December 8, 2020 4:00 PM, EST

UPS Says It Can Handle Vaccine Rollout, Holiday Parcel Rush

UPS trailersChristopher Dilts/Bloomberg

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UPS Inc. said it has the capacity to handle the rollout of coronavirus vaccines and an unprecedented holiday package rush this month after investments in automation, tracking technology and dry-ice production.

The courier is the primary end-to-end distributor for Pfizer Inc.’s vaccine, as well as for kits to prepare the shots and dry ice shipments to keep the inoculations at extremely cold temperatures, UPS sales chief Kate Gutmann said in an interview. The vaccine and kits will have tracking devices that allow shipments to be monitored at all times.

“We’re planning enough capacity on the ground and in the air to make sure that there is no limit around the UPS side,” Gutmann said.

The initial vaccine shipments will coincide with the busiest shipping weeks of an extraordinary peak season in which virus-averse consumers are going online to order a record deluge of goods for home delivery. U.S. approval of the Pfizer vaccine is expected soon, now that the Food and Drug Administration has published a report saying there are no safety concerns to prevent its authorization.

UPS had to limit the packages it took from some large retailers immediately after Cyber Monday last week because volume exceeded prearranged delivery agreements. That surge has now eased, allowing those extra packages to be “feathered” into the network for delivery, Gutmann said. Last year, the network was overwhelmed for about a week because UPS accepted too many packages at once, she said.

“If we took everything, we would have gone well above network capacity,” Gutmann said. “Any of the loads that were left over, we actually moved into the network.”

The strategy of matching capacity with volume has so far enabled UPS to post the best on-time delivery performance for any peak season since at least 2012, said Nando Cesarone, chief of U.S. operations. The Atlanta-based company published data from ShipMatrix that shows the on-time delivery percentage rate in the high 90s from October and through Nov. 21.

Now, with the final week before the Dec. 25 Christmas holiday approaching, UPS said it’s ready to take on last-minute deliveries while doing its part to ship all the vaccines that roll off the production line.

“We’ve been disciplined to not turn the network upside down,” Cesarone said. “We are in great shape in terms of service, capacity and working very closely with our customer to fulfill their requests.”

FedEx Corp., which operates the largest freight airline, also pledged to make vaccine distribution a priority over other shipments. The courier is using tracking devices and providing dry ice to make sure the vaccines reach their destination and are ready to be administered, Richard Smith, head of the Americas for FedEx’s Express unit and the point person on vaccine distribution, said in an Oct. 30 interview.

UPS ranks No. 1 and FedEx No. 2 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.

Both companies were scheduled to discuss vaccine distribution at a White House event Dec. 8.

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