BAT Germany has selected Arvato as its logistics and fulfillment partner for its e-commerce operations encompassing e-cigarettes and heated tobacco products.
Since the end of June, BAT Germany online orders have been processed centrally from the site in Marienfeld, Guetersloh district. At this site, Arvato, a leading supply chain and e-commerce service provider, operates a state-of-the-art distribution center spanning approximately 32,000 square meters, serving multiple clients in the technology sector, according to the American Journal of Transportation(AJOT).
The comprehensive logistics services provided for BAT Germany at the facility encompass goods receipt, storage, order picking, packing, and shipping, as well as returns management.
“BAT’s goal in awarding the e-commerce logistics contract was to guarantee the most efficient and fastest delivery service for its customers. Our customer-centric approach allowed us to accommodate BAT’s specific processes and requirements,” says Thomas Becker, executive vice president at Arvato.
The logistics service provider commits to delivering within a 48-hour timeframe. To optimize warehouse operations for efficiency and speed, Arvato heavily integrates automation technology. Automated carton setup and closure processes significantly enhance the speed of operation. Moreover, product information is automatically included with orders through flyer dispensers.
“With its experienced team, Arvato provided us with very flexible and reliable support in setting up our logistics and distribution concept,” confirms Robert Juhnke, distribution manager at BAT Germany. “Even throughout the offer and final negotiation phase, the collaboration has been exceptionally cooperative.”
Sustainability is a growing trend in the vaping industry. Arvato is dedicated to doing its part, according to the AJOT story. In an effort to reduce plastic waste, the company adopted wet adhesive tape made from recycled paper, resulting in the annual saving of approximately 16 tons of plastic, as an alternative to polypropylene adhesive tape. Arvato’s approach to optimizing shipment sizing and processing minimizes the consumption of packaging materials.
Australia’s government says it will consider key changes including tightening importation rules and toughing up labelling laws for e-cigarettes in an effort to prevent youth use.
Australia’s drugs regulator, the Therapeutic Goods Administration (TGA), will begin public consultation in four areas:
changes to importation and border control laws required to stop illegal products entering Australia;
pre-market assessments of vapes to create a regulated source of products for pharmacists and doctors to prescribe;
labelling, advertising and flavoring of vapes that make them attractive to children;
and stronger identification and regulation of nicotine-containing products.
Additionally, Health Minister Mark Butler announced menthol cigarettes will be banned, along with other cigarette flavors and additives, according to media reports.
The public consultation on vaping reforms will be open until Jan. 16. Butler will meet that same month with state and territory health ministers to discuss how a response to vaping can be coordinated nationally.
New graphic warnings for tobacco will be created, Butler said, and for the first time the government will look at requiring warnings like “smoking kills” on every individual cigarette, and changing the colors of cigarettes to be more unappealing.
He said the appealing names of products will also be tackled, health promotion inserts will be put into every cigarette packet and advertising regulations will be updated to include vaping products.
Tobacco control expert and member of the Australian Council On Smoking and Health, Maurice Swanson, said Butler had contributed to a “major step forward for public health and tobacco control in Australia”. But on vaping, he said Butler must “urgently” make the importation of all e-cigarettes prohibited, regardless of whether they contained nicotine.
“This regulation will empower Border Force to seize all e-cigs unless they are accompanied by a doctor’s prescription required by the TGA regulations,” he said.
China’s government in Hong Kong said on Monday that it wants to allow shipments of illegal vaping products through Hong Kong. A move it says will help the city keep its status as an international logistics hub.
The Transport and Logistics Bureau told a Legislative Council (Legco) panel that there has been a significant downturn in air cargo volumes since the ban on the import, sale and manufacture of e-cigarettes and heated tobacco products took effect in April.
During the meeting, Deputy Secretary for Transport and Logistics Pamela Lam said authorities want to exempt sea-to-air shipments of the vaping products from the ban, according to media reports.
“Our transshipment of air cargo has dropped from May to October this year by about 18 percent compared to the same period last year. If this trend continues, Hong Kong’s status as an international logistics hub will be seriously undermined,” Lam said. “So whilst we want to ensure the ban on importation of alternative smoking products, we would like to keep our status as an international logistics hub.”
Lawmaker Frankie Yick, who represents the logistics sector, said the authorities should go further and also allow illegal vaping products to be brought to Hong Kong by land.
“People in the trade would like to have the land-air transshipment to be allowed as well, this is very important because most of the products are made in Dongguan area. It’s more convenient and cheaper to transport that via land to Hong Kong International Airport,” he told reporters.
Another lawmaker, Jeffrey Lam, questioned why the authorities hadn’t realized sooner how logistics companies would be affected by the ban.
“When you drew up this piece of legislation, you should have taken all these into account,” he said. “Why did you not think about this long ago? You shouldn’t be talking about this only at this moment,” he said.
A bill amending the law to allow the sea-to-air shipments is expected to be tabled to Legco early next year.
Postal regulations and shipping bans create major roadblocks for smokers trying to quit combustibles.
By Maria Verven
As the saying goes: When the going gets tough, the tough get going.
Thanks to the Preventing Online Sales of E-Cigarettes to Children Act that passed last year, retailers have had to hustle to deliver vapor products to their customers.
All the major shipping vendors, from the U.S. Postal Service (USPS) to the leading nongovernmental carriers—UPS, FedEx, DHL—have stopped shipping vaping products containing nicotine or cannabis to avoid violating the 2007 Prevent All Cigarette Trafficking (PACT) Act.
Although some alternative logistic solutions have emerged and the USPS has made some exceptions for business-to-business shipments, delivering vapor products to consumers remains a huge challenge—especially for customers who live outside of major metropolitan areas.
Some smaller retailers simply called it quits.
“We stopped shipping when the USPS ban went into effect,” said Char Owen, CEO of Cloud 9 Vapor Shop. Cloud 9’s two shops in Seguin, Texas, and Kenedy, Texas, are 40 miles and 60 miles, respectively, from San Antonio. She said the software to track shipments was too expensive, adding that some quotes were as high as $100,000. Even quotes that were closer to $20,000 put this option out of reach.
“And if we didn’t use software, we would have to hire a person to keep up with it, and that wasn’t within our reach either,” she said. “We are two small stores, and we’re not big shippers, but our stores are in areas where customers might have to travel over an hour to get to us. With current gas prices, it would absolutely be cheaper to ship; however, we can’t afford that option anymore.”
While Owen said her stores haven’t taken a big hit, the PACT Act had a huge impact on the customers they used to send shipments to. “It’s the remote vaper that got hurt in this case,” she said.
Exceptions to the rule
Credit: Hakinmhan
It’s rare, but business and regulatory exemptions to the PACT Act have been made.
Pure Labs, parent company for Halo vaping products, sought and obtained approval by the USPS to ship e-liquid and other vaping products to other compliant businesses. The approval allows Syndicate Global Distribution and Halo Wholesale Direct to ship Halo electronic nicotine-delivery system (ENDS) products directly to their brick-and-mortar retail customers—a huge win for Halo.
“Halo’s tobacco and menthol vape products are in demand by adult consumers throughout the country, and we are excited to have USPS solidify the supply chain,” said Kevin Dietz, director of Halo brand sales, adding that several of Halo’s ENDS products are in the final stages of the U.S. Food and Drug Administration’s premarket tobacco product authorization process.
Unique challenges
Filling the shipping void are companies such as X Delivery, which promises to satisfy all PACT Act requirements, including verifying the purchaser’s age and obtaining a signature from an adult aged 21-plus upon delivery. Other restrictions—such as the maximum weight requirement (no more than 10 pounds), requisite stickers indicating that the package contains a “tobacco” product and a notice that the recipient is required to pay taxes on the purchase—must be met.
“All shipping has unique challenges. The fact that the national carriers opted out of shipping vape products shows us that they’re only interested in the drop-and-run delivery model,” said Paul Vinuelas, chief logistics officer for X Delivery. “We are dedicated to ensuring compliance and protecting youth from obtaining these products. While it may take a bit more effort to perform our deliveries and audit them for PACT Act compliance, we think it’s worth it.”
While they only began shipping vapor products in late 2020, X Delivery worked closely with vape companies to build a fully compliant service. An application programming interface helps streamline the shipping process and sync data in real-time across various platforms. They’ve also connected empty warehouses, local delivery services and other supply chain assets to their sophisticated system in an effort to speed and simplify the flow of information.
When Vinuelas spoke to Vapor Voice (“Stand and Deliver,” Issue 2, 2021) last May, he said X Delivery could ship products to consumers in about 90 percent of the U.S. He was cautiously optimistic that the company could eventually increase coverage to include the entire country.
“Our long-term goal is to be the No. 1 shipping carrier for D2C e-commerce brands,” Vinuelas said. “We understand the relevant laws in detail and are determined to be a good partner to vape and e-cigarette merchants.”
A misguided law
Credit: blr60
Shipping vapor products with X Delivery comes at a cost, which is why smaller retailers, such as Cloud 9, decided to restrict sales to its brick-and-mortar locations. Other retailers, including Five Pawns, had to reengineer the way they handle all shipping.
“The problems started as soon as the PACT Act was enacted,” said Jay Oku, head of business development for Five Pawns. Oku said Five Pawns reengineered their shipping logistics to comply with the “misguided law introduced by our out-of-touch 88-year-old California career politician, Diane Feinstein.
“When we were prohibited from shipping via USPS, UPS and FedEx, we were forced to use a third-party logistics service,” Oku said. But even with this service, he said that delivery to all areas—even areas in Five Pawns’ own California backyard—remain problematic.
“The fact that each shipment requires a signature from an adult on the premises has caused frustration with many customers. Our customers are forced to make arrangements to have someone of age at home midday for several days so [that] they don’t miss their shipments,” he said, adding that some shipments are taking 15 days or more.
“These companies don’t have effective tracking data, so customers have no idea when their order will arrive,” Oku explained. “Many [customers] reported shipments being delivered in an unmarked van as late as 9:30 p.m. We have elderly customers completely inconvenienced, frightened of strangers coming to their door at night and ultimately fearful they may no longer be able to get their e-liquid.”
Regardless of the workaround shipping solutions devised by vape companies, challenges will continue to mount as anti-vaping legislation continues to be popular with misinformed politicians.
“While we understand and agree with the need for reasonable and responsible regulation, our concern is that these overarching regulations and restrictions will push vapers back to deadly combustible tobacco products,” said Maggie Gowen,vice president of retail marketing and communications for AMV Holdings. AMV Holdings is the largest operator of specialty brick-and-mortar vape stores in the U.S., with over 120 retail locations, as well as the parent company for numerous major e-liquid brands, including Alohma, Kure, MadVapes and MAXX.
“We have a lot of customers in rural areas and other areas with shipping restrictions who are very upset that they can’t purchase their vapor products like before,” Gowen said. “Excessive shipping costs due to the PACT Act requirements just added to their frustration. At what point will these vapers simply give up and revert back to combustible tobacco because they cannot access vapor products? That is our biggest fear.”
AMV Holdings conducted a large behavioral study and found that nearly 90 percent of its customers were former smokers with an average age of 37 years; roughly half had been smoking for 10 years or longer before they started vaping. A third of them had tried traditional nicotine-replacement therapies to quit, and over half had tried to quit cold turkey.
“Our data tells the story of a group of adults—not minors—desperate to quit smoking, who ultimately found vaping and were able to successfully kick the cigarette habit using ENDS products,” Gowen said.
Vapers are the victims
Credit: Nasibli
Public health and the smokers trying to quit ultimately carry the burden of limited shipping options and all-out bans for mailing vapor products. “What we’ve seen unfold over the last year cannot accurately be characterized as ‘unintended consequences,’” said Gregory Conley, president of the American Vaping Association, a nonprofit advocacy group.
“No member of Congress who pushed for this law took the time to understand its implications for small businesses. From conversations on the Hill, it was painfully clear that the sponsors were ready and willing to see the industry and its adult consumers take some pain.
“In the era of TikTok and Snapchat, and despite dealers who don’t hold business licenses or collect excise taxes, very few teenagers have been stopped from accessing vaping products by this law,” Conley said. “Like with most anti-vaping policies, the primary victims are adult smokers and ex-smokers just trying to live in peace.”
The story isn’t over, however. Business owners are searching for solutions. “For years, we have had to fight tooth and nail for the rights of our consumers,” said Schell Hammel, president of The Vapor Bar, a Dallas area retail store chain, and director of Chapter Relations for the Smoke-Free Alternatives Trade Association. “This stand by the shipping companies is just one other way to make it harder to get these products to those who need them to stay successful.
“We will always find a way,” Hammel continued. “We are a resourceful bunch, and no matter what, we will continue to fight for our consumers’ rights and those who are able to keep their doors open to serve them.”
The original “Vaping Vamp,” Maria Verven owns Verve Communications, a PR and marketing firm specializing in the vapor industry.
The U.K. Vaping Industry Association (UKVIA) has launched an online logistics survey for the vaping industry.
This action follows the decision of several delivery companies to stop carrying shipments of vaping products.
Reports have involved leading providers such as DHL, UPS and FedEx, resulting in varying degrees of disruption to deliveries in recent months. The UKVIA is keen to learn if any disruption is affecting products imported from countries within the European Union or if products imported from China and the USA are also being held up.
“The UKVIA is extremely concerned to hear of any disruption to deliveries of vaping products experienced by our members or any other businesses in the sector,” said John Dunne, director general of the UKVIA.
“We will be closely looking into the response to this survey, to gauge the severity of the problems faced by businesses. The UKVIA will then be in a better position to take up these concerns on behalf of our members and the wider industry. I would encourage everyone eligible to take part in the survey or to get in contact with the UKVIA directly to flag up any individual logistics issues”
