Saturday, July 20, 2024

Soaring e-commerce sales put pressure on cardboard supplies

The cost of cardboard has increased by 10–15% in Mexico due to low global and local production and high demand generated by an online shopping boom amid the coronavirus pandemic.

In an interview with the newspaper El Financiero, the head of the AMEE packaging association said that member companies have been forced to look for new cardboard suppliers in foreign countries because imports from the United States and local production have been insufficient to meet demand.

“The pandemic is affecting the supply of cardboard,” Hiram Cruz said.

“This is a result of the increase in e-commerce activity of up to 80%,” he said, adding that another factor is that China has stockpiled raw materials for the production of cardboard, “such as recycled cardboard.”

“That was coupled with the suspension of logistics firms’ activities due to the pandemic, which generated a shortage and an increase of 10–15% in the cost of cardboard,” Cruz said.

According to ANFEC, a national association of cardboard manufacturers, there was an unmet demand for 150,000 tonnes of cardboard last year.

“… Companies like FedEx and UPS tripled their demand. The change in the habits of the public due to coronavirus generated an additional degree of demand for short- and medium-term consumer goods that are transported in cardboard,” said ANFEC director Sergio Farfán.

The production in Mexico of three different types of cardboard — corrugated, micro-corrugated and foldable — all decreased in 2020, which Farfán attributed to the suspension of nonessential economic activities early in the pandemic.

Cardboard imports also declined last year, falling 5.6% to 395,769 tonnes, according to Economy Ministry data.

Farfán predicted that Mexican cardboard production will decline again in 2021 due to unreliable gas supply, a lack of paper availability — its cost also increased last year — and a shortage of other imported raw materials.

Cruz said the use of alternative packaging materials is not always feasible.

“What the packaging industry is about is finding the optimal material which is suitable to the packaging and security requirements of the product. There are materials with important innovations such as plastics and there are more innocuous materials such as glass, but we have to consider the benefit-to-cost ratio,” he said.

The newspaper El Economista reported Friday that e-commerce sales soared 62% in February compared to the same month last year.

Source: El Financiero (sp) 

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