Ocean to compete with air for vaccine deliveries, says Maersk

Ships will soon compete with planes to deliver COVID-19 vaccines in a distribution drive that could take four years, The Financial Timesreports, quoting a senior executive at AP Møller Maersk.

Most of the vaccines have been transported by air and land since the factories are mainly located in Europe, the US and India, close to early recipients. But ships will be used increasingly to access markets in Africa, Asia and South America from midway through this year, when Maersk predicts vaccine supply will outstrip air freight capacity, the newspaper noted.

“By the middle of 2021, then we will see a surplus of vaccines and see a logistics network that is not able to handle it in terms of air freight, cold-chain infrastructure,” said Hristo Petkov, head of pharmaceuticals at Maersk. “Then shipping containers play a bigger role.”

He believes that half of all Covid-19 vaccine distribution will happen locally through overland and short-haul flights, with air and ocean freight competing for the remaining half. Manufacturers and health authorities would take into account supply chain maturity, infrastructure and vaccine production rates for the various countries and regions.

Vaccine gains for ocean

Over the past decade, ocean liners have been steadily taking share from air freight in the transportation of medicines, treatments and vaccines, as the threat from generic drugmakers has forced pharmaceutical companies to cut costs. Yet quicker, more costly air freight remains dominant for more expensive pharma goods.

Around 87% of medical products by volume are sent via sea versus 13% by air, but that ratio flips in terms of value, estimated Mark Edwards, managing director of logistics consultancy Modalis and a former regional freight lead for AstraZeneca.

“The Covid vaccine fits at the higher end of low value,” he told the FT but added that the share of container shipping was likely to be lower than usual in the case of Covid vaccines as speed is prioritised.

AstraZeneca’s use of ocean carriers has reportedly soared in recent years and the low cost of its coronavirus shot makes it a leading candidate to be shipped by sea, the FT highlighted.

Maersk has an exclusive agreement to distribute a vaccine under development by Covaxx, a US biotech group that aims to produce 1 billion doses by the end of 2021.

Reefers as mobile warehouses

Advocates say the refrigerated containers on vessels, reefers, can function as mobile warehouses on land, helping countries lacking cold-chain infrastructure, while seaborne transport steadies the flow of vaccines out of factories. It arguably leads to less waste as sea freight passes through fewer handlers, lowering the risk of temperature deviations.

Still, Edwards said that a fair number of vaccine makers were likely to stick with airborne cargo because quality departments at the pharma groups, which “rule the roost”, tend to resist change.

Maersk has also joined other logistics groups and the world’s largest vaccine manufacturer, Serum Institute of India, in warning about lengthy waits for developing nations because production capacity will not be increased quickly enough to go faster.

“It will take three to maybe four years to vaccinate the whole world,” said Petkov. “If you think everything will be done by the notebook, then you’ll be done by 2023. But there could be different variations of the virus and vaccines, so we are looking at this potentially continuing longer.”

Petkov said supply-chain bottlenecks could slow the rollout. “Logistics can quickly become the limiting factor,” he told the FT.