ising Costs in Corrugated Cardboard: Navigating the $70 Per Ton Increase
The packaging industry is facing a significant challenge as we enter 2025: the cost of producing corrugated cardboard has increased by $70 per ton, with corrugating medium seeing an even sharper rise of $90 per ton. Packaging Corporation of America (PCA), the third-largest containerboard producer in North America, announced these price hikes, effective January 1, 2025. This change highlights the growing pressures on businesses that rely heavily on corrugated materials for shipping, retail, and e-commerce. Understanding the reasons behind these increases—and finding ways to adapt—is critical for businesses looking to maintain their bottom line.
Why Are Costs Rising?
Several factors are driving these cost increases for corrugated cardboard production:
1. Rising Raw Material Prices
The primary component of corrugated cardboard is kraft paper, made from virgin and recycled fibers. Increased demand for packaging materials, particularly from e-commerce businesses, has caused a spike in raw material prices. Supply chain disruptions and shortages of wood pulp have further exacerbated the issue.
2. Energy Costs
Energy prices remain a key factor. Producing corrugated cardboard requires significant energy for pulping, drying, and converting raw materials into finished products. Rising energy costs have directly increased manufacturing expenses.
3. Supply Chain Bottlenecks
Global transportation challenges, including port congestion and rising fuel costs, are making it more expensive to transport raw materials to manufacturers and finished products to end users. Some integrated manufacturers report being fully booked through mid-January, reflecting high demand and tight capacity.
4. Strategic Price Increases
PCA’s $70 per ton hike mirrors their strategy from previous years. For example, their February 2024 increase of $40 per ton set the stage for broader pricing adjustments in the industry. These changes are part of a broader trend where manufacturers adjust prices to maintain profitability amid rising operational costs.
How This Impacts Businesses
The $70 per ton increase may seem manageable at first glance, but its effects are far-reaching for businesses that rely on corrugated cardboard. Here’s how industries are being impacted:
- Higher Packaging Costs: Companies shipping large volumes of goods face rising packaging budgets, squeezing profit margins.
- Increased Product Pricing: Many businesses pass these cost increases to consumers, leading to higher retail prices.
- Strain on Small Businesses: Smaller companies with limited resources may find it particularly difficult to absorb these additional expenses.
What Businesses Can Do
While cost increases are unavoidable, businesses can take proactive steps to mitigate the impact:
1. Optimize Packaging Design
Lightweighting corrugated packaging or redesigning boxes to use less material can reduce costs while maintaining product protection. Eliminating unnecessary layers or using smaller box sizes can lead to significant savings.
2. Diversify Suppliers
Relying on a single supplier for corrugated materials can increase vulnerability to price hikes. Sourcing from multiple suppliers—both locally and internationally—can help stabilize costs.
3. Invest in Recycling Programs
Recycled materials play a crucial role in corrugated cardboard production. Implementing robust recycling programs can reduce reliance on virgin materials while supporting sustainability efforts.
4. Collaborate with Packaging Experts
Partnering with experienced packaging providers like Creative Edge Packaging can help businesses identify cost-saving opportunities. From innovative packaging solutions to supply chain optimization, a knowledgeable partner can make a big difference.
Looking Ahead
The $70 per ton increase in corrugated cardboard reflects broader trends in the global economy, including rising demand, supply chain challenges, and fluctuating energy prices. While these challenges are likely to persist, businesses that take strategic steps to manage their packaging costs can remain competitive and resilient.
Packaging Corporation of America’s price increases are a reminder of the importance of staying informed and adaptable. At Creative Edge Packaging, we’re committed to helping businesses navigate these changes with innovative, cost-effective solutions.
👉 Contact us today to learn how we can support your business in 2025 and beyond.
