Recently, some shipping and freight costs have quadrupled. International trade in vinyl films is at risk of becoming unprofitable. Nepata CEO Fabian Franke has a solution: jumbo rolls. By NEPATA CEO Fabian Franke, March 2022
Summary: Many vinyl films and similar products are manufactured in Asia but are primarily sold in Europe, the USA or Oceania. Vinyl film resellers can save up to 70 per cent on sea freight costs if they purchase so-called ‘jumbo rolls’ directly from the manufacturers. It is only once they reach their destination country that these are converted into standard rolls of 25, 50 or 100 metres. In this article, I will introduce you to this strategy. You will also learn how this can be achieved using NEPATA solutions with a manageable investment, compared to an industrial slitter/rewinder.
Trade in vinyl films for signmaking and garment decoration – a global business
Supply chains have been, and continue to be, disrupted by the Covid pandemic. Energy prices have been rising for months, most recently exacerbated by sanctions against Russia. At the same time, demand for products and raw materials is growing as the economy picks up again in many places. In short: international freight capacity is in short supply – and expensive. Since last year, shipping and freight costs have, in some cases, quadrupled. International trade in vinyl films and similar products is also affected. Flock films, flex films, self-adhesive films, protective films, etc. – these and similar materials are often produced in Asia. However, the majority of customers are based in Europe or the USA. Added to this are trade links between manufacturers and distributors from the USA and Europe, or from more distant countries such as Australia and New Zealand.
How wholesalers and distributors can optimise freight costs
Vinyl rolls therefore sometimes have to travel long distances. The problem with Film Logistics is that freight costs drive up product prices extremely sharply. Business models are at risk of becoming unprofitable. Vinyl film resellers, particularly wholesalers and distributors, must therefore try to reduce the freight costs for their goods. One promising strategy is to source so-called ‘jumbo rolls’ directly from manufacturers. These are over 1,000 metres in length and are only subject to rewinding into standard rolls of 25 m, 50 m or 100 m once they arrive at their destination. Above all, this saves on volumetric weight in sea freight – a decisive factor in freight costs.
A calculation example: A jumbo roll containing 1,500 running metres of vinyl film has a diameter of around 70 cm and is 1.22 m high – a volume of only around 0.6 cubic metres. If the same goods are dispatched as 50-metre rolls, this equates to 30 rolls in individual cartons. The space required for this is 1.5 Euro-pallets, or almost 1.8 cubic metres – three times as much as the jumbo roll! Our calculations have shown that, depending on the material, jumbo rolls can save between 50 per cent and 70 per cent of the costs for sea freight.
Interim conclusion: Using jumbo reels can save between 50 per cent and 70 per cent on sea freight costs.
Converting jumbo rolls for resale
Of course, simply sourcing the large rolls of adhesive film and the like is not enough. The vinyl film reseller must then rewind the jumbo rolls into standard-sized short rolls and perform length trimming. Now, for example, due to their design, Nepata’s rewinders can only handle rolls with a maximum diameter of 40 cm. This means that, initially, an additional investment is required to implement the ‘jumbo strategy’. However, this investment is surprisingly modest and promises a quick return on investment. At Nepata, we have developed what we call the ‘Jumbo Companion’: an optional unwinder that is operated directly on a converting centre or a rewinding machine. With the Jumbo Unwinder, rolls up to 100 cm in diameter and weighing up to 500 kg can be unwound and, as usual, precisely rewound and cross-cut using the NEPATA machine (and software).
A conversion solution requiring a moderate investment
Of course, the use of industrial converting solutions – such as large slitter-unwinders, as found in the packaging or paper industries – would also be conceivable. We see two major advantages in our combined solution comprising a rewinding machine and an optional jumbo unwinder:
- Flexible use of machine capacity As a vinyl film reseller, adding the Jumbo Companion allows you to utilise part of the machine’s capacity for batch production: you can convert the jumbo rolls into standard rolls of 25, 50 or 100 metres. In between, the machine can be used again with the internal unwinding system – without any changeover – as the familiar flexible, precise and ergonomic rewinder/slitter for individual rolls and special orders. The JC models can process a wide range of film materials, papers and non-wovens.
- Manageable investment costs Let’s return to the subject of costs. After all, the aim of the ‘jumbo strategy’ is to achieve cost advantages and thus remain competitive. It would therefore make little sense to invest in a completely oversized machine. When it comes to industrial converting machines, slitters and the like, we are talking about sums ranging from hundreds of thousands to over a million euros. Our solution with the Jumbo Companion can also convert jumbo reels into short rolls – and at manageable investment costs in the five-figure euro range. An amount that pays for itself quickly, especially if freight rates continue to rise.
A NEPATA rewinding machine, fitted with a jumbo unwinder, achieves the same result as an industrial converter that is 15 times as expensive.
Conclusion: The film trade remains profitable thanks to the ‘Jumbo Strategy’
With a conversion solution from Nepata, complemented by a jumbo unwinder, vinyl film resellers can tackle the challenges posed by the current freight cost crisis – and gain a decisive competitive edge that will enable them to continue offering film products profitably.
Find out more in this video
https://www.youtube.com/watch?v=UcA1kSJUxGY Technical specifications here. Interested? Request a quote here