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The challenges the packaging industry is facing

The packaging industry has been experiencing a number of negative impacts from a range of
factors including Brexit and the pandemic over the last 12 months. In this article we explore the causes, the effects and how Medica has mitigated throughout these turbulent times. 

The fundamental causes

Brexit

More paperwork and processes are required for working with businesses in the Eu. These changes have caused a huge amount of waste for those who have stocks of EU compliant packaging and, also many companies have stockpiled material towards the end of 2020 due to the uncertainty about a deal. The unified territory for packaging materials and products will be divided which will mean significant challenges for brands and their packaging supply chains.

The Office for National Statistics reported that after the Brexit transition period ended, UK goods exports to the EU plummeted 40.7% and imports dropped 28.8%. These falls in imports and exports are the largest monthly declines since comparable records began in 1997 and contributing to significant delays in lead times. 

Pandemic

Both Brexit and coronavirus resulted in increased demand for certain products which led to shortages in the packaging industry. UK online sales grew 74% year-on-year in January 2021, this being the largest rate of growth since the start of the first lockdown in March 2020. The high increase in ecommerce during the pandemic meant that many businesses had to react quickly and change their e-commerce strategy to meet the increase in demand for home deliveries. 

Shift in consumer behaviour

Sustainability is becoming increasingly important to businesses with more awareness for our environment being raised. Companies are acting upon this with many having clear strategies in place to switch from plastic to paper-based materials, which is creating even more pressure on an already struggling corrugate market. 

The effect of corrugated cardboard 

Due to the massive increase in home deliveries the demand for corrugated cardboard has surpassed the capacity of papermills. This has caused substantial delays as well as challenging market conditions. It is expected to continue for the remainder of the year.

When supply is low and demand is high, it inevitably leads to price increases. There has been a universal rise in paper/board cost. 
 

How is Medica Packaging handling these challenging times?

Throughout these difficult times it is Medica’s priority to maintain suppliers to keep customers operational and customer service levels. Strong relationships, transparency and excellent communication are key throughout these challenging times.

For over 30 years’, Medica Packaging has built strong relationships with suppliers. This loyalty is now pivotal and ensures Medica has a secure supply chain.

Through transparency and open communication, we ensure to work with our customers to help sustain their operations. Whether that be using a different type of board for your packaging or simply by forecasting stock levels to get the orders in earlier than usual.

We continue to do our utmost to mitigate these input cost increases whilst, doing our best to ensure uninterrupted supply. Medica will continue to make your packaging operations as productive and stress-free as possible. 

If you have any questions or concerns regarding the current market challenging please feel free to get in touch. T: 01270 253777, Email: info@medicapackaging.com. 

 

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