With the relentless march of e-commerce over the past decade, satisfying demand for corrugated cardboard packaging ahead of the festive season has become an increasing challenge for packaging buyers and manufacturers alike.
Since the advent of the pandemic, however, that challenge has taken on a whole extra dimension, after online retail sales saw a dramatic rise as home-bound customers flocked to their laptops, tablets and phones in droves to order cardboard packaged goods during lockdown periods.
Record demand, surging prices
As we reported earlier this year, following the widescale reopening of global economies, demand for corrugated packaging further intensified in early 2021, causing extended lead times across the board, some supply shortages and a significant price escalation in the cost of cardboard.
Though this position has thankfully come into better balance over the summer months, cardboard production is still struggling to meet demand and with Christmas just around the corner, corrugated supplies and lead times are under pressure once more – a scenario significantly exacerbated by ongoing disruption in the global shipping and national haulage industries, wider transportation personnel shortages and added cost pressures occurring throughout the paper supply chain.
Bottom line impacts
Unsurprisingly given these challenging market conditions, inflationary pressures continue to abound for suppliers and manufacturers. Indeed, the price of old corrugated cases in the UK, which provide the material for making containerboard, has risen by more than 80% this year. Meanwhile, containerboard prices are some 47% higher than compared to last December.
What’s more, given the energy-intensive nature of the papermaking industry, the current global surge in energy prices is further adding significant cost pressures to producers, with the Confederation of Paper Industries recently warning prolonged high prices could further disrupt packaging supply in future.
The bottom line has been a notable rise in box prices, which have increased by 38% this year along with a tenfold overall rise in the price of cardboard since the beginning of the pandemic.
The Planning Imperative Remains
These unprecedented dynamics caused some commentators to speculate that there would inevitably be cardboard shortages this Autumn as businesses prepared in earnest for Christmas. While thankfully, we are not seeing widescale evidence of this so far and any gaps in supply experienced over the coming weeks are only likely to be temporary, it underlines the importance of buyers continuing to work closely with packaging suppliers to forward plan their requirements – both now and well into next year. Especially so with demand for cardboard likely to continue to outpace supply for the time being at least and materials shortages related to the paper industry being seen in other sectors like bookselling.
Here at Nicklin, cardboard packaging solutions continue to be an integral and important part of our offer and we have worked hard throughout the challenges of the pandemic to meet increased customer demand, while continuing to ensure our pricing reflects market conditions. This customer commitment remains steadfast for the new year ahead and we will of course continue to provide updates on any fresh developments impacting this dynamic market as they occu
