Can the Case Packaging Industry Handle the Supply Chain Crisis in 2023

For nearly three years at this point, supply chains around the globe have been facing an unprecedented crisis. A combination of factors - including pandemic restrictions, container shortages, and a lack of workforce - has been responsible for the crisis.

So you can't point the finger at a single industry or location and blame it for everything.

Like most industries, the case packaging industry feels the strain of this crisis and will continue to do so in the next 12 months. However, ignoring the signs now and not taking steps to prepare for 2023 is dangerous.

To help you cope with the crisis, we'll explore how the supply chain crisis may affect case packaging in particular and offer some helpful tips.

The Ongoing Supply Chain Crisis

Before talking about the future, we must go back and see how this mess began in the first place.

When the pandemic started in 2020, all of the major ports around the globe had to either minimize or shut down their operations completely to stop the coronavirus from spreading. In addition, most businesses heavily reduced the number of workers coming in.

The staff shortage affected the labor supply at a crucial time when the consumer demand for certain products reached record-high levels. There was also a space shortage problem, which made it challenging for staff members to organize and dispatch goods.

The ripple effect from all these issues caused a bottleneck in the supply chain that's still felt to this day.

The Effects on the Case Packaging Industry

All of this impacted various case packaging industry segments: it narrowed profit margins, increased the potential for more delays, and caused consumer dissatisfaction.

The cost of some input chemicals used in packaging increased by 30%. In addition, pulp prices increased by 50% during the same period—finally, recycling paper doubled in price.

The supply chain crisis also had an impact on the environment as well. For example, EVOH, an important material that creates an oxygen barrier for food packaging, was in shortage for a long time. That led to increased food waste and, subsequently, an increase in emissions.

How the Supply Chain Crisis Can Impact Your Business

Case packaging is an integral part of the supply chain and requires special attention from manufacturers to function at its best. Careful planning and a clear understanding of all the possible scenarios are essential steps toward getting ready for 2023.

Here are some potential issues case packaging makers should consider when preparing for the supply chain crisis:

1. Shortage of Packaging Materials

Although lockdowns are a thing of the past in most countries, the shortage of packing materials is still a severe issue. Manufacturers of cardboard, paper, and plastics have had to pause operations in many cases, leading to a shortage of case packaging materials.

And that's not all. Many plastic manufacturers have been forced to slow down production in the United States due to extreme weather conditions.

Since you can't predict certain events, case packaging suppliers must have a backup plan in case raw materials become scarce. Finding alternative sources may be the only way to keep up with demand.

2. High Cost of Raw Materials

Again, while the pandemic was initially responsible for the supply chain crisis, the cost of case packaging materials has been affected by multiple factors, like logistics and production constraints.

A low supply of certain materials caused a surge in demand. As a result, the price of certain materials, such as polyurethanes, went up more than 50%.

The higher costs will be passed on to case packing manufacturers, who must adjust their prices accordingly. Therefore, its packaging suppliers must be aware of the costs and plan accordingly.

3. Over-Ordering 

During a crisis, many companies often make the mistake of overstocking materials. Packing companies are no different. Several case packaging companies had to pay a hefty price for over-ordering materials during the pandemic.

Seeing the ongoing crisis in Europe showing no signs of stopping, we can expect even more companies to try and protect themselves by stocking up on case packaging materials.

It's essential that case packaging makers plan their orders carefully and not get carried away by the fear of shortages.

4. Logistics Constraints

Border closers still prevail in many countries around the world. China may have eased up its restrictions due to recent protests, but it won't return to pre-pandemic conditions anytime soon.

Logistical constraints like border closers may lead case packaging makers to look for alternative suppliers that can help offset the risk of supply shortages.

If case packaging makers want to stay competitive, they need to develop flexible supply chains that are not reliant on a single supplier.

5. Labor Shortage

Not many businesses are looking to expand their production capabilities right now. However, if the crisis continues into 2023, case packaging makers may need help finding enough workers to meet their demands.

Workers in many industries are also quitting in what's been dubbed "The Great Resignation" phenomenon. For manufacturers to remain competitive, case packaging makers must pay close attention to the labor market and plan for contingencies should workers become scarce.

Automation may be the only option for manufacturers until the labor shortage is resolved. While it may seem like a big investment, having a case packaging robotic solution will increase productivity and reduce costs in the long run.

Prepare Your Packaging Business for the Future

As 2023 approaches, case packaging makers must plan ahead and prepare for the unexpected. The supply chain is a crucial part of case packaging, and case makers must work hard to ensure they have the materials they need to meet customer demands.

Companies can protect their business by considering a case-packing robotic solution. That's where BluePrint Automation can help. With our case-packing robotic solutions, you can be sure your case-packing needs are met and your business is prepared for contingencies.

So contact us as soon as possible and let our specialists guide you on the path to success.