Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Air cargo industry group The International Air Transport Association (IATA) is urging governments to begin planning now with industry stakeholders to create supply chains capable of distributing a future Covid-19 vaccine, warning of “potentially severe” capacity constraints in transporting vaccines by air.
Even in years without major pandemics, air cargo plays a key role in the annual distribution of vaccines through well-established global time- and temperature-sensitive distribution systems, IATA’s director general and CEO, Alexandre de Juniac, said in a release.
But that process will likely be far more complex for a potential coronavirus vaccine, which still has major unknown variables, such as the number of doses, temperature sensitivities, and manufacturing locations. To cope with those challenges, it is clear that the scale of activity will be vast, cold chain facilities will be required, and delivery to every corner of the planet will be needed, IATA said.
According to IATA’s calculations, providing a single vaccine dose to the world’s 7.8 billion people would fill 8,000 747 cargo aircraft. Of course, developed economies with local manufacturing capacity will offset many of those flights through land transportion, but the estimate underlines the size of the challenge.
“Safely delivering Covid-19 vaccines will be the mission of the century for the global air cargo industry. But it won’t happen without careful advance planning. And the time for that is now,” de Juniac said. “We urge governments to take the lead in facilitating cooperation across the logistics chain so that the facilities, security arrangements and border processes are ready for the mammoth and complex task ahead.”
In addition, those challenges come at a time when the air cargo sector is mired at historically low capacity levels, due to coronavirus travel restrictions and travelers’ wariness of boarding airplanes. Those factors have led airlines to ground large numbers of passenger jets, which typically carry some 60% of global air freight volumes as “belly cargo.”
According to IATA, additional challenges will include boosting cargo security to guard valuable vaccine shipments from theft, and easing border restrictions to streamline regulatory approvals, security measures, appropriate handling, and customs clearance.
“Delivering billions of doses of vaccine to the entire world efficiently will involve hugely complex logistical and programmatic obstacles all the way along the supply chain,” Seth Berkley, CEO of Gavi, the Vaccine Alliance, said in a release. “We look forward to working together with government, vaccine manufacturers, and logistical partners to ensure an efficient global roll-out of a safe and affordable Covid-19 vaccine.”
Air freight specialists bulk up pharma networks
Some logistics providers are already preparing for the looming challenge of global vaccine distribution.
DHL Global Forwarding, Deutsche Post DHL Group’s air and ocean freight specialist, today announced a series of technology enhancements to its Life Sciences and Health Care logistics services. The Miami-based company rolled out: a new iteration of its Lane Risk Assessment software tool that incorporates data from sensors and internet of things (IoT) devices; a digitalized version of its Standard Operating Procedures (SOPs) for biopharmaceutical shipments; and a new interface for its DHL LifeTrack tracking portal for temperature controlled shipments.
“At DHL Global Forwarding we partner with our life sciences and healthcare customers to develop ground-breaking technologies to facilitate their logistical needs. Due to the unprecedented challenges unchained by the pandemic and its aftermath, it prompted us to expedite the rollout of these innovations, in order to more quickly support our customers to navigate this fluid environment,” Patricia Cole, global head of temperature management solutions at DHL Global Forwarding, said in a release.
Also, the freight forwarding and logistics provider Kuehne + Nagel today announced recent investments to its global pharmaceutical and healthcare network, saying it has opened airside pharma & healthcare hubs in Brussels, Belgium, and Johannesburg, South Africa. Those facilities support direct tarmac access, which is critical for handling temperature-sensitive products with very low to no stability outside of their stated temperature ranges, the Swiss firm said.
"Today, new pharma & healthcare products tend to be more valuable, more temperature-sensitive, and have additional requirements for storage and transportation conditions,” Yngve Ruud, member of the management board of Kuehne+Nagel, responsible for Air Logistics, said in a release. “Such capabilities and facilities are not easily available globally.The new hubs in Brussels and Johannesburg will ensure that our pharma & healthcare customers can fully rely on Kuehne+Nagel to handle the specific challenges of integrity as well as provide end-to-end visibility and regulatory compliance along the logistics journey of their sensitive products.”
Just 29% of supply chain organizations have the competitive characteristics they’ll need for future readiness, according to a Gartner survey released Tuesday. The survey focused on how organizations are preparing for future challenges and to keep their supply chains competitive.
Gartner surveyed 579 supply chain practitioners to determine the capabilities needed to manage the “future drivers of influence” on supply chains, which include artificial intelligence (AI) achievement and the ability to navigate new trade policies. According to the survey, the five competitive characteristics are: agility, resilience, regionalization, integrated ecosystems, and integrated enterprise strategy.
The survey analysis identified “leaders” among the respondents as supply chain organizations that have already developed at least three of the five competitive characteristics necessary to address the top five drivers of supply chain’s future.
Less than a third have met that threshold.
“Leaders shared a commitment to preparation through long-term, deliberate strategies, while non-leaders were more often focused on short-term priorities,” Pierfrancesco Manenti, vice president analyst in Gartner’s Supply Chain practice, said in a statement announcing the survey results.
“Most leaders have yet to invest in the most advanced technologies (e.g. real-time visibility, digital supply chain twin), but plan to do so in the next three-to-five years,” Manenti also said in the statement. “Leaders see technology as an enabler to their overall business strategies, while non-leaders more often invest in technology first, without having fully established their foundational capabilities.”
As part of the survey, respondents were asked to identify the future drivers of influence on supply chain performance over the next three to five years. The top five drivers are: achievement capability of AI (74%); the amount of new ESG regulations and trade policies being released (67%); geopolitical fight/transition for power (65%); control over data (62%); and talent scarcity (59%).
The analysis also identified four unique profiles of supply chain organizations, based on what their leaders deem as the most crucial capabilities for empowering their organizations over the next three to five years.
First, 54% of retailers are looking for ways to increase their financial recovery from returns. That’s because the cost to return a purchase averages 27% of the purchase price, which erases as much as 50% of the sales margin. But consumers have their own interests in mind: 76% of shoppers admit they’ve embellished or exaggerated the return reason to avoid a fee, a 39% increase from 2023 to 204.
Second, return experiences matter to consumers. A whopping 80% of shoppers stopped shopping at a retailer because of changes to the return policy—a 34% increase YoY.
Third, returns fraud and abuse is top-of-mind-for retailers, with wardrobing rising 38% in 2024. In fact, over two thirds (69%) of shoppers admit to wardrobing, which is the practice of buying an item for a specific reason or event and returning it after use. Shoppers also practice bracketing, or purchasing an item in a variety of colors or sizes and then returning all the unwanted options.
Fourth, returns come with a steep cost in terms of sustainability, with returns amounting to 8.4 billion pounds of landfill waste in 2023 alone.
“As returns have become an integral part of the shopper experience, retailers must balance meeting sky-high expectations with rising costs, environmental impact, and fraudulent behaviors,” Amena Ali, CEO of Optoro, said in the firm’s “2024 Returns Unwrapped” report. “By understanding shoppers’ behaviors and preferences around returns, retailers can create returns experiences that embrace their needs while driving deeper loyalty and protecting their bottom line.”
Facing an evolving supply chain landscape in 2025, companies are being forced to rethink their distribution strategies to cope with challenges like rising cost pressures, persistent labor shortages, and the complexities of managing SKU proliferation.
1. Optimize labor productivity and costs. Forward-thinking businesses are leveraging technology to get more done with fewer resources through approaches like slotting optimization, automation and robotics, and inventory visibility.
2. Maximize capacity with smart solutions. With e-commerce volumes rising, facilities need to handle more SKUs and orders without expanding their physical footprint. That can be achieved through high-density storage and dynamic throughput.
3. Streamline returns management. Returns are a growing challenge, thanks to the continued growth of e-commerce and the consumer practice of bracketing. Businesses can handle that with smarter reverse logistics processes like automated returns processing and reverse logistics visibility.
4. Accelerate order fulfillment with robotics. Robotic solutions are transforming the way orders are fulfilled, helping businesses meet customer expectations faster and more accurately than ever before by using autonomous mobile robots (AMRs and robotic picking.
5. Enhance end-of-line packaging. The final step in the supply chain is often the most visible to customers. So optimizing packaging processes can reduce costs, improve efficiency, and support sustainability goals through automated packaging systems and sustainability initiatives.
Geopolitical rivalries, alliances, and aspirations are rewiring the global economy—and the imposition of new tariffs on foreign imports by the U.S. will accelerate that process, according to an analysis by Boston Consulting Group (BCG).
Without a broad increase in tariffs, world trade in goods will keep growing at an average of 2.9% annually for the next eight years, the firm forecasts in its report, “Great Powers, Geopolitics, and the Future of Trade.” But the routes goods travel will change markedly as North America reduces its dependence on China and China builds up its links with the Global South, which is cementing its power in the global trade map.
“Global trade is set to top $29 trillion by 2033, but the routes these goods will travel is changing at a remarkable pace,” Aparna Bharadwaj, managing director and partner at BCG, said in a release. “Trade lanes were already shifting from historical patterns and looming US tariffs will accelerate this. Navigating these new dynamics will be critical for any global business.”
To understand those changes, BCG modeled the direct impact of the 60/25/20 scenario (60% tariff on Chinese goods, a 25% on goods from Canada and Mexico, and a 20% on imports from all other countries). The results show that the tariffs would add $640 billion to the cost of importing goods from the top ten U.S. import nations, based on 2023 levels, unless alternative sources or suppliers are found.
In terms of product categories imported by the U.S., the greatest impact would be on imported auto parts and automotive vehicles, which would primarily affect trade with Mexico, the EU, and Japan. Consumer electronics, electrical machinery, and fashion goods would be most affected by higher tariffs on Chinese goods. Specifically, the report forecasts that a 60% tariff rate would add $61 billion to cost of importing consumer electronics products from China into the U.S.
That strategy is described by RILA President Brian Dodge in a document titled “2025 Retail Public Policy Agenda,” which begins by describing leading retailers as “dynamic and multifaceted businesses that begin on Main Street and stretch across the world to bring high value and affordable consumer goods to American families.”
RILA says its policy priorities support that membership in four ways:
Investing in people. Retail is for everyone; the place for a first job, 2nd chance, third act, or a side hustle – the retail workforce represents the American workforce.
Ensuring a safe, sustainable future. RILA is working with lawmakers to help shape policies that protect our customers and meet expectations regarding environmental concerns.
Leading in the community. Retail is more than a store; we are an integral part of the fabric of our communities.
“As Congress and the Trump administration move forward to adopt policies that reduce regulatory burdens, create economic growth, and bring value to American families, understanding how such policies will impact retailers and the communities we serve is imperative,” Dodge said. “RILA and its member companies look forward to collaborating with policymakers to provide industry-specific insights and data to help shape any policies under consideration.”