How UPS Could Be Winner In COVID-19 Vaccine Logistics

COVID-19 vaccines could create logistics problems due to the requirement to store them at frozen temperatures, which could create an opportunity for a company like UPS.

What Happened: A Tuesday press release from United Parcel Service UPS showed the company’s focus on vaccine distribution.

UPS Healthcare, which has 128 facilities in 32 countries, will produce 1,200 pounds of dry ice per hour in the United States and Canada. The dry ice will be available for hospitals, clinics and other points of care and can be made available in next day shipping.

UPS is also launching a joint effort with Stirling on ultra-low temperature freezers. The freezers will be able to ship and store vaccines at temperature ranges of -20 degrees Celsius to -80 degrees Celsius.

Related Link: 7 Stocks That Could Benefit From Pfizer's COVID-19 Vaccine That Requires Cold Chain Storage

Why It’s Important: The vaccines from Pfizer Inc PFE and BioNTech BNTX require storage at a temperature of -70 degrees Celsius. The Moderna Inc MRNA vaccine requires storage at a temperature of -20 degrees Celsius.

The U.S. government plans to distribute over 6 million doses of the Pfizer vaccine, pending FDA approval. The logistics around the storage and distribution of the vaccine is a major concern that could be answered by a company like UPS.

FedEx Corporation FDX bought ultra-cold freezers in early November, according to the Daily Memphian. The company has made no official announcement on purchasing freezers.

Demand for ultra-cold freezers and dry ice could see huge spikes after vaccines are approved and UPS is getting ahead of the game to enter these markets to help facilitate the distribution.

Price Action: Share of UPS closed up 4% to $172.69 on Tuesday. The stock is up 48% year-to-date.