Supply Chain Challenges in the Paperboard Industry

Managing supply chains has always been a difficult task, but through 2020 and 2021 the COVID-19 pandemic brought disruptions that not many were prepared for. There were raw material deficits, staff shortages, container and ship shortages and port shutdowns worldwide. In the paperboard industry in particular, mill lead times that were traditionally less than a month pre pandemic, have now stretched to 4-5 months. The paperboard industry, converters and downstream packaging companies had to respond to these challenges.

A variety of industries are facing the same challenges. Demand is higher than usual and supply is tighter than usual. The plants that produce the different materials are all oversold, and it often takes months more than before to get supplies. There has also been a ripple effect across the supply chain due to ship/container shortages and lockdowns in major ports caused by COVID-19.

A delay because of a shutdown in a port can reach every part of a supply chain. If a major port has a two week shutdown, it means that the shipping container won’t be available to bring materials to a different part of the world. That container will then be late to pick up the next thing it needs to transport, and it continues like that with delay after delay.

In addition to these COVID-19 issues that hit many industries, the paperboard industry in particular has been hit with the double whammy of (i) significantly higher ecommerce sales which has driven demand for packaging for all the parcels that are now being delivered to your front door, and (ii) the increasing trend away from non-recyclable plastics towards environmentally friendly paper based packaging products. This has created unprecedented demand for paper mills who are struggling to get the raw materials (and at a reasonable cost) and produce enough product to meet demand.

It is important to be able to manage these delays when they happen. Hammond Paper have a variety of strategies in place that will help manage these delays. Pre-existing relationships with suppliers and clients means that everybody orders well in advance. This way, there is a reduced chance of missing delivery dates and having other delays. Another strategy is having a broad inventory. A client might want a very specific type of chipboard that will take a while, but with broad inventory you can point them in the direction of a very similar product that is easily available. A new product called low density chipboard, is readily available also. Low density chipboard is lower density than traditional chipboard and often more readily available and therefore reduces wait times for customers.

Hammond Paper

Operating out of Vaughan, Ontario, Hammond Paper Company has been a reliable source for environmentally friendly paperboard and protective packaging solutions in Canada for over 25 years. We believe that everyone should do what they can to protecting the environment and our fragile ecosystem.

 

Whether you need custom cardboard, other paperboard products or packaging, or just off-the-shelf protective packaging supplies like slip sheets, dividers, layer pads, corner posts or even pallet wrap, Hammond Paper can help in an environmentally sustainable way.

Contact us anytime at (905) 761-6867 or info@hammondpaper.com to talk about how we can help you, and the planet.