Wednesday, May 6, 2020

Air travel shutdowns disrupt medical supply chain

Drug industry warns that cuts to passenger airline service have put medical supplies at risk | Washington Post - Ian Duncan:

May 2, 2020 - "Dramatic cuts in passenger airline service in the face of the coronavirus pandemic have had an unintended consequence: disrupting the supply chain for the pharmaceutical industry, which relies on room in the bellies of passenger jets to quickly move drugs around the world. The loss of the cargo space has revealed itself in dramatically higher costs for airfreight. The normal rate of a few dollars per kilogram — a little over two pounds — has surged to as much as $15, customs brokers say. Organizations representing major drugmakers have warned that the strain on their supply chains could affect their ability to respond to the ongoing pandemic....

"The outbreak has underscored America’s dependence on foreign-made medicines, pharmaceutical ingredients and medical supplies, many of which come from China and India. And it’s an issue that could be of critical importance if a vaccine for the coronavirus is developed and there is a global scramble by nations seeking to protect their citizens.

"Already, U.S. officials have had to intervene to obtain supplies. The Trump administration has chartered cargo flights to bring in medical supplies from overseas. Maryland Gov. Larry Hogan (R) secured thousands of testing kits from South Korea, which arrived by a Korean Air jet last month. But despite fears early in the pandemic of widespread drug shortages across the board, they have largely not materialized....

"Some 45 to 50 percent of freight typically moves in passenger jets, complementing dedicated cargo flights run by companies such as FedEx and UPS. The passenger network is important to the drug industry, which makes some products that need to be kept cool and moved quickly. But as the virus has spread, nations around the globe have imposed restrictions on international travel, and airlines have slashed flights.... The total weight of air cargo between the United States and other countries was down 7.3 percent in February, compared with the same month in 2019.... Cargo between the United States and China dropped ...: 22 percent....

"The stimulus law contained specific provisions designed to safeguard medical supply chains. But in a ruling interpreting the terms of the stimulus, the Transportation Department declined to mandate international flights, siding with the airline industry in saying it was unreasonable to compel airlines to fly when foreign governments are setting the terms for travel....

"The airlines say that as passenger demand has evaporated they’ve stepped up cargo operations. The Federal Aviation Administration issued guidance affirming that cargo can be carried inside passenger cabins, but it included safety warnings.... Airlines For America, a group representing the major carriers, asked the FAA to go further and allow its members to load cargo into passenger seats. The organization framed the request as a way to help boost capacity for critical medical supplies. The FAA has yet to respond to the application.

"United Airlines is running 150 all-cargo flights a week between six airports in the United States and 13 cities overseas. That figure is expected to grow, company spokeswoman Rachael Rivas said.... American Airlines had 46 cargo-only flights per week in late April, connecting the United States to Asia, South America and Europe.

"Marco Oliveira, director of pharmaceutical business at logistics company Oceanair, credited the airlines with coming up with creative ways to try to address the problems. But for now, he said drug companies have little option but to pay the vastly inflated freight rates.

"The challenges are likely to continue to be a factor as the pandemic continues to unfold. Mulcahy, the RAND researcher, said the viability of the medical supply chain will be especially important if a vaccine is first developed overseas. He said government officials ought to be thinking now about how supplies of a vaccine or ingredients to make enough in the United States will be secured."

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