Just as with computer chips, packaging materials made out of plastic, paper and cardboard are all in short supply. When sellers can get these critical goods, they find that costs have skyrocketed.
While holiday shoppers are already panicking about not being able to get their hands on hot gifts, retailers have bigger worries — how to wrap those items and get them to their destinations intact.
Joe Stefani, a co-founder and the president of Desert Cactus, said, “We’re seeing it right now, and it’s something I would say has progressively gotten worse over the past several months.” Desert Cactus, an e-commerce company founded in 2012, sells licensed collectibles and accessories, such as keychains, flags and stickers.
“The types of materials that would be key and the raw materials that go into them — polyethylenes, polyurethanes — we’ve seen the cost of those raw materials surging to the tune of 50 percent year over year,” said Vipul Shah, the chief product officer of Next Trucking, a logistics technology startup. “The story for packaging is the same.”
“With boxes, we’ll have an issue getting certain sizes,” Stefani said. He has resorted to squeezing some items into smaller boxes, although he worries that the shipments could be damaged during shipping as a result. “The packaging is too expensive right now, or we can’t get hold of it,” he said. “We’ve seen companies trade down — in particular it’s been the mid-market and lower market who don’t have the purchasing power to forward-buy and have to make the most tradeoffs,” he said.
Geale said the shift is starting to happen at the business-to-business level. “We’re seeing plastic pallets in place of wood and cardboard, particularly in food and industrial parts,” he said. He acknowledged that plastic gets a bad rap, but he said extending the life cycle helps mitigate the environmental impact. “We have a bit of a downer on plastic, but if used correctly and reused in a circular model ... it can be a really strong solution,” he said.
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