The US has seen strange buying patterns in November and December- the cardboard industry generally slows during the holidays. Box shipments have increased 9% from a year ago to almost 32 billion square feet, matching pre-recession levels. Industry insiders have listed many factors for the surge in box demand, including a post-presidential election rise in consumer confidence; a predicted pickup in West Coast agricultural box demand as precipitation promises a bountiful spring harvest in the California Central Valley; and expanding online shopping before the holiday season.
Though robust demand may leave you optimistic on the state of our economy, box manufacturers are probably sweating just a bit. In the wake of tightening supplies, large scale producers are turning to independent contractors to fulfill customer orders. They've even pulled back on exports to meet domestic needs. Despite their efforts, lead times remain at four weeks or over.
What's constricting US box supplies? Shortages were preceded by industry confidence in improving transportation times, provoking them to slash high inventories. In the past six months, manufacturers cut their stocks by more than 437,000 tons. Cuts were compounded unexpectedly by Hurricane Mathew, causing plant shutdowns along the Atlantic Coast and a loss of about 70,000 tons in production. Also, cardboard consumption outpaced box shipments due to increases in non-traditional uses, including displays and "right-size" custom boxing.
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