UPS and FedEx Manage Capacity for Peak Vaccine Shipping

April 4, 2021
UPS and FedEx Manage Capacity for Peak Vaccine Shipping

UPS and FedEx are planning to increase vaccine delivery capacity threefold by May.

As of February 2021, the two companies were delivering about 14 million doses per week.  UPS in particular believes it can still prioritize timely vaccine delivery when increased production by multiple manufacturers allows triple the volume in May 2021.

Video Spotlight: 

This post is based on the Bloomberg article, UPS expects 40% jump in vaccine doses next week, peak in May, by Thomas Black,  February 25, 2021, and the YouTube video in the Spotlight. Image source: FG Trade/Getty Images

Discussion Questions:

1. How have distribution points grown since the start of 2021?

Guidance: Distribution points are becoming increasingly varied as local and state governments open up stadiums, arenas, amusement parks, and other large-scale venues in addition to smaller outlets like pharmacy and grocery chains.  Whereas there were about 14,000 distribution points in the vaccine supply chain when UPS and FedEx began deliveries, there were 100,000 as of late February 2021, with that number increasing rapidly.  As distribution points open up, more delivery capacity is needed to ensure that plenty of vaccines can move steadily through the supply chain to waiting Americans.

2.  How much of UPS’s capacity will be needed for vaccine delivery when peak levels are reached in May of 2021?

Guidance: UPS has such a huge delivery capacity that even when vaccine deliveries reach their highest anticipated point, they will only comprise about six percent of its daily load of 24.7 million packages.

3.  What is a bottleneck, and where in the vaccine supply chain have bottlenecks occurred?

Guidance: A bottleneck is a point in an operation or supply chain at which subsequent processes cannot keep pace with what is happening upstream.  This causes a backup.  The unusual snow and ice events in Texas in February 2021 caused some temporary bottlenecks for many carriers.  UPS in particular had to hold some vaccines because some vaccination sites were closed due to the inclement weather.  Fortunately, these problems only lasted a few days.

In addition, UPS has invested in two freezer farms, locations where it can store vaccines en route to vaccination sites if for some reason deliveries cannot be made in a timely way or if future bottlenecks occur.  As of the time of this post, however, the Moderna and Pfizer vaccines have on average flowed from factory to recipients’ arms within less than 20 hours, so the freezer farms have not been needed.


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