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MARINE | Vaccine transportation In association with Munich Re
Marine market to play critical role in historic supply chain challenge The effective distribution of Covid-19 vaccines across the world presents arguably the greatest supply chain challenge of all time. Sean Dalton, (left) Head of Marine Underwriting, North America at Munich Reinsurance America, and Robert Sedlmair, (right) Senior Underwriter Marine - Innovation & Single Risks at Munich Re, believe that with the right level of partnership and transparency throughout the risk chain this challenge can be overcome and made insurable
As the global community works together to meet the many challenges brought by the Covid-19 pandemic, the unprecedented work on vaccine development is yielding great results. With vaccines becoming increasingly available over the world, we are now witnessing the start of of a global population in a safe, timely and efficient manner, and so... the transportation and distribution of vaccines is critical. This will require the largest transportation and supply chain efforts ever undertaken and will be on a massive scale. From a marine (re)insurer’s perspective, this requires the following criteria to be carefully assessed: > The volume. Global logistics company DHL estimates that some 10 billion doses of vaccine need to be shipped over a period of two years to transport the vaccine into the far corners of the planet. This will necessitate 15,000 flights, 15 million cooling boxes and approximately 200,000 movements by pallet shippers; > The values. Industry analysts put the value of the vaccines to be shipped at up to US$100bn. This is an unprecedented amount considering that shipments must be delivered within a relatively short period of time; > The cold-chain. Vaccines are a highly sensitive cargo that are extremely susceptible to variations in temperature. Depending on the manufacturer, temperatures of up to -80 The Marine Insurer Nordic & Asia Special Edition | April 2021
degrees Celsius have to be maintained throughout the entire logistics chain - from the production facility up to the “last mile”, i.e. a hospital, vaccination centre, doctors’ practice or pharmacy. Interim storage of the vaccines requires specialised freezers with monitoring and alarm capabilities. However, today there is a considerable lack of cold-chain logistics capacity suitable for life science products; > Security. In some countries, we can expect that there will be considerable risk of theft and hi-jacking of these highly valuable consignments. Sophisticated security arrangements and loss prevention measures must be put in place along the entire supply chain; and, > Accumulation. The value concentration for single shipments up to storage at facilities such as airports, will reach triple-digit million US dollar values. It is vital for insureds, insurers and reinsurers alike to make sure that risk management measures are in place to monitor and control the accumulations effectively.
ADDRESSING THE ISSUE Rising to this new challenge requires development of innovative marine re/insurance products and solutions. The key success factor, however, will be to ensure seamless and secure cold-chain management throughout the entire supply chain. Rigorous temperature monitoring and quality control using state of the art sensor technology will be vital to
