From 2020, paper is more expensive worldwide. And when we talk about paper, we are talking about both the paper used in the printing and publishing industry and the cardboard used for the production of boxes.
To give you an idea, the production of cardboard in the United States reached 124 billion square meters in 2020, according to the association of manufacturers. The year-over-year increase was 3.4%, equivalent to approximately 768 square kilometers of additional corrugated cardboard. Enough to cover New York City with plenty.
This increase in production is a direct consequence of the increase in demand for the material, which causes its cost to also rise. And that puts the profit margins of those who depend on the cardboard boxes in their business at risk. But what justifies this high? And is it possible to dodge it? That’s what we’ll talk about in this post.
Why are cardboard box prices increasing?
There was a surge in demand for packaging around the world and it was largely driven by the Covid-19 pandemic. This is because a trend that has already been consolidating and strengthening in recent years – online shopping – has intensified with 2020, a period marked by quarantines around the world.
What happens is that there is not always enough wood to meet market demands, causing both prices and delivery times to increase. Throughout 2020, there was also an increase in shipping rates between countries. For example, the cost of transporting a container from China to the United States used to be around US$ 2,500 in 2020. This figure reached US$ 6,500 in 2021, and could reach up to US$20,000 for express shipping. Estimates are from Fortune magazine.
How to dodge the high prices?
Even if the issue of increasing cardboard prices is global, it is possible to circumvent this scenario – or at least reduce its impact on your company’s finances. How?
Well, if cardboard boxes are an essential material for the day-to-day in your company (as it is in the case of online stores, for example) and you have the working capital to do so, negotiate larger quantities of packaging directly with your supplier. This way, you can postpone the transfer of these values to the final consumption for some time. If so, also assess your material storage costs to understand if the choice is worth it.
Another very important thing is to try to find local packaging suppliers. This is because the material that comes from another country, for example, has a higher transport cost (as we saw above). By negotiating with local manufacturers, you can get better values.
Cardboard Boxes in Vancouver
If you are in the Vancouver area and are looking for a cardboard box supplier, please contact us. As our suppliers are local, we were not impacted by the increase in global packaging prices. We work with all types of boxes, from custom to boxes for produce boxes, and we can help you with your demands in this regard. Please request a free quote by clicking here.