Operation Warp Speed in the United States started distributing COVID-19 vaccines to hospitals. Against this backdrop, the shares of FedEx and UPS, America’s two largest courier networks, are rising by an average of 2 percent. Some information about the steps taken for transportation was released by the companies. For instance, all states would be split between FedEx and UPS to reduce competition for government orders between them.
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They supplied each of the dispatch points with portable refrigerators and the courier points with mobile bags to store ice and drugs a few months before the beginning of the operation. Today, factories manufacture 0.5 tones of dry carbon dioxide on a regular basis to fill their refrigerators with it. Vaccine shipments were granted takeoff and landing priority over all other aircraft, including passenger ones, at airports in the United States. FedEx and UPS expect to deliver about 3 million doses by the end of this week.
The U.S. authorities are estimated to spend between $5.5 and $8.4 billion on transporting the vaccine. That compares with two weeks of combined revenue from all of its operations for FedEx and UPS. And this explains the investors’ excitement for these companies’ shares. Both are trading near their absolute highs now though trying to maintain a positive trend. FedEx was down 1.36% on Monday to close at $285.54 while UPS closed the trading session at a loss of 1.06% to settle at $166.62.
As its business model shows higher margins with comparable turnover, we consider FedEx to be the most promising. Currently, this company’s shares have the potential to rise to $310 each against the existing market price of $285. This gives a growth rate of more than 8% in the medium term, whereas the UPS has a medium term growth potential of about 3% at current levels.
