Rising input and freight costs impacting paper and packaging companies’ bottom line

Tony MulveyFreight Market Blog

Last year, FreightWaves estimated that the top five paper and packaging companies in the U.S. spent a whopping $7 billion and $9 billion on transportation in 2019. Despite revenue declines across the industry in 2020, we estimate that freight spend was as high as pre-pandemic levels due to growth in packaging demand and elevated freight rates.

In contrast to the softer packaging prices experienced in 2020, companies have experienced significant inflation rates to-date in 2021, which has made packaging an area of greater focus for shippers. Packaging inflation is clearly part of a larger inflationary trend that has created headaches for shippers also facing higher costs for raw materials, labor, contract manufacturing and freight.

If FreightWaves, through its data intelligence and the SONAR platform, can drive a 1% savings on transportation spend (~$23 million annually) that would also drive about a 1% increase in net income (at a 25% tax rate) for the leading paper and packaging company in 2021.

The free white paper, Shippers pay more for packaging while paper and packaging companies face rising input and freight costs, shows how FreightWaves’ SONAR platform assists paper and packaging companies to save money on transportation spend, de-risk from market conditions and benchmark against the competition. Data sets within the platforms allow paper and packaging companies to:

  • Use data from electronic tenders and carrier surveys to assist in negotiations with carriers and 3PLs
  • Benchmark contract rates against the overall market as well as industry peers
  • Understand where intermodal conversion makes sense as well as saves money compared to truckload

Download the free white paper to understand how FreightWaves’ SONAR platform will increase freight market knowledge and allow for lower freight costs across paper and packaging supply chains.

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