Dive Brief:

• In a letter to President Joe Biden, AdvaMed on Tuesday stressed the need to prioritize transporting and shipping of medical devices and supplies as the administration examines and addresses broader supply chain issues.
• Transport challenges like shipping container shortages, limited unloading space and insufficient trucking capacity at U.S. and international ports are contributing to a "transport and logistics crisis," according to the medtech lobby. CEO Scott Whitaker said while "multiple industries are affected by these disruptions, we believe the implications for the healthcare system and patient care are imperative as we head into the fall, which brings with it flu season and uncertainty surrounding COVID-19 variants in unvaccinated populations."
• David Gillan, senior vice president of supply chains for Vizient, said that bottlenecks in shipping and transport have come throughout the coronavirus pandemic and has "absolutely affected every medical device that you can name." Gillan added "from a congestion standpoint, the only thing we're able to communicate to our constituents, so the hospitals, is to plan … a slack in their supply chain."

Dive Insight:

Supply chain challenges have been a constant challenge throughout the coronavirus public health emergency. Last spring, shipping demand dropped as the pandemic accelerated around the globe, causing shipping cancelations and rescheduling. Then an unexpected peak in consumer spending increased demand, leading to capacity constraints — increased spending and shipping demand created a shortage of containers and congestion at ports that have impacted numerous industries.

Along with shipping challenges, companies across multiple sectors are also dealing with trucking capacity issues.

The medical device and healthcare industries were particularly impacted by shipping challenges during the pandemic as demand for essential products like face masks and personal protective equipment, diagnostic tests and other medical supplies spiked, in some cases creating shortages for essential products as patients with COVID-19 filled hospitals.

Addressing supply chain issues was one of the first priorities set up by the Biden administration. The president issued an executive order on Jan. 21, one day after the inauguration, requiring a multi-agency review of the public health supply chain.

While supply chain challenges were exasperated as the pandemic intensified, transport capacity constraints continue today.

Vizient's Gillan said challenges from increased demand have led to overall shipping costs increasing by 400% over the last year and major capacity issues, and a normalization of costs and capacity is not expected until February 2022.

"The summary is that bottlenecks in shipping continue to arise from [the Suez Canal] to now Hong Kong, the demand for goods in Western countries continues to increase yet the manufacturing and logistics from Eastern countries is compressed, and really much of the compression is the result of COVID," Gillan said

AdvaMed's Whitaker said transport challenges, including shipping container shortages and insufficient trucking capacity, have "impeded our companies’ ability to deliver healthcare products while also significantly driving up costs."

The CEO acknowledged that the transport issues at U.S. and international ports are affecting multiple industries but added the transport of medical supplies and equipment should be "a top priority as you and your teams think through solutions to the ongoing transport and logistics crisis."

Gillan said that while the medical device and healthcare industries are not in a "red alert" requiring a hyper prioritization on medical supplies — more precise buying strategies are being implemented to offset delays and other challenges — there are no easy fixes in the near term.