Food, electronics, cosmetics, medical devices, OEM parts. You name the product, and it’s likely that the industry it applies to has experienced a rise in the cost of packaging it in recent months.
There’s no single variable to blame for these price increases, but rather a combination of factors at play. Some of the biggest culprits are material shortages, increased labor wages and a rise in shipping expenses.
A Shortage of Packaging Materials
The supply of raw materials available is not what it used to be. From plastics to metals, the sudden growth in demand amid the economic resurgence has created a ripple effect where packaging materials take significantly longer to obtain or are simply unavailable from suppliers. In light of this limited availability, the price of raw materials to produce product packaging has increased.
A Rise in Labor Wages
While worker wages were already on the rise before the pandemic, the need to do so heightened as companies strive to keep workers on the job. With workers receiving more compensation for their labor, many packaging suppliers have started to charge more for their products to protect their margins.
An Increase in Shipping Costs
Like other supply chain disruptions, the roots of heightened shipping costs can also be attributed to the COVID-19 pandemic. The rise in product consumption after a period of stalled production has created a scenario where containers are scarce, and oftentimes so is the labor that’s needed to unload this cargo upon arrival. Alongside these variables that raise packaging costs, rising fuel prices contribute to a higher product cost per unit.
What Can Be Done About Rising Packaging Costs
Considering the changing market dynamics at play, many companies can be left with uncertainties around how to navigate the rising cost of packaging their products without overextending their packaging budget. At Cases By Source, one of the ways we deliver value to our customers is by identifying ways to counteract these unpredictable costs.
By analyzing your current product packaging solutions from the ground up, we can see where there are opportunities to reduce costs within the packaging production lifecycle. Is packaging tailored to your product’s exact specifications? Are the most cost-effective manufacturing techniques used? We’ll answer these and other questions to ensure that your end result is optimized both from a quality and efficiency standpoint.
Alongside this evaluation, we’ll also leverage our rich inventory of industry connections to help you source the most cost-effective materials, work around high offshore tariffs and locate cargo trucks and ships to keep your products moving to their destinations.
Ready to connect with our team? Request a free consultation!