News / WHO complains of 'outrageous' air freight rates - $105 per kg, anyone?

09/12/2020

Medical-related products have seen air cargo prices soar, despite prices as shown by the TAC Index continuing to oscillate around the ‘new normal’ levels, with the highest rate this week from Shanghai Pudong to North America at $7.73 per kilo.

But according to the World Health Organisation, carriers are charging “outrageous” prices to fly dry ice and other medical equipment.

Paul Molinaro, WHO chief of operations support and logistics, told Reuters that he had been quoted $105 per kilo for a dry-ice shipment from Texas to Freetown, Sierra Leone.

Reuters also noted that Unicef, which is leading the Covid vaccine distribution efforts in developing countries, spent $35m to $40m on vaccine distribution in 2019, but it expected prices to be significantly higher this year. The WHO expects much of the distribution to be handled by charters, which are seeing high rates.

In the US, FedEx and UPS are gearing up too – but claim that despite the holiday season, they have sufficient capacity.

FedEx Americas president Richard Smith said “there is plenty of capacity in our networks to handle this, and remember it’s not all going to hit us on a Tuesday.

“It’s going to come over time, so we’ve got this. Relax.”

While some shipments are already underway, the bulk of the distribution will come in the first half of 2021, when air freight prices are traditionally lower.

Sea freight is also gearing up to move vaccines – and while rates are currently as expensive as they have ever been – it remains cheaper than air. And in some cases, free.

Last week DP World and its subsidiary P&O Ferries offered free transport.

A spokesperson for DP World UK said: “We stand ready to support the government in getting all the necessary vaccines into the UK. What’s more, we are willing to do this work for free should we be asked to do so, to help play our part in getting the UK through the pandemic as fast as possible.”

Meanwhile, DHL Supply Chain announced yesterday that it had been contracted by the state of Lower Saxony to store 2.2m doses and 350 pallets of equipment, and transport it when required to state vaccination centres.

As DHL noted, few companies have the infrastructure for storage and transport at -70C, as the Pfizer vaccine requires.