Can Chinese Logistics Firm Cainiao Help with the Distribution of COVID-19 Vaccines in Africa?
- African countries are facing serious challenges related to the distribution of COVID-19 vaccines.
- Cainiao and its parent company Alibaba, which both have growing links to the region and deep logistics expertise, can help deal with some logistics challenges, though it is not without its limitations and potential pitfalls.
- International organizations, national governments, and the private sector need to work together to develop solutions to this enormous challenge.
On November 30, Chinese logistics company Cainiao Smart Logistics Network Limited (“Cainiao”), the logistics arms of tech giant Alibaba Group (“Alibaba”), announced a partnership with Ethiopian Airlines to launch China’s first regular cross-border medical cold chain flight route, for the transportation of temperature-controlled medicines from Shenzhen to other parts of the world including Africa via Dubai and Addis Ababa. Ethiopian Airlines noted that the route is “certified to transport temperature-controlled medicines including COVID-19 vaccines” and Cainiao noted the launch “allows [Cainiao] to offer a one-stop solution for the global distribution of medical products such as COVID-19 vaccines.” On December 3, Alibaba announced that it is discussing cooperation over COVID-19 vaccine logistics with Chinese COVID-19 vaccine developers and international organizations.
These are certainly encouraging news for Africa and other developing countries which are expecting serious challenges in distributing COVID-19 vaccines down the road. Eric Olander at the China Africa Project recently wrote an insightful piece discussing the significance of Cainiao’s move. Our earlier piece on how China can deliver its promise to make the COVID-19 vaccine a global public good, had also noted that China can contribute to the distribution of COVID-19 vaccines with its logistical assets and expertise. Indeed, given both their growing involvement and existing expertise, Cainiao and its parent company Alibaba are well-positioned to help with logistical challenges associated with distributing COVID-19 vaccines in Africa — though not without limitations and potential pitfalls.
Challenges Faced by Africa
Mass COVID-19 vaccinations have already started in several developed countries after they authorized several COVID-19 vaccines for emergency use. For African countries, however, there are serious challenges ahead.
Availability of COVID-19 Vaccines
African countries are having difficulties securing the vaccines they need. Africa Centres for Disease Control and Prevention estimated that to vaccinate 60 percent of its population, the estimated minimum requirement to achieve herd immunity, Africa will need 1.5 billion doses.
Vaccine Inequality. According to Arnaud Bernaert, head of global health at the World Economic Forum, of the approximately 12 billion doses of the COVID-19 vaccine expected to be produced in 2021, about 9 billion shots have already been reserved by rich countries. Many well-supplied developed countries have also stated publicly that they will only be willing to share their pre-ordered vaccines after their domestic demands are met.
COVAX Facility. Most of Africa’s 54 nations will need to rely largely on the COVID-19 Vaccines Global Assess Facility, or COVAX, which is set to distribute at least 1.3 billion doses of COVID-19 vaccines across 92 low- and middle-income countries in 2021. COVAX recently announced that it also has “arrangements in place to access nearly two billion doses of COVID-19 vaccine candidates”. Nevertheless, COVAX is only targeting up to 20% population coverage by the end of 2021, and one of its main vaccine suppliers, the Serum Institute of India, stated that its first priority would be making shots for India, which is likely to delay other developing countries’ access to COVID-19 vaccines.
Logistical Challenges
Even if enough COVID-19 vaccines are made available to African countries, serious logistical challenges remain.
Stringent Logistical Requirements. The three most widely-purchased COVID-19 vaccines that have been approved by regulators all strictly require cold chain transportation. The most demanding one, Pfizer/BioNTech’s COVID-19 vaccine, has to be shipped in special containers designed by Pfizer packed in dry ice to keep them at the required minus-70 degrees Celsius. Moderna’s and AstraZeneca’s COVID-19 vaccines have less stringent requirements, but they still need cold chain transportation (Figure 1). On this front, logistics experts have warned that most of Africa lacks the refrigeration and cold chain to administer effective vaccination programs. Many African countries also face problems with supporting infrastructure such as access to energy.
Low Overall Readiness for Mass Vaccination. Dr. Richard Mihigo, Immunization and Vaccine Development Program Area Manager at WHO Africa, said that based on data reported by 45 countries in the region, the average COVID-19 vaccination readiness across Africa is only at 36 percent, far below the desired 80 percent benchmark to conduct a successful and efficient vaccination drive. He noted that the main areas of concern are in logistics and supply chain, and he called for a review of vaccine distribution strategy and mapping the points of storage and additional back-up storage facilities.
Lack of Cold Chain and Supporting Infrastructure. It is unclear if African countries which have already been hit hard by the economic downturn caused by the COVID-19 pandemic have the resources to invest in such infrastructure and equipment. In addition, African countries may not be able to procure the much-needed cold chain equipment. For example, at the US-based ultra-low temperature freezers manufacturer Stirling Ultracold, the estimated wait time for new orders is six to eight weeks. African countries’ demand for equipment could again be sidelined, just like their demands for COVID-19 vaccines.
What Cainiao Can Do to Help?
Cainiao can also utilize its expertise and capacity to help with the distribution of COVID-19 vaccines in Africa.
Integrating Existing Logistics Assets for Better Solutions
Logistics Expertise. Cainiao’s main expertise is to organize existing logistics assets and design better logistics solutions. Cainiao is best known for its capability to integrate logistics organizations, information, facilities, equipment, and protocols of different enterprises into effective logistics solutions leveraging its technological capabilities. Cainiao and Alibaba have a proven track record at an international level. In April 2020, Cainiao and Alibaba were selected by the World Food Programme (WFP) to provide commercial hub services for a global humanitarian hub in China to support efforts against COVID-19. In 2019, Alibaba helped WFP built a global hunger monitoring system that uses “artificial intelligence (AI), machine learning and data analytics to predict and track the magnitude and severity of hunger in over 90 countries in close to real-time.”
Experience in China. Cainiao has extensive experience in developing logistics solutions that can reach rural and remote areas in China. Alibaba’s e-commerce service has long faced similar challenges in these areas as Africa’s COVID-19 vaccine distribution effort: long physical distance, lack of proper packaging and cold chain equipment, and difficulty to maintain distribution schedule. Cainiao uses its data system to connect countless couriers and logistics providers all around China, standardizes the logistics solutions provided, tailors solutions based on customer’s demand, and builds new facilities when necessary. For example, using big data, Cainiao can even predict the demands in different counties and villages and adjust its distribution of goods accordingly.
Investing to Fill the Gaps in Cold Chain Logistics
Cainiao can also help fill some gaps by investing in additional infrastructure in the region because such investment aligns with its commercial interests. Alibaba and Cainiao stand to benefit from the increasing volume of trade of goods enabled by additional infrastructure and thus have the incentive to invest in some new logistics facilities and other infrastructure in Africa, which can be used to distribute COVID-19 vaccines. It is already building a global logistics network as part of its global strategy, which aims to realize “delivery anything in China within 24 hours and across the globe within 72 hours”. Of note, Alibaba has already established two Electronic World Trade Platform (eWTP) trade hubs in Ethiopia (2019) and Rwanda (2018), which are designed to offer support in smart logistics and fulfillment. This is likely to contribute to Cainiao’s partnership with Ethiopian Airlines.
Limitations with Cainiao’s Capacity and Expertise
There are indeed ways in which Cainiao can help with the distribution of COVID-19 vaccines in Africa, but it faces real limitations and challenges that cannot be resolved easily.
Vaccine Availability. Neither Cainiao nor Alibaba can do much about the vaccine shortage issue African countries are facing. They may be able to help facilitate deals between Chinese vaccine developers and African countries to supply their COVID-19 vaccines to African countries, but the Chinese and international regulators are still working on their approval. It is unclear when and if they will be made available to the Chinese or African public.
Limited Cold Chain Infrastructure. Cainiao’s logistics optimization and management system are still based on logistics assets on the ground, so its system has its limits. Even Cainiao’s innovative solutions cannot overcome some problems such as insufficient logistics and supporting infrastructure. Cainiao and Alibaba’s investment in new logistics infrastructure in African countries in the short term is also likely to be limited.
Data Privacy. In order to optimize logistics solutions, Cainiao collects and analyzes a massive amount of data. There have been concerns over user privacy and data security. Some African countries are already taking steps to strengthen data protection and it is important for Alibaba and Cainiao to address these concerns.
Local Context. It remains a question whether Cainiao can replicate its success in Africa. Although Africa has roughly the same population as China, it is divided into 54 countries and countless jurisdictions. All of them have very different political systems, cultures, religions, levels of income and development, and languages. Devising logistics solutions for these areas is a major challenge. As we mentioned in our last article on Alibaba, Chinese companies operating in foreign markets often suffer from a lack of local knowledge. While Cainiao and Alibaba might aspire to standardize the logistics solutions it provides and develop global rules in this area, it is essential for them to take into account inputs from the African public and private sectors.
Collaboration with International Organizations and National Governments. International organizations and national governments in Africa are likely to lead the effort in distributing COVID-19 vaccines in Africa. International organizations, in particular the United Nations, have strict systems to register and manage their vendors, and donations to these agencies often come with additional requirements such as greater transparency and accountability. Much of any eventual success will depend on Cainiao’s ability to collaborate with them and follow their rules in the process.
There are still many things we do not know about COVID-19 vaccination in Africa such as when and what kind of vaccines will be available for distribution in African countries. Nevertheless, experts have already warned against difficulties ahead due to the lack of logistics infrastructure, resources, and solutions in African countries. Cainiao and Alibaba’s recent moves are steps in the right direction, and there is more they can do to help with COVID-19 vaccine distribution in Africa. But what they can offer is not a silver bullet. Their involvement could even cause backlash and new problems. Cainiao and Alibaba should work within the framework set up by international organizations in this area, as well as national governments, to make sure their impact is both positive and welcome. In addition to companies in Africa, other global logistics companies such as DHL and UPS should also pitch in to help. Facing an unprecedented challenge like this, international organizations, national governments, and the private sector will have to work together to build much-needed solutions.
References for Graphs
Figure 1: Disclosed Storage and Transportation Requirement for Nine Leading COVID-19 Vaccines
Pfizer. “Pfizer-BioNTech COVID-19 Vaccine U.S. Distribution Fact Sheet”. Pfizer. November 20, 2020.
Moderna. “Moderna Announces Longer Shelf Life for its COVID-19 Vaccine Candidate at Refrigerated Temperatures”. Moderna. November 16, 2020.
AstraZeneca, “AZD1222 Vaccine Met Primary Efficacy Endpoint in Preventing COVID-19”, AstraZeneca, November 23, 2020.
Han, S. “Distinguish Between COVID-19 Vaccine’s ‘Expiration Date’ and ‘Duration of Protection’: the Expiration Date on the Packaging Means Shelf Life ”. The Paper. September 4, 2020
Li, X. “The Covid-19 Vaccine Developed by Academician Chen Wei and CanSino Could be Kept at 2 degree Celsius to 8 Degree Celsius for A Long Time”, The Paper, November 20, 2020.
How Cainiao Delivered Half a Million Tulips to 26 Chinese Cities on the Same Day
Zhong. Q. “Cainiao Network Joins Forces with Cold Chain Resources in Society, Guides Industry Standardization”. China News. February 14, 2014.
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