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The biggest challenges facing vaccine distribution

Ann Marie Collins, Savills Executive Vice President, joined Yahoo Finance Live to discuss the biggest headwinds facing vaccine distribution.

Video Transcript

ADAM SHAPIRO: Let's talk about how you get vaccines once they're here to everybody globally. One of the best ways to do that is to invite into the stream Ann Marie Collins, Savills Executive Vice President. Savills is a global real estate services firm. And we appreciate you being here, Ann Marie. I've got to ask you, in the United States, are we ready for this, for the vaccine distribution, or are we're going to need to build this out?

ANN MARIE COLLINS: We are ready. There's been a lot of planning. A lot of people haven't seen all the background, but there has been inventory building, and supplies with syringes and vaccines. Vaccines have been stockpiling, just waiting for the go ahead from the FDA.

So you have sort of a big logistical problem, and General [INAUDIBLE] has been working on that since-- since last March. So you have a very detailed system that's going to track every vial, called Tiberius, that was written in the last six months. That will be able to track where the vial has gone, who has gotten the actual vaccine, and then how it's getting delivered to the various sources.

So you have a classic regional hub and spoke model that's building inventories of vaccines and medical equipment to administer those vaccines, and then you have a hyper local model. So you've got FedEx, and other overnight delivery people that are going to be, be able to deliver by zip code. And that is a real important aspect of our mobilization, is actually getting things to the people that need them.

SEANA SMITH: Well, Ann Marie, I am excited to hear you say that, because I think a lot of the concern is that we aren't even close to where we should be, and logistically speaking there's a lot of challenges. While I think that still might be the case a little bit, though, I mean, are rural areas in as good of a position, or as strong of a position as we would like them to be at this point to receive the vaccine?

ANN MARIE COLLINS: Well, with that hyper local model, what happens is that they have developed technology called, they call them "pizza boxes." So they will be loading the vaccines in these small pizza boxes and shipping them in containers. And like I said, the FedEx people can deliver by zip code, so what you're going to want is the vaccine delivered right at precisely the time that you want to give the vaccine.

And just like when you freeze a steak in the freezer, you keep it for a while and it preserves it. So that's what they're doing, they're pre-making the vaccine, deep freezing it, and then shipping it and keeping it cold. But once it's actually defrosted, it's still good for five days. But it's not going to sit around. I mean, people are going to want that those vaccinations immediately. So you'll see administered just like at your local pharmacies, and Target, CVS-- all the places that you would normally get a vaccination will be able to get the vaccine delivered.

ADAM SHAPIRO: Pizza boxes, anything with pizza it it's got to be good. But I have to ask you-- we're having pizza for dinner tonight. The service that your firm provides though, when you watch in real time, we had on the CEO from American Airlines-- they're going to be flying the pizza boxes to different places--

ANN MARIE COLLINS: That's correct.

ADAM SHAPIRO: --along with FedEx. But, but we're going to need-- do we have to build out the ability to make dry ice? I mean, this is-- what service does Savills-- how have you assisted in this to your different client?

ANN MARIE COLLINS: Well, it's been a challenge, because you've got several things colliding here. So you have the vaccine delivery combined with the increase of at-home deliveries, which have increased about 25%, and the holidays on top of that. So there was an overall shortage of cold storage even before the virus. We had probably about zero availability, and some of the infrastructure is really outdated and outmoded.

So to compensate for that, what's happened is we've developed-- we have these freezer capabilities in trucks that are being delivered, like FedEx has refitted their trucks for minus 90 degrees. We also have one of our vaccines, a Moderna vaccine, can function at minus 4, which is very typical in the market. So you have that capability built in.

Also with dry ice, we do have enough capacity right now, although this is going to be a good year for the dry ice business. They can increase their capacity by running multiple shifts, and then from a sustainability standpoint, they may increase their capital assets. But the view is out there that they do have enough capital assets, they just have to maintain multiple shifts.

SEANA SMITH: Ann Marie, I don't know if you know the answer to this, but what's the cost of this, just in terms of refitting the trucks, like you were talking about, when it comes to FedEx to store these vaccines? What does that cost?

ANN MARIE COLLINS: I don't know what it costs per truck. But I would tell you that for a typical warehouse, what you have is, if you had a, say, 250,000 square foot warehouse that may cost you 14 to 15 million to retrofit a warehouse or to build that capacity and capability into the warehouse, it's double that amount. So it's not cheap.

ADAM SHAPIRO: I'm thinking about the frozen steaks that were sent to this apartment as a gift not too long ago that had dry ice.

ANN MARIE COLLINS: That's what I used as an example.

ADAM SHAPIRO: And who doesn't love pouring water on dry-- you're not supposed to do it, right? Pour water on dry ice and get the smoke and the spooky atmosphere. Ann Marie Collins, Savills Executive Vice President, thank you so much for joining us here on Yahoo Finance Live.

ANN MARIE COLLINS: Well, thank you for having me.