1. Raw materials are short, although raw materials are not short.
In general, raw material shortage affects pretty much all industries: paper and fibers, plastics both fossil-based and bio-based, metals and aluminum, glass. It is not always the raw material that is scarce, but the availability due to disruption of transport routes. This can be seen in the already significantly fallen costs for containers, which had increased twenty-fold during the Corona pandemic.
The dependence on China has had a strong impact here, both in terms of costs and in the reliability of delivery due to 'congestion' in and before the ports and trade routes – to be seen quite prominently in the example of the Suez Canal.
2. Yesterday's energy waste is today's raw material shortage
Another aspect that has had an impact on the availability of raw materials is the cost of energy. Some productions are no longer profitable, and in some cases are maintained only to avoid having to shut down, or the process of shutting down and starting up production again is very lengthy and also costly. Here it is noticeable that many companies in the past have relied too little on their own energy-saving means or have also disregarded their own regenerative energy production. Here, we will certainly see a lot of movement in how companies will expand their own energy on the roofs and grounds of production plants. Perhaps we will then also see smaller wind turbines on industrial sites if the legal hurdles are also removed for joint use among companies. Renewable energy is cheap to produce and has great leverage on the way to becoming climate neutral as a company.
3. Few suppliers, many problems
Some customers also report that they are already sourcing packaging more regionally to be less dependent on long transportation distances. Or they are also expanding their supplier relationships in order to have more flexibility in the event of shortages on the part of their regular suppliers. Occasionally, PACOON has been asked whether we have any contact with suppliers. After years of always serving the same pool of suppliers, companies are now opening up more.
Some suppliers are also stocking up more because they expect longer-term deliveries. This increases the demand pressure on the market, but you remain a little more flexible as a company.
4. Today's waste is tomorrow's raw material
Depending on the material, we also see developments that could take pressure off raw material markets in the medium term. Alternative fiber materials such as grass, hemp, silphia or, in Asia, rice, bamboo and others are produced annually as agricultural waste. In the same way, there are raw materials that are generated in the production of food: Coffee, tea, potatoes, cocoa, to name a few. The processing of these fibers is certainly not yet finalized, there are also still some questions about which pesticides and therefore toxic substances are contained in them. But there are already many ideas on how to deal with these fibers and where they can be used. Of course, this also means that the issue of recycling has not yet been conclusively clarified. But this development will take pressure off the discussion of deforestation.
5. Concentration on fewer grades increases availability
In the short term, one could consider whether a company should focus on concentrating on the most common papers and board grades. Less variety can then mean that these more common grades are also more frequently available from several suppliers. This would make sourcing more flexible, and it may also be possible to achieve cost advantages by bundling higher order quantities.
6. We need a bioplastics industry
This also applies to bioplastics, which are still represented on a very small basis in the plastics market. Here, large production facilities are needed to convert these various raw materials into plastics and barrier materials. The basic work has been going on for a long time, but there is usually a lack of refineries to cover the industrial scale of availability. Oil for packaging in general is also not to be seen under the aspect of lack of raw materials, but more as an inflation of the raw material due to price driving in the context of the current crises.
7. Plain and simple: Reusable
One future solution to the shortage of raw materials will certainly be reusable packaging. In the first instance, plastics will require more raw material because rigid packages require more material than lightweight, flexible packages. However, this changes with the number of cycles. In the case of glass, on the other hand, the raw material requirement will drop rapidly with reuse, since there is not much difference between disposable and reusable packaging. This means that energy requirements will also be dramatically lower in the future, at least compared to the amount of packaging in circulation. It cannot be ruled out that the demand for reusable glass packaging could increase.
8. A new cycle for metal packaging
The situation with metal packaging will be similar to that with glass. Here we are already seeing an increased use of metal recyclates for packaging. In the past, these recycled metals went primarily to other industries. Efforts are now being made to ensure that recycled materials such as aluminum or metals are also reused in packaging. Since the energy required for recycling is only about five percent of the effort required for new production, there is also an enormous saving in energy for metal packaging. With the effect of reusable packaging, raw materials will also play a smaller role.
The crises are a catalyst of the developments. Lower use of raw materials in packaging through weight reduction, reusable packaging, alternative raw materials, regional supply sources, regenerative energies for production and transport, longer stockholding are not only short- and medium-term approaches against crises and risks, but will also continue in the long term. What seems like an emergency plan now will be standard in a few years.