It’s a fort, rocket ship, robot costume…cardboard boxes are where childhood imaginations live! When that doorbell rings children are just as eager to get their hands on the packaging as parents are to retrieve the contents within. So, of all the things that have run into short supply in 2020 and now the new year, few expected that cardboard boxes and corrugated materials would be on the list with toilet paper, cleaning chemicals, and survival food kits. However, because cardboard has been the unsung hero of the shipping world for decades, it too has become a critical resource in the booming online ordering world augmented by everyone staying at home and growing remote service delivery exponentially.
The cardboard shipping box has long been the fundamental means by which to move goods through standard couriers, and its demand was already climbing years before as Internet broadband and e-commerce grew significantly in the 2000s. The corrugated packaging industry realized early on it had nowhere near the supply needed to keep up with production demands, and the market quickly pivoted to heavy recycling of corrugated box material as well. However, 2020 pushed the same market into the stratosphere.
Just in March 2020, corrugated box demand jumped 9 percent from where it was a year before. As soon as the lockdowns kicked in socially and worldwide, shipping of goods started to spike, and those products had to be packaged somehow to move through couriers. Much of that demand was driven by the initial consumer overstocking and panic-buying of cleaning materials as well as storable food products, and soon after consumer electronics began to spike as well due to people working and schooling at home in large numbers. The result has been a record production rate for box makers and manufacturers nationwide, trying to keep up with demand and still not anywhere close to meeting it. For comparison sake, the surge was the equivalent of two years’ normal growth in the corrugated box industry compacted in a few months’ time.
Across the corrugated packaging industry, every key player has been running at full steam for months, from recyclers to paper mills to box fabricators to distributors. And where there is short supply, material pricing has started to rise as well. From January to October, the industry sold over $67 billion in corrugated packaging and still continues to be under pressure for more. Again, e-commerce has been the primary driver.
The industry has been a massive job-builder as well due to the ongoing orders and inventory needs. Some 50,000 people in the U.S. alone are employed by the corrugated packaging industry, and the number is even higher internationally. How that is sustained will depend on how many of the changes due to e-commerce become permanent now that people have lived for a while with remote work, learning, and the differences that electronic supply provides.
Going forward, efficient recycling of old corrugated packaging has become a priority. It’s one thing to tell society to recycle boxes, but it’s quite another to recycle in a manner that the material comes in with an organized fashion where it can be recycled quickly and effectively. This has always been the challenge with any kind of recycling, and it has been exacerbated by the high demand for shipping boxes in cardboard management. However, the supply side is improving; more people are finding it easier to recycle corrugated material, which in turn is increasing supply for box makers and re-utilizers to meet demand. Cities have been huge partners in this flow, pushing consumer recycling heavy at each household level and consolidating the mass systemically so it can be useful for manufacturers.