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At Supplyitall we serve multiple markets and verticals. We have industry specialists trained and experienced to update our team on trends and insights. Our end goal is always to serve you, our partners, with the finest products at the best possible cost. Keeping you well informed, we believe, will continue to strengthen our partnership. Whether you view this page as a cup half empty or an opportunity half full, we promise to share our knowledge with you.
Supply Chain Issues Update 1/5/2022
Over the course of a number of years, supplies of virgin white paper have been on the decline. The trend began as the demand for printing, writing, and newsprint started to decline with the growth of digital media, and production has continued to decline at a rate of approximately ten percent year over year. At the same time, paper manufactures shifted towards producing paper to align with the increase in e-commerce and, in particular, the demand for cardboard boxes. As has been widely reported, the Covid-19 pandemic made conditions worse by increasing e-commerce and the need for corrugated packaging that is required to support the growth in deliveries.
In addition to the systemic shift in the traditional demand for virgin white paper, most recently and largely due to Covid suppliers have also experienced labor and related production problems that we read almost daily are hampering the manufacturing sector at large. We are in close communication with our paper suppliers and know that they are making every effort to meet demand. However, it will be difficult to make up for lost production when current operations remain below normal levels.
We realize that the shortfall presents a difficult situation for you, and we are working on finding additional supplies of paper to support our operations and your business. We ask that you remain flexible and, in the interim, consider alternate paper substrates to meet your packaging needs in the short term. This could temporarily provide you with bags even if they are not consistent with your brand.
Supply Chain Issues Update 10/5/2021
Additional supply chain issues are expected as there is a shortage of coal being exported from Australia into China.
- The coal shortage has created power shortages and need for allocation to residents and away from manufacturing.
- Some plants are expected reduce production from 7 days a week to 3 days.
- Equipment will have to be taken off line during down days causing additional delays.
A 60-80% drop in productivity is expected by early November. The categories that will suffer the most are:
- Vinyl gloves
- Plastic cutlery and cutlery kits
- Plastic portion bags and cups
- PET cups
- Paper hot/cold cups
- Bagasse products
- Foil products
Supply Chain Problem Keeps Getting Worse
SupplyitAll distributes domestically manufactured and imported goods across many different verticals. Although our preference is made in the USA, some commodity items are a better value imported from overseas. Providing this forum of information confirms our commitment to be the most transparent distribution company within our industry. With this goal we share not only domestic pains and price increases but also worldwide issues.
The World Economy’s Supply Chain Problem Keeps Getting Worse
A supply chain crunch that was meant to be temporary now looks like it will last well into next year as the surging delta variant upends factory production in Asia and disrupts shipping, posing more shocks to the world economy.
Manufacturers reeling from shortages of key components and higher raw material and energy costs are being forced into bidding wars to get space on vessels, pushing freight rates to records and prompting some exporters to raise prices or simply cancel shipments altogether.
China’s determination to stamp out Covid has meant even a small number of cases can cause major disruptions to trade. This month the government temporarily closed part of the world’s third-busiest container port at Ningbo for two weeks after a single dockworker was found to have the delta variant. Earlier this year, wharves in Shenzhen were idled after the discovery of a handful of coronavirus cases.
“Port congestion and a shortage of container shipping capacity may last into the fourth quarter or even mid-2022,” said Hsieh Huey-Chuan, president of Taiwan-based Evergreen Marine Corp., the world’s seventh-biggest container liner, at an investor briefing on Aug. 20. “If the pandemic cannot be effectively contained, port congestion may become a new normal.”
The cost of sending a container from Asia to Europe is about 10 times higher than in May 2020, while the cost from Shanghai to Los Angeles has grown more than sixfold, according to the Drewry World Container Index. The global supply chain has become so fragile that a single, small accident “could easily have its effects compounded,” HSBC Holdings Plc. said in a note.
The spread of the delta variant, especially in Southeast Asia, is making it difficult for many factories to operate at all. In Vietnam, the government has ordered manufacturers to allow workers to sleep in their factories to try to keep exports moving.
On the other side of the planet, companies in the U.K. are grappling with record low levels of stock and retail selling prices are rising at the fastest pace since November 2017.
What Bloomberg Economics Says...
It is hard to see supply chain bottlenecks being resolved any time soon, with some major exporters including Indonesia and Vietnam still struggling to contain the delta outbreak. It could continue to drag on the global recovery by slowing production and pushing up costs, although not derailing it. At the heart of the price pressures is the transportation bottleneck.
Big retailers tend to have long-term contracts with container lines, but Asian production relies on networks of tens of thousands of small and medium-sized producers who often arrange shipping through logistics firms and freight forwarders. They in turn have been struggling to secure space for clients as vessel owners sell to the highest bidders.
Some 60% to 70% of shipping deals on the Asia-America route are done through spot or short-term deals, according to Michael Wang, an analyst at President Capital Management Corp. He said auction-style pricing may continue until Chinese New Year in February 2022.
Buyers agree. In Germany, more than half of the 3,000 firms polled by the Association of German Chambers of Industry and Commerce expected widespread supply-chain problems to persist into next year.
For Asian factories outside China, the problem is even worse. Many Chinese companies are willing to pay above-market rates to load their cargo, said a spokesman at HMM Co., South Korea’s biggest container line. So when the ships call at ports outside China, they’re already almost full.
Chinese companies that spent decades shifting production of lower-value components to cheaper labor markets in South and Southeast Asia now face the headache of trying to get those parts to factories where they can be assembled into finished products.
As factories succumb to lock-downs, manufacturers are forced into a game of whac-a-mole, switching raw materials from one country to another. Some have resorted to air-freighting materials to keep production lines rolling.
Product, Transportation & Operating Cost Inflation
Following up from our update in May, we want to provide the latest details on cost increase and future speculation.
- Resin costs have increased 5-7 cents almost every month in 2021
- Increased wages for drivers and distribution employees combined with a limited workforce pool
- Rapid and significant increases in inbound/outbound freight, and ocean freight costs
- Warehouse supply and maintenance increased costs
- Fleet maintenance and parts increases with limited availability
- Supplyitall transportation costs are up 33% (employee, fuel, maintenance)
- Supplyitall inventory value is up 47% (cost of goods on hand)
- Manufacturer price increases have nearly tripled compared to last year, while the size of increases are close to double digits on average and often greater.
- Manufacturer announced increases continue for July and August.
- Most recent Consumer Price Index for May shows an increase of 5%, the highest since 2008 or excluding food and energy since 1992.
Supplyitall’s management team works diligently to mitigate all increases and product shortages from hitting your bottom line and customer experience. We continue to work with alternate manufacturers and research viable substitutes to products in short supply. Our team will never stop working to give you the best product at the best possible price with a transparent view of our business.
Market Instability Update August 2021
- Polyethylene resin producers are implementing an 8th consecutive price increase to the market on all grades of polyethylene effective July 1, 2021. PE producers are citing continued supply and recovery constraints in addition to strong domestic demand.
- CNBC announces, “Container shipping rates have skyrocketed as the global economy bounced back from the Covid-19 pandemic and commodity demand recovered, while a shortage of containers exerted pressure on supply chains.”
- Maersk, the world’s largest container shipping firm, has posted a sharp increase in second-quarter earnings as congestions and bottlenecks continue to drive up shipping rates.
- The company on Friday reported earnings before interest, tax, depreciation and amortization (EBITDA) of $5.1 billion, a 200% increase from the $1.7 billion reported in the same period last year. Revenues were up almost 60% to $14.2 billion.
- Container shipping rates have skyrocketed as the global economy bounced back from the Covid-19 pandemic and commodity demand recovered, while a shortage of containers exerted pressure on supply chains. More recently, a combination of rising retailer orders and slower turnaround rates due to Covid-19 outbreaks in several countries has driven prices even higher.
- “Right now in container shipping we have effectively unmet demand. The global capacity is not able to lift all of the demand and that is what is driving up freight rates,” Skou told CNBC’s “Squawk Box Europe” on Friday.
- “At the same time, of course, we have had congestion in Los Angeles, we have had the Suez Canal closed for a week, we have one of the largest ports in China closed for more than a week in the last quarter, and that takes our capacity from the market, which adds to the problem, so to speak.”
- Rates from China to the United States, for instance, have scaled fresh record highs above $20,000 per 40-foot box, up more than 500% from a year ago, according to freight-tracking firm Freightos.
Market Instability Update May 2021
- 1.) U.S. inflation was 2.5 times more in April 2021 than it was in March 2021. This is the largest increase in over 8 years.
- 2.) Energy prices increased 13.2% in the past 12 months.
- 3.) Many U.S. businesses are facing worker shortages as the economy starts to reopen.
- - i. Economists expect employment pains to continue through 2022.
- - ii. Expanded unemployment benefits and Covid-19 fears are keeping many from seeking work.
Top 3 Causes Of Market Instability in March 2021
All resins have the ability to harden under certain conditions - by mixing with a setting agent, heated, or exposed to light. Such materials are highly viscous liquids before solidifying. The range of synthetic resins is huge and includes resins created from thermoplastics like ABS, Nylon, and Polypropylene. Some of these are referred to as resins only in their liquid form – after curing, they are simply called plastics or elastomers. Some resins after hardening can’t be melted or re-used. Different types of resins exist depending on their chemical compounds which define its properties: silicones, epoxies, acrylics, alkyds, and more.
What is resin material made of?
There is a huge variety of different resin materials, both natural and synthetic. Resins consist of long chains of monomers, which form cross-link bonds during the curing process.
What are the different types of resin?
Typically resins are divided into thermosets and thermoplastics based on whether or not the hardening reaction can be reversed. Widely used thermoplastic resins include ABS, polyethylene, polystyrene, and polycarbonate. Most common thermoset resins are polyester, vinyl ester, epoxy, and polyurethane.
Thermoplastic resins are basically the ones that can be melted and then hardened once cooled. Within the molecule chain of such resins, there are extremely strong bonds between molecules. Thermosets, on the contrary, undergo a non-reversible reaction resulting in a hard end product. It is determined by the process called polymerization or cross-linking which takes place in such materials caused by the use of a catalyst, heat or a combination of the two.
How is resin produced?
Production of artificial resins starts from a so-called cracking process, which means that different types of hydrocarbons are heated up to separate molecules. Then polymer compounds are built in order to create a specific resin.
2.) Winter storms at the end of February severely disrupt Polyethylene & Polypropylene production up to 85%.
The storm forced at least 50 major outages and closures, including most Gulf refineries, petrochemical plants, and steam crackers; all three propane dehydrogenation (PDH) units; and resin reactors accounting for an estimated 80 to 85% of all US polyethylene (PE) and polypropylene (PP) production.
3.) Gulf Coast logistics disruption with the complete shutdown of the Port of Houston, rail services, resin warehouses and highways.
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CURRENT PRICE INCREASES BY MONTH
2021 Oct Price Increase
ACS - Select Products - 6% - 10% - 10/1/2021
Berry - Select Products - 10/1/2021
Cellucap - Select Products - 5% - 12% - 10/1/2021
Dart - Select Products - 6% - 25% - 10/1/2021
Disco - Select Products - 5% - 12% - 10/1/2021
Freeport Paper - Clay Coated - 10% - 10/11/2021
Genpak - Select Products - 6% - 12% - 10/18/2021
Kari Out - Select Products - 10% - 15% - 10/17/2021
Kutol - Select Products - 5% - 6.9% - 10/4/2021
NCCO - Guest Checks, Register Rolls - 6% - 8% - 10/1/2021
NCCO - Date Code Genie Products - 8% - 10/1/2021
Pactiv - Select Products - 6% - 14% - 10/1/2021
Seaman Paper - Select Products - 6% - 10/15/2021
Sterno - All Products - 7.5% - 25% - 10/1/2021
Sonoco - All New Print Jobs - 5% - 10/1/2021
Southern Champion - Select Products - 15% - 18% - 10/17/2021
Stanpac - Select Products - 6% - 30% - 10/1/2021
2021 Nov Price Increase
Bagcraft - All Products - 10% - 11/1/2021
DHG - All Products - 4% - 15% - 11/29/2021
Eatery Essentials - PET - 6% - 11/30/2021
Eatery Essentials - Paper Products - 17% - 11/30/2021
Eco-Products - All Products - 8% - 11/1/2021
EMI Yoshi - All Products - 10% - 11/1/2021
Fabrikal - All Products - 20% - 11/15/2021
Graphic Packaging - All Products - 8% - 11/15/2021
Hoffmaster - All Products - 9% - 11/1/2021
Innopak - All Products - 11/1/2021
Kari Out - All Products - 10% - 25% - 11/1/2021
Novacart - All Products - 10% - 11/1/2021
Norpak - All Products - 6% - 11/1/2021
Plastifar - Select Products - 6% - 16% - 11/1/2021
Polar Pak - Select Products - 11/15/2021
Stanpac - Foil Laminated Wraps - 12% - 11/1/2021
Stanpac - Foil Lined Bags - 9% - 11/1/2021
Trinicum - Select Products - 6% - 11/15/2021
WNA - All Products - 14% - 11/15/2021
2021 Dec Price Increase
AmerCareRoyal - All Products - 12/1/2021
Dart - All Products - 8% - 12/1/2021
Fabrikal - Select Products - 8% - 12/1/2021
Foldpak - Select Products - 8% - 12% - 12/1/2021
Kari-Out - All Products - 5% - 25% - 12/6/2021
Kari-Out - All Products - 5% - 27% - 12/27/2021
Kimberly Clark - No Dispensor Orders until 1/3/22 - 12/8/2021
McNairn - All Products - 7% - 12/1/2021
O'Dell - All Products - 12/1/2021
Plastifar - PET - 10% - 12/1/2021
Plastifar - Cutlery - 14% - 12/1/2021
Sabert - Select Products - 8% - 12/1/2021
2022 Jan Price Increase
Dart - Select Products - 1/1/2022
Fabrikal - - 6% - 1/1/2022
Fancy Heat - All Products - 1/1/2022
HFA - Select Products - 8% - 10% - 1/1/2022
Impact Products - 3.6% - Select Products - 1/3/2022
Joy Cone - All Products - 10% - 20% - 1/1/2022
JT Eaton - All Products - 1/15/2022
Lyons Magnus - Select Products - 1/3/2022
Pactiv - All Products - 6% - 1/1/2022
Pansaver - Select Products - 4% - 1/17/2022
Plastirun - Select Products - 1/3/2022
Sabert - Select Products - 6% - 1/3/2022
Safety Zone - Select Products - 6% - 25% - 1/3/2022
2022 Feb Price Increase
ACS - All Products - 7% - 2/1/2022
Dart - All Products - 6% - 2/1/2022
KIK Products - All Products - 6% - 16% - 2/1/2022
Sani Professional - All Products - 6% - 10% - 2/1/2022
Steramine Tablets - All Products - 8.5% - 2/1/2022
2022 March Price Increase
Dart - All Products - 14% - 3/1/2022
Solo - All Products - 8%- 3/1/2022