Air freight prices 'outrageous' as Covid-19 shots rolled out, says WHO expert

Some carriers are seeking "outrageous" prices to fly dry ice and other medical equipment in the pre-holiday rush, but a capacity squeeze should ease in 2021 when the roll-out of Covid-19 vaccines is expected, the World Health Organisation's logistics chief said on Tuesday.

Distribution of vaccines to low- and middle-income countries will be tricky, due to grounded passenger air services in some places, and may rely on charters, Paul Molinaro, WHO chief of operations support and logistics, told Reuters.

Price inflation has been a growing feature in air freight, with "across the board increases especially since November," Molinaro said.

He cited a price quote just received for a dry ice shipment, needed to cool some lab re-agents, which is around 20 times the norm.

"I just had a quote from a cargo (company) - a big one that shall remain nameless - Dallas (Texas) USA to Sierra Leone, Freetown - at sort of $105 a kilo, which is outrageous actually," he said. The "normal price" would be $4-$6 per kilo, he said.

Molinaro said a range of factors had driven prices, including a greater than usual pre-Christmas increase in e-commerce as lockdowns keep people at home.

"So we have air freight rates coming out of China going up because of the introduction of the new iPhone, because of the introduction of Play Station 5 and because of the fact that products are in high demand anyway," he said.

By January, available capacity might increase, he added.

Airline body IATA's chief economist Brian Pearce told reporters on Tuesday that Christmas demand "exaggerates the problem" of soaring cargo rates, which should ease early next year in time for the ramp-up in vaccine shipments. "That's the low season for the cargo business - that will free up a lot of capacity," he said.

Hotspots And Sanctions

The WHO hopes to have half a billion doses of Covid-19 vaccines available for distribution by the global COVAX initiative in the first quarter of 2021, its chief scientist said on Friday.

The UN Children's Fund (Unicef), which is taking the lead on delivering Covid-19 vaccines to developing countries, says it spent $35-$40 million on international vaccine freight in pre-crisis 2019 when it procured 2.43 billion doses for immunisation campaigns against polio and other diseases.

Since then, prices have gone "through the roof," the agency's transport chief Pablo Panadero said. But Unicef is negotiating lower rates with airlines for the airlift.

WHO may help arrange delivery of COVAX vaccine supplies to hotspots such as Somalia or Yemen or to sanctions-hit Iran or North Korea, Molinaro said.

"It will be areas where it is not necessarily straightforward using the regular passenger/cargo network," he said.

"Syringes will be sea freight, you wouldn't have air capacity to move that, no way," he said.

The WHO is providing technical guidance to all countries on cold chain issues, Molinaro said, noting that the Pfizer vaccine requires storage at minus 70 degrees Celsius.

"We are still in a period with a lot of fog and crystal-ball kind of gazing, which obviously doesn't make this easier.

"There may be a breakthrough vaccine that comes out, big production, 2-8 degrees, and that changes the game," he said.