Online shopping boosts shipping – which boosts Sealed Air

Charlotte-based Sealed Air is one of those benefiting from the boom in online shopping and the subsequent surge in shipments as shippers buy more of its Bubble Wrap and other packaging products.

“In this first part of December, we have been surprised how strong fulfillment activities are for e-commerce retailers,” says Ken Chrisman, Sealed Air’s Product Care president and packaging expert.

Chrisman describes his business unit as “a bit seasonal,” comprising about 25 percent e-commerce and third party logistics. It feels a bit of a sales bump over the holidays.

In the company’s third-quarter earnings call in October, Sealed Air noted that North American sales were down nearly 4 percent. But it said double-digit growth in e-commerce and third-party logistics partially offset unfavorable trends in the industrial sector.

“Our e-commerce business is going to be very nicely growing,” Chief Executive Officer Jerome Peribere said during the call.

More significantly, however, e-commerce growth has shaped the way Sealed Air innovates and expands its business.

Sealed Air’s new bubbleless Bubble Wrap, called iBubble Wrap, for example, is sold airless in flat plastic sheets that shippers fill up with special pumps. Before it’s inflated, one roll of the new iBubble Wrap uses about 1/50 as much space as traditional Bubble Wrap.

“One of the big benefits to that is it uses less warehouse space,” Chrisman says.

And Sealed Air’s August acquisition of B+ Equipment is a recent example of the company augmenting its portfolio of space-efficient products. The French manufacturer’s newly introduced e-Cube system makes boxes the exact right size for the item being shipped.

“It just allows you to put more boxes into a truck or a plane,” Chrisman says, adding that airplane space in particular is precious.

During this holiday season, Sealed Air expects shipping demand from e-commerce to remain strong. Nationwide, online sales are expected to rise 14 percent to $70.06 billion during the November and December shopping period, according to research firm Comscore.

Part of the drive for more efficient packaging comes from a new way shippers are being charged this year. Under so-called dim-weight pricing, the price of all boxes is based on their weight but also their volume, meaning it’s more important than ever for shippers to pack boxes tightly to maximize space.

“It’s in the center of our value proposition – using less packaging but making it more efficient,” Chrisman says.

Chrisman adds that like retailers themselves, Sealed Air’s shipping customers try to strike a balance of just the right amount of inventory. They’re concerned about their balance sheets, he says, so are waiting until they perceive demand to buy more packaging products, whereas in prior years, they would have stocked up in September or October.

“They wait as long as they can to buy these materials. They hold onto their cash until the last minute,” Chrisman says.

Sealed Air is able to respond to the demand because it works with nearly 1,000 fulfillment partners throughout North America. It can quickly deploy its products at short notice, Chrisman says.

Sealed Air divides its business into three segments: food care, product care and Diversey Care, which focuses on health care, hygiene, infection control and facility management. The Fortune 500 company broke ground on its Charlotte headquarters in the LakePoint Corporate Center in June. As of mid-December, the company employed 459 people locally.

This story was originally published December 22, 2015 at 1:00 AM with the headline "Online shopping boosts shipping – which boosts Sealed Air."