international paper co. is seeing a surge in demand for packaging from both online and traditional retailers stocking up for the holidays.so far, box orders for the online retail segment have been up 15 yearoveryear in 2014, although it is still early in the season and that could increase depending on demand, chief executive mark s. sutton said in an interview.&ldquosome of the seasonality that occurs over the holidays has been hard to predict lately,&rdquo mr. sutton added. &ldquoeach year, the online side has surprised.&rdquoalthough boxes for online retail are still a relatively small part of the memphis, tenn., company&rsquos global business, the demand signals a strengthening north american economy amid a more sluggish global picture. operating profit at the company&rsquos north american industrial packaging unit was up 11 to 570 million in the third quarter, up from 516 million in the same quarter a year ago. sales were flat at 3.2 billion.that segment&mdashwhich includes cardboard boxes, specialty packaging, retail displays and paper bags&mdashis bearing fruit after a series of moves to improve efficiency, as well as the company&rsquos efforts to target customers that will bring it more profitable business, mr. sutton said.the company has worked to integrate its 2012 acquisition of templeinland paper mills within its existing supply chain and has targeted manufacturing orders closer to their final destination. as a result, the company has trimmed an average of 25 miles per load, saving it about 18 million a year. &ldquothe savings are dropping to the bottom line,&rdquo mr. sutton said.the company also has added supplychain technology that allows it to cut costs by planning ahead. &ldquothe earlier you book transportation, the lower the cost,&rdquo mr. sutton said.that has been beneficial for the company when it comes to shipping by rail. international paper is the largest boxcar shipper by rail, and the company has been affected by tightening rail capacity, mr. sutton said. booking space a few days in advance of shipping helps with getting needed space, and allows the company to completely fill railcars. &ldquoyou need to be a better planner, and railroads get a benefit from the fact that we&rsquore a little more predictable,&rdquo mr. sutton said.in choosing customers, the company seeks those who will need more design, print or advertising applied to boxes, which tends to be more profitable. the company also advises customers on how to save money, offering help on how to improve operations.mr. sutton, a 30year veteran of the company who took the reins on saturday, isn&rsquot planning on veering far from the path laid out by former ceo john faraci , who has taken an advisory role until his retirement in february. mr. sutton reaffirmed the company&rsquos target of reaching 5 billion in annual earnings before interest, taxes, depreciation and amortization in the near future.while mr. sutton does believe there will be strategic changes to come, he said he would address those as they arise. the company has chosen to focus on paper and packaging. &ldquopaper is challenged in certain markets, so we&rsquoll continue to evaluate that over time,&rdquo he added.he said the company also would consider acquisitions in markets where it is already doing business, although there is nothing &ldquoimminent&rdquo on the horizon. due to sluggish growth in asia, acquisitions there are unlikely to happen in the near future, he added.source httponline.wsj.comarticlesinternationalpaperseessurgeinpackagingordersaheadofholidays1415143378
