The COVID-19 pandemic is currently affecting over 200 countries and territories across all regions, including countries from which UNICEF procures essential commodities for children.

UNICEF is committed to advocate for the protection of children’s rights and help meet their basic needs and to expand their opportunities to reach their full potential. This includes the availability and accessibility of life-saving supplies such as medicines, vaccines, sanitation and education supplies.

The current COVID-19 pandemic is applying pressure on global manufacturer production capacities and global supply chains. Since the start of the outbreak, UNICEF Supply Division has been undertaking a continuous assessment of developments and the impact this crisis has on shipping and logistics as well as on sourcing of essential and strategic supplies. Below is a current picture of the situation as well as risk mitigation undertaken or to be actioned.

Key shipping and logistics challenges
 

• Limitations to airfreight is at present the single biggest challenge to UNICEF logistics operations with restrictions and reduced demand on passenger flights, which generally carry cargo in the belly-hold. Despite the current increase in freighter flights, reduction in passenger flights is causing a 31% decrease in global air cargo capacity. This has had a knock-on effect on airfreight rates which have increased substantially and has also negatively impacted delivery of supplies worldwide, most notably to those African destinations which lie outside major trade routes. Sea freight is less affected with rates remaining constant although a fall in demand has led to a reduction in frequency of sailings.
• Last year, UNICEF supplied 2.43 billion vaccine doses which, at a value of USD 1.65 billion, accounts for almost half of all goods procured by UNICEF (in value terms). Approximately 30-40 per cent of the vaccines are transported using passenger flights.
• 48 per cent of vaccines procured through UNICEF are produced in India alone, and rely heavily on passenger flights for  shipment. India’s issuance of visa and travel restrictions to non-nationals has led to a reduction in flights and air freight  capacity. 36 per cent of UNICEF procured vaccines are from Europe, mostly from France and Belgium, and the logistics outlook is equally concerning.
• UNICEF is working with country offices and global freight forwarders to prioritize shipments of emergency and essential supplies, including analysing available options (re-routing, consolidation in charters, sea shipments) to maintain timely delivery. UNICEF is also collaborating with partners (WHO, OCHA) and relevant export authorities where export bans for medical items have been imposed to enable UNICEF and other humanitarian actors to respond to COVID-19. Finally, where feasible and affordable, UNICEF is pre-positioning and shipping supplies to hubs and locations in as close proximity to programmatic activities as possible to reduce the impact of travel restrictions on shipments, cost and shipping times.   
   

COVID-19 response challenges
 

• For the COVID-19 pandemic response itself, the supply of critical items such as personal protective equipment (PPE) – surgical face masks, N95 respirators, gowns, coveralls, gloves, and hand sanitizers, is constrained. This is because of both increasing demand (which for some products has risen to 100 times pre-outbreak levels) and export restrictions for these commodities in many countries. UNICEF is working with industry globally to source additional products and with relevant authorities to waive export bans for medical items and PPE.
• Despite extreme PPE supply shortages in the initial stages of the outbreak, UNICEF has, in view of meeting the demand for PPE products for the months of April to June,  managed to secure availability from suppliers for key products, such as 33 million surgical masks, 21.0 million respirators, 4.2 million coveralls, 5.7 million surgical gowns, 1.6 million goggles, 12,000 infrared thermometers and 31.5 million face shields.
• Availability of hand sanitizer – another critical product to disrupt transmission of COVID-19 in communities, at home, and for use by medical professionals – is limited. Suppliers have been communicating price increases to UNICEF ranging from 40 per cent to 90 per cent since the start of the outbreak. Where possible, hand sanitizer is procured locally and regionally to reduce freight cost and prolonged lead times.
   

Other supply chain exposures, and impacts of COVID-19
 

The remainder of this document provides an overview of the current and anticipated near term impact of COVID-19 on UNICEF’s supply chains for country programmes. The focus is on supplies that make up the majority of UNICEF’s procurement ‘footprint’ (by procurement value and volume) as well as those programme supplies required for its response to the COVID-19 outbreak. Accordingly, it covers health and nutrition products – notably medicines, vaccines, long-lasting insecticidal nets (LLINs), diagnostics tests, and PPE – as well as products related to education.
 

Vaccines
 

• In seven vaccine markets, 100 per cent of vaccine procured by UNICEF is sourced from one country: For Malaria vaccines (Belgium); DPT (India, multiple suppliers); Hep A (China); Hib (India); JE (China); MR (India); Rabies (India); TCV (India). This poses considerable risk to access to supply if there are imposed quarantines or restrictions on air cargo transport. Furthermore, although there is supply diversification of production of OPV, there are dependencies on the bulk product from Indonesia that pose a risk to access to supply.
• In six other markets, over 60 per cent of vaccine doses supplied through UNICEF is sourced from one country: Influenza (S. Korea); BCG, Measles, Meningococcal A, MMR and TT (India). Again, the risk is high that some country’s programmatic requirements will not be met if there is a quarantine or restrictions on air cargo transport out of these countries. UNICEF continues to explore other means of delivering vaccines as described above.

Medicines
 

• UNICEF procures pharmaceutical products globally from various regions with 45 per cent (USD 44 million) being sourced from India, and 7.8 per cent (USD 7.8 million) from China. Both countries represent an exposure for UNICEF of just under 53 per cent. A large portion of the remainder are sourced from Europe. UNICEF is working with WHO and other partners to monitor and manage access to essential medicines.
• Of the 16 manufacturers contracted by UNICEF to supply antimalarials, four are based in India and one is in China. Nine of UNICEF’s 11 contracted antiretroviral (ARV) suppliers are based in India, with none in China. Indian manufacturers supply generic ARV products, for which alternative originator manufacturers exist outside of India. As for other essential medicines, the majority (80 per cent) of the essential medicine suppliers are from India, with only four per cent (three) in China. Alternative suppliers are available in Europe for the injectable antibiotics sourced from China.
• The production of essential medicines from Chinese suppliers has now normalized. However, the recent lock down in India has resulted in reduction in some supplier’s production capacity and increased lead times for medicines sourced from India due to in-country logistical challenges. There is a high likelihood of delays for pharmaceuticals sourced from India.  However, where possible, UNICEF is using suppliers outside of India to source the medicines, including from Europe and China where UNICEF suppliers have now resumed full production.

Cold chain equipment
 

• The global supply of immunization of Cold Chain equipment (CCE) is diversified. The key suppliers of WHO prequalified CCE are spread across Europe, South Africa, India, USA, as well as China.
• The production capacity of the Chinese supplier is back to normal with confirmed availability of raw materials and components. Some of the European suppliers’ production capacities have been restricted; one supplier had their factories closed while others noted difficulty in sourcing specific components and raw materials. However, there is minimal impact on CCE orders in the pipeline, especially with the largest CCE manufacturers.
• As a result of border closure to incoming shipments in some countries, there has been delays in picking up some orders from the suppliers, as well as delays of shipments in-transit.
• In terms of CCE project implementation and installation services at the country level, lockdowns and restrictions on importation have resulted in full or partial suspension of in-country logistics and installation activities. In some cases, this resulted in increased operational costs.
• UNICEF is monitoring the production, delivery and implementation status with the suppliers on a weekly basis and adjusting timelines and priorities in view of the changing situation.

Long-lasting insecticidal nets (LLINs)
 

• UNICEF has forecasted procurement of up to 85 million LLINs over the 2019-2020 period and has contracted 10 suppliers (including three from China and two from India) to fulfil these needs. Chinese suppliers of LLINs have returned to their normal production capacity. Indian suppliers are currently in nationwide lock-down and the manufacturing facilities are closed until 4 May. UNICEF is in the process of assessing the impact of COVID-2019 on upstream supply chains for LLINs.
• To avoid any delays, supplies forecasted to be delivered up to June 2020 have been re-allocated from Indian suppliers to other suppliers outside India. UNICEF continues to monitor the LLIN production status and is in dialogue with other global procurers (e.g. PMI, Global Fund) freight forwarders and inspecting agencies to collaborate on actions to mitigate further risks.

Diagnostics tests
 

• The market for HIV diagnostics products has remained stable during the COVID-19 outbreak. UNICEF procures only WHO prequalified items for both HIV and Malaria and there are many HIV tests on the WHO pre-qualification list that remain in production under these circumstances.
• The market for malaria diagnostics products is challenged due a limited number of suppliers and country lockdowns impacting production capacity. One supplier is scaling back on production as they are diverting capacity to produce COVID-19 tests, with the risk of adversely impacting the availability of malaria diagnostics.
• UNICEF will continue monitoring the production, delivery and implementation status with the suppliers on a weekly basis and adjusting timelines and priorities in view of the changing situation.

Nutrition products
 

• On nutrition related products, UNICEF currently has 21 suppliers of ready-to-use therapeutic food (RUTF) with a geographical spread across the globe with producers in most regions including in South Asia, the Americas, Europe, the Caribbean, and Africa. A large quantity of RUTF is also received as a contribution-in-kind (CIK), sourced from manufacturers in the USA. However, UNICEF’s supplier base for therapeutic milk is constrained with only one main supplier contracted based in France. To mitigate this risk, UNICEF is working with the supplier and the regions receiving most of the therapeutic milk procured by UNICEF (i.e. across Africa) to pre-position therapeutic milk closer to these countries, to increase production, and to establish a contract with a second supplier based in Africa. Even though UNICEF procures as much as 80 per cent of the global production of RUTF and therapeutic milk, most of UNICEF’s contracted manufacturers (and manufacturers providing RUTF via CIK) have to date not reported delays in production nor delivery of supplies. Given that most of these products are shipped via sea freight, their deliveries have not been significantly affected by recent air freight disruptions.
• Other commodities used in nutrition programmes such as multiple micronutrient powders (MNPs) and anti-anaemia products (e.g. iron folic acid) can be delivered from UNICEF stock in Copenhagen (CPH warehouse) or directly from manufacturers. Replenishment of UNICEF’s warehouse inventory is being increased and brought forward to ensure sufficient buffer stocks. The supplier base for MNPs is healthy with large capacity in Europe, Asia and Africa. The same goes for the anti-anaemias with suppliers in Europe and Asia, although production is currently constrained with one of the suppliers with UNICEF responding to a negative quality audit. For Vitamin A capsules (Retinol) both UNICEF and the donor of the CIK are using the same supplier based in Canada, which has been able to produce as planned. The product is delivered to UNICEF programmes and partners from the UNICEF Copenhagen warehouse.

Education supplies
 

• Most of UNICEF’s education supplies are procured from China and the outbreak of COVID-19 has resulted in production and delivery delays. Currently, all education suppliers in China have resumed work. Lead times for delivery are longer than usual due to the production backlog at Chinese suppliers but UNICEF’s order pipeline dating back to November and December 2019 has now been shipped and UNICEF has started to receive consignments. New warehouse replenishment orders have been placed and accepted by suppliers with scaled deliveries anticipated to arrive from the end of June onwards.
• Alternative sourcing arrangements from non-Chinese suppliers have revealed that most manufacturers and traders also primarily rely on Chinese imported products and raw materials, and therefore are equally impacted by production delays. Overall, education suppliers remain very responsive during the crisis with daily updates and maintaining regular communication with UNICEF.

Water, sanitation, and hygiene (WASH) supplies
 

• Water, sanitation, and hygiene (WASH) products related to emergencies are mostly available in local markets (i.e. soap, buckets, jerrycans, handwashing stations, and others). For some key products, such as water purification tablets, UNICEF sources supplies from geographically diverse regions, mostly in Europe and South America, and they are generally shipped by sea freight (i.e. less exposed to air freight disruptions). UNICEF does retain an emergency buffer stock at its warehouse in Copenhagen and is in regular contact with key suppliers to monitor stock availability, which is changing rapidly. Even though UNICEF can still place all procurement orders, some suppliers are delaying the delivery of non-emergency orders for items such as handpumps.
  Contributions in kind for hygiene products such as soap increased in recent months.