2021 has left the pressure sensitive label industry in utter chaos. Soaring freight rates, cargo container shortages, and port congestion have driven up shipping costs. Lead times have extended out so far, they are unknown. A rising need for pulp and paper has far exceeded supply and demand, escalating raw material costs. Packaging supplies like sealing tape, stretch film, and ribbon are seeing price hikes to the moon.
This is all currently happening.

So how did we get here?Areas like freight have been some of the hardest hit in the label supply chain. Over the past year, ocean cargo prices have skyrocketed up to four times their previous amount, with 40-foot containers seeing price hikes double their normal rate.

Along with a global shortage that has many containers stranded in ports and rail yards in less popular route areas, the situation is being further exacerbated by unprecedented wait times for anchorage at many ports. Labor constraints, like a rise in positive COVID-19 cases, have diminished the number of dockworkers, truckers, longshoremen, and more, extending the time it takes for vessels to be unloaded and even causing ocean carrier operators to cancel voyages.

Further disruptions have been caused by rising pulp and paper prices. These increases are driving up raw material costs for direct thermal and thermal transfer base products, as well as release liners, label laminates, and acrylics. Delays in mill maintenance and shutdowns in North and South America have only worsened the restraints of the pulp supply chain, creating huge shortages at a time where demand is already increasingly high.

To continue learning more and get the full details on this topic, click to read the 2021 Supply Chain Chaos – Pulp, Packaging, and Freight…Oh My! article on the Smith Corona website.