Last Updated: 17th September 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. 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;
Christmas may seem like a long way away, but we are actively working with all of our customers to help them plan ahead for the Christmas rush.
Production and delivery times for certain packaging lines, especially bespoke polythene and corrugated products, normally lengthens by approximately 200% in Quarter 4. However in 2021 after the turbulence in the global markets that we have already seen, this is likely to have a further worsening effect too. We expect lead times of up to 4 months on some products.
By working ahead we can help you to ensure you never run out, and have back up stock held in our warehouse for you.
Please talk to your account manager when they contact you about this, and we look forward to helping you to keep your business running.
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.
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 2021 certain plastic and adhesive material costs plateaued, but they have been on the increase again since June and have started to increase again now. You can see data up to 18th July 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/
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.