retail news in context, analysis with attitude

The Boston Globe has a story about how the rapid growth of e-commerce has created a boom for the cardboard business, as boxes are filled and shipped and delivered and then recycled. Ironically, though, “beyond a temporary bump, the box industry may not benefit as much in the long term from this huge shift in retail,” the Globe writes.

“For one, the surge in demand also has pushed up prices manufacturers pay for raw materials, which eat away at the gains from e-commerce. Meanwhile, they risk losing business outright as online commerce companies explore packaging alternatives to keep their shipping costs under control.”

Some interesting context: “Prices for the raw materials used to make most boxes, known in the industry as old corrugated containers, or OCC, have surged. Prices during the second quarter of 2017 averaged $149 a ton, compared to $85 a ton a year ago, according to a report from BMO Capital Markets. One reason is that supplies of the material in the United States has dropped, down 2.3 percent this year through May, while demand for boxes has gone up.”
KC's View:
I always think it is interesting to consider the unexpected impact of cultural and economic trends. I, for one, never thought about the cost and availability of cardboard.