General Notice on Price Increases

by | Friday, September 10, 2021 | 0 comment(s)

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Prices these last few months have increased at an alarming rate. Pricing remains extremely volatile. Supply is tight. There is no relief yet in sight! 

Paper, paperboard, plastic and other commodity prices have risen significantly in 2021. Hardly a day goes by at Transline without a phone call or update from a vendor and supplier regarding price increases.

Paperboard used to make boxes is up at least 28% since the start of the year. Plastic used to make holders is up 13% to 25%. At the time of this writing, we just received a quote with a 72% year-over-year increase on raw material for coin holders.

Yet raw material price increases represent only part of the picture. Inputs from labor, duties, tariffs, and transportation all factor into the final cost of a product and affect both domestic and internationally procured goods. And the biggest factor in price increases occurring now is transportation and international container rates where shipping bottlenecks have sent prices up nearly 9 fold.

We do not expect any relief from higher labor costs or tariffs in the near term. Those are likely here to stay. Raw material costs will not see much easing until the shipping bottleneck clears.

However, when the shipping bottleneck finally does clear, inventories could begin to swell as on-time arrivals replace endless delays. Peak demand we saw in summer is already waning. At some point shipping rates will likely fall back to earth, leading to price stabilization and, hopefully, some reduction in price off current inflated levels.

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