250 Years of the United States of America
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
That line of text is a continual challenge. Not a statement that America has been or is perfect. But it is the inherent challenge to live up to it as a country and as individuals that makes it so beautiful to me.
250 years of the greatest experiment in the world has led to the greatest country. I’m not talking just sports, though it has been great to watch our hockey and soccer teams this year. Nor am I talking about economic or military might. More important than anything else, I fullheartedly believe the US offers the individual the most personal freedom and opportunity in the world.
I hope you and your family had a wonderful Fourth of July!
Resin - Starting the Correction Phase?
There are strong rumors we will see the first decrease in July. Partial resumption of traffic in the Strait of Hormuz, months of planning around the Strait, and an inventory surplus are factors in this. Some producers have announced 15 cents/lb, but others have not yet. We will know within a week what actually hits and is confirmed by IHS and CDI indices.
Having said the “strong rumor” phrase above, please keep in mind that it is not confirmed as of yet. Resin movement this year has been extremely hard to predict. Just two weekends ago, Iran brought traffic in the Strait of Hormuz to a complete stop for a couple of days. It quickly picked back up but a similar event could result in a smaller decrease or completely nix the proposed decrease.
But the possibilities for no decrease extend beyond geopolitical. July is the start of the Atlantic Hurricane Season. The bulk of domestic resin production is on the Gulf Coast and a single tropical storm or hurricane can dramatically disrupt production.
A couple of notes:
Some are starting to bake decreases into new pricing. Be cognizant of this as it leaves room for your pricing to jump up unexpectedly.
Personally, for the last week and through this week, I am quoting at the current levels and noting in my quote or email body what I think the price will be once IHS & CDI confirm resin prices this month.
What does this mean for packaging prices?
Items that are solely PE will be hit first — stretch film, poly bags, sheeting, etc. Those items could see decreases within the next few weeks.
How will a potential decrease affect things like strapping, labels, air pillows, foam-in-place (e.g. Instapak), and others? Unsure at the moment. It will not be immediate. I would anticipate having a better idea in the coming weeks.
Corrugated - that $50/ton increase happened
I’m going to keep the image from last month as it’s relevant again.
Sure enough, the potential increase I mentioned last month did hit. Pulp & Paper announced a $50/ton increase in June. I thought it would happen but not necessarily this fast. Historically, there has been a minimum of 5 months between the big corrugators pushing increases.
I’ve previously touched on factors like diminished capacity, labor & energy costs, and general inflation. Those are still playing a part but there have been a couple continued trends on the mill side which are part of the cause for the sooner than expected increase.
The mills are where linerboard is actually made before being sent to plants which make the actual corrugated items used in your facility. The first factor is OCC (Old Corrugated Containers) are still increasing. Used as scrap material to be recycled and turned into new linerboard, OCC is part of the raw material equation. The other factor is demand has increased. Mills are looking at up to an 8 week backlog compared to 5 weeks just a month ago.
What I’m really watching is the transportation cost. I saw gas for $2.89/gallon last week which felt great to pay! Yet, fuel is still higher than it was in January (and that’s with a gas tax holiday saving about $0.61/gl). Those who implemented fuel surcharges a few months ago are still holding onto them for the moment as well.
Moving forward, I think we should have some calm for a while. Maybe there will be another increase this year but my hope is having now increased $100/ton, the remainder of 2026 is flat.
How do I plan accordingly?
Gif by peacock on Giphy
With all the movement and uncertainty, 2026 has had a whiplash feel to it.
On the resin side, I would give a few steps:
For any new items you’re sourcing, does your quote have the potential decrease baked in or not? (Will it even be affected immediately?)
Ask your supplier about their supply chain to understand when a decrease would hit your products.
Do NOT let a plateau or one decrease bring you a sense of complacency. Innovation has been off the charts this year out of necessity. If you haven’t looked at your packaging operations & supply chain beyond simple quoting, opportunities still certainly exist to drive cost out.
On the corrugated side, here would be my plan if I have P&L responsibilities:
Understand lead times as they have started to increase in places.
Ask yourself - “What is the box solving?” Corrugated is probably the right solution, but maybe not. I just worked with a company to move some of their boxes to padded mailers.
Audit your packaging as a whole. The box, tape, and internal packaging all go together just as labor, DIM weights, and other factors go into the total cost. A distributor like FlexPAC will be objective about your needs vs. a box mfr. bringing only corrugated solutions.
Want to learn more?
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