The latest supply chain issue on the radar is that of cardboard boxes. The corrugate and cardboard sector of the packaging sector is feeling the effects of the energy crisis just as much as any other industry. Paper-based products have been the victim of consistent price increases within electricity and gas over the last several months, causing huge concerns for the manufacturers of these products. The situation is currently so dire that smaller manufacturers are closing down in droves.
An Austere Outlook
Paper packaging is an energy-intensive industry and therefore, like many, is struggling to keep up with demand. This is especially true for smaller businesses, which are disproportionately affected by rising prices and are simply unable to source corrugated packaging in many cases. According to leading figures in the packaging industry, demand for cardboard boxes (as well as aluminium cans) is expected to rise by 5% later this year, leading to an inevitable shortage of these items come autumn.
When even a small part of the supply chain is compromised, it results in a ripple effect that can have larger, long-lasting effects. For example, the founder of Evolve cosmetics, Laura Rudoe, explained that her company works with small cardboard manufacturers that struggle to get ahold of corrugated stock for their products. This means that they need to use odd box sizes to ship said products, meaning they are unable to use shipping space efficiently. This ultimately results in more carbon emissions, curbing sustainability efforts. Another example is that of recycling rates. During the pandemic, recycling rates fell across England due to staff shortages as well as the sheer increase in overall waste due to the whole population being at home more; this meant that the availability of cardboard that was to be repurposed into new materials fell consequently.
Goals and Hiring Trends
Solutions are, as of right now, few and far in between. For paper packaging companies, there is little wiggle room to change their business operations to mitigate such shortages, because it’s as simple as the fact that if a manufacturer cannot access a sufficient gas supply, they cannot produce any stock, bringing the entire supply chain to a halt. However on the other hand, the industry itself doesn’t seem to be in trouble in terms of demand – there is still plenty of need for various types of packaging and the industry will always find itself stable in terms of job security and potential for growth.
One target for many in the packaging sector that both gives them something to focus on currently and could help insure them from crises such as the concurrent energy one in the future is carbon neutrality. Global leader in packaging and paper Mondi is currently focusing its efforts on this goal. Within the past few years, it designed a paper developed to stretch and resist punctures, with the goal of using it to replace multi-layer plastic. This creation was initially developed with the purpose of wrapping mattresses, but the company soon realised that it could go one step further – using it to wrap heavy pallets for transportation. This would result in a massive decrease in single-use plastics. This is one example of the innovation taking place in this sector, regardless of its current worries.
Therefore despite all of the struggles mentioned above, the corrugated packaging and paper industries are very attractive right now: they offer stability and growth opportunities and offer the chance to contribute to the distribution of an essential global product. For individuals looking for a career of problem-solving and challenges, but is nevertheless full of opportunity and rewarding, supply chain in packaging is a great fit.
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Initially published June 2022.