The current pandemic has been disrupting supply chains, causing delays with both manufacturing and logistics. Corrugated packaging supplies have been no different for many companies, driven by an increase in e-commerce sales. The growth of e-commerce over four months in 2020 represented 16.1 percent of total US retail spending compared to 10.7 percent in 2019, according to a transcription of Innovation Stage during PACXX Expo Connects in November. Online holiday sales are projected to increase by 25% to 30% year-over-year this season.
This surge in e-commerce and the increased need for corrugated boxes is impacting the ability to get boxes promptly for many companies. Large integrated corrugators face capacity limitations, and as a result, lead times are expanding, leaving companies scrambling to get the boxes required to ship products to their customer. One integrator stated in its fourth-quarter 2020 earnings call that their “corrugated box backlogs are at record levels.”
We can speculate that this one integrator isn’t alone with backlogs. It is expected that key accounts would be their priority in order fulfillment, leaving smaller accounts in the lurch waiting for weeks to get shipments. To add to this, many companies have chosen to consolidate their suppliers and move to a single-source vendor to get volume discounts and price breaks. If their supplier has a large backlog, this can create a snowball effect through the supply chain as those companies risk shipment delays to their customers.
Many companies are finding that receiving boxes at a lower unit price from integrators is actually increasing their total costs. Increased costs caused by the often long and unpredictable delays come in the form of packaging line inefficiencies, production downtime, customer turnover, and brand deterioration. It is important to look at the company as a whole (service, delivery, flexibility) to ensure your packaging won’t cost you more in the end.
If you are one of the companies facing these delays, there is a solution. Tyoga Container is an independent corrugator that has the capacity to meet your needs, large or small. Our facilities are optimized for fast SKU changes and short lead times. Being right-sized allows us to be nimble and accessible while meeting your needs. You can have peace of mind knowing you won’t get pushed aside for other customers.
If you are not ready to completely move to a new supplier, you can mitigate your supply chain risk by having Tyoga as a secondary supplier. When your primary corrugated supplier faces delays, we can pick up the slack and meet your delivery times. However, we are confident once you experience the Tyoga difference, you will see that our ability to meet your needs quickly will be impactful for your business.
For over 50 years, we have provided corrugated, bulk bag, packaging, transit protection, and pallet and crate solutions to various companies. Whether you want packages faster or want them more colorful, lighter, stronger, cost-effective, or easier to assemble, we can meet your most challenging needs as you Plan, Pack, Protect, and Ship your goods. Contact us today to get started.