FedEx, UPS say they’re equipped to handle US vaccine delivery

Claims reflect jockeying among carriers for a share of the vaccine distribution business

Federal Express cargo jets at the carrier's Memphis, Tennessee, hub. (Paul J. Richards/AFP via Getty Images)
Federal Express cargo jets at the carrier's Memphis, Tennessee, hub. (Paul J. Richards/AFP via Getty Images)
Posted December 10, 2020 at 5:48pm

Officials at FedEx and UPS on Thursday told a congressional panel that they believe their companies can handle domestic distribution of the COVID-19 vaccine entirely without needing to call on U.S. passenger airlines that have spent recent months preparing to transport the vaccine.

“We don’t believe at this point in time in the United States to deliver this we’re going to need to rely on the passenger airline sector at all,” said Richard Smith, regional president of the Americas and executive vice president, FedEx Express.

Smith, testifying at a hearing of the Senate Commerce Subcommittee on Transportation and Safety, was responding to a question from Sen. Maria Cantwell, D-Wash., who said she worried that passenger airlines decimated by the pandemic would need to ramp up quickly to help deliver the vaccine.

Smith’s comments reflect jockeying among carriers for a share of the vaccine distribution business. McKesson, an Irving, Texas, pharmaceutical distribution company, has been selected by Operation Warp Speed to oversee the process. A company spokesman did not return a call for comment. 

Delta Air Lines, United Airlines and American Airlines have all been conducting test flights in preparation for delivering the vaccines, which can require storage at minus 70 degrees Celsius (minus 94 Fahrenheit) to remain effective.

[Shipping networks prep for COVID-19 vaccine distribution]

The Wall Street Journal reported late last month that the Federal Aviation Administration has permitted United Airlines, which is conducting charter flights from Brussels to Chicago with Pfizer’s vaccine, to carry 15,000 pounds of dry ice on charter flights carrying the vaccine — five times more than the roughly 3,000 pounds normally permitted. 

Delta has established warehouses and cooler facilities in Atlanta, Detroit, Los Angeles, New York-JFK and Seattle to store the vaccines. And American Airlines began conducting trial vaccine flights last month from Miami to South America on its Boeing 777-200 aircraft.    

But Smith repeatedly emphasized that his company and UPS are sufficiently equipped to deliver what Subcommittee Chairwoman Deb Fischer, R-Neb., said would be as many as 660 million vaccine doses. The vaccine requires two doses per person.

“There are only two companies in the United States of America that have the networks to connect all those O [operations] and D [distribution] pairs that I talked about on an overnight basis, and they’re both represented at this table,” he said. “The reason we’re both here and we’re both doing this is because we’re the only ones who can.”  

The airlines made clear that they were ready to help, if not domestically then globally.

“All U.S. airlines, both cargo and passenger carriers, stand ready to assist with the distribution of these vaccines across the country and around the world,” said Carter Yang, spokesman for Airlines for America, a trade group that represents both kinds of carriers. “While some carriers will lead the distribution efforts, others are prepared to augment the mission by helping to facilitate efficiency and increase capacity as needed, based on volume and demand.”

Wesley Wheeler, president of global health care for UPS, acknowledged that passenger carriers might help, if “we get into trouble anywhere.” 

“We have relationships with all of them,” he said.

Payroll support

Lawmakers have cited the need for efficient vaccine delivery as one reason to extend the $32 billion in payroll support that Congress approved in March as part of a $2 trillion COVID-19 relief package. The program expired in October, and passenger airlines have argued for an extension, having exhausted the $25 billion allocated to them under the program. 

But cargo airlines, which received $4 billion in payroll support in that package, were not hit as hard by the crisis, asking for a total of $828 million, according to Treasury data. UPS and FedEx did not request any money under the payroll support program, according to the Treasury database. 

Smith said FedEx has added 70,000 more employees in anticipation of increased demand, in part for the holidays, and is prepared to keep those employees on board to deliver vaccines.   

He said the company delivers to 220 countries and territories and can deliver to every U.S. ZIP code, using more than 670 cargo airplanes and 180,000 ground vehicles to deliver 17 million packages a day. The company will differentiate holiday packages by sending them under FedEx Ground, while they’ll send vaccines under express delivery, he said.

Wheeler, meanwhile, said UPS typically delivers 25 million packages a day — it’s now delivering about 34 million a day — and has added 100,000 temporary employees for the peak season with the expectation of keeping them as vaccine delivery increases. The company is manufacturing more than 24,000 pounds of dry ice per day in Louisville.

Sen. Jon Tester, D-Mont., questioned whether the companies had relationships with passenger airlines if needed.

Smith said that while they work with those companies for international purposes, “in the United States, we have plenty of capacity, as I’ve pointed out, that the decision to use a commercial airline I don’t think would make a lot of sense” because airlines lack the infrastructure to do end-to-end product delivery.

“We would certainly work with them if they were brought in,” he said.

Rachel Levine, secretary of Health for the Commonwealth of Pennsylvania and president of the Association of State and Territorial Health Officers, told the committee the most difficult part of the supply chain would be ensuring that people take the vaccine once it’s delivered.

She said the federal government allocated $300 million to states, territories and cities to deliver the vaccine for “an enterprise unparalleled in scale and complication.”

She called for an $8.4 billion federal investment that would pay for workforce, infrastructure, outreach to priority populations, communication and educational efforts to include vaccine confidence and to fight misinformation.