Can the US Cold Storage Sector Handle the Strain of Covid Vaccines?

The cold storage asset class has been seeing high levels of investment, but this may not necessarily translate into a smooth supply chain for the distribution of Covid-19 vaccines. The answer, experts say, may be a mix of strategies for distributing the vaccine. Make no mistake, though—cold storage will be an essential component and with an inventory equal to the size of JFK Airport (or nearly 250 million square feet), it is questionable whether it is up for the task. 

“Vacancies for modern cold storage facilities are lower than in any other product type,” says Mehtab Randhawa, Director, Industrial Research, Americas, JLL in a post.  “Older facilities are outdated and often cannot be renovated to meet modern standards based on the level of automation required.”

Right now, there just aren’t a lot of available cold storage facilities to meet the demand for vaccines, in addition to food distribution. The cold storage industry represents 1.8% of the total US industrial inventory, and vacancies in cold storage assets have remained below 10% for nearly 20 years, according to JLL. In comparison, office vacancy rates have been at 15.3% during the same period.

Vaccines will be manufactured in a handful of locations and then go through a sprawling infrastructure of transportation and warehouses to get to their final destinations, according to JLL. Complicating that journey will be that the three leading vaccines will have different temperature and freezer requirements—ranging from below -94 degrees Fahrenheit (-70 degrees Celsius) to – 4 degrees Fahrenheit (-20 degrees Celsius). 

Pfizer’s ultra-cold vaccine, which presents the most challenges to transport and store, will be manufactured in Michigan and Belgium and eventually placed in trays that will go into GPS cooler boxes filled with dry ice. Trucks will take them to airplanes and other vaccination locations. 

The vials can sit in distribution coolers for 15 days, but the dry ice needs to be replenished and the cooler can’t be opened more than once a day. The trays can also sit in conventional freezers if the vaccine is administered within five days, according to JLL. 

Storing the -4-degree vaccine isn’t without complication either. Warehouses that store it must have a reliable electricity supply and backup generators, according to Matt Roesch, regional director, Life Sciences, JLL. The problem is that there are a limited number of these facilities, partially because of their complexity and partly because of land availability near airports.

States may be able to help out. Creighton Armstrong, co-lead, Government Practice Group, JLL, says that ones that have unused CARES act funds may use that money to move the vaccine from airplanes to the distribution sites. 

States and localities may also come up with ways to tailor vaccine distribution to a specific constituency. For instance, Kristen Parrish, an associate professor in the School of Sustainable Engineering and the Built Environment at Arizona State University’s Ira A. Fulton Schools of Engineering, sees centralized locations using the Pfizer product, which requires ultra-cold freezers. The vaccines could be kept in fewer temperature-controlled places in conjunction with drive-through, pop-up tents for vaccinations. 

For assisted living and nursing home vaccinations and injections in rural areas, the Moderna or AstraZeneca vaccines, which do not require ultra-cold freezers, could be placed in coolers that use phase-change materials to maintain required temperatures for several hours, according to Parrish.

One of the primary focuses for states, cities and hospitals is to secure freezers to store the Pfizer vaccine. 

They are potentially getting support from unexpected places in this quest. For example, Reuters reports that Smithfield Foods, the world’s biggest pork processor, has offered to help US health officials distribute COVID-19 vaccines and store them in ultra-cold freezers. “We have assessed our ultra-low freezer capabilities and capacity and are ready and willing to assist health agencies if storage capacity becomes constrained,” Chief Administrative Officer Keira Lombardo told Reuters.

Other private sources will also be pivotal in distribution. Also, at a recent press conference, FedEx executives said its Express network would play a crucial role in delivering the vaccines.

“We have more than 90 cold chain facilities on five continents that will be ready if necessary, where we can stage temperature-sensitive product, and have plans to expand that number to 115 locations next year,” FedEx Express Regional President of The Americas Richard W. Smith said, according to CFO Dive.