SIX ways to manage packaging price increases to stay competitive
Global pressures on prices
Slowdowns in the logistics and transportation sector, semiconductor shortages, and labour issues all have taken their toll. Add to that dramatically increased consumer demand for home delivered goods, unprecedented airport mayhem, and the war in the Ukraine, it’s no wonder that industry leaders are losing sleep over an onslaught of concerns, not the least of which are price increases and longer delivery times.
So why have prices gone up in the packaging industry?
Simply put, demand is higher than supply.
In the pulp and paper industry, which supplies the necessary materials for corrugated packaging, there has been an uptick in prices by as much as 20 percent. Prices for pulp have risen up to 40 percent.
Manufacturers and distributors like RDR Packaging have absorbed some of these increases, but the reality is that managing these costs still remains tricky. It’s the reason RDR Packaging is vested in understanding the underlying factors contributing to these increases, so we can help clients manage the impacts.
Compounding the supply chain issue is the rise in demand for home delivered goods. This increased demand drives prices up too because production has to catch up with demand. International trade has also pushed demand for boxes. For example, last year Canadian exports – stuff like fruits, grains and wood pulp, to China blew past the record setting numbers last seen in in 2018.
Meanwhile paper manufacturing and distribution capacity fell when major mills had to close down due to COVID outbreaks among their employees and labour was in short supply.
Then there’s the skyrocketing cost of transportation with diesel fuel hitting new highs that include a 33 percent increase from a federal carbon levy on diesel.
A packaging provider that helps you gauge and avoid risks
At times like these, you need a packaging provider who understands your business realities and is on top of the issues. At RDR Packaging, we are particular about our suppliers, many of whom have built-in resiliency to supply chain issues, and are well positioned to better gauge and avoid risks on behalf of our clients.
One way in which we are doing this is by emphasizing recycled materials. It’s not only good for the environment, but it also augments supplies.
Six ways you can save in packaging
Looking for a better price? Work with our integrated packaging consultants to find the best solution for your needs and budget.
- Reassess whether you really need larger, more expensive boxes which need more padding for your product, or if smaller boxes will do. At RDR Packaging we can work with you to customize the size and make it just right. It could help you save on shipping costs.
- Consider fitting more product into your current boxes.
- Minor adjustments to secondary packaging may also produce savings. For example, by modifying the size of a case of product and how it was placed on the pallet, you may be able to add an extra layer of product on the pallet. You might even consider using our cost-effective and eco-friendly GRIP FIX™ palletizing adhesives. You will get more product into each truckload, and cut down on the number of shipments by several hundred dollars over one year.
- Investing in stronger chipboard or corrugated boxes, saves you money overall because it provides better protection for your product, reduces damage and enables you to stack more cases on a pallet which reduces storage and transportation costs.
- Consider whether you need corrugated boxes or if our woven polypropylene bulk and tote bags are suitable.
- Be strategic in your purchases and buy in bulk, ensuing extras when supplies are low.
For more ideas on how you can make the most of your dollar and offset price increases, contact our consultants today or call us at 905-607-0053.
