Why are packaging prices going up and delivery times longer?

Plastic prices have recently reached records. The shutdown of subsequent economies at the beginning of the pandemic resulted in a decline in the prices of base raw materials and their derivatives. In turn, from autumn prices started to go up, and in just a few weeks they were close to the highest in history.

There are many reasons for this state of affairs:

  • increased transport costs,
  • broken supply chains,
  • countries closing down various sectors of the economy.

Plastics production

One of the reasons for the price increase is related to the reduced demand for fuels (mainly aviation), which caused many refineries to reduce the scale of production. This resulted in less production of substances from which plastics are made. At the same time, the demand for plastic has not decreased and has been growing steadily since autumn 2020.

The situation is so dramatic that European Plastics Converters (EuPC), an organization associating plastics converters, sent a letter to Ursula von der Leyen, head of the European Commission, and Thierry Breton, Commissioner for the Internal Market, describing the great problems with access to plastic and longer and longer delays in deliveries.

90% of plastic packaging producers have supply problems. This applies to both PET, PE and PP packaging manufacturers. Manufacturers who use ABP, PVC and PS also experience problems.

The price of the packaging is up to 75% the price of the material, so any change is felt almost immediately.

The Packaging Center team tries to keep the prices of the products we offer unchanged. Unfortunately, this is not always possible and price increases have also become visible in our country.

Increase in transport prices – causes

Instruments

The disorganization of logistics chains resulted in a sharp increase in transport costs and significantly extended waiting times. First of all, there is a noticeable shortage of containers that leave China but cannot return due to the pandemic.

Covid - 19

In recent weeks, there has been an increase in COVID-19 cases in China. First, the deterioration occurred in the south

country, then in the important transport province of Jiangsu, and this week a new outbreak was detected in the port of Ningbo. In China, each such case is taken very seriously, most often closing entire cities/terminals. This primarily paralyzes the work of seaports.

Weather

July this year was a time when huge floods occurred in both Europe and China. Unfortunately, they had a significant impact on the operation of railway terminals on both continents, making it difficult to efficiently rotate equipment between Asia and Europe. At the same time, in China itself, many trains did not leave according to schedule and/or had to take circuitous routes.

In this difficult situation, we try to negotiate the most favorable prices with producers and offer our customers the best conditions on the market, but price increases are inevitable. We are also working on a new system that will allow us to minimize interruptions in packaging deliveries so that you can have constant access to them.

! Due to the situation, we encourage you to submit your demand for specific products several months in advance !

In the graphic below you can see how clearly the prices of transport from China have increased.