UPS is ‘over prepared’ for COVID-19 vaccine distribution
Yahoo Finance’s Myles Udland, Julie Hyman, and Brian Sozzi speak with UPS Senior Vice President of Healthcare & Sciences, Kate Gutman, about the logistical challenges of the COVID-19 vaccine rollout.
MYLES UDLAND: All right, let's turn our attention now to distribution of vaccines, and how some companies are involved in the supply chain of going from where you are formulating the vaccine to getting them to facilities across the country.
For more on this conversation, we're joined now by Kate Gutman. She is a Senior Vice President of Health Care and Sciences and the Chief Sales and Solutions Officer over at UPS. Kate, thanks so much for joining this morning. I'd love to just begin with where you sit in this process as it begins to roll out here in the US. What has happened so far with UPS vehicles and facilities, and what you expect the next couple of weeks to look like.
KATE GUTMAN: Well, thanks for having me. And we're very excited to be very involved in the distribution of the vaccine. So as we have already moved the first immediate shipment, right after authorization was provided, deliveries are occurring right now.
So we worked over the weekend, through our airline and sortation, and then now delivery to those critical medical centers. And based on the time zones throughout the country, are delivering early and very, very excited to be a part of this-- this area.
BRIAN SOZZI: What's your biggest logistical challenge over the next few weeks? Is it access to more cold boxes? Is it access to more trucks? Is it access, simply, to more dry ice?
KATE GUTMAN: So I will tell you the challenges. We thought, together with Operation Warp Speed, with Pfizer in this case, as well, for the last six months about the instances that we should be prepared for. So I would tell you we're overprepared. So we've actually allocated more resources and capacity just in the event that there is more production.
So I believe that that all of that planning has really paid off by every entity involved, knowing that this is so critical on our path to recovery.
JULIE HYMAN: Kate, it's Julie here. So when you have been shipping this out, I'm curious where it has been going. Not just geographically, but sort of through what entities. For example, we know that long term care facilities are one of the first priorities in terms of distribution of the vaccine. Are you shipping directly to those types of facilities? Does it go through pharmacies, doctors' offices? How does the whole system work?
KATE GUTMAN: Well, right from the authorization, first Pfizer released the first shipments, and that is what occurred over the weekend and is out for delivery today to medical centers. And then really, we just are following the direction provided by Operation Warp Speed through Pfizer, and we will deliver from the medical centers to then the dosing sites, which CVS would be a great example, great partnership that we have with them, where they reach the communities around them.
So as the stages of progression occur with Operation Warp Speed, you know, we cover every address in the US and over 220 countries and territories worldwide. So we are prepared to help wherever that need exists.
BRIAN SOZZI: Hey, talk to us about, have you had to retrain your employees inside the facilities? Even the truck drivers, to handle these vaccines?
KATE GUTMAN: So UPS Healthcare has really been in existence for over a decade. We handled, just as an example, over 1 million clinical trials last year. Some of them also had some temperature controlled environment. So we've been training our dedicated resources to the healthcare division over, again, years.
And then what it really is about is reinforcing the needs of each specific shipment. And we have the process and the technology that helps us to do that seamlessly. So the sensor actually is contained right within the box and actually broadcasts to us any type of deviation. So that, 24/7, we know how the temperature is being monitored.
And then also, we have UPS Premier, which is GPS tracking. So we know the pinpoint location of all of these packages. And as more and more of these vaccines come into the market, each with different conditions and needs, because of the experience we've had in UPS Healthcare, we feel very prepared to deliver, and all of our employees trained to do so.
JULIE HYMAN: So as you have had that tracking and the sensors trying to keep tabs on the temperature, have you seen any fluctuations thus far? Have there been any doses that you all have had to discard because you've seen-- I mean, you're sending out a lot of doses here.
So although one would hope that they all arrive in their temperature controlled condition, one would imagine, along the way, there are going to be some that don't make it.
KATE GUTMAN: Yeah, so 100% on time performance as of right now. And again, we're delivering the East Coast right now. And then as the time zones progress throughout the day, we will be delivering-- so we're actually delivering early, and the temperature has been spot on. So there is a deviation range that is an allowed tolerance, and none have deviated from that.
So we're glad that all the planning is paying off, and that we are delivering these very critical vaccines to the needed medical facilities.
BRIAN SOZZI: OK, for those not necessarily familiar-- too familiar with the UPS story, are these shipments of these vaccines on these trucks, are they as profitable as shipments, let's say, for holiday merchandise?
KATE GUTMAN: Well, so I won't talk to the profitability side of it as much as the high value side. So we have added technology-- I mentioned the GPS tag. That's called UPS Premier. That is designated, really, for health care right now. And that does come added an additional fee. Because it gives you additional value.
So we do know that, with sensitive products such as these, and there are many others, that you have to match the proposition to the pricing that you give. But I would tell you that, when we look at our whole healthcare business, just every aspect, delivering more to the areas that are in need, we know that value, and coming through, and making our service commitment, whether it's during the peak season or not is critical.
So to that point, our peak season is underway, as you well know. Anyone doing holiday shopping. And UPS has demonstrated, every week, so far in peak, as accounted for by ship matrix, as the top on time performance. And I would tell you the best that we've seen in decades. And we're proud of every year that we deliver for our customers.
But that goes hand in hand with these vaccines, because we want to make sure a network that delivers the value that we offer to our customers.
JULIE HYMAN: And yeah, obviously still have some time to go before we get to Christmas itself. Kate, finally, I wanted to ask you about security of the drivers. If you guys are providing anything sort of extra for the vaccine distribution?
KATE GUTMAN: Yeah, so I would tell you, you know, the reinforcement of the technology helps to give us pinpointed accuracy as to where the product is. And then, of course, surrounding that package, and really any sensitive package in the UPS network with more security, is what we tend to do. And of course, as an underscore to that, we don't disclose the details. Because you want it to remain secure.
But we feel very confident that there will be no mishaps and that we are delivering on time for these critical vaccines.
JULIE HYMAN: Kate Gutman is UPS Senior Vice President of Healthcare and Sciences and Chief Sales and Solutions Officer. Kate, thank you so much for speaking with us. And of course, thank you to UPS and all of the other companies that are helping to get this vaccine out to Americans, as well as people around the world. Appreciate it.