Maersk announced earlier this week that they had signed a deal with COVAXX to distribute up to a billion doses of Covid-19 vaccines in 2021. The vaccine is only in phase-1 trials at present, but should it be authorised for mass use, Maersk may be scoring themselves a major competitive advantage.
Admittedly, Monday’s announcement between Maersk and COVAXX may not seem like overly significant news. There are of course a number of vaccines in phase-3 of their clinical trials, including one promising vaccine AstraZeneca have in the works. Meanwhile, COVAXX are still waiting on regulatory approval to conduct Phase 2 trials in the United States.
However, according to COVAXX, the properties of its COVAXX UB-612 vaccine give it one particular advantage over a number of others currently in the pipeline.
As Maersk highlighted in their press release, the design of the COVAXX vaccine components will allow for the use of existing cold-chain storage and distribution channels, as the COVAXX vaccine does not require additional infrastructure such as -80⁰C freezers or liquid nitrogen tanks to store materials at extreme temperatures.
Indeed, Lou Reese, Co-Chief Executive Officer of COVAXX, even goes as far as to say that the vaccine can be stored in a conventional fridge:
“The COVAXX vaccine is unique in that it can be stored in the fridge you have at home, moved in the same trucks that deliver groceries and administered anywhere you can get a flu shot.”
If that is true, the ability to transport the vaccine without such infrastructure could give Maersk a significant competitive advantage. The transportation costs of such a vaccine would almost certainly be lower. On top of that, less equipment would be required, making the process of delivery less complex and less affected by disruption.
The challenges associated with delivering vaccines that require strict temperature control was spelled out last month in DHL’s white paper ‚Delivering Pandemic Resilience‚, which was produced in cooperation with McKinsey & Company.
The paper argues that there are 3 main operational challenges related to the mass distribution of such a vaccine:
- The availability of suitable packaging as well as the maximum-allowed quantities of dry ice in air cargo transport could potentially limit shipment possibilities in certain cases if the preparations are not made in time.
- Ensuring consistent temperature management (in a way that avoids damage to the precious shipments throughout the last-mile network) is much more complex for ~50 boxes/parcels than it is for one pallet shipper.
- The physical handling of ultra-deep frozen shipments requires special equipment (such as gloves) and processes to avoid injury. This means that a large number of couriers and consignees need to be informed or even trained.
All of the factors above will inevitably entail significant costs and make distribution more challenging compared to a vaccine that can be stored at temperatures ranging between 8°C and -2°C.
DHL’s paper seems to support this argument by saying the „ideal candidate” for a vaccine would be one that is „not only efficacious, but also allows for scalable production and manageable distribution at standard temperatures.”
Moreover, as DHL Chief Commercial Officer Katja Busch explains in her article for the World Economic Forum, the requirement for strict temperature controls is a problem in regions with a particularly warm climate and limited cold-chain logistics infrastructure. This, she says, is the case in large parts of Africa, South America and Asia.
Naturally, Maersk’s portfolio does not lend itself to mass-air distribution – the shipping giant launched its air-freight business as recently as this month. Therefore, it’s only natural that the company would seek a vaccine that could be transported effectively via its existing network. Regardless, should Maersk’s bet on COVAXX developing a safe vaccine work out, they could find themselves in a very promising position indeed.
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