Does the energy crisis impact the packaging industry?

If the global pandemic has forced businesses around the world to discover new ways to survive amid widespread lockdowns and government restrictions, the energy crisis combined with the global conflict in Ukraine seems to be creating new needs. Once again, companies’ boundaries and resilience are challenged in the most violent way, with the packaging industry also been affected.

The packaging industry is a sector that has been suffering a lot for the last two years, with delays and postponements in the shipment of the necessary packaging materials, due to government restrictions and to e-commerce’s flourishing that has brought to the fore the need for high quality and of exceptionally durable packaging, and in quite large quantities.

So, here we are, one month before Easter and just a few months before the start of summer sales, and businesspeople are expressing their concern about orders for packaging which have been more delayed than ever, with delivery times at more than six months.

So how does the energy crisis impact the packaging industry?

Confirming the worst-case scenarios, the global energy crisis has affected entire manufacturing industries, especially in China, which faces one of the most significant energy challenges in its history.

The carbon shortage that led to its price spike, the increasing energy demand and the new policies aiming at reducing carbon emissions have led entire industries to reduce their operations or, in the worst case, to completely stop production. Businesses in China are being asked to cut back on electricity, especially during peak hours, resulting in a dramatic drop in production.

We cannot exclude from the equation the significant increase in the price of raw materials that had preceded as well as the constantly increasing shipping costs.

The Trade and Industrial Policy Director of CEPI (Confederation of European Paper Industries), Bernard Lombard, in a recent interview stated that the cost of materials used in paper manufacture has increased by 30% compared to last year (source: Packaging Europe), while in September-October the production of packaging materials decreased by almost 15%, with this percentage constantly changing (source: Rabobank).

At the same time, a significant increase in the price of raw materials has been caused by the war in Ukraine, which on the one hand led to higher energy costs and on the other hand has led to the suspension of exports from Russia to the rest of Europe. In a press release, Tarsus Group, organizer of LabelExpo Europe, announced that the fair has been postponed to September 2023 as a result of the escalating supply chain issues affecting the industry as well as of the situation in Ukraine. "Shortages of materials caused by the pandemic have been escalated in the last few months, with long lead times disrupting supply chains across Europe”, the Tarsus Group stated in a press release.

How does the energy crisis affect Packitup?

At Packitup we have invested in securing the raw materials that will allow us to continue to serve our customers, with the best possible specifications and in viable lead time.

More specifically, we deliver our customers' orders within 10 days and without the quantity of each order being prohibitive, even for smaller companies with fewer packaging needs. At Packitup we take orders from 100 pieces while we offer customized solutions for all your needs, with professionalism and respect for our customers.

For more information, do not hesitate to contact us to find together the solution that will make a difference.