by Freedonia Industry Studies
December 3, 2020
Holiday shopping is in full force and concerns about exposure to COVID-19 are driving more people than ever to do their shopping online. For online retailers, that’s good news. However, all that merchandise needs to be packaged before it is sent to customers, and that means more shipping boxes as well as other protective packaging. And boxes increasingly are in tight supply.
According to Brian Smith, an executive at Georgia-Pacific, in an interview with public radio program Market Place, “It’s certainly been a challenge, because we’re taking extraordinary steps to keep all of our employees safe, which can slow production down considerably.” The company’s paper mills are running at full capacity and it has started to buy paper from other producers to keep up with orders.
WestRock, another producer of corrugated boxes, reported in its quarterly earnings report that the company is “selling every ton that we can produce, and we ended the quarter in tight inventories.” And this was before the holiday shopping season began.
Unlike toilet paper, a product also produced by Georgia-Pacific, there are not shortages of boxes in the US yet. However, producers report sales in some cases are up as much as 40% in 2020 compared to prior years. The positive side benefit of this is that interest in paper recycling has rebounded both with consumers and manufacturers, as adequate recycled corrugated supplies are critical to producing more boxes. According to Kevin Hudson, of WestRock, in an interview with the Wall Street Journal, “You’re definitely seeing more old corrugated cardboard from residential programs since COVID.”
For more information and a discussion of market opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research related to the packaging industry, including Global Corrugated Boxes, Protective Packaging, and Global E-Commerce Packaging. Freedonia Custom Research is also available for questions requiring tailored market intelligence.