Packaging industry insights April 21…

The Perfect Storm

In the last week, we’ve had amazing warm sunshine followed by snow showers and then back to bright sunshine but with cold winds. A very bizarre combination of weather, but nothing could quite compare to the most inexplicable storm of economic events which have hit many parts of the globe over the last year.

Brexit and Covid-19

It all started with Brexit preparations and the practice runs, followed by the Covid-19 virus which created a worldwide pandemic and then we had the real Brexit.  These two major events created what could be described as the ‘perfect storm’ causing chaos and destruction in its path.

A perfect storm is a particularly violent storm arising from a rare combination of adverse factors which drastically aggravate an event.  The term is used by analogy to an unusually severe storm that results from a rare combination of meteorological phenomena.

In the packaging world, the aftermath of this rare but perfect storm caused major disruption in the supply chain of raw materials like steel, resins and polymers.  There were huge manufacturing delays due to staff shortages as a result of sickness or isolation. The transportation networks were also hit causing delays across roads, air and particularly sea freight. 

Prices Rise Steeply

These factors combined meant packaging lead times which were typically ten days then became six weeks and prices started climbing by as much as 25%.  High demand for hand sanitising and cleaning products meant there was less packaging to go around, which became a ‘double whammy’ when the manufacturers were struggling to secure steel and polymers supplies.  Sea freight was not being unloaded due to staff shortages at ports, which lead to shipping container shortages. Shipping companies looked to introduce more shipping containers into the loop, however, due to steel shortages additional containers could not be manufactured.

Then as we began to see light at the end of the pandemic and Brexit, we had the Suez Canal traffic jam. The stranded Ever Given was holding up seven billion pounds of goods each day including perishable items and livestock – 12% of the world’s trade passes through this canal. Although the shipping officials said it would take three days for the hundreds of waiting ships to clear, experts say it could take several weeks if not months to get back to normal.  So yet again more carnage in the supply chains.

What Next….?

Who knows what will be thrown at us next?! Personally, I’m hoping for that calm after the storm and maybe a few rays of sunshine up ahead…

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