DHL Express Germany, CEO on Vaccine Distribution Challenges and Developments

The Vaccine Challenge

This episode of The Vaccine Challenge is hosted by Priyanka Asera and features Markus Reckling, CEO of DHL Express, Germany. Markus has decades of experience in the industry – both in logistics and retail.

2020 was all about the pandemic. 2021 is all about the COVID-19 vaccines.

With different pharma companies rolling out their respective vaccines consisting of various types of storage requirements, we talk to Markus about the developments in this space from a vaccine distribution perspective and how DHL is contributing to this mega task.

Topics touched upon:

Lay of the land from a distribution perspective for the COVID-19 vaccines and what DHL is doing:

• Roughly 10bn dozes need to be shipped worldwide within 2021. This translates to 200,000 pallets, 15mn cooling boxes, 15000 flights across all flight chains and throughout the value chain
• After 12-24 months there will likely be a routine process, but up until then it’s all hands on deck
• Transportation material also doubles down as cooling and storage material where there are no cold storage capabilities – which is most clinics around the world – so the boxes in which vaccines are transported is also used as storage in hospitals and clinics
• Soon there will be there will be the challenge of too much vaccine going to spots that will be need to be dealt with
• DHL is already doing a lot of work in healthcare. Within their customer portfolio, they have 150 pharmacists, 20 clinical trial depots, 100+ certified stations, 160+ Good Distribution Practice (GDP) sites, 50+ Good Manufacturing Practice (GMP) sites, and can process medical shipments in 135+ medical sites globally. They deliver in 220+ countries and territories.
• The aim is to reach the 3bn in the less developed world also and not just the 5bn in the developed world

What are the cold chain challenges, restrictions and requirements

• Even the -80 Degree requirement for the Pfizer vaccines can last 10 days with dry ice packaging
• There are 3 types of cooling levels in logistics. Ambient is at 2-8 Degrees, typical deep frozen is at -20 Degree C, and -80 Degree C requirement is very limited and rare around the world

Biggest challenges around vaccines distribution

• Air freight capacity is limited. 50% of global air freight normally goes in passenger air crafts, and not dedicated cargo aircrafts. So 25% of global freight capacity is just missing because half the passenger airplanes are not flying.
• DHL has their own air freight capacity which puts them in a great position. Had ordered some new cargo aircrafts a few years ago - 6 new white body aircrafts B-777. Have bought 8 more B-777 recently for use in 2022.
• Availability of the crews in the right place, with all the lockdowns etc. Sometimes they have to fly empty planes to ensure pilots are in the right place. Also have to spend a fortune on disinfecting aircrafts
• Temp control and extreme temps requires a very coordinated effort. There’s only so much dry-ice you can put on an aircraft due to regulatory requirements. Need dedicated people at origin and destination who know what to do and avoid handling mistakes
• Security risks are huge because the commodity is so high value

Things that will likely change permanently in the world of supply chain as a result of COVID:

• Increase in certified stations and transportation providers in healthcare to prepare for more such scenarios in the future
• Investment in “Resilience”. Resilience is something that has been discussed just as a concept for the last 7-10 years. With all the struggles this time, it’ll be given much more importance and investment
• Continued boom in eCommerce: 30% more deliveries were seen in 2020 on peak day compared to peak day in 2019. That’s a fundamental shift which will keep increasing.
• B2C change will drive B2B change in eCom to a large extent. Small companies are also gearing for more connected, global supply chains. Alibaba’s of the world are driving this change rapidly.

About Markus

Markus Reckling is Managing Director, DHL Express Germany. He has worked for Deutsche Post DHL Group for more than 20 years in Germany and abroad. His prior positions included Head of Corporate Development, where he was responsible for developing Strategy 2015 and directly reported to the Group CEO, as well as the Managing Director of DHL Express Turkey. Currently, at DHL Express Germany Markus is responsible for the German business of the world's leading express service provider for international time-critical shipments with a focus on customer service, quality and employee motivation. Experienced in leadership and finding individual solutions for different tasks, Markus enjoys to share and discuss his learnings. Previously he worked for Otto Group and other German retailers. Combining his logistics experience with retail knowledge, Markus is a big promoter of eCommerce.