Price Increases Set for the Packaging Industry in 2021

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As you’re likely aware, the coronavirus pandemic, in combination with recent import delays brought about by the uncertainty of Brexit, is having a huge impact on the price of containers shipped to the UK, with shipping rates increasing by up to 300% and backlogs marring French and British ports in December (source).

The surge in shipping costs and numerous issues in receiving shipped goods are compounded by a global price hike in plastic and paper, resulting in higher production costs for manufacturers and suppliers. 

The increase in material prices and continued unpredictability of Brexit are posing a number of significant challenges for the packaging industry, but Allpack is working closely with its suppliers to try and navigate the uncertainty ahead and mitigate disruption as optimally as possible. 

Concerningly, the price of transporting freighted goods from France to the UK increased to nearly four times the usual level last week, matching shipping rates for containers travelling from Asia to Europe (source).

Beyond the agreed shipping charges, carriers are at liberty to set shipping rates to reflect demand, creating an upsurge in price as a result of container shortages--a product of fluctuating import and export activity across the world.

Logistics firms and suppliers fear yet more pileups at British ports in the future and increased prices for imported goods after the roll out of proposed trade agreements, as the coronavirus pandemic continues to force the staggered restarting of economies globally.

Uncertainty surrounding Britain's trade negotiations with the EU leave numerous questions in play regarding tariffs, legislations and production costs, and an ever-increasing uptick in demand for corrugated packaging--to align with exponential growth in e-commerce markets--has resulted in surging costs for the production of paper and plastic goods. 

According to research experts, the value of the global corrugated board packaging market is slated to increase from £183.97 billion to £256.66 billion by 2026 (source), while in the UK the price of corrugated cardboard is set to continue climbing as the country attempts to carve out its post-Brexit agreements and the COVID-induced forces of supply and demand take hold.