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Many businesses are feeling the impact of nationwide cardboard shortages. Many businesses are finding it challenging to locate corrugated packaging. Even major news agencies, including the  BBCThe Telegraph, and The Daily Mail, have recently emphasised the UK’s current cardboard crisis.

In the last instalment of “Navigating the Cardboard Supply Crisis”, we had a look at what the cardboard supply crisis was and touched on what was driving the scarcity. Following on from how the increase in eCommerce and online orders has had an impact, we will now explore how the elephant in the room, Covid-19, has also had an effect. 

Coronavirus

The Coronavirus pandemic has impacted demand in a variety of different ways. Many businesses that would never sell online in the past, such as brewers, bakeries, fresh fruit and vegetable suppliers, and so on, have been forced to shift online. With conventional physical markets, restaurants, and cafés collapsing, many of these businesses had no choice but to begin offering subscription or takeaway services.

Staff shortages were another impact of Coronavirus.

Last year, some of Europe’s major paper mills had substantial downtime due to personnel concerns caused by COVID-19. As a result, paper stockpiles were at an all-time low at the same time as UK corrugated volumes began to rise (some estimates indicating as much as 30 per cent).

Another key cause for the market-wide paper price hike in December 2020 was this (which also pushed lead times out significantly).

Amazon / Large e-commerce players

Massive corporations, such as Amazon, which has benefited greatly from the shift to e-commerce, are also being accused of stockpiling large volumes of corrugated packaging.

This has been reported by The Telegraph (subscription required to view full article), and Amazon claims it was not suffering shortages (possibly implying they have a bulk supply).

Paper supply/manufacturing

Another important element to consider is the supply coming from European paper mills.

According to Packaging News, cardboard stockpiles were up 16 per cent year on year in July, while demand across Europe was much lower (at first) due to the pandemic and major new containerboard capacity coming online.

To bring the market closer to equilibrium in supply and demand, European paper mills accelerated their typical quarter one plant shutdowns, and many aggressively shipped to China.

Mitigation

What is Tams Packaging doing to combat this?

Cardboard shortages have, of course, influenced Tams’ operations as a printed cardboard packaging company. However, because of a tight working relationship with suppliers, Tams packaging has had the benefit of being able to retain (to date) a regular supply of corrugated material.

Due to the previous issues, lead times have seen an extension, and the cost of creating and acquiring corrugated has risen.

Tams Packaging has absorbed as much of these expenses as feasible while also giving recommendations on offsetting packaging cost increases in other ways. 

Tams Packaging is happy to provide any advice regarding printed cardboard packaging. Is your business experiencing drawbacks from the cardboard supply crisis? Contact us today to discuss your requirements.