Although American Forest and Paper Association found that containerboard production increased 9% in March compared to March 2020, the boost in supply was not enough to keep prices from going up this month.
Rising containerboard prices could be a threat to companies that rely on packaging to deliver goods ordered online to their customers. If prices continue to shoot up, companies will have to pay even more for shipping boxes and figure a way to balance out the additional cost. That could mean setting higher prices to absorb the increase.
"Boxes are the most widely used packaging for e-commerce shipments," Webber said. And to meet the rising demand, manufacturers have "steadily increased over the last decade" by expanding capacity by 14% between 2010 and 2019, he added.
Manufacturers are now operating at almost full tilt. Many investments are geared toward recovering product fibers for reusable packaging to secure supply.
"Boxes are ... the most recycled packaging in the United States providing a versatile and sustainable packaging solution for retailers and consumers alike," Webber said.
American Forest and Paper Association expects the industry's capacity expansion to continue with billions in investments lined up through 2023.
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Global supply and demand shocks have disrupted just-in-time practices.
The acquisition has contributed to an approximately 35% reduction in delivery times, executives said on an earnings call.
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Topics covered: logistics, freight, operations, procurement, regulation, technology, risk/resilience and more.