8% Corrugated Price Increase Drivers

Have you noticed that your boxes have been the same price for almost 3 years?  The party is over.  North American container board mills implemented a $50 per ton price increase in liner board effective in September.  That translates to an 8% increase in the price you'll pay for your corrugate boxes, displays, and liners.

 

Export and domestic demand are on the rise, which has caused container board inventory levels to dwindle hitting a 33 year low in August.  Unfortunately, increasing production is not easy since the industry is running at 97.5% capacity after a lot of consolidation (has anyone noticed that Weyerhaeuser, Smurfit-Stone, and Temple-Inland are MIA?).  The bottom line is that demand is greater than supply which results in higher prices.

 

 

It might be a good time to revisit your packaging and supply chain to see if you can squeeze some efficiencies out.  Perhaps switching from 200# to 32ECT, redesigning your product packaging to use less, or implementing a more efficient JIT warehouse program could offset the increase.