Logistics technology

After Federal Maritime Commissioner Carl Bentzel launched the agency's data initiative last year in an effort to enhance data definitions and standards, open sessions became a monthly occurrence from November to June.

During these sessions, stakeholders including shippers, logistics providers and ocean carriers answered a variety of questions about where they find data gaps when it comes to ocean shipping, and what data they currently lack access to that could improve their company's performance.

The goal of the discussions, led by Bentzel, was to determine what data-related constraints could be addressed to help improve the flow of cargo through the global supply chain.

In June, the agency wrapped up the initiative with its Maritime Data Summit, bringing together industry stakeholders as well as members of the National Shipper Advisory Committee.

Bentzel told Supply Chain Dive he will share his preliminary recommendations as a result of the initiative with his fellow commissioners later this year. The proposals are meant to address a variety of concerns, including what industry executives have highlighted as four key data issues facing the ocean shipping industry.

1. Ocean shipping data is inaccurate and limited

Many shippers have access to container status data, but “a lot of the times you get an update in the morning and by noon or by you know, late afternoon, it's kind of old and what you're working off of isn't valid anymore,” Patricia Ritz, international logistics director for Target, said during a January 18 open session for beneficial cargo owners.

Shipping data access can be limited when it comes to certain information, such as details on all terminals in the U.S.

“There is not a single place where I can get about 40% of those terminals in the U.S.,” Adnan Qadri, director of global imports-network planning and Infrastructure at Amazon, said during a February 22 open session for Amazon, FedEx and UPS.

This problem becomes exacerbated when looking across ports and even individual terminals, which lack a uniform communication system and data oversight.

“We do recognize that there is also a data governance problem that is a part of the commercial relationships between stakeholders, which leads to accuracy gaps and information flow as well,” Qadri said.

2. Providing data to clients becomes "constant detective work"

For forwarders, accessing data remains a challenge when it comes to locating containers, tracking vessel arrivals and getting notification of driver delays.

Unlike carriers like FedEx that notify customers when packages are delayed, forwarders are often left guessing about the status of their cargo, Michelle Fajardo, president of Cargo International Consolidators, said during a February 15 open session for ocean transportation intermediaries.

“Steamships lines do not offer that information and many a time we have to be doing constant detective work looking for that,” she said, adding that she's often forced to hunt through multiple websites and calling destination agents in an attempt to find needed shipping updates.

3. The pandemic exacerbated known data standards issues

The onset of the pandemic compounded issues at ports, including congestion and elevated shipping rates. As disruptions mounted, so did concerns around shipping data standards, such as data that is filed late or with incomplete information.

“They were known issues, they were known problems. We were able to ... throw resources or ‘Band-Aids’ at the situations that kind of got us through but, we’re now at the point where it’s all Band-Aids, gum and string and trying to get this thing together. And it’s falling apart,” Cindy Allen, VP of regulatory affairs & compliance at FedEx Logistics, said at the February 22 session.

4. Implementation is not a one-way street

Shippers and forwarders are now waiting for recommendations from Bentzel, but remain wary that improvements in the industry will come down to implementation, Dominique Willems, head of public affairs and government relations at the Digital Container Shipping Association said during a March 22 open session focused on international standards. Without agreement on new standards, carriers and customers are left waiting for the next steps.

“There is already quite an abundance of standards out there. It’s a matter of picking, combining the right ones and making them operate,” Willems said.

In an inefficient, costly and yet vital piece of the supply chain, Google saw an opportunity to capitalize on the capabilities of its Maps platform and jump into last mile services.

The technology giant staked its claim in the home delivery sphere in March with the launch of two tools — Last Mile Fleet Solution and Cloud Fleet Routing API — focused on last mile execution and route planning, respectively.

Google's foray into fleet management technology isn't surprising to Jim Nicholson, SVP of operations at Loadsmart. He compared it to Amazon's entry into the logistics space: a natural next step for the company's wider ambitions. Hefty financial resources and years of Google Maps improvements should help the company with its foray into the space.

"Having a leading web mapping platform absolutely gives them a great opportunity and some advantage against the competitors," Nicholson said.

Google is bringing a bevy of Maps data and a familiar navigation interface to a space that has seen increased attention as home delivery demand has boomed. U.S. parcel volumes surpassed 21.5 billion in 2021, compared to pre-pandemic levels of 15.5 billion in 2019, according to the Pitney Bowes Parcel Shipping Index.

More effective route planning and execution has become critical in response to the rising number of packages. Since the last mile is the most expensive and least efficient step of the delivery process, avoiding misses like an inaccurate address is critical, said Shalin Mantri, group product manager at Google Maps Platform, who oversees its transportation and logistics vertical. Fleet operators receive addresses in varying states of quality, and it is one of the top causes of delivery failure, he said.

"One failure on that package basically means that it's unprofitable for the fleet operator," Mantri said.

Map quality and data ownership could be key advantages in the last mile space going forward. Customers for Google's last mile offerings are likely to only help the company improve its own mapping accuracy further, said Rick Watson, founder and CEO of RMW Commerce Consulting, in a LinkedIn post.

"Listen to any Amazon Flex driver and one of their primary complaints is about their route, maps, etc." Watson wrote.

Google targets delivery execution, route planning

The foundation of Last Mile Fleet Solution is the Google Maps Platform's tool for ride-hailing and on-demand delivery providers, which launched in 2020 and saw "tremendous traction,” Mantri said. That interest led Google to bring many of those capabilities to last mile delivery fleets.

Last Mile Fleet Solution aims to help fleet operators improve various aspects of the last mile delivery process, including including navigation using Google Maps' well-known interface, address capture, route planning and shipment tracking. It brings Google Maps' navigation capabilities to the driver, while both fleet operators and end consumers have real-time visibility into where the package is in its delivery journey, Mantri said. It's currently available for select customers in public preview before moving to general availability. 

Cloud Fleet Routing API, which is now generally available, focuses on route planning. It helps fleet operators create accurate routing plans at scale, while being able to reoptimize an existing plan up to 20 times a day at no additional cost, Product Manager of Google Cloud AI and Industry Solutions Christopher Cho said in an April blog post. Reoptimizing may be necessary in instances such as traffic congestion.

There are plenty of companies already offering delivery route planning solutions, such as Circuit, Onfleet and Route4Me. Mantri said part of what separates Google's offerings from competitors is that it's bringing "an integrated cloud and mapping platform" across the last mile delivery process. This integration is critical to avoid information like destination addresses from getting lost in translation, he added.

"If you're using different maps or different geocoding between the entry point of an address to the downstream execution, it's like playing a telephone game, right?" Mantri said.

Major carriers keep routing in-house

Google's leap into the last mile could become more complicated than first anticipated as it stretches beyond its core competencies, according to Nicholson.

Carriers are always looking for ways to maximize the capabilities of their expensive fleets and beef up profits, but the last mile space is filled with large incumbents that have existing fleet management systems, he said. Transitioning to a new system like Google’s would introduce "a significant amount of lift" for these potential customers.

Major fleets also already have in-house routing capabilities. UPS completed the rollout of a dynamic routing upgrade to its ORION technology last year. The parcel delivery giant is now working toward automating driver dispatch, former chief information and engineering officer Juan Perez told CIO Dive in April. In 2020, FedEx Ground rolled out advanced route optimization software for its drivers to help it boost efficiency while meeting rapidly growing home delivery demand, President and then-COO Raj Subramaniam said on an earnings call.

But many companies beyond FedEx and UPS have been building up their own delivery fleets, and now they need the tools to execute those deliveries effectively, said Bringg CEO Guy Bloch. Many regional carriers and small-scale fleets also don't have the technological heft that larger carriers do, which could draw them to Google's services, he added.

Experts weigh in on what's next for Google

Carriers have begun to lean more on cloud-based technology that allows them to fully integrate their systems and improve visibility, Nicholson said. Google’s rollout of a full-scale, end-to-end solution could be the next step, depending on the reception of its current offerings.

"This is going to be very critical for them to demonstrate success and also learn and evolve within a very complicated space," Nicholson added.

Google is already providing services for one major transportation provider. As part of a multi-year agreement announced June 6, XPO Logistics moved several of its key applications to Google Cloud to take advantage of cloud computing's "scalability and availability." This will help XPO better deal with demand swings and keep its services running smoothly around the clock, according to a news release. 

Google is making its logistics resources available to other companies in a similar way to Walmart GoLocal and Fulfilled by Amazon, Bloch said. He believes Google's new offerings play into its long-term goal of getting as many people using its search engine as possible. Helping companies improve their digital operations and their customers' online experiences will bring shoppers back online, creating more Google searches in the process, he said.

Customization in Google's offerings will be key for its success in the last mile space, as plenty of routing software vendors offer fuel and mileage optimization, John McClymont, director of operations strategy and continuous process improvement at Brink's, said in a LinkedIn post. He said the company will allow basic customizations at first before expanding those capabilities further.

"Google is getting the most mapping data on the planet," McClymont said. "Pair this with more commercial feedback and their database and rules engine will outperform everyone."

Juan Perez has left UPS with a legacy that includes a stint as a delivery driver in 1990 and a rise to the title of CIO in 2016. He then expanded his role to encompass engineering, and wielded a $6 billion budget.

In April, Perez started his new job as CIO of Salesforce. His successor will only take over half the job.

"We're not going to have the CIO and the engineering officer role combined anymore," Perez told CIO Dive. "I was able to do that because I had experience in both areas — and there was a need at that particular time in the company to bring those two functions together." 

But his successor will face formidable challenges. UPS is "so dependent on technology, that IT has taken a central role," Perez said. 

UPS has more than 550,000 employees — more than 5,000 of which are dedication to technology — and global operations that include an airline, a supply chain solutions business and a small package business. Every day, UPS delivers almost 25 million packages and documents.

Technology weaves throughout what Perez calls a "smart logistics network." 

A data-driven strategy encircles the network: data are available to users or systems to make better and faster decisions, tapping into automation as needed. 

"Packages are constantly flowing no matter what actually is thrown into this network," Perez said.

Delivery and handhelds

Perez's experience at UPS spans the entire operation, starting with a eight-month stint as a driver in Beverly Hills, California, as part of a management training program.

When he was knocking on doors with packages, the delivery process used analogue tracking and recorded packages by hand on paper. During his tenure, Perez piloted the first version of a "delivery information acquisition device" (DIAD), a basic computer, clipboard-size. 

This year, UPS will refactor the entire application and the backend support systems into a more nimble handheld: DIAD 6.

Perez thinks of the newest evolution as "a driver assistant," augmenting the smarter vehicles and handheld devices. 

"But here's the virtuous cycle that UPS has always been in … the innovations that we have in hand today will lead to more innovations in the future," he said.

UPS's investment in technology is one of the main threats to its fiercest competitor — FedEx — according to Dean Maciuba, managing partner USA at Crossroads Parcel Consulting. 

"UPS always had significantly more resources to throw at customer technology solutions," Maciuba said. After lagging FedEx's early investment strategy in express shipping, UPS poured money into R&D.

Though UPS is still investing heavily in technology, deployment is sometimes delayed by complications in IT development and regulations.

Grand plans for drones and electric aircraft, for example, are barely off the drawing board. But Perez still sees them as the future of last-mile delivery.

UPS plans to purchase Vertical Takeoff and Landing aircraft from BETA Technologies, with the first 10 aircraft to begin arriving in 2024. The 250-mile range aircraft have a 1,400-pound cargo capacity, suited for the small- to mid-size markets. UPS has the option to purchase up to 150 of the aircraft. 

Centralizing the CIO

Core to Perez's leadership: IT-business intimacy.

IT is "a participant in the business team's objectives, and of course, it's also a participant in the business team's results," Perez said. 

He paved the way for standards and a process where the architecture team at UPS sees all the technologies deployed across the organization. Through that discipline, and improving technology processes, UPS has reduced business-impacting incidents 73% since Perez’s tool over, he said. UPS considers an incident business-impacting if any technology-related issues or change causes a package to not be delivered on time. 

Alongside investments in R&D, UPS continues to invest in its network, announcing last week an expanded partnership with Google Cloud. In 2019, UPS touted its collaboration with Google Cloud Platform on routing software for saving the company up to $400 million a year, reducing fuel consumption by 10 million gallons a year. 

It still has a robust on-premise technology investment, with four mainframes and 76.3 petabytes of storage. More than 90% of its data center servers are virtualized, according to UPS.

One of the cornerstones of his tenure is Perez's work on ORION, the On-road Integrated Optimization and Navigation system for UPS, which helps dynamically optimize driver routes to improve last-mile delivery.

UPS is now working toward automating driver dispatch so the technology can create the entire dispatch, optimizing routes while providing driver feedback, Perez said.

With more cloud capacity, UPS will invest in new data analytics and AI/Ml tools to help improve supply chain operations. 

The company is also investing in the modernizations of its back office solutions, including its ERP and payroll systems. 

While Perez always assigns a certain amount of the budget for technology modernization, he also sets aside room for technical debt reduction, a balance he strictly maintains.

It's all about balance, Perez said. "At the end of the day, the CIO needs to be very effective working again with the business in defining priorities for the organization as to where the budget is going to go."

With a boost from the pandemic-delivery demand, CIOs are reporting to the CEO and have a direct line to the board, establishing technology as a mission critical operation.

There's been significant improvement during the pandemic to align business technology with the C-suite, according to Craig Stephenson, senior client partner, managing director, North America with Korn Ferry's CIO/CTO practice. 

The top cadre of technology leaders are agile thinkers who can handle a lot of complexity, Stephenson said. Companies are evolving and tackling talent with expertise in data analytics and cloud. Successful leaders need a high level of comfort with ambiguity.

Centralizing IT with the business goals is key to Perez's leadership strategy and his legacy. Serving as a CIO for more than six years, the once-delivery-driver has cemented his role, closely aligning with UPS's top leader, CEO Carol Tomé. 

In fact, Perez avows CIOs must report to the CEO: "It's important the CIO has that seat at the table and that support from the CEO to be able to do his or her job."

Daniel Silva remembers being an intern at Amazon in the summer of 2014, months after founder Jeff Bezos unveiled the company's plans for drone delivery service via Amazon Prime Air.

"At the time, it seemed like we were going to start seeing drones delivering packages within a year," said Silva, now an industrial and systems engineering professor at Auburn University.

Yet progress has been slow, even for a company of Amazon's stature. In 2016, Prime Air made its first successful drone delivery, which took place in the U.K. Last year, it received Federal Aviation Administration clearance for drone delivery on a rural test range. Parcel-carrying drones haven't filled the skies just yet.

"We are actively flying and testing and it will take time and more hard work before our operations are ready to scale," Amazon says on its website regarding Prime Air. "We're excited about this technology and one day using it to deliver packages to customers around the world in 30 minutes or less."

Silva attributed its slower-than-expected growth to the FAA's thorough regulatory process. But as the agency works through approvals for safe deliveries beyond the operator's line of sight, other logistics use cases for drones outside of mass-scale B2C deliveries are being tested and deployed. The COVID-19 pandemic has only highlighted their value.

"Online ordering has seen an amazing boom in the last year-and-a-half because of COVID-19," said Yariv Bash, co-founder and CEO of Flytrex. "With that, you're seeing interesting and better on-demand delivery services, because the current options are just not good enough."

Today, the possibilities for drones in last-mile logistics range from delivering still-hot coffee to a suburban backyard to ferrying vital health care goods in an urban environment. Research is also exploring their potential in bringing items to delivery drivers on their routes. These cases show drones haven't replaced the delivery van. Rather, they are slowly taking on the least efficient types of last-mile deliveries.

Quick, on-demand delivery to the suburbs

When Flytrex launched in 2013, the company designed and manufactured GPS trackers for drones. But the company realized three years later "that the killer application for drones is going to be drone delivery," Bash said.

So Flytrex pivoted its focus to B2C deliveries. Today, its drones operate out of stations located in two Fayetteville, North Carolina-area shopping centers. The autonomous drones deliver from the centers' stores — including Walmart — to customers in surrounding suburbs who can order via Flytrex's phone app.

The drones can carry up to 6.6 pounds and make five-mile round trips, according to the company's website. These specifications make them best suited to deliver food, drinks or lightweight essentials. Transit times are key for food delivery to prevent them from losing their desired temperature.

"Once it takes off, within three to four minutes your dinner is going to be in your backyard," Bash said, adding that the back or front yard is the perfect area for a "slow and very safe delivery."

Flytrex was able to expand its service to cover more than 2,000 homes after landing an FAA permit in May 2021 to fly over people. Its eventual goal is to make drone deliveries 10 times more affordable than deliveries by a human courier, Bash said. The lack of population density in suburban areas makes on-demand delivery "crazily expensive" and difficult to optimize for other transport modes, he added.

To achieve that, Flytrex needs more business. Earlier this year, a Flytrex spokesperson said the company expects to make hundreds of deliveries weekly with the Fayetteville expansion.

"The goal is to increase the volume for each one of our stations," Bash said. "The more deliveries we make from any one of those locations, the more affordable it becomes for everybody."

Medical deliveries in urban areas

While Flytrex is focused on suburban food deliveries, Matternet is initially targeting the transport of high-value healthcare products in urban areas, where traffic congestion poses an issue to urgent deliveries using ground transport.

Matternet's drones are one piece in the company's end-to-end delivery offering, said Jon Michaeli, the company's global head of sales and business development.

There's also Matternet's stations, in which payloads are deposited and inserted into the drones. Finally, there's the company's software platform that generates routes and controls all Matternet assets.

"So you don't have this hub and spoke, you truly have a multidirectional, on-demand service where a drone is sitting at your doorstep and you can use it to transport goods within that fixed range," Michaeli said.

In November 2020, it launched operations at a hospital laboratory in Germany to help deliver diagnostic samples across its facilities.

In the U.S., drone delivery regulations and approvals are progressing at a slower speed than expected, Michaeli said, so Matternet intentionally chose to focus on getting FAA type certification for its aircraft. That meant the company needed to find a partner that was FAA-authorized for operating a drone delivery through part 135 air carrier certification.

Matternet found that partner in UPS Flight Forward, allowing it to focus on "what we do best, which is our technology," Michaeli said. UPS is using a Matternet M2 drone to deliver COVID-19 vaccines at Atrium Health Wake Forest Baptist in Winston-Salem, North Carolina.

Although part 135-certified companies like UPS have the operational approvals to handle drone deliveries, Matternet's technological expertise is not something companies easily duplicate internally, Michaeli said.

"We're not just hardware off the shelf," Michaeli said. "The secret sauce is really in the software, and you need to protect it against things like hacking and someone hijacking your aircraft. We have our proprietary software that's showing us the aircraft and data feeds that are coming from various places. It's a whole operation — software, hardware and then operational know-how."

Restocking vans on rural delivery routes

At Auburn University, Silva and fellow industrial and systems engineering professor, Alice Smith, have flown test missions to see how drones could help make the rural delivery process more efficient.

One use case they have tested has a drone resupply a delivery van with patient medications along the van's route. The process makes medical deliveries more cost-effective and timely in rural environments, the professors said, making such deliveries a more feasible use case for drones in the near-term.

"The idea of the drone going to people's homes that have never seen one and have never interacted with one, and it will know what to do, is neat, but I think that's where we're the furthest from reality," Silva said.

Field testing remains in its early stages, but Smith noted battery life needs to improve for drones to see further adoption for rural deliveries.

"We're doing things where the drones aren't going out long-term," Smith said. "In other words, our models are assuming distances that are now technically available. With improvements in batteries, that would open up more research and more implementations to reach more rural environments further away."

The tests have already prompted further research by Smith and Silva relating to how a drone operates in a large distribution center or a warehouse.

Silva expects in a few years that a drone will be involved in some stage of the delivery process, it may just not be bringing the order to the customer due to line-of-sight regulations that currently limit larger-scale applications. Instead, it could be moving goods within a warehouse or scanning inventory, Silva said.

"I think drones will play a role, but it wouldn't necessarily be everybody's first guess, which is bringing the package to the house," Silva said.

Digital freight brokers are called disruptors for their swift, profound impact in the logistics space. Transportation management system providers also fall into the disruptor category, as they increasingly transition to cloud-based platforms and make manual business management practices obsolete.

The two groups are further innovating and pushing the industry toward digital operations by forging partnerships that merge their products.

Digital brokers Convoy, Loadsmart, Transfix and Uber Freight are among those integrating with dozens of TMS providers, including AscendTMS, Blue Yonder (soon to be a Panasonic company), BluJay Solutions, FreightPOP, MercuryGate, Oracle, project44, Recon Logistics and SwanLeap.

Some digital brokers, like Transfix, so far have partnered with a small number of transportation software providers, while others, such as Convoy, have partnered with more than a dozen. Regardless of the exact number, the integration trend is clear as most digital brokers have forged at least one TMS partnership.

"Digital brokers are looking for capacity. Our fleet carriers are looking for loads. We put the two participants in touch with each other," said Tim Higham, CEO of AscendTMS.

This approach melds the strengths of two individual service providers into an all-in-one platform for shippers. Partners on both sides say integrations are increasing significantly with the rapid industry transition to digital tools and cloud-based solutions.

"In 2018, we started to see all the large TMSs … migrating from local, on-premise software to the cloud. Now in 2021, almost all the big TMSs have migrated," said Felipe Capella, president and co-founder of Loadsmart. "In 2018 and 2019 we saw more shippers integrating. Last year, we saw a record number; in quarter three we had more integrations with shippers than in all of 2018 and 2019 combined."

Some say the pandemic has accelerated the action as businesses across the supply chain quickly converted to digital operations in 2020.

"There’s a massive amount of momentum over the last year or two — certainly in the last year since Covid started," Higham said. "Everybody wants to be part of this new digital world."

The real-time view from one platform

Before the integrations, shippers didn’t have a centralized view of their freight management, said Jason Langhoff, Transfix head of partnerships.

But that’s changing as partnerships gain momentum. Digital broker and TMS partners use an application programming interface to directly integrate digital brokerage platforms with the TMS software. This provides data-sharing capabilities and creates more access to real-time pricing and tendering.

"Once we hook this API into TMSs, we can process all these loads to be moved and send back prices instantaneously inside the TMS," Capella said.

That's a commonly repeated integration advantage: Shippers do not have to switch back and forth between platforms to complete transactions. The ability to access carrier performance, get quotes and book with the click of a button in one system increases efficiency.

"When we integrate with these solutions, we provide real-time pricing visibility. If a planner for one of our shippers wants to get a price, they don't leave their system… If they like that price, they can click 'book' and automatically have that tendered over to us," Langhoff said.

Shippers and carriers experience benefits including "fewer deadhead miles, lower rates and lower costs," Higham said.

One barrier is that some shippers avoid adopting an integrated platform due to concerns about increased access to their business data. Digital brokers and TMS providers alike say the information is secure.

"The data belongs to the shipper whether they're using our TMS platform TrueView or whether they're using some other solution," Langhoff said.

TMSs often have hundreds or thousands of clients who are exposed to digital brokers through an integration. This could boost business for digital brokers, who tend to have fewer users because of their newness in the industry.

Brokers, old and new, build tech stacks

A twist of the broker-TMS integrations is that some digital brokers are building their own TMSs. Opus9 launched a TMS last year, and Convoy launched Convoy Connect in 2019. Transfix launched its TrueView TMS platform in January to accommodate small and mid-sized shippers.

These platforms are another way to "meet shippers where they are," Langhoff said.

"If they use a TMS, great. We can work with them using that platform. If they are still using a spreadsheet or email the old-fashioned way, we can help them get onboarded to our TrueView TMS," he said.

Digital brokerages might eventually encroach on dedicated TMS providers' territory if they add enough capacity and demand to launch their own all-in-one, standalone platforms, although it is unclear if or how that would affect shippers. Brokers that spoke to Supply Chain Dive predict more partner integrations, at least in the near term.

And traditional freight brokers are expected to increasingly give digital brokers a run for their money as they, too, delve further into the tech space and expand their own relationships with TMS providers. C.H. Robinson and DAT each list more than a dozen TMS partners that integrate with their products.

"The lines between a digital broker and an incumbent, more traditional broker are blurring. Five years ago when these digital brokers first came on the scene there was a big difference between the two," Higham said. "The incumbents didn't sit around doing nothing. They very quickly started to copy those traits and those trends. ... A year from now, they will be indistinguishable."

The theory is supported by a 2017 report from consulting firm Accenture, which indicates that digital disruption is transforming the logistics space and businesses that cling to traditional business models and resist digital technologies will become irrelevant.

"The next two years we're going to see huge adoption of TMSs on the shippers' side… We're going to see unprecedented migration of data that was isolated and siloed and offline to the cloud," Capella said. "I think everything is going to change when it comes to procurement in the transportation industry."

Others agree. "I think in the next three to five years you’ll find nobody will be passing paper around anymore," Higham said. "It's all going to be digital."

Assuming a COVID-19 vaccine is on the horizon, the cold chain needs to be prepared for the onslaught of vaccines shipping around the world and the U.S.

It’s not an easy task, given the number of transfer points from manufacturing to administration sites. Vaccines often travel by truck and airplane, with stops and storage at the distributor before arrival at the terminal point, where they once again go into cold storage. The last mile to the healthcare provider could be a van delivery to a nearby town, or they could be transported via donkey, bike or camel.

Vaccines lose effectiveness the longer they are outside their target temperature range, whether too warm or too cold. They should be stored between -58 degrees Fahrenheit and 5 F if frozen, or 35 F to 46 F otherwise. 

A quarter of vaccines are degraded by the time they arrive at their destination, due to incorrect shipping procedures, according to the International Air Transport Association's Center of Excellence for Independent Validators in Pharmaceutical Logistics. And 20% of temperature-sensitive biopharmaceutical products, including plasma, are damaged during cold chain transport. "These are very sensitive materials," said Mahesh Veerina, CEO of Cloudleaf, an IoT sensor and visibility company.

Losses from vaccines exposed to temperatures outside the recommended range, known as excursions, are estimated at $34.1 billion annually, including lost product cost, replacement cost and wasted logistics outlay.

"Considering the state of healthcare, that is almost unconscionable," said Joe Battoe, CEO of Varcode, a temperature monitoring technology company.

The characteristics, such as exact temperature range, of forthcoming COVID-19 vaccines are not yet known, but "every vaccine is a cold chain product," Veerina said. Vaccines used in clinical trials must be transported via the cold chain as well. 

As coronavirus cases tick up in many parts of the world, the stakes are high not only for manufacturers and suppliers, but the logistics providers tasked with safely transporting the vaccines across the world. With billions of doses needed, a 20% vaccine loss due to cold chain issues — or even lower loss percentages — is problematic. 

Blockchain, cloud storage, and technology-enabled tracking and monitoring sensors provide real-time visibility into temperature changes — and an opportunity to intervene before damage is done. Without sensors, there's no understanding of what happens to the temperature once the pharmaceutical materials leave the labs or manufacturing facilities. Traditional data logger technology collects data, but by the time someone looks at it, it may be too late and the material must be discarded, Veerina said.

IoT sensors keep supply chains on alert

Digital technology can help manage distribution once the products leave the factory, with sensors placed on every pallet, case or unit on the production floor, tracked through their journey to the healthcare facility. Current vaccines aren’t tracked by dose, said Veerina, but that may change with higher value vaccines like the one for COVID-19. 

Tracking will include IoT sensors in some cases, which are already in use in some biopharmaceutical logistics. They can help identify weak links along the supply chain, like if there’s a trend where temperatures change at a specific point in the route. More than 50% of the temperature excursions occur during airline and airport handling, according to IATA.

Cloudleaf uses Bluetooth radio technologies for continuous data transmission. Its data tracking system produces a digital twin that maps the product's transit history in real time. The sensors can read light, temperature and humidity, along with manufacturing details like serial or lot numbers. Along with that data, the manufacturer specifies business rules, including what temperature band or range to program into the sensors. The system sends alerts to stakeholders for any violations outside the band, noting temperature specifics and product location. A power unit could have broken, causing the materials to heat up, or the pallet might be sitting on an airport tarmac too long.

The sensors have cell memory to store information if cloud upload and wireless communication are not immediately available, said Veerina. When the healthcare organization receives the products, the organization would check the dashboard to review its history and chain of custody before signing off on the product. But even before the product got that far, the manufacturer would know if a batch of vaccines was out of the proper temperature range and unusable.

Cloudleaf is also combining its individual tracking data with outside contextual data, like weather and transportation information. The tech company can use artificial intelligence (AI) to predict anomalies, transit backups or estimated arrival times.

Another IoT method is using scannable barcodes which upload information to a cloud-based blockchain system. Varcode uses this approach to monitor time, temperature and location. The system can provide alerts after the barcodes are scanned. The Varcode tags, which can track cumulative time outside the designated temperature range, would return a message to the scanner within seconds, confirming the safety of the product or suggesting safety measures to preserve the product, like to chill it immediately or put it in cold storage, said Battoe.

Stakeholders in the vaccine supply chain can track and monitor individual vials or the entire pallet or tray. A bright orange parent tag at the pallet or tray level connects to other tags in the system, so individual tags inherit the parent’s history if handled in the same environment. "No one wants to scan thousands of vials as they take or relinquish custody," Battoe said.

Varcode and Cloudleaf use blockchain-based cloud systems, which provide an immutable record and can help identify counterfeit items. Using blockchain and tracking allows users to better recognize diversion of vaccines, those stolen or inadvertently sent to the wrong location, Veerina said. Traditional vaccines already have diversion problems domestically and internationally, he said, and certainly COVID-19 vaccines would be subject to the same concerns.

Tracking plasma to reduce waste

Temperature tracking is also helping to decrease waste of plasma, the liquid part of the blood. Convalescent plasma has antibodies from donors who have recovered from COVID-19, which could aid in treatment and research related to the illness. 

Plasma is collected from donor centers where it’s kept in a freezer. The collection centers then send it in temperature-controlled trucks to facilities that process the plasma, separating out the components needed to create medicinal products. It’s stored at -4 F there, Veerina said.

"The processing is complex and a manual effort," he said. The processing happens in a room at 41 F. Bags of plasma have unique identification labels which include the source information. Temperature has to be monitored continuously, as it’s a violation if it’s left on the counter for more than 90 minutes. Also, labels can be lost, causing additional tracking problems.

"There are strict policies, but [the process is] mostly manual and not digitized," Veerina said, with alarm clocks monitoring the time outside the freezer.

"That’s where sensors come in," he said. They can detect location and temperature, and track how long the material is cumulatively outside of preservation to ensure the plasma doesn’t need to be discarded. Veerina said companies monitoring the plasma through the supply chain using real-time sensors have decreased spoilage and wastage.

"COVID-19 brought a completely different level of fragility to the supply chain," with billions of needed vaccine doses, said Veerina. Decreasing the waste of this biopharmaceutical product through the cold chain will have a direct impact on disease control.