Lufthansa introduces air cargo product for private customers

Lufthansa Cargo has introduced “myAirCargo” to target private customers looking to send bulky items via international airfreight. “Whether it’s an urgent move, an exotic antique or a larger-than-usual sports accessory,” the airline announced, Lufthansa can now send these goods by air.

For myAirCargo customers, Lufthansa’s logistics subsidiary will organize complete transport of goods from door to door, while also handling customs formalities en route. The new product frees up deep-pocketed customers, such as tourists, to indulge in ambitious impulse buys.

“We are occupying an innovative niche in the market between postal services and forwarders,” said Peter Gerber, CEO of Lufthansa Cargo. “Book air cargo quickly and easily online, at first hand – only we can do that.”

However, the World Wildlife Fund warned buyers to beware. Before forking over their Malaysian ringgits, Mozambican metical, or Vietnamese dong, customers should ensure that their purchases don’t violate international laws on endangered species and plants. “Most countries, including the United States, protect their native animals and plants under national laws and through CITES – a treaty signed by more than 170 nations to support sustainable trade in wildlife and plants while protecting endangered species,” the organization said. “Just because you find an item for sale does not mean it is legal to bring it home. By making informed choices, you can avoid having your souvenir confiscated or paying a fine.”

Record second-quarter results for DP-DHL

Deutsche Post-DHL reported second-quarter net income up 66.0% y-o-y to €541 million, a sound indicator the company’s restructuring plans are beginning to have the desired effect. Total revenue declined 3.5% to €14.19 billion (see chart at right). Operating profit (EBIT) for the quarter was up 40.0% to €752 million. For the first half of 2016 DP-DHL reported net income up 43.7% to €1.18 billion and EBIT up 29.3% to €1.63 billion, with the gains coming despite a 4.8% decrease in revenue to €28.06 billion. The company said the decline in revenue was the result of changes in a contract with the UK National Health Service combined with negative currency effects.

Companywide, each of DP-DHL’s four operating divisions reported significant increases in operating profit during the first half, even as revenues for all divisions except Post and Express (which were nearly flat) declined. Now for a closer looking at each division’s performance:

Post-eCommerce-Parcel: Revenue from postal operations was up 1.0% in the first half, driven by higher package volumes and three extra working days. The shining light in the division however, was the eCommerce – Parcel unit which saw revenues jump 11.3%. Overall EBIT for the division was up 39.0%.

Express: The DHL Express division continued its strong performance, with revenue up 1.2% in the first half to €6.77 billion, despite negative currency effects. The revenue growth was strongest in the Americas region, up 6.5%. CFO Larry Rosen said DHL Express has made market share gains “across all regions” as the trend of “rising, high-value, cross-border B2C volumes” continued to supplement existing B2B volumes. Express EBIT was up 9.7% in the half to €777 million, and operating margin rose 0.9 percentage points to 11.5%.

Global Forwarding: Freight: Revenue in the division dropped 10.8% in the first half, impacted by negative currency effects, lower fuel surcharges, and “the generally low level of air and ocean freight rates. Air freight volume fell 7.7% in the half to 1.7 million tonnes, although ocean freight volume was up 2.8% to 1.5 million TEUs. DHL said lower airfreight volumes resulted from the division’s “selective stance” on profitable volumes and a decline in demand from the oil & gas sector. This strategy, despite the fall in revenue and tonnage, has pushed divisional EBIT up 110% to €120 million, as turnaround measures instituted after the New Forwarding Environment disaster began to take effect.

Supply Chain: In the Supply Chain division first-half revenue was down 13.2% to €6.93 billion, but EBIT was up 33.1% to €229 million. EBIT received a one-off boost from the proceeds received from the sale of a stake in King’s Cross which the division used to finance restructuring expenses of €41 million during the first half. Rosen said the division also saw “an increase in new signings” noting that “retail, consumer and automotive continued to be the biggest sectors for the division.”

Looking forward, the company will to hone-in its focus on e-commerce, what it refers to as a “megatrend” expected to continue to drive volume and revenue growth. Last week, the company’s eCommerce – Parcel unit announced major investments into new distribution centers in the United States aimed at capturing the growing market for cross-border e-commerce. In addition to upgrading existing fulfillment centers in Los Angeles and Columbus, it will add six new centers in New Jersey and other cities throughout the United States to complement its 18 existing distribution centers.

Briefing: The Shift from Rigid to Flexible Packaging

The flexible packaging market is estimated to be worth $351 billion by 2018, meaning that it is rapidly gaining market share from other sectors such as traditional rigid packaging.

The way in which consumers view and interact with packaged products is changing. There is a growing focus on convenience and particularly on sustainability, which will be explored at this year’s Sustainability in Packaging conference in March. Traditional pack types are being replaced by innovative and flexible options designed to meet these consumer needs.

There have been many exciting new product developments which have helped to demonstrate to consumers the true potential of flexible packaging. Examples include the Halls “twist-off” Stickpack converted by Sonoco & Co – a flexible package which allows one sweet to be dispensed without losing others – and the Savvy Green Laundry Detergent Pouch, which displays high-end graphics and offers easy dispensation.

So, what sets these products apart from the rigid packaging we are more used to seeing on supermarket shelves? In the sixth instalment of our exclusive and informative bulletin series, Smithers Pira examines the latest flexible packaging market trends, as well as the main advantages of flexible packaging over more traditional rigid packaging solutions.

1. Lightweighting

The bottled water sector is a prime example of a market in which materials have gotten lighter and lighter over time, producing less waste. However, manufacturers have now reached the stage where PET bottles cannot be made much lighter.

Therefore, the next step in this process is to replace plastic bottles with lightweight, flexible pouches. This development has been gaining traction over the years, although widespread usage has not yet occurred. The primary reason for this has been issues with high-speed filling – while PET bottles can be filled at speeds of 1,500 packages per minute, the process of filling pouches falls behind at only 400 packages per minute.

However, some of the newer PET bottle-filling technologies are designed to transport the bottle through the cycle via the neck, a breakthrough which will also allow the introduction of pouches using the same technology. This is forecast to occur as early as 2014, and the use of pouches would allow water companies to reduce their packaging weight by 50%.

2. Ease of decorating

Part of the total cost of any rigid package is the label, and these are applied as part of the filling process. Labels are supplied from a different supplier than the bottles, meaning that they often become a bottleneck in the filling process.

With flexible packaging such as pouches, the converting of the pouch generally includes full printing features along with the lamination of the films if necessary. This printing only marginally increases the cost of the pouch and has no effect on the filling process itself. Printing options for flexible packaging are endless, and can be instantaneously changed if required.

Another key decorating feature is the printing of security or brand identity graphics, which is just being developed for flexible packaging. The challenge associated with this new technology is: how can security graphics be included in the packaging design without making it obvious to the potential counterfeiter? Solutions include pigment additives which only appear under certain lighting and inks which disappear and reappear depending on environmental conditions. Such technology simply isn’t possible with rigid alternatives.

3. Barrier properties

One of the main advantages of flexible packaging over rigid packaging is the ability of the company to “dial-in” the appropriate barrier for the product and end-use. Many products, such as juices, wines and milk, require a reasonable oxygen barrier. Bottles made from PET, glass or multi-layer paperboard laminates provide a barrier for all products whether it is required or not.

A flexible package can be supplied with barrier properties which can provide anything from moisture and aroma protection to essentially the same barriers as glass. Aluminium foil has been used for many years as the ultimate flexible barrier material, although its properties are compromised by the most recent flexible packaging developments, such as stand-up pouches. When creased in this way the foil can fracture, leading to pinholes which let in oxygen, water and light. To combat this, new flexible materials such as styrene-acrylonitrile (SAN) have been developed as foil-replacement. SAN is tough even in thin layers, and recent production methods have improved the flexible properties of this resin.

4. Packaging variation and dispensing

Packages made from flexible plastic films can be made into practically any shape imaginable, and the inclusion of handles, fitments and opening features is quite straightforward. Today’s pouches often have advanced dispensing functions such as screw-top caps and laser-scored tear features. Flexible packaging can also be used to enhance rigid packs; an example being shrink labels used for plastic bottles. These labels not only provide attractive decoration features, but also additional levels of barrier protection against oxygen or light.

Other key technical developments include fitments for use with flexible packaging for liquids, with traditional dispensing taps leading to connecting valves, one-way dispensers and pop-up straws. Connecting valves allow consumers to connect a pouch with dishwashing soap directly to the appliance, so the proper amount of detergent is dosed every cycle and no clean-up is required.

5. Larger sizes

As technology has improved, the flexible packaging market size has increased and the ability to produce packaging of ever-larger sizes has become possible. Larger retail flexible packages are now becoming the norm as consumer packaged goods and retail outlets alike take advantage of larger-format packaging. For example, the classic paperboard carton and unprinted flexible liner used for dry cereals is rapidly being replaced with flexible pouches incorporating high-end graphics and easy to reclose features. These packages are typically much larger.

Kraft Food’s YesPack for salad dressings and other condiments recently won gold at the Global Packaging Association Awards. Incorporating many of the benefits of flexible packaging into a large format package for food-service liquids, the pouch makes it easy to dispense product, and makes sure every last drop is utilised. We can expect to see many new types of pouches being introduced for large format liquid packaging as consumers better understand the benefits and converters develop new technologies to their fullest.

Global packaging market to reach $975 billion by 2018

Global packaging sales are projected to rise by 3% in real terms to $797 billion in 2013 and grow at an annual rate of 4% to 2018.

The Future of Global Packaging to 2018 provides a detailed five year forecast of the global packaging market. Based on expert research and analysis, this report contains more than 500 tables and figures revealing essential industry trends and information.

According to this report, sales of packaging are concentrated in Asia, which accounted for 36% of the total in value terms in 2012. North America and Western Europe totalled shares of 23% and 22% respectively. In 2012, Eastern Europe was the fourth largest consumer of packaging with a global share of 6%, closely followed by South and Central America with 5%. The Middle East represents 3% of the global demand for packaging, while Africa and Australasia each have a 2% share. According to the study, this segmentation of the market is expected to change significantly by 2018; Asia is predicted to represent over 40% of global demand, while North America and Western Europe lose out noticeably.

The report explores the numerous reasons for this expected growth in the world packaging market, including technical developments, cost per package, sustainability initiatives and, perhaps most importantly, the growth of the consumer class in the Asia-Pacific, South and Central America, and Eastern Europe.

The growth of the global packaging industry is being driven by a number of trends, depending on various geographical regions. Growing urbanisation, investment in housing and construction, the development of retail chains and the burgeoning healthcare and cosmetics sectors are driving packaging demand in China, India, Brazil, Russia and other emerging economies. An increase in living standards and personal disposable income in the developing regions fuels consumption across a broad range of products, with subsequent growth in demand for the packaging of these goods.

In terms of economically developed markets, a number of key social and market trends have been having a major impact on developments in packaging over recent years. These include: the trends towards smaller households and accompanying rise in demand for more, smaller pack sizes, the increasing requirement for convenience among consumers, and the growing number of men interested in health and beauty products.

According to The Future of Global Packaging to 2018, all end-use sectors registered growth in value terms during 2012. Medium-term forecasts for food packaging demand indicate a potential growth rate of 3.4% on average to 2018, by which stage it will be valued at about $284 billion. Consumption of drinks packaging over the period is projected to increase at a rate of 3.3% on average per annum until 2018, reaching a value of $102 billion.

The Future of Global Packaging to 2018 is available to purchase online and receive immediately for £3950.

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CEVA adds temperature control at Dublin facility

New pharma shipping and handling options at CEVA Logistics’ Irish outpost are evidence that the country’s “bio boom” is still going strong. The supply-chain management company has introduced a temperature-controlled “building-within-a-building” at its warehouse in Dublin to handle temperature-sensitive pharmaceutical shipments.

The 15,000-square-foot facility is authorized under the Health Products Regulatory Authority Wholesalers Distribution Authorization program. The Dublin edition is designed to “store up to 2,100 pallets of medical products within the 15-25[°C degrees] temperature range and cater to growing numbers of customer inquiries where temperature-controlled storage is an essential part of their business,” said CEVA’s managing director for Ireland Gary O’Connor.

In addition to offering temperature controls, the Dublin unit features a Sintra system that provides a “clean room” facility customers can use for re-kitting and reassembling medical products. By the end of the year, the company plans to introduce on-site pharmacists to support its healthcare offerings.

CEVA’s addition to the pharma transport network is part of a larger series of recent expansions contributing to Dublin’s role as a major pharma hub. In June, Qatar Airways added a route of 787 flights between Dublin and Doha, and DHL Supply Chain opened a life-sciences facility for pharma storage near Dublin Airport.