December 15, 2020

Is the Logistics Sector Ready for the COVID-19 Vaccine?

Is the Logistics Sector Ready for the COVID-19 Vaccine?

The December peak season brought a new set of challenges. As COVID-19 vaccines received FDA approval in late 2020, logistics operators faced the daunting task of distributing vaccines around the world. While the FDA was able to fast-track the approvals process and many vaccines have already shipped, changes in the last mile are still ongoing to accommodate more reliable distribution of the billions of vaccines that providers will manufacture and ship in 2021.

The supply chain faces the following obstacles:

1. Supply Chain Cold Storage

Vaccines require proper storage conditions at all points in the supply chain to ensure their efficacy when they reach the patient. This isn’t usually overly challenging—the flu vaccine requires refrigerated storage between 35°F and 42°F, for example.

The leading COVID-19 vaccine has more stringent requirements. The Pfizer and BioNTech mRNA-based vaccine requires cryogenic storage below -90°F. Cold storage has been underserved in global industrial real estate for decades, and cryogenic cold storage even more so. Low availability makes it difficult to regionally distribute and store vaccines.

Other leading vaccines, such as Moderna’s mRNA vaccine, have more standard storage requirements and last up to six months in a standard freezer. Ideally, ongoing upgrades to last mile capabilities and varying storage requirements between vaccine types will be enough to avoid significant disruptions in vaccine distribution.

2. Dry Ice Shortage

Due to a lack of cold storage availability, Pfizer ships directly to health agencies and hospitals. Storing vaccines at appropriate temperatures is challenging enough for the supply chain, but near impossible for the medical facilities where patients will receive the vaccines. Once removed from cryogenic storage, the vaccine lasts about five days.

The solution to this problem is special packaging from Pfizer, which can maintain appropriate cryogenic storage temperatures for up to 30 days if refilled with dry

The December peak season brought a new set of challenges. As COVID-19 vaccines received FDA approval in late 2020, logistics operators faced the daunting task of distributing vaccines around the world. While the FDA was able to fast-track the approvals process and many vaccines have already shipped, changes in the last mile are still ongoing to accommodate more reliable distribution of the billions of vaccines that providers will manufacture and ship in 2021.

3. Distributing Related Equipment

The medical supply chain still hasn’t recovered fully from the shortage of personal protective equipment (PPE) it experienced in early 2020 at the onset of the pandemic. Many medical professionals still struggle to reliably source N95 masks, gloves, face shields, gowns, and other critical PPE needed to protect medical workers as they vaccinate the public.

In addition to the standard PPE, the vaccine rollout has caused a rush on other ancillary gear needed in vaccination operations, such as alcohol wipes, syringes, needles, and bandages. While manufacturers of these goods fortunately had time to prepare, it’s currently unclear how well the supply chain will hold up to long-term vaccination efforts over the next several months.

Bending But Not Breaking

The supply chain has been preparing for this moment since successful vaccine development began to appear likely. Logistics providers, airlines, ground carriers, healthcare networks, and manufacturers have all come together to find innovative ways to bring vaccines from the production floor to the people who need them. While vaccine distribution isn’t without its obstacles, 2021 still looks much more positive than the year before.

About Phoenix Investors

Founded by Frank P. Crivello in 1994, Phoenix Investors and its affiliates (collectively “Phoenix”) are a leader in the acquisition, development, renovation, and repositioning of industrial facilities throughout the United States. Utilizing a disciplined investment approach and successful partnerships with institutional capital sources, corporations and public stakeholders, Phoenix has developed a proven track record of generating superior risk adjusted returns, while providing cost-efficient lease rates for its growing portfolio of national tenants. Its efforts inspire and drive the transformation and reinvigoration of the economic engines in the communities it serves. Phoenix continues to be defined by thoughtful relationships, sophisticated investment tools, cost efficient solutions, and a reputation for success.

Mr. Frank P. Crivello began his real estate career in 1982, focusing his investments in multifamily, office, industrial, and shopping center developments across the United States. From 1994 to 2008, Mr. Crivello assisted Phoenix Investors in its execution of its then business model of acquiring net lease commercial real estate across the United States. Since 2009, Mr. Crivello has assisted Phoenix Investors in the shift of its core focus to the acquisition of industrial real estate throughout the country.

Given his extensive experience in all aspects of commercial real estate, Mr. Crivello provides strategic and operational input to Phoenix Investors and its affiliated companies.

Mr. Crivello received a B.A., Magna Cum Laude, from Brown University and the London School of Economics, while completing a double major in Economics and Political Science; he is a member of Phi Beta Kappa. Outside of his business interests, Mr. Crivello invests his time, energy, and financial support across a wide net of charitable projects and organizations.

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