Cardboard Shortages Drive Supply Chain Challenges

During the COVID-19 pandemic, online shopping reached new heights, causing the 2020 holiday season to break global delivery records. Despite the convenience and safety of online shopping in a pandemic, online shopping has caused a supply chain crisis, causing some consumers to wait months for their products. In addition, the increased demand for cardboard boxes for shipping has led to higher cardboard prices, supply issues, and delays in a variety of industries. From bestsellers to appliances, any purchase may be impacted.

Cardboard prices shot up in the pandemic as demand increased

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Figure 1. For the first ten months of the pandemic in 2020, cardboard prices remained fairly level.
Image: supertechhvac.com

From March 2020 to September 2021, increased demand caused the price of cardboard containers to increase by more than 10%, the bulk of the increase occurring in 2021.

Through the first ten months of the pandemic, cardboard prices stayed stable as U.S. manufacturers faced uncertainty about economic conditions, says Scott Sager, an economist at the U.S. Bureau of Labor Statistics (BLS). But towards the end of 2020, “the economy was starting to shift, and e-commerce was becoming more prevalent,” and the price of cardboard boxes increased accordingly.

As the prices rise and supply becomes limited, many consumers wait months to print and ship items.

Amazon’s dominance over shipping

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Figure 2. Amazon surpasses FedEx in the shipping market.
Image: supertechhvac.com

No single retailer does more shipping cardboard than Amazon. The company shipped about 4.2 billion packages in 2020, according to a September 2021 report by Pitney Bowes (more than double the number of packages shipped in 2019).

For comparison, in 2020, FedEx delivered 3.3 billion packages, and UPS delivered 4.9 billion. The U.S. Postal Service is still the top shipping service in the country; but, Amazon’s quick shipping may become preferable for many consumers experiencing the USPS delays that have become more and more commonplace.

As Amazon ships out more packages, it uses up more of the nation’s supply of cardboard—taking that material away from smaller businesses. Due to the sheer amount of cardboard, recycling companies can’t collect and repurpose Amazon’s used boxes fast enough to keep up with demand.

Cardboard shortages hold up heating, AC suppliers

Cardboard shortages impact products that many consumers might take for granted: their heating and cooling systems. The heating, ventilation, and air conditioning (HVAC) industry has faced increased delays and rising prices for key equipment due in part to a shortage of cardboard packaging.

At times, equipment manufacturers have had equipment ready but have not been able to ship it to HVAC companies due to a lack of packaging. These delays then cause consumers to wait weeks or months for a new AC and/or heater.

To compensate for increased shipping prices and other shortages, many HVAC manufacturers have increased the prices of their products. Equipment became about 25% more expensive through 2021. Unfortunately, not all HVAC installation companies can afford these increased prices. Many small companies cannot order new equipment at all as suppliers prioritize their bigger customers.

Bestselling new books delayed by paper shortages

The publishing industry has also been impacted by increased cardboard demand. Both the paper used to print books and the cardboard containers used to ship books are in short supply. Due to these shortages, publishers push back release dates while bookstores wait weeks for inventory to arrive.

Demand for books has increased during the pandemic, as Americans hope to fill their extra free time with entertainment. But printing hardcovers and paperbacks has become increasingly challenging as paper mills face higher demand for packaging and shipping materials.

In response, some publishers have begun on-demand printing, where a publisher waits for customer orders and prints the exact number of copies that consumers have signed up to purchase. While this process prevents excess inventory, consumers might have to wait longer for their purchases since they are waiting for a book to be printed and shipped from scratch.

More efficient recycling and box optimization can help

As COVID-19 rages on, so too do retailers’ cardboard supply challenges. So, how can manufacturers and small businesses manage to get products out to consumers in a timely manner?

First: more efficient recycling systems could help ensure that packages from one shipment are quickly re-used for another. Currently, the United State’s recycling system includes mixed paper, plastic, and other recyclable items in the same processing routes as cardboard, making it difficult for recycling companies to isolate the packaging material.

Second, Amazon and other companies should optimize their box sizes so that products fit right into their packaging, rather than sending consumers small items in massive boxes filled with plastic air bubbles.

All companies can make their packaging more recyclable. Cardboard boxes are more sustainable than single-use plastic, but other components like sealing tape and printer ink can also be produced from recycled or recyclable material.

There is hope that industries will take lessons from the pandemic to adapt their printing processes. But for now, be sure to order your holiday and birthday gifts far in advance.

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Figure 3. Potential solutions to shortages.
Image source: supertechhvac.com

Hannah Gallagher is the Marketing Manager at SuperTech, a heating and air conditioning company. We opened in 2014 and won the Angie’s List Super Service Award in 2017 In 2019. Download her free Guide: The Home Buyer´s Guide to HVAC Inspection.

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