Pinnacle Packaging announced Monday that it would be dropping the prices on its corrugated boxes to address the challenging economic climate.
Noting a trend begun by wholesalers, the company said it would reduce corrugated box prices in a strategic decision to help its customers during ongoing economic pressures.
“I’ve reduced prices on corrugated boxes by 10 to 15 percent,” Pinnacle Packaging President Nicole DeJoris said. “Packaging prices have decreased due to low retail demand, retailers have overstock, and the market is equaling out after two years of high prices. The result is falling prices.”
DeJoris said the price of corrugated materials has been on the increase since 2020, but before the pandemic, prices were relatively stable for nearly 20 years. After an unprecedented surge in demand for corrugated materials due to online shopping during the pandemic, coupled with labor shortages and limited paper manufacturing capacity, prices for corrugated cardboard rose between 2020 and 2022.
“Demand and output for cardboard boxes and other packaging material fell sharply in the fourth quarter of 2022,” according to an article by FreightWaves.com, Cardboard Box Demand Plunging at Rates Unseen Since the Great Recession. “It’s the latest indicator that consumer demand is eroding following the pandemic. Dwindling savings, inflation, rising interest rates, and fears of a recession may all be swaying consumers to spend less.”
DeJoris said as the economy shows signs of slowing down, the packaging industry is experiencing a significant shift. The future of corrugated material prices is uncertain, she said. As the Federal Reserve’s efforts to control inflation, the packaging industry will need to adjust and adapt to evolving market conditions.