How the energy crisis is impacting the packaging industry

The recent energy crisis & supply issues have been well documented. Gas, electricity and even carbon dioxide have been in the spotlight recently due to price & supply concerns. But how do all these impact on your packaging supplies?

Our latest blog looks at the some of the problems that are currently impacting packaging and the mitigations Hub Packaging are putting in place to ensure we can service your packaging requirements as we approach the busy season & end of 2021.

The sourcing of raw materials to produce packaging products is always a delicate process. Any issue at all – transport of said materials, labour requirements or shipping can all have a knock-on effect in the supply chain, ultimately resulting in a delay to the customer. One example of this is the recent supply pressure on Acrylic adhesive tape. Butyl Acrylate is a derivative from aviation fuel & a key ingredient used to make adhesive tapes. The price of this material has risen from $800MT to $2,800MT – an increase of 350%. This huge increase has in part been caused by the lack of international travel in the aviation industry because of the COVID-19 pandemic. The sudden increased has resulted in a short supply, whilst demand continues to remain high.

Concerns for manufacturers

Electricity & gas price increases are causing huge concerns for packaging manufacturers. Paper based products e.g., cardboard boxes have consistently witnessed price increases in recent months. Some EU & UK Paper mills have recently announced they will undergo downtime due to the increase in energy costs. Energy crisis issues in China are also impacting on packaging supply. Some Chinese production facilities are now operating at reduced capacity due to the significant increase in energy costs.  With China producing almost 50% of every commoditised product that the world uses, this is sure to have knock-on effects. India is also experiencing problems. Around 80% of India’s industry runs on coal, however there has been a steep increase in the price – almost 300%.

Ongoing pandemic issues

The above issues are compounded by the ongoing problems being caused by the pandemic. The shortages of containers, due to being stockpiled globally full of uncertified PPE products and general stockpiling of empty containers by China are impacting global supply chains. This has caused congestions at U.K ports since the end of 2020 and throughout 2021, creating vastly longer lead times and in most cases additional costs. Indeed, shipping expenses have never been as high. In some cases, shipping 40ft container costs have risen from approximately peak charges of $2,100 to £21,000.

How Hub can help you secure your packaging supplies & mititage the energy crisis

Despite the issues stated above, it’s not all doom and gloom. At Hub Packaging we have been working frantically behind the scenes to ensure our customers have the best options possible when it comes to packaging supplies.

We are delighted to say that despite the issues being faced globally, we can continue to provide our wide range of packaging solutions. Our ongoing relationships with some of the biggest global packaging manufacturers across various product ranges ensure we have a continuity of supply as we approach the end of 2021.

In addition, our steady supply allows us to offer much shorter lead times, enabling you to get your products to customers quickly.

Get in touch with us today to speak with one of our packaging experts who can help you to source and supply your packaging needs in a timely and cost-effective manner.

Alternatively, shop online using our online store which has a wide range of industrial packaging options to choose from.

Web: www.hubpackaging.com/shop/

Email: sales@hub-packaging.com

Phone: +44 (0) 28 4175 4977

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