Industry Partners

Boxes Remain the Backbone of the American Supply Chain

Photograph courtesy of Fibre Box Association

Over the past few years, the growth of e-commerce has raised the visibility of packaging, especially of corrugated cardboard boxes arriving on consumer doorsteps with goodies or necessities inside.

COVID-19 elevated Americans’ dependence on e-commerce, and on reliable supply chains to deliver more products than ever direct to consumers. In addition, the critical nature of healthcare and other essential industries’ supply chains has suddenly become clear to all:  Without functional, efficient supply chains, nothing moves. That includes groceries and consumer products, medical and pharmaceutical products, tissue and hygiene products and so many other essentials whose availability consumers took for granted until they couldn’t.

Until now, the e-commerce trend shifted a lot of corrugated boxes from one supply chain to another: more, smaller boxes shipping individual units or small quantities to more destinations (households, small businesses, etc.) replaced some of the larger, bulk containers used to ship the same products to retailers. Actual corrugated consumption was increasing in line with GDP, as it always has, and the shift to e-commerce did not create major production increases.

When the coronavirus crisis first hit America and shutdowns swept the country, the Fibre Box Association advocated for corrugated box manufacturers to be classified as essential. Think about it—if box production stopped, there would be no way to transport even the most critical supplies to where they are needed. The government agreed, and box plants continued operations through the COVID lockdowns and stay-at-home orders, helping keep critical supply chains running.

In terms of the economy and domestic employment, to put it in perspective, the U.S. corrugated packaging industry is a $35.2 billion manufacturing sector with 1,183 box plants operating in nearly 1,000 cities and towns across America. It provides employment and benefits to more than 100,000 workers. And in terms of supply chain necessity, more than 95% of all goods consumed in North America are packaged and transported in corrugated packaging and close to 40% of all corrugated packaging produced annually is used to package food and beverages. Disruption in the availability of these goods would cause significant hardships to consumers across the country who depend on steady and stable supplies.

Box manufacturers stepped up to the challenge and increased production of corrugated cardboard boxes during the crisis. March 2020 corrugated shipments increased by 9% above prior years’ March shipments, boosted by both an additional shipping day and overstocking of household paper, cleaning supplies and food. The March average-week shipment rate rose by 4.0% over the prior year and provides a more accurate picture of the impact of coronavirus pre-buying in March. First quarter box shipments were 4.3% higher than Q1 2019, driven mostly by stay-at-home stock buying in March.

As the country adjusts and modifies retail and other businesses to accommodate the “new normal,” CPGs and other product manufacturers are facing unprecedented challenges in getting their goods to market. With more than a hundred years of successful partnership with grocery and other suppliers and retailers, and a shared commitment to providing sustainable, recyclable packaging, the corrugated industry will continue producing the boxes that are needed to facilitate recovery in the months and years ahead.

This post is sponsored by Fibre Box Association

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