The past 18 months have truly been a rollercoaster for nearly everyone on the planet. As we have all reacted and adapted to new ways of going about life and work, things have changed drastically in the business world and the corrugated industry is no exception. Price increases seem to be coming faster than businesses can react, but what is the reason for this extremely volatile year?
The paper that makes up a corrugated fiberboard sheet is comprised of a combination of two types of paper. Linerboard (your interior and exterior sheets of paper), and the medium (the fluted lines sandwiched between liners). Both of these types of paper are commodities that are traded and as such, their price fluctuates up and down. Unfortunately for everyone as of lately, the fluctuation has only gone upward leading to the slew of price increases we have seen over the past twelve months.
In a “normal” year we may see on the average one price increase. So what exactly has made this last year such an outlier?
DEMAND: While many businesses may have had to cut down or scale back manufacturing due to lockdowns or restrictions over the past year, corrugated packaging has seen a historic increase in demand for boxes. E-Commerce has been the main driver of this change as many individuals adjusted to buying things online that they may have normally bought at a store. Many manufacturers and retailers may have been accustomed to sending “bulk” packs of their product out with many items to a box which would then be put on retail shelves. Now that customers are buying more online there is a larger demand for smaller boxes containing only what the customer needs so the retailer can send the product directly to the customer.
OTHER COSTS ARE ALSO INCREASING: While the paper costs are the main driver of the recent price adjustments, there are a lot of other factors that go into the cost of a box. ALL of the components that go into making and shipping your boxes are going up at even greater rates than the cost of the paper. The ink we use to print on the cartons, the glue that’s used to seal them, and even the pallets we ship your product on having all gone up considerably over this last year. Shipping costs are also up as the added volume on the logistics industry has created higher demand.
HOW FOREST PACKAGING CAN HELP: Although a price increase is never a welcome event, here at Forest Packaging we consider it more of an “opportunity” to discuss your corrugated needs and how we may be able to mitigate any kind of price adjustments. Our team of sales professionals and designers can work with your company to implement changes that can help to streamline your packaging process through size, material, design, or order quantity changes. Don’t hesitate to contact Forest Packaging today to discuss your corrugated packaging needs!