Cold Supply Chain
The cold chain is a kind of supply chain that specializes in the storage, transport, and preservation of cargo that needs to be maintained at a specific temperature or within an acceptable temperature range. Transportation modes like truck, rail, air, and ocean are the fundamental backbone of the temperature control chain of custody network.
The cold chain has been in existence for a while, supporting the perishable livestock and processed food industry with important roles in transplant transportation and temperature-controlled pharmaceutical material. COVID-19, made the cold-chain industry realize that it is not ready to handle a pandemic because of infrastructure bottlenecks and inflexible business processes. The newly developed COVID-19 vaccines have exposed the gaps in the cold chain industry when there is a need to handle very cold shipments.
Cargo has always been an integral part of the air transport industry. Its contribution to total movement of goods is standing strong at 25% CTK (Cargo-Tone-Kilometer) * Source : IATA: Industry Readiness for Vaccine and Life Science Products Transportation Oct 2020
However, lack of capacity in terms of freight aircraft is one of the key air cargo challenges. Other challenges include seamless partner/network communication, trained crew, and ground handling staff. If we look at the capacity-wise split of passenger versus cargo equipment, it stands at an 80:20 ratio split. * Source: IATA: Industry Readiness for Vaccine and Life Science Products Transportation Oct 2020
Preighters, a combination of passenger aircraft and freighter, have been instrumental in key global markets, providing the much-needed cushion to build capacity during the pandemic.
Air Cargo's contribution to the airline business has significantly increased, over the past 18 months. It used to be 10-15% of the total airline revenues before the pandemic. Now with the surge in demand and airlines' ability to plan preighters this contribution stands at 30-35% of airline revenue. Source : IATA: Key Learning from the ongoing vaccine distribution effort and paving the way for future April 2021
On the other hand, Air Pharma has proven resilient this year. In terms of volume vs other air cargo transportation types, as general and other cargo categories saw a drop; pharmaceutical saw a constant increase of 2% y-o-y. Source : IATA: CDC-Enhanced CargoIS
The Change Matrix | Cold Supply Chain
Industry readiness and preparedness to manage a global supply chain for vaccines, as well as health and humanitarian supplies, is a must in order to effectively respond to future pandemics and/or disruptions. COVID-19 has demonstrated various gaps in the global cold chain industry, whether it is capacity or business process. Global collaboration is the only way that the cold chain industry will be able to support current and future pandemics, keeping worker health and safety as the focal point.
There are multiple teams involved to ensure a smooth and safe shipment delivery of vaccines via the cold-chain network. To quickly name a few, we have:
- Freight Forwarders
- Origin Cargo/Ramp Handlers
The foundation of collaboration is seamless communication, a lack of which impacts global supply chain planning efforts. Such critical shipments also have to be closely monitored for damage and theft throughout the value chain.
Manufacturers need to have visibility to airline and airport terminal cargo and ground handling capacity along with available flight schedules, even before the release of vaccine shipments.
Freight Forwards play a much more important role. They are the ones who will be ensuring that shipment is taken from the manufacturer all the way to the designated airport from the point of origin. They are the ones who will also ensure that the temperature-controlled shipment reaches the destination on its last mile with limited or zero damage. Uninterrupted temperature monitoring and control across the global supply chain, coordinating an integrated transport solution, and land-based infrastructure will be a few key responsibilities.
Airport Cargo/Ramp Handlers and Airlines are critical to the journey. Apart from the availability of the infrastructure, they need to ensure clear visibility of flight schedules, departure runways, closest available ramps, and trucking access, all the way to the aircraft load duct.
At each milestone, the health and safety of staff along with the speed of training new staff will be critically important to the efficient functioning of the cold chain.
Customs authorities need to ensure that necessary government and regulatory bodies are notified at each step of the journey by making border processes nimbler to accommodate fast, secure movement of vaccine shipments.
The Proposed Solution
Industry bodies have come with defining guidelines that will evolve the end-to-end cold-chain industry and make them future-ready. HCL’s chain of custody solution framework for cold-chain complies with these global guidelines.
HCL’s Smart Vaccine Tracking Solution (SVaT) provides a seamless mechanism for cold-chain transportation covering condition monitoring, temperature control, health and safety, training, shipment security, and chain of custody across each step of the value chain. This is made possible by leveraging state-of-the-art digital technologies like IoT, AI/ML, blockchain, and automation, to enable the future of supply chains.