Board Converting News, April 26, 2021

The Perfect Storm Keeps Improving BY GREG TUCKER

To get this eCommerce explosion on track, Amazon built and leased out over 50 percent more space in 2020. Others followed and the likes of Target and Walmart used their massive footprints as mini distribution centers to move all their products through to people’s homes or pick up areas. Just think of the rise in warehouse costs we see today. Where did all the Uber drivers go? Amazon, FedEx, UPS? Where could they have gone? You can’t get an Uber unless you call out for a Black Car or SUV. Transportation prices are still exploding as the industry is taxed with a short supply of labor and equipment. One of our long time clients is closing their doors due to rising material and la- bor costs. They sighted their transportation cost is more than seven and a half percent of their sales price. WOW! Let us look at what else is going up. Labor is now very scarce. I am talking about unskilled and skilled labor and these costs continue to skyrocket. Bay Cities is fortunate to have a great working environment, fantastic benefits, an opportunity to progress upward, fantastic training process- es, a great culture and competitive rates to combat the labor issues the industry and many industries are facing. Our biggest competitors are Amazon and our partners, the State and Federal government. Our State and Feder- al governments keep coming up with plans that influence people to stay at home and paying them competitive wag- es. Get this, we pay you to sit at home and buy crap off the internet! Brilliant strategy don’t ya think? CONTINUED ON PAGE 44

Linerboard supply is very tight across America today. We are waiting for another shoe to drop here in boxland. So

far it has been raining shoes and what’s wrong with another? Our industry has been dealing with some of the most in- triguing issues I have ever seen person- ally in my 40 years of box making. We walked into this year coming off the most explosive demand for box-

es ever in our country. The pesky virus enhanced every American’s ability to order just about everything online. We shipped over three billion parcels during the holiday rush season. Many reports indicate that we were collec- tively about five percent late on deliveries. Think about that for a bit, we had 90 million parcels arriving late for Christmas. The usual shippers, UPS, FedEx, Amazon, and the rest, stopped their express shipments and USPS at- tempted to pick up the slack. For this reason, I still scratch my head when the post office racks up multi billion dollars losses at USPS. We also must understand that 30 percent of items ordered online get returned. The last few months have been the “Return Season”. Oh, to be in the reverse logistics business! Greg Tucker


April 26, 2021

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