Deutsche Post DHL and rival DB Schenker have established air charter programs to meet rising demand for reliable capacity options amid an overall transportation shortage that has increased costs and shipping delays on high-volume routes during the coronavirus pandemic.
DHL’s freight-forwarding arm announced Monday an airfreight charter service aimed at the life sciences sector that is likely to be utilized for future distribution of a COVID-19 vaccine. The twice-weekly pendulum flights originate in Chongqing, China, and fly to Amsterdam and Chicago, then head east to Seoul, South Korea, before returning to China.
DHL Global Forwarding has contracted with Atlas Air to operate the flights on its behalf using Boeing 747-400 freighters, spokesman David Stöppler said.
There is apprehension within the health care and air cargo industries about how quickly a vaccine for COVID-19, once approved, can be distributed around the world given the immediate need to contain the spread of infection. Experts are warning there will not be enough aircraft, refrigerated storage facilities with specialized biopharma capabilities and chilled shipping containers to handle a massive vaccine release without increased planning and coordination among stakeholders.
Dr. Anthony Fauci, the U.S.’s top infectious disease expert, says a vaccine might be available by the end of this year, or early next year, but ramping up production and distribution could take much longer.
Headquartered in Bonn, Germany, DHL is the largest freight management company in the world by revenue and volume, according to Armstrong & Associates.
There is about a third less commercial air transport capacity for cargo this year because the coronavirus severely hindered travel, forcing airlines to close a majority of their passenger networks. Businesses rely on passenger aircraft, especially large jets used in international service, to move high-value and critical goods. Air cargo capacity is very tight out of Southeast Asia and even access to scheduled freighters can be difficult to procure in the current environment. On average, shippers worldwide are paying about 30% more to ship by air this year than last and rates are expected to rise as demand increases during the peak shipping season that runs now through the holidays.
Technology and manufacturing companies are also expected to take advantage of the new charter service, but DHL selected the route because of its utility for the life sciences and health care sectors.
South Korea experienced a 26.7% increase in health care-related exports in the first half of the year, with pharmaceutical goods leading the way with 52.5% growth year-over-year, according to Korea Biomedical Review. China exported 28.5% more medical devices in the first five months of the year than in 2019, according to Chinese figures, and demand for epidemic prevention supplies such as face masks is expected to increase in anticipation of an expected second wave of COVID-19. China, the Netherlands and the U.S. are among the top 10 exporters and importers of medical goods.
In a recent white paper, DHL projected that 15,000 flights, 200,000 pallets and 15 million cooling boxes will be required to distribute a COVID-19 vaccine worldwide over a two-year period. Shipping medicines, medical equipment equipment and diagnostic devices requires special handling and regulatory compliance to maintain product integrity.
The company has built an extensive network of certified facilities and processes for bio-pharma storage and transport, with technologies to track temperature-sensitive products such as vaccines during transport. DHL offers cold-chain consulting and a specialized air transport product with in-transit tracking of logistics and temperature data provided by RFID sensors. Data is monitored through an integrated IT platform that allows for active intervention at up to 17 touch points along the journey.
In April, DHL Global Forwarding managed the distribution of more than 1.3 million COVID-19 test kits from South Korea to Brazil, Ecuador, India, Lithuania, Poland, Russia and Saudi Arabia. It also has been operating a weekly airfreight service for aid organizations and governments shipping health and medical-related items and other goods from China to the Middle East and Africa.
FedEx Express on Monday revealed a new tracking device that can be attached to critical shipments, such as emergency medical supplies and vaccines, to provide more precise location information than is currently available. Instead of scanning packages at various intervals, the technology utilizes Bluetooth low-energy technology and Wi-Fi access points to provide status updates every two seconds.
DB Schenker, the logistics arm of German railroad operator Deutsche Bahn and the third-largest global forwarder, said it has launched a heavy charter operation to help Chinese exporters reach Chicago and Frankfurt. There are 10 full plane loads per week that shippers can book from Beijing, Shanghai, Zhengzhou and Hong Kong to Chicago and Frankfurt.
It’s the type of service that might come in handy for technology companies such as Apple, Microsoft, Sony and Samsung, all of which are soon expected to have new product releases that they need to rush to market by air.
“In China, the majority of the manufacturers have recovered to normal. With the COVID-19-pandemic still not under control worldwide, we do not expect passenger flights and belly capacity to return to the market within the next 12 months. The instability and insufficient supply within the capacity market have become a bottleneck for our customers,” said Martin Habisreitinger, vice president air freight for Greater China, in a statement.
The Global Flight Operations Program connects Shanghai and Frankfurt three times a week, Beijing and Frankfurt once per week, Zhengzhou and Frankfurt once per week, Hong Kong and Frankfurt twice per week, and Shanghai and Chicago three times per week. DB Schenker also offers partial charters, connecting Hong Kong to Frankfurt twice a week, Hong Kong to Los Angeles three times per week and Hong Kong to Chicago once per week.
Reserving entire planes for customers is nothing new for DB Schenker. The company typically runs about 1,200 chartered flights per year, according to its website. Earlier this year during the height of the coronavirus outbreak, DB Schenker provided 1,190 dedicated flights through arrangements with airlines, including 72 flights with COVID supplies out of China using reconfigured Boeing 767 passenger airplanes operated by Icelandair.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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