Half Year Industry Review
09 Jul 2021
It is a little over fifteen months since the packaging world of boxes and all things corrugated was seemingly turned on its head; a bit like the rest of the world!
Demand for sustainable packaging reached an all-time high as retailers switched to online platforms, consumer buying habits changed, and businesses changed their approach to stock from ‘Just in Time’ to ‘Just in Case’. It created the perfect storm for demand and, in turn, saw a flurry of price increases for our raw material and other essential commodities and saw lead times increase from the typical few days, to several weeks.
Gareth Stell, Group Sales Director, Logson Group briefly shares his thoughts on where we’re at halfway through 2021, where we’ve been and what’s still to come.
Where we’ve been
In the first half of 2021, businesses continued to feel the impact of Brexit and combined with the pandemic, we were all in choppy waters, uncertain of quite how things were going to work. Lockdown 3.0 failed to help matters as people were unable to return to the high street, eat or drink out, or enjoy entertainment meaning they were once again spending money on goods that were largely for home delivery across a wide range of sectors.
Whilst the changes delivered significant impact for many, we’ve achieved some great things during Q1 and Q2. It’s been exciting to work on a huge number of new projects with new customers to create, design and manufacture sustainable solutions entirely from corrugated and removing the need for non-recyclable packaging materials. Supporting our existing customers has been vital to allow them to continue efficient business operations when they were facing other challenges brought about by the situation too.
The entire industry has found the challenges of raw material supply tricky to deal with but, it has shown that our teams are resilient – their knowledge of the industry, product and machinery capabilities has allowed us to find solutions where others may have not.
What’s still to come
So, as we enter the second half of another strange year, what do I think it will have in store for the industry?
Currently demand is holding steady; typical for the summer months before the peak season begins in early September through to the end of the year.
With uncertainty still very much prevalent in terms of how life will look, let alone the business world we expect that peak period to spike even more than usual and perhaps start a little earlier and last a little longer. Global supply chains are still experiencing challenges and Brexit still continues to add another layer of complications for many businesses. As a result, containers are being held at port longer than they should be and this then means that goods are not being transported with their usual levels of efficiency and timeliness.
Come the run up to the festive period it is hoped that in person shopping will be taking place without restriction or limitations however many businesses are hedging their bets and preparing for the alternative scenario too, just so that consumer demand can be met. This will see the ecommerce sector poised and ready to go whether that is through necessity, or just the shift in the way the UK now shops.
Industry wise, we’re still tipping growth to the end of 2021 to be significant. Questions that we wish we knew the answers too such as ‘will there be more raw material price increases?’ would help us in developing our strategies for the latter half of the year! Who truly knows, however what this past twelve months has thought me is to always expect the unexpected. I’ve never known a time like it in the industry, one that I have worked in for over thirty years.
However, it’s made me proud to be part of an industry that has rallied round to support supply chains like never before, and to be part of a group that has unswervingly stepped up to the plate and delivered just what’s been needed.