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- Cardboard boxes and packaging materials are in short supply because of the supply chain crisis.
- Constraints to containerboard and corrugated cardboard have been a growing issue since early this year.
- In February, the price of cardboard reached a record high, according to the Producer Price Index and the US Bureau of Labor Statistics.
Retailers in the throes of navigating the supply chain crisis will soon confront yet another hurdle – an even shorter supply of cardboard boxes that was already growing scarce.
Inventory of packaging materials has grown increasingly limited in recent weeks due to supply-chain bottlenecks prompting shortages on everything including household goods, electronics, and food. The strains are a result of a wide array of factors, including increased demand for online shopping, the national labor shortage, congested shipping ports, and increased costs for freight and raw materials.
Low containerboard and corrugated cardboard inventory has been a mounting issue since early this year, thanks to meteoric growth in e-commerce during the pandemic.
As concern over supply grew, retailers like Amazon began stockpiling cardboard in January to meet demand, leaving smaller businesses empty-handed.By February, the price of cardboard reached a record high, according to the Producer Price Index and the US Bureau of Labor Statistics.
International Paper, one of the largest providers of containerboard and corrugated cardboard in the US, told investors in July that supply of cardboard boxes was "severely low," and warned of continued supply chain bottlenecks leading into the rest of the year.
"As COVID restrictions began to loosen, the economy started to pick up steam," Thomas Ryan, director of corporate communications at International Paper, told Insider in May regarding the growing cardboard shortage. "Then, the winter storms hit, and inputs began to get tight - for us, fiber, recovered fiber, petroleum derivatives such as chemicals for adhesives. Then, add a tight labor market to the mix."
Fang Cheng - CEO of Linc, a consumer experience automation company - told Insider that while the holiday season is expected to be a "strong year for e-commerce," lack of cardboard will prove especially challenging for retailers and customer service providers.
"Retailers are expecting additional stress when it comes to delivering solid customer service," he wrote in an email to Insider. "Supply chain challenges faced by many retail verticals are adding to the stress. It is widely anticipated that there will be record levels of out of stock and slow fulfillment challenges, such as the potential cardboard shortage, due to these supply chain issues."
Cheng wrote that ultimately retailers may need to get creative when it comes to shipping and to prepare their customer service teams accordingly in advance of an expected influx of queries about delays.
"Brands often don't have the means to resolve this fundamental issue in time for the holiday season, therefore they must be prepared for an increased amount of customer service inquiries around product inventory check, back order status, fulfillment delays, and increased second-degree inquiries that are caused by out of stock and fulfillment delay situations," he wrote.
As for this holiday season, Joe Stefani, co-founder and president of the Desert Cactus ,told NBC News that the e-commerce company is experiencing difficulty obtaining the correct sizes 0f boxes, prompting employees to send out precariously packaged shipments for lack of other options.
"The packaging is too expensive right now, or we can't get hold of it," Stefani said.