Moving PPE into the NHS supply chain by Air Freight
27th April 2020
Market rates rocket but Spatial Global keeps it’s fees super low to help the NHS
A 90% reduction in air traffic and in some cases, country restrictions, has combined to severely reduce capacity, resulting in huge price rises on air freight. This comes at a time when there is unprecedented demand on imports of PPE and other urgent medical supplies. Freight forwarding and logistics have become key services in the fight against COVID-19 during this global crisis. Spatial Global has been able to secure air freight routes against the odds, plus delivered it's solutions at pre-crisis commission rates.
A squeeze on capacity, a spike in demand, and shortage of PPE – the perfect storm
A global supply chain is common across most industry sectors. This is because over the last two decades of the World Wide Web, businesses have been able to source from practically anywhere via the internet. Brands like Amazon trail blazed and global logistics became more sophisticated to accommodate the diverse and disparate ecommerce market place. This meant even the smallest of businesses was capable of extending their reach to a World stage. Movement of freight globally was integrated across rail, sea and road for bulk shipments; and air freight for more fast moving cargo. However, when passenger airlines became grounded as a result of the Coronavirus pandemic, the global supply chain lost 90% of air traffic movements. This ‘removal of hold cargo' form the global supply chain capacity has put unimaginable stresses on the dedicated cargo routes. Even with additional cargo flights, capacity remains seriously strained.
A simple cost v speed choice
The demand for PPE and other critical medical equipment is high with global demand, because it really is a matter of life and death. Manufacturers are responding to this need by adapting their production lines, switching processes and up scaling production of PPE and other critical supplies, in the battle against the Coronavirus pandemic. However, with the products needed immediately, manufacturers are finding they are unable to get space on air freight routes. With sea routes being too slow to meet the demands of the worlds fight against the disease, air freight capacity is being squeezed even more. As a result, air freight premiums are running at over 600% above pre-crisis consignment fee's - and that's if you can get space on a flight.
When longstanding NHS providers need help in getting product into the UK
Spatial Global has been called to help several key suppliers to the NHS. Each had a similar challenge, getting product from an overseas manufacturer, into the NHS supply chain. As a consequence, each one has had a successful result and vital products are now entering the NHS supply chain. In reaching the hospitals on the frontline, the products are saving lives.
The supplies including ventilators, PPE, dialysis equipment, and other critical inventory, have been imported from a variety off different locations. But one size doesn't fit all when it comes to freight forwarding in the present crisis. The solutions have been through a combination of expert 'logistical and freight forwarding' interventions. They have been both innovative and collaborative, involving project teams representing the NHS suppliers, their manufacturers, a network of local agents and the airfreight companies – all working with Spatial Global as the coordinator.
Reducing bulk, import duties and VAT or knowing the right people – one size doesn’t fit all
If there was ever a time when being an expert in freight and logistics, plus being a trusted player in the market was essential to success, it’s now. What’s more, the shipping solutions have delivered more than simply getting the product successfully delivered, they’ve reduced costs. On one contract, by advising on volume, Spatial Global have been able to reduced the packaging used. In turn this reduced the ‘price to fly’ per mask down from 11p to 7p. Then working with the overseas manufacturer to get two production cycles aligned, it enabled the fortnightly charter of a dedicated cargo plane. All of which gets the price down even more, to 5p per mask, less than 50% of the original price to ship each units. When the contracts are for millions of masks per month, this makes a considerable difference.
On another contract, Spatial Global were able to collaborate with a friendly forwarder in China. Pre-crisis, they would normally be shipping huge volumes for fashion and department store retail, from China to the UK. As demand has shifted to medical supplies, Spatial Global were able to ring fence this released air freight capacity, and fill it with urgently needed medical supplies, as well as co-loading other products.
An ethical approach in this time of national emergency
This type of collaboration also provides the potential to co-load with some other freight on a house charter reducing costs. The other benefit of our ‘in-country’ collaboration brings is, it gives us expert capability on the ground in Shanghai, close to the factory, from a team already moving NHS material. This is vital because there are export controls on PPE and all approvals need to be in place. Having the combination of longstanding relationships, logistical expertise and in-depth freight forwarding knowledge, means we’ve turned around contracts in days. The freight rate from China is currently 600% above the rate we paid in February, the charter would be less than 500%. In terms of our profit we have calculated our fees on the pre-crisis air freight rate, as Spatial Global want to do our bit in the fight against this pandemic. This includes finding new ways to pack, collate and ship product, to ensure it reaches the hospitals, protects NHS staff and care workers, treats patients and saves lives.
Mike Wallis, Executive Chairman of Spatial Global
Whatever your international supply chain needs, it pays to work with experts
Some of the NHS supply chain contracts gained were through existing clients who had simply needed to increase their volumes. But many were through organisations who were unable to ship their products because of the changing market place. Experts in freight forwarding and logistics will have the knowledge, experience and contacts to provide shipping solutions. They will know what areas to explore when it comes to being innovative and creative, they understand the changes and can help manufacturers - and the supply chain - adapt and respond to this dynamic global crisis.