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Price Increases Explained

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Rising Costs Explained

We find ourselves in an unprecedented economic (and social) situation, we as an industry like many others are currently facing a period of high price inflation. It is helpful to understand just what is causing the current prices of paper and corrugate products to rise so dramatically and why.

 

Prices are being driven up by the socio-political climate, raw material costs and rising energy bills. In recent weeks our industry has also been faced with a prolonged strike in Europe’s largest paper mill. Below we outline the detail surrounding the rising costs:

 

Material Increases – The cost of raw materials used in the manufacture of corrugated cardboard is at an all-time high. There are many contributing factors to the rise in materials cost which include regional and national lockdowns, the requirement for social distancing and increase staff absences due to Coronavirus meaning there is simply less paper available, which is driving up costs.

 

Paper Mill Strike - UPM one of the largest paper miils announced an industrial strike from the beginning of 2022 in all of its Finnish paper mills – to date these mills are still on strike. This has created a huge shortage in availability in the market pushing the prices of paper up further.

 

Supply & Demand – Increased demand for corrugated packaging driven by a surge in ecommerce caused by the pandemic.

 

Labour – Perhaps one of the more overlooked reasons is labour. April 2021 saw further increases in the national living wage and national minimum wage, adding to businesses costs throughout the packaging supply chain. Since the pandemic there has also been fewer EU nationals looking for work, meaning that many manufacturers are facing a competition for suitably trained and skilled staff.

 

Socio-political Climate – With trading restrictions currently in place with Russia, many commodities such as oil and gas and wood pulp for paper have been impacted this is pushing the cost of fuel for manufacturing and transport to un-precedented levels. These issues have resulted in paper mills levying an energy surcharge on every tonne of paper they supply, sometimes as much as £400 per tonne.

Fuel Prices Graph

Our advice to you:

  • We encourage you to stock up now to save on rising costs
  • Be mindful before agreeing to any fixed term priced contracts with your customers
  • Talk to us, we may be able to offer you an alternative range to suit your needs better
  • If you are looking to change to custom packaging, talk to us sooner to avoid disappointment

 

 

We aim to maintain availability and best prices of products and service at the highest levels as our number one priority, through careful planning we have been able to manage this so that we currently have strong levels of stock available.

 

If you are in need of any support or advice the Blake team are contactable throughout day and we are contactable via phone 01935 477555 and email, sales@blake-envelopes.com, Please feel free to reach out.

 

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