The effect of corrugated shortage in the packaging sector
This is going to be an interesting year in the world of packaging for a variety of reasons. Shortages of packaging materials such as pallets, plastics, corrugate, metal and glass are disrupting the supply chain, and it still remains unclear when these constraints will subside. Corrugated boxes are extensively used in pharma companies, the food sector, electronic goods and now the e-commerce sector. Demand is rapidly picking up but the supply chain is not able to keep up. Companies are now absorbing the cost, but ultimately the final customer’s pockets will be affected.
Here are some of the main causes of the corrugated shortage we are witnessing at the moment:
- The Covid pandemic accelerated the growth of online shopping, therefore increasing the demand for carboard boxes. On the downside, it has negatively affected the recycling industry. Packaging now goes directly to consumers and takes much longer to reach the recycling chain. Disposal practices are often incorrect and carboard packaging is frequently contaminated
- The war on plastic has begun and many companies are now choosing to invest in corrugated packaging as a cheaper and more sustainable alternative. By using recycled carboard we can reduce landfills and deforestation and retailers understand the value of cardboard boxes
- Shipping recyclable material to countries who will accept it, such as India, has become harder. China implemented a recovered paper policy which banned unsorted waste paper imports — disrupting markets globally
- The war in Ukraine is posing additional challengesfor the plastics and cardboard value chain because of the surge in energy prices and an uncertain oil and gas supply. In addition to this, Ukraine, Russia and Belarus supply a significant amount of the softwood for pallet manufacturing. Russian pulp producers are struggling to keep operating due to rising cost and logistic disruptions in the Black Sea
- Pulp production was also delayed in North and South America because of the extended downtime during the pandemic and maintenance work to get the mills running properly again. In addition to this, the construction industry in the US is competing for pulp with packaging and printing companies and the cost is skyrocketing
- Backlogs at ports are the new norm due to a lack of containers and long lines of truck drivers waiting to pick up containers every day
- Disruptions on inland transportation with workers strikes have increased in the last year and it has been hard to recruit truck drivers, probably caused by the lack of appeal of the profession that leads to an unhealthy lifestyle
- Prices are surging in every aspect, from energy cost to shipping containers, making it hard for packaging companies to keep up
The packaging world has been growing and making consistent investments but their capacity now seems to be wasted due to this series of problems.
Due to the material shortage we are observing worldwide, in the next years we expect to see lots of changes and developments in all sectors.
Why are companies choosing carboard packaging?
E-commerce is booming and the packaging sector is thriving despite the lack of pulp and the issues that we are facing right now. Retailers seem convinced that carboard is the most suitable material for their products. Here are the reasons why we agree:
- Corrugated boxes are eco friendly and recyclable. They don’t need any special treatments, they can just be tossed into the right bin as long as they haven’t been contaminated by chemicals or greasy food
- They cut transportation costs, are versatile in terms of size and shape and most importantly they are lightweight
- Carboard packaging is cost- efficient when compared to other packaging materials and most companies can afford it
- Companies can easily modify boxes using colors, logos, embossing… anything they want to create personalized packaging and strengthen brand image
Despite the shortage of carboard and the rise in costs, this is still considered a great alternative in the packaging world.
Carboard shortages in the printing industry
There has been a significant uptick in print demand in the pandemic and post-pandemic period. The shortage of paper and carboard is causing printers to scrutinize all areas of operations to find ways to slash waste, maximize resources, and optimize material usage.
It is now crucial to save on ink, paper, and labor costs as well as use software that can automate, accelerate, and streamline operations. Printer are ordering inventory in advance of need but cannot hoard paper. They need to work WITH one another rather than compete for materials.
Slashing costs and automating production can lead to a more sustainable production and higher profitability.
How to deal with the carboard shortage
A cardboard box shortage is escalating across the globe, but what are some strategies that we can use to mitigate the impacts of tightening supply, rising costs, and delayed deliveries?
- Packaging and printing companies need to plan in advance and order early, especially when it comes to peak periods. They need to make sure they stock everything they need to continue production and prepare to pay extra
- Governments should establish recycling policies and good practices
- Retailers can use smart packaging design to minimize material use and come up with new shapes and designs for specific products
- Retailers also need to be prepared for extended delivery times and price increases. They can reuse old boxes rather than buy new ones, making packaging circular
And for the final consumer – Don’t let single-use plastic alternatives tempt you. Ethical packaging is important to the final user and they will find a product that uses sustainable materials, eco-friendly inks and is easy to recycle.
- When it comes to paper products, we can choose the digital version! For invitations or books, for example, we don’t really need paper, do we?
The pandemic-driven shift in consumer buying preferences may be forcing an industry-wide change and bringing challenges along the way, it may also provide an opportunity for growth and improvement.
Raw material shortages have put great strain across most businesses. They have suffered in terms of supply, increased costs and delivery times but many of us want to be optimistic and believe that present supply issues may settle down quickly.
This year the growing demand for packaging expected to be an ongoing trend and we hope to be able to satisfy all the requests on the market.