleets or re-purpose idled passenger jets.
While shippers like U.S.-based FedEx and UPS that can move smaller volumes quickly may have an advantage during the 70-million-dose rollout projected in 2020 for vaccines from Pfizer/BioNTech and Moderna, DSV Panalpina is counting on deliveries accelerating next year.
â€œDSV will only become active in the distribution around April, when mass roll-out starts,â€ the Copenhagen-based shipper said.
Pfizer and Moderna predict 1.8 billion-plus doses come 2021, with other vaccine developers hoping to add to that if their candidates get approved, as expected.
Kuehne + Nagelâ€™s distribution is based in Liege, Belgium, where it is readying its European vaccines hub.
From here, shots will be trucked to Europe or loaded onto cargo planes, or â€œfreightersâ€, at nearby airports for long-haul journeys to places like Africa which will get vaccines under humanitarian programmes.
â€œWe can send a freighter out and hit four or five of those countries in milk run-type fashion back into Liege,â€ said Rob Coyle, Kuehne + Nagelâ€™s pharmaceuticals logistics business head.
For 11 billion vaccine doses, Coyle estimates 5,000-6,500 trucks or roughly 1,000 large freighters would be needed. While some types of transport will get busy, shippers can manage volumes as vaccines roll out, Coyle said.
â€œOther industries, aerospace, automotive, theyâ€™ve got less volumes,â€ Coyle said. â€œWeâ€™re already having conversations with air carriers, to pull some of their airplanes out, if we need (to).â€
Reporting by John Miller in Zurich, Jacob Gronholt-Pedersen in Copenhagen and Matthias Inverardi and Tom Kaeckenhoff in Duesseldorf; Editing by Kirsten Donovan