If you are a consumer, you are seeing price increases at the pump. If you purchase anything in an industrial environment, you are feeling the squeeze on your budget. If you are a manufacturing company, you are unable to get supplies on time, let alone at the same price you paid months ago, or even just days ago! The cause is a disruption in the global supply chain. Why are prices of raw materials going up so significantly, what impact is it having on companies and their end-users, and how can you minimize your supply chain disruption?
One reason that prices are surging is that we are still not out of the immobilizing grip of the Coronavirus pandemic and its impact on the supply chain. On the first anniversary of the global virus lockdown, we are still dealing with cargo ships stuck at ports due to the shortage of dock workers who unload them, a shortage of shipping containers, and the lack of truck drivers to move the cargo to its final destination. Ports all over the world, such as the Port of Los Angeles, are playing catch up. Ships are spending days anchored off the coast waiting for their turn to be unloaded. Many purchasing agents have turned to air freight as a means to get their supplies in a timelier manner. This is bad news for the end-user as this increases costs which are then passed down so companies can try to hold on to a profitable margin.
Another factor that drove up prices in the U.S. was the extreme winter weather in February. Texas is home to the world’s largest petroleum complex. Power outages crippled the state which halted petroleum and resin production. Petroleum and resin production is just now starting to ramp up, but it could be months before production is back to 100%. This has a rippling effect on an already strained plastics market. Plastics in Asia and Europe have skyrocketed from pandemic-related shortages as well.
So how can you plan ahead, faced with such factors that dig into your margin? The truth is that manufacturing companies that have ridden out the pandemic, and weathered the February freeze, are the best chances for getting your supply chain back on track. The reasoning is that these manufacturers were more prepared for unprecedented events.
JohnPac, as an example, is always prepared to manufacturer any type of FIBC, or small woven bag, such as BOPP, right here in Crowley, LA. We also have a large industrial packaging supply. If you need any type of corrugated item, stretch film, pails, PE bags, tape, jugs, drums, or strapping, just call us. We can get you out of a bind! We have short lead times so you can prevent disruption of your supply chain.
In conclusion, the pandemic and the February freeze have caused prices on most raw materials to skyrocket due to supply shortages. This does not have to hamper your operation. You can still get packaging, such as FIBCs and small woven bags, in a short amount of time. Our American manufacturing facility, and our ability to stock industrial packaging, will get your company through these hard times.
Call us today, at 1-866-916-2247, to find out how quickly you can get the packaging you need. We are here to help.