Cardboard shortgages latest hit to global logistics

In the latest shock to global supply chains, prices have spiked for both recycled paper — an important source of wood fiber for the packaging industry and used to make boxes — and corn, a main ingredient in the starch used in the glue that holds the containers together.

The price of containerboard needed to produce corrugated boxes, which are used for things like pizza and shipping perishable food, has risen as much as 17% since November, according to Bloomberg’s Intelligence analyst Joshua Zaret.

The push for packaging is so high that big paper companies haven’t been able to meet demand. Machines are running near capacity and contending with major backlogs, raising the risk of emptier-than-normal grocery shelves,.

This adding to the woes of an industry already struggling with high costs due to tight supplies and surging pandemic-era demand for shipments of all types.

This is feeding into policy maker’s accelerating concerns about impending food inflation as record demand and limited inventory of agricultural commodities such as corn, wheat and vegetable oils is sending crop prices to multi-year highs.

The price of coated recycled board used in consumer packaging for items such as cereal has climbed 8% since September 2020, according to Bloomberg.

Arfon Consulting’s procurement and supply chain analysts are experts in helping clients implement buying strategies to mitigate the worst impacts of constrained commodities markets. Please make contact for a free 30-minute no obligation video consultation.

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