Costs For Paper and Packaging Rising

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Los Angeles, CA—Even as more businesses move towards online operations, paper is still a valuable commodity, particularly in the packaging and shipping sectors.In fact, there is so much demand for shipping materials and services that prices for wood pulp and paper products have risen substantially, and only stand to grow higher. 2011 actually had the highest prices for wood pulp in over 30 years, and this is only expected to grow with rising disposable income and interest in e-commerce. Research company IBISworld has compiled market data and anticipates that the three markets that stand to be most affected by these trends are corrugated boxes, which are expected to increase prices by 3% by 2017, molded fiber packaging, (4.2%), and packaging services (2.5%). However, they also believe that there are steps buyers can take to lower their costs.

Corrugated boxes have a large amount of uses, and are primarily becoming more expensive due to rising paper costs. Part of the problem this poses for businesses is a lack of viable substitutes, with fiber boxes being less expensive but less durable, and plastic boxes being more expensive. To combat this, IBISworld recommends shopping around for the lowest price, as due to the relative ease of manufacturing and distributing corrugated boxes, there are plenty of vendors to choose from. In the case of molded fiber packaging, most commonly seen in egg cartons and other food packaging, there are some viable substitutes if supplier prices become too high, like as expanded polystyrene packaging. This carries a slightly higher price, but also greater durability and aesthetic appeal. With packaging services, the high amount of competition between suppliers can be used as leverage to get lower prices. In addition, large orders and long-term contracts are good ways to get added value from these suppliers.

Published in WholeFoods Magazine, November 2014(online 9/30/14)