INDIANAPOLIS, Ind. — A mix of cost savings, faster transit times and sustainability benefits drew two major customers to use DHL's new temperature-controlled air cargo service out of Indianapolis.
Speaking Friday at Indianapolis International Airport, supply chain leaders at Siemens and Eli Lilly said the offering from DHL Global Forwarding will allow their perishable products to be transported with less packaging.
"This is an amazing, amazing game changer," said Chris Goss, a senior director of transportation at Siemens. "Sustainability is one thing, but this really does it in a whole different way."
The new service from DHL's freight forwarding unit is supported by a $1.5 million, temperature-controlled facility with direct ramp access at Indianapolis International Airport and a dedicated connection to Liège, Belgium, through MSC Air Cargo's B777F aircraft. The service has two flights per week to Liège, a destination providing easy access to much of Europe, said Jose Maria de Orduna, regional vice president, U.S. East Region for DHL Global Forwarding.
The service's innovative handling process is designed to safely ship pharmaceuticals and other life-sciences products without the need for more expensive and energy-intensive "active packaging" such as temperature-controlled containers.
Instead, DHL reduces transportation costs and transit times by using passive packaging — like thermal blankets that insulate the cargo. By having the facility located near the tarmac at the airport, DHL can quickly load containers into the temperature-controlled aircraft to keep products in their required temperature range while using less passive packaging than what perishable goods shippers often use to keep products unspoiled.
A heavy amount of packaging on a product can increase weight and, consequently, costs. De Orduna recalled one DHL customer that used a large amount of passive packaging to transport products that was thrown away each week.
"With a solution like this, they can reduce the amount of passive packaging, and now it's more cost-effective," de Orduna said, adding that companies' sustainability efforts also improve by using less packaging.
Siemens began assessing DHL Global Forwarding's Indianapolis service in February, making sure it delivered in terms of transit times and temperature control, Goss said. For example, Siemens tested DHL's capabilities by placing general cargo within a thermal wrap and pre-chilling it to mimic the characteristics of a perishable product before shipping it.
"The initial claims and the concept have been maintained, and that's very, very big for us, because we've just moved into our next phase, which is really the launch of what we've been trying to do all along: Eliminate packaging," Goss said.
On Friday, Siemens was constructing shipments relying on passive packaging like thermal blankets at the pallet level. Without the need to pack and unpack each product, transit times are shortened by several days, which also helps the company turn inventory quicker, Goss said. Siemens will transport "less robust" products with the service later in about a month, with a "go live" date later in the year for all products, he added.
"Our intent is probably by late summer to take out all the packaging out of our shipments to our European distribution center," Goss said.
Mike Broughton, Eli Lilly's senior director of global logistics, has heard debates through the years on whether active or passive packaging is better overall, but he said the DHL service is a win-win scenario with its minimal and reusable packaging.
While cost was one of the main drivers in Eli Lilly using the service, sustainability gains provide added benefit as the pharmaceutical company has eyed greater use of passive rather than active packaging, Broughton said. The company is anxious to begin transporting products through the service, he added.
"We've done some tests, but we haven't done a real product yet,” he said. “We're getting close to it.”