News / K+N will take financial hit to 'create critical mass' for smart labels

© Maksim Pauliukevich

The success of ‘smart’ labels hinges on mass adoption to bring prices from unsustainably high levels.

Scaling up production will bring down the cost dramatically, it is expected, although this may not happen fast enough – or may be too siloed – to support mass adoption of the technology.

DB Schenker says there is no mechanism to return labels. This means they become disposable, making full market penetration financially catastrophic at today’s prices.

According to a DB Schenker spokesperson, the high price paid for the labels — about €40 according to some sources — limits adoption to customers with high-value shipments like pharmaceuticals, consumer electronics, luxury goods and some machinery parts, he told The Loadstar. “[It is] these kind of goods where temperature control is most relevant as well.”

Rather than providing frequent updates, the labels notify users when the parcel’s situation changes – for example, when it leaves a pre-programmed geofenced facility, or when the temperature spikes.

A scheme to adopt smart labels is also under way at Kuehne + Nagel (K+N), which has been using sensor-boxes. However, according to a presentation by KN head of product development and innovation Reinier Danckaarts in September, K+N believes they are “not scalable”.

K+N regards design of a specialised label printer to be pivotal for mass-adoption and, with Zebra Technologies, it has developed a ‘smart’ printer to make labels of 1mm thickness without bending the paper (given the sensitivity of the electronic components).

“The solution was to adapt a printer that could take thicker labels but, at the same time, recognise which label ID was used to print the house air waybill (H AWB) label that includes the serial shipping container code, which in our world means… shipment piece per H AWB.”

K+N told The Loadstar it was willing to engage in ‘loss-leader’ pricing for its smart labels in order to create critical mass. DB Schenker, however, which announced a smart label scheme last week, said it was too soon to know.