Production and shipping costs
There’s no two ways about it – the costs associated with production and shipping in our industry have increased.
The price of LLDPE resin, the key material in pallet stretch film, has risen dramatically. In May 2021 it was $1250 per tonne. In January 2022 this has risen to over $2100 per tonne. So too has the cost of shipping sharply increased. In Mid-2021 the approximate cost of shipping a 20” container from Malaysia to Napier was $4,140 USD. This year that cost has reached as high as $6,320 USD.
“The impacts of the invasion of Ukraine are having ramifications throughout a world already rocked by Covid,” says Universal Packaging GM Jed Goudie. “Despite all our hopes pre-Christmas, global shipping is showing no signs of improving.”
“Whilst freight pricing has plateaued since October 2021 we are seeing no relief at all,” he says. “And schedule reliability has plunged from 78% in 2019, to 63.9% in 2020, and then to 35.8% in 2021. This is a staggering drop from the pre-2020 levels.”
However it’s certainly not all doom and gloom for Universal Packaging.
“While the tightening of supply has seen raw material supply to smaller polyethylene producers dry up that’s not an issue here,” Jed says. “Our tight-knit relationship with Asia-Pacific’s major producer of stretch film means we’re sheltered from these supply issues.”
That means that at Universal Packaging we are consistently maintaining our stock levels. The key focus from here is on maintaining clear communication with all customers regarding price reviews and any potential increases.
“Keeping everyone in the loop in these challenging times is of the utmost importance,” says Jed. “So too are we focused on helping both existing and new customers increase their efficiency, eliminate waste and save budget across the board.”
“We’ve always been proud of our ‘small-details-big-picture’ approach to packaging protection,” he says. “With accurate measurement and expert analysis there is a significant amount we can do to save costs on spend-per-pallet, product damage and returns, time reductions and much more.
“In the meantime, if anyone has any questions, please feel free to get in touch with the team here. We’re doing everything we can to stay on front of any issues, ensuring everyone can plan as effectively as possible.”