The 6 reasons why cardboard shipping box prices are going up
It’s no secret that the price of cardboard shipping boxes has increased dramatically.
With steady corrugated box demand, corrugated board suppliers in U.S. have announced around $60-70/ton price hike for container-board grades in Q1 2022, according to PRNewsWire. There are several reasons why cardboard prices are rising, varying from industry to industry. This article will explain why the price of corrugated boxes has risen and how it affects your business (or personal life).
Unfortunately, you can’t prevent cost increases in the price of cardboard boxes, but you can offset the costs with higher revenue from increasing your sales through higher repeat customer rates, which in turn help cover those cost increases (see our calculations at the end of the article).
Factory closures, labor shortages, and increased salaries
Many factories have shut down due to labor shortages and increased salaries. As a result of these shutdowns, fewer boxes are produced and available on the market for consumers. These shortages create an increased demand as well as higher production costs--not only does this mean more people want boxes, but that there will be less money available for you as a buyer and that manufacturers will need more time before they can ship your order out (which means more expenses).
Rise in Ecommerce
The rise in ecommerce is one of the largest contributing factors to increased cardboard shipping box prices. As more people shop online, the demand for packaging materials increases. More goods are being shipped online instead of via traditional methods such as mail order catalogs or brick-and-mortar stores. As a result, there's an increased demand for cardboard shipping boxes to protect products during transport, which increases their cost as well as their popularity among consumers who are opting to buy electronics or clothing online instead of at retail stores.
Logistics Crisis
The logistics crisis is a problem with the supply chain. It's caused by increased demand for cardboard shipping boxes, and it results from increased ecommerce. The popularity of online shopping has led to more packages being shipped across the country every day, which means more cardboard boxes are needed to ship them.
The growth of online shopping has resulted in many people buying things they wouldn't have otherwise bought in stores or malls– which translates to more packages coming into your home every week!
The rise in ecommerce has also contributed to an increase in demand for cardboard shipping boxes, which has led to a shortage of supply at times. Additionally, the pandemic interrupted the global supply chain, making it harder for box manufacturers to source the raw materials for boxes.
Drive towards Sustainability
Manufacturers are prioritizing sustainable packaging that uses less energy and resources. Businesses are making efforts to reduce their carbon footprint through recycling programs and more eco-friendly practices such as reducing packaging waste by using recycled materials (such as recycled corrugated fiberboard). Cardboard boxes are an excellent packaging choice because they can be recycled up to seven times without losing their structural integrity or dimensional stability. Cardboard boxes are also much cheaper than plastic packaging materials (like those used by Amazon).
Interrupted Recycling System
The recycling system has been interrupted, causing a shortage of cardboard boxes. If you're looking to send your stuff in a box, your options may be limited. If you purchase boxes now and hold onto them until things improve (or at least stop getting worse) when the time comes that someone needs their cardboard box back from you so they can use it for shipping purposes again, then your box will still be available for pickup by them on demand--and also by anyone else who needs one too!
Alternative factors include oil prices, energy costs, and inflation
The rise in oil prices, energy costs, and inflation directly affects the price of cardboard shipping boxes. When the cost of oil increases, so does the cost of producing cardboard shipping boxes.* When energy costs rise, cardboard box production takes more fuel to produce each box and ship it across town or worldwide.* Cardboard shipping boxes are subject to inflation, affecting everything from wages paid out by companies who make these boxes down to the consumer prices for goods being shipped by customers online.* According to Sifted, costs increases of 6.9% have been announced at UPS/Fedex for 2023 on top of surcharge increases of 10-30% from 2020 to 2023. This means that over time you will likely see an upward trend in costs associated with shipping items via cardboard boxes even if nothing else changes.
What Has Uline Done In Response?
Unfortunately, Uline’s size hasn’t prevented it from taking on cost increases and passing those increases on to customers. We used Wayback Machine, but if anyone has any old catalogs laying around please help us fact-check these numbers. It looks like the heavier 200# cardboard has increased more than the lighter weight 32 ECT boxes, due to the weight of shipping a heavier box made with more cardboard. For example, on the 200# boxes the costs for the 6x6x6 box have gone up over 50% (from $0.30 / box to $0.47), and costs for the larger 20x20x20 have gone from $1.80 top $3.67 an increase of a whopping 104%!
Ok, So What Can I Do About It?
Answer: drive more sales by purchasing custom boxes. You can purchase 1-panel custom boxes for the same price as blank, boring boxes. So what’s stopping you? If you get a few upgrades your chances for higher repeat order rates increase, so the added sales should cover your costs. Here’s the math:
Scenario A: $1,000,000 Sales, 3% CVR, $125 AOV = 8000 orders (6000 boxes)
Avg Price / Box = $0.80 for blank, $1.30 for custom with us and $6.50 for competitors
- ● Cost = $5000 Uline
- ● Cost = $8000 us
-
● Cost = $40,000 others
Breakeven is 0.3% for us and 1.5% increase in sales for our competitors
- ● CustomBoxes.io: $3,000 Incremental Cost / $1,000,000 = 0.3%
- ● Competitors: $30,000 Incremental Cost / $1,000,000 = 1.5%
Source
https://www.prnewswire.com/news-releases/demand-for-corrugated-boxes-is-expected-to-spike-by-around-3-5-during-2022-2025-says-beroe-inc-301493982.html#:~:text=Corrugated%20board%20suppliers%20in%20U.S.,with%20steady%20corrugated%20box%20demand.