Cardboard manufacturers need your box to make more

For families trapped indoors and eager for entertainment, cardboard boxes can be turned into temporary playgrounds for children or shelters for cats. However, day after day, they have been a key but often overlooked link in the national supply chain.
But due to the explosive growth of e-commerce this year, households across the country are now full of boxes. This makes the corrugated packaging industry rely on consumers to recycle products to meet their financial and environmental needs.
Industry data shows that shipments of corrugated boxes in March increased by 9% compared to the same period last year, despite a brief decline in revenue when the supply chain was frozen by the initial shock of the pandemic. But because of such widespread panic purchases in the early stages of the coronavirus pandemic, retailers had backlogs of food, cleaning supplies and toilet paper, which quickly boosted shipments again. Shipments continued to climb in the fall and peaked in October, and box makers are preparing to meet this year’s soaring demand by the end of the year with record production.
In fact, retail analysts say that e-commerce sales have compressed growth for more than two years since the pandemic began nine months ago. The corrugated paper industry is also scrambling to keep up: paper mills are operating at full speed, and some producers are restricting orders and outsourcing to smaller companies.
George said: “At some point, yes, because people are preparing for the possible impact of the pandemic, there are some goods in the pantry, but I think we have passed that point, what we see here It’s a new consumer behavior.” Staphos is a senior analyst for paper and packaging at Bank of America Securities. “Once a new model is established, it is difficult to change.”
According to a report by IBIS World, the cardboard box and container manufacturing industry has 139,000 employees in the United States, with revenues of $67.3 billion from January to October. Even if the broader economy fell into recession and the industry was hit, e-commerce sales remained stable.
The report said: “Industry operators are largely inspired by the consumer online shopping movement.” As consumers increasingly choose e-commerce instead of physical stores, demand will continue to rise.
Executive Officer Brian Smith said in an interview with Marketplace that Georgia-Pacific is one of the world’s largest pulp and paper products manufacturers, and its factories are already operating at full capacity. He said the Atlanta-based company had to source from smaller manufacturers to keep up.
“This is certainly a challenge, because we are taking extraordinary measures to ensure the safety of all our employees, which will greatly reduce the production speed,” Smith said. “So sometimes it needs to work overtime until the weekend to keep up with demand.”
According to its third-quarter earnings report, the Memphis-based International Paper Company is the largest forest products company in the United States, producing more than 2.7 million short tons of corrugated packaging, a year-on-year increase of 2%. Chairman and CEO Mark Sutton said on the October 29 conference call that “e-commerce continues to maintain strong double-digit growth, and consumers increasingly rely on e-commerce as a consumption channel.”
WestRock produces 1 out of every 5 cardboard boxes in the United States. This Atlanta-based manufacturer of corrugated packaging, paperboard and cardboard has 50,000 workers.
Box demand usually peaks in September, and then gradually decreases until the end of the year as the merchandise reaches the store. But from June to October this year, box shipments reached 34 billion square feet each month, setting an industry record. Rachel Kenyon, vice president of the Fiber Box Association, an industry tracking agency, said that as retailers and shoppers have adapted to the epidemic, demand has skyrocketed. The U.S. Postal Service’s well-documented backlog of orders has also prompted consumers to start shopping online earlier.
“According to our data dating back to 1999 (from the Fiber Box Association), this is a record,” said Staphos, an analyst at Bank of America. “It will be a lot for two consecutive months. Five months is unheard of.”
Staphos said the containerboard industry is now raising prices — November shipments rose by $50 per ton — and limiting customer orders in the tightest market since 1994. According to a recent survey of carton manufacturers released by his research team on December 13, production growth is still rising-5.1% in November and 4.5% so far in December, which does not account for holidays and last-minute orders. Of shoppers most of the time.
Most of the companies surveyed expect prices to rise again in the first half of 2021, and more demand is expected, including vaccine shipments.
The other side of the industry’s growth is the environmental impact. Cardboard is more biodegradable than plastic packaging, but its production is related to the deforestation of cardboard factories and the use of large amounts of chemicals. Industry experts say that to ensure that most of these boxes will not end up in landfills, it needs to start at the beginning of their life cycle.
According to data from the Environmental Paper Network, approximately 15 billion trees are consumed globally each year, of which 3 billion are used for paper packaging. The industry relies on recycling virgin fibers (the base of cardboard boxes) five to seven times, thus saving trees and improving the bottom line.
Kevin Hudson, WestRock’s senior vice president of forestry and recycled fiber, describes how this “circular economy” works: Fiber produced in its paper mills is sent to production facilities that make and ship cartons for customers such as Amazon and Domino. The boxes shipped to WestRock’s 18 recycling plants were then turned into fibers again, and the whole process was restarted​​.
WestRock invested $2 million in October to upgrade its recycling facility in Marietta, Georgia-Hudson said this is critical to addressing this year’s high demand.
“The continued investment in single-stream sorting technology is absolutely critical, so that the entire industry can adapt to changes in the supply of recyclable materials,” he said.
Hudson said WestRock works with private landowners to ensure that the fiber it uses comes from sustainably managed forests. He said his team is also working with non-profit organizations to expand community recycling, improve the efficiency of roadside projects, and allow municipalities to educate residents about recycling.
Hudson said: “With the development of e-commerce, residents’ ability to recycle cardboard is also constantly developing, and we can more easily and more knowledgeably capture more and more of this product.”
As packaging changes, retailers and corrugated paper manufacturers have more knowledge about consumer needs. A few years ago, Amazon orders were usually packed in a huge cardboard box with several smaller cardboard boxes wrapped in plastic bubbles. But WestRock now uses its box sizer to allow customers to adjust the package size and reduce waste.
“We have optimized the box size for the product, so we are reducing the amount of fiber required for the box. We have also reduced the amount of filling products required for the box,” Hudson said, because foam packaging and similar fillings are very Difficult to recycle.
This means that packaging is more protective, ensuring the quality of suppliers for customers, and improving efficiency: smaller packaging means that postal and delivery workers can load more packages on trucks, thereby reducing gas emissions and saving time.
Customers also play a role in efficiency. Amazon now relies on proprietary artificial intelligence to calculate the most suitable products for an order, which sometimes means using envelopes instead of boxes. As a result, Amazon said that in the past five years, it has reduced outbound packaging by 33% and reduced more than 915,000 tons of packaging materials—the equivalent of 1.6 billion shipping boxes. The company also invested $10 million in a closed-loop infrastructure fund to improve the recycling of 3 million households in the United States. (Amazon founder Jeff Bezos owns the Washington Post.)
Target spokesperson Brian Harper-Tibaldo (Brian Harper-Tibaldo) said that the company has been recycling cardboard from stores since the 1960s. In 2019, the Minneapolis-based retailer recycled more than 514,564 tons of cardboard, an increase of 4.5% from 2018 and an increase of nearly 6% from 2017, some of which were achieved through a partnership with a paper mill of. According to the company’s 2020 Corporate Responsibility Report, 51% of Target’s private label paper retail packaging comes from sustainably managed forests.
“Target is committed to using resources responsibly, eliminating waste and minimizing our footprint,” Harper-Tibaldo said in an email. “All the cardboard used by Target in its operations is bundled and brought to the local recycling supplier.”
Both Amazon and Target refused to share cardboard usage data. TJ Maxx declined to comment for this story. Representatives of Walmart and Gap did not respond to requests for comment.
Now, as more and more cartons appear at the door instead of in the store, the industry is relying on more consumers to keep up with the pace of recycling.
Heidi Bullock, president and chief executive officer of the American Forest and Paper Association, said in an email statement: “More paper is recycled from municipal solid waste streams than glass, plastic, steel, and aluminum combined.” As more and more people stay at home, this is a good reminder that the boxes at your door are designed for recycling.”
Historically, most of the waste from the United States was exported to countries in Southeast Asia and Mexico, including old corrugated boxes (cardboard boxes used by industry representatives). However, trade data shows that since China imposed restrictions on U.S. imports in 2018, revenue from exports of recyclables has fallen sharply, and some countries have followed suit. These declines were exacerbated during the Sino-US trade war last year: According to the Resource Recycling Organization, fiber exports, mainly from old cardboard boxes, fell by 3.1 million tons, to their lowest level since 2006.
This means that the industry must step up its efforts to process more of these recycled fibers domestically. Brock said that between January and October 2020, the production of the containerboard industry (of which corrugated boxes accounted for the largest) increased by 3.8% year-on-year, and recycling increased by 4.1%. At the same time, it is expected that three new recycled containerboard paper mills will be built in the next two years, and US$4.1 billion will be invested in manufacturing to continue to recycle fibers for reuse, Brock said.
Kenyon said that since the three-sided recycling symbol first appeared on the box in 1993, the reuse of cardboard has made considerable progress, when only more than half of the boxes were recycled. The recovery rate in 2019 was 92%. Nowadays, cardboard boxes placed in front of your house usually contain about 50% recycled fiber.
Correction: Paper packaging consumes 3 billion trees worldwide every year. An earlier version of the report listed an incorrect number.
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Post time: Oct-13-2021