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Packaging Industry Updates

Packaging Industry Updates – July 2021

2021 has brought unprecedented and seismic changes to both pricing and delivery times in the global packaging sector.

At Actionpoint we are committed to our customers, and their individual needs. Therefore, we want to keep you well informed of these industry changes, and to make sure you are up to date with the developments as early as possible, so that your packaging process remains hassle-free.

The vast majority of packaging products contain either paper or plastic, and these are the two main sectors which have seen these changes take place.  As of the time of updating our page in June 2021 the situation is continuing with the constraints of the past 6 months, so customers will be advised to plan as far ahead as possible particularly as we start to get close to Q4 with its usual spikes in demand.

As an overview, the tables below show the pricing and lead time data for the industry as a whole compared to Actionpoint, since November 2020;

Corrugated 

On average, 80% of the cost of a box is the paper content. This helps explain why by far the main driving factor behind the cost increases is the price of paper.

This increase can be seen in the pricing of paper internationally in the chart below;

As you will have already seen this has had a knock-on effect to the price of your corrugated products. This is almost sure to have further repercussions in the coming weeks as the PPI (Paper Price Index) is still increasing rapidly.

Key Corrugated Industry Facts

  • 4.8 billion boxes were required in 2020, compared to 3.6 billion in 2019
  • Freight costs have increased by up to 400% across the globe
  • 5 years of growth in home deliveries in less than 12 months
  • Companies stockpiling before a Brexit deal was reached
  • Production has been limited due to self-isolation, social distancing and staff sickness

Plastic

There are many factors contributing to the increase in costs of polythenes and plastics since the initial rise in 2020. This includes scarce supplies, rising energy costs, sharply increasing feedstock costs and extreme weather conditions in the USA, which had a knock-on effect in the UK.

At the same time, stockpiling caused by both planned and unplanned plant closures, have been made worse by incredibly strong domestic and export demands. While demand for polymers grew in 2020, supply did not follow accordingly. These factors, coupled with a shortage of shipping containers, has meant companies are experiencing price increases.

For a couple of brief months in April and May certain plastic and adhesive costs plateaued, but in June have started to increase again now.  You can see data up to 17th May in the chart below;

*The data in this graph runs 5 weeks behind and has been gathered from https://www.plasticportal.eu/en/cenove-reporty/

We are here to help 

Thank you

Above all, we want to thank you for being a valued customer and giving us the opportunity to continue working with you during these uncertain times. Please feel free to reach out if you have any questions.

*This page was last updated July 2021