Product-to-Market Pathway SUMMARY: Raw material cost inflation continues to rise though at a slower pace for many commodities than those we witnessed earlier in the year. However, shipping expense, on land and at sea, continues to drive up the cost of moving products to market around the globe.
Q4 2021 Market Update
Severity Scale
Low
Moderate
High
Factory-to-Port Outbound Logistics
Ocean Transport Inbound to North America
DC-to-Customer Outbound Logistics
Raw Materials
Manufacturing
Record North American demand driving Aluminum cost to 10-year highs
Hurricane Ida’s landfall in late August had significantly reduced North American rail and intermodal operations, across the continent Driver shortages continue to reduce available truck capacity, driving 3 rd Quarter freight rates up nearly 30% since the start of the year
Covid outbreaks have plagued production in China, Malaysia and Vietnam throughout the summer and into fall
North American retailers are scrambling to build inventories ahead of the Holiday rush, further straining cargo capacity
Recovery continues from Covid disruptions at Chinese port complexes in Ningbo and Yantian that occurred during the summer
Unstable consumer demand has increased cost of paper production, especially for specialty products
Chinese government shutdowns of power grids for infrastructure renovation and hydro-electric conservation are disrupting and limiting production capacity
Estimated effect of which outpaced supply chain impact from the Suez Canal blockage in March
Shipping container cargo fees now routinely exceed $20,000, a level five times higher than this time last year
PVC-based product costs increasing sharply in Q4
Cost of raw materials used to manufacture takeout meal packaging and associated products, including aluminum, thermal papers, bagasse and plastics have continued to rise throughout 2021, as increasing consumer demand has put pressure on material availability.
Material Cost Rate of Change since January ‘21
Raw Material
Affected Product Lines
PVC
Vinyl Gloves, aprons and other apparel
30-35%, up 20% since July
Aluminum
Foil sheets, lids, wraps
40+%
Register Rolls, Thermal and Bond Paper, Placemats, Paper Takeout Products, Napkins, Crayons, Filter Papers
Bleached Paper
5 - 35%
Bagasse Fiber
Eco-friendly Takeout packaging and Cutlery
20%
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