Packaging Market 2018

Wednesday, October 31, 2018

As we look at the packaging industry from mid-2017 through 2018, we see there have been both increases and decreases on various packaging items. Below is a summary . The net effect, price wise, is that the packaging market has increased pricing on most packaging items in 2018. The two main reasons for these increases include the following:

 

  • Freight--The trucking industry has been in a state of turmoil because of the new trucking legislation which was put into effect in late 2017. The new laws have limited the number of hours per day that truck drivers can drive. This has caused a strain on driver’s availability, which then becomes a perfect example of supply and demand. When demand is high, the fees associated with that demand rise. The result:   not only has there been an increase in the cost of transportation but also a shortage of available trucks/drivers.
  • Tariffs & World-Wide Market Demand--As the economy has heated up and the extra costs are incurred, the demand for packaging materials again comes into play. Corrugated manufacturers are already running at 99% of their capacity. As other manufacturers reach their capacities also, the risk of further increases becomes a possibility. There is no way to get around high demand negatively impacting the amount of supply available to all.

 

Below is a summary of the price adjustments that have been made by manufacturers over the last 18 months, broken down by each packaging category. During these times of influx  it is key to partner with a distributor like Murphy Packaging who has aligned itself with top manufacturers. In partnership with our suppliers, we are sometimes able to avoid these price adjustments or  buy product prior to the increase effective date. At Murphy Packaging, our end goal has always been to look out for our customers’ best interests. We also pride ourselves in the fact that we have never shut a customer’s plant  down due to inability to provide product. We do whatever it takes to ensure product arrives at our customers’ doors.

 

Packaging Item

Number of Increases

Number of Decreases

Total Increase over 18 months

Corrugate

2

0

12-15%

Stretch Film

8

2

16-20%

Foam

2

0

16-18%

Chipboard

1

0

9%

Cornerboard

3

0

25-29%

Tape

3

0

16%

Steel Strapping

2

0

7%

 

 

As we wrap up 2018 and look forward to 2019, we leave you with what we have experienced over our 40 years of packaging: fluctuation in pricing is normal. 2019 is unpredictable due to the world market influence, but we will continue doing what we do best, looking out for our customers.