How to reduce and control e-commerce rising packaging costs in 2022

The dependency on single-use packaging is becoming a struggle. Businesses have to face both unsteady material availability and rising prices.

There are many reasons to switch to reusable packaging, but operational resiliency quickly made its way to the top of the list.

In addition to being much better for the planet, reusable packaging is on its way to becoming a massive competitive advantage by allowing e-commerce to future-proof its operations.

The nightmare that is sourcing single-use packaging

At their best, global supply chains lower costs for businesses. But the past years highlighted profound fragilities in these networks, with disruption in one part of the chain having a ripple-down effect upstream and downstream.

Who doesn’t remember how the Evergreen entertained the Internet for weeks?

When it comes to the shortage of packaging and its rising costs, it results in retailers battling to be able to pack their goods.

Understandable when for many businesses, not being able to source packaging simply means they don’t have a business.

“Someone like Amazon is going to be at the front of the line to get their share of capacity, whereas these smaller businesses are at the back of the line. They don’t have the ability to absorb these costs as easily ... whereas smaller- to mid-sized businesses are going to be stuck or have to pay exorbitant prices.” said one e-commerce owner

Cardboard prices were already through the roof in 2021, with an increase of five to six times in value and the trend is not improving in 2022.

According to Bloomberg, making and shipping packing materials to customers is expected to remain tough in 2022.

Some anticipate overall packaging costs to increase about 30% in 2022, and for paper and cardboard, the price increase could be of as much as 50% in 2022, driven by strong demand (from the e-commerce and food industries), high production costs (for energy, fibre, and transport), and tight supply in the market (raw material availability).

The Global Packaging Mintec Category Index has been built based on PET, PP, LDPE, HDPE, kraftliner, testliner, pulp, recovered paper, fluting, cartonboard, aluminium and steel.

And if you managed to purchase it, it’s getting hard to actually get it delivered. Besides the freight rate rising again, waiting for cardboard became longer than waiting for the next Marvel. The normal 72-hour lead time from cardboard suppliers is turning into an unreliable 3-8 weeks.

Statistica, 2022

The circular economy enables businesses to become future-proof

Luckily there is a silver lining in that mess. That amount of volatility might be the butt-kicker the business world needed to move towards circular models - like reusable packaging.

Of course, reusable packaging providers like ourselves also face unexpected global demand shifts. But reuse solutions powerfully remove the stress of businesses’ shoulders by guaranteeing a much looser dependency on new packaging supply.

Interested in reusable packaging?

The packaging is already manufactured and ready to be used and reused—no need to worry about availability or giant price swifts.

“By embracing a reusable packaging system, a company can transform its operations from linear to circular, from waste-managing to waste-preventing, from lowest cost to value creation, from consumption to conservation, and from rigid unpredictability to flexible certainty.” Tim Debus, Reusables

The supply chain disruptions were a real eye-opener for many in terms of resources scarcity. The world needs a more circular economy to recalibrate how products and systems are designed to maximize material lifecycles before products become waste and need to be replaced.

💡 RePack helps hundreds of e-commerce brands to reduce & control e-commerce packaging cost

In addition to helping businesses shrink their environmental footprint and stay relevant to their consumers, reusable packaging help companies remain resilient.

Wherever you're still using single-use, there’s the perfect reuse solution for your business.

Let us break down two of the most popular options:

• RePack for your online orders: by offering RePack as an option on your site, you can loosen your single-use packaging consumption, while offering your customer a nice sustainable alternative.

By transferring the cost to your customer, you can even recover some single-use packaging rising costs. Get your personal business case to understand how RePack can positively impact your business: https://www.repack.com/business-case/

• RePack for your Click&Collect and other internal shipments: the easiest way to reduce your dependency on single-use packaging is to identify the internal packaging flows within your operations.
  
  For example, if you are using single-use packaging for your click&collect operations, RePack is a great alternative.
  
  Our customer Decathlon Canada estimates avoiding 30.000 single-use packaging in 2022 by using RePack to manage its Click&collect shipments in Canada.
  
  Besides the environmental savings, they are now able to control fully their packaging stock by reusing them. Read the case study.

💡 Interested by RePack for your Click & Collect?