The scale of the pandemic’s impact on supply chains, manufacturing, labor and costs eclipses anything most manufacturers have experienced before. As these conditions hit the print industry, we’re seeing material costs across all categories increase over 10%. Have you been watching the supply chain? The New York Times article “How the World Ran Out of Everything” takes a deep dive into Just In Time (JIT) manufacturing, inventory shortages and the global shipping chaos. CNBC reports that supplier price increases climbed 6.6% in May – the largest 12-month increase on record. Reuters imparts that manufacturing is slow-going due to shortages of inputs and rising demand in their article “Supply chain bottlenecks amid roaring demand slow U.S. manufacturing”.
We are on top of itBuying raw materials and manufacturing products requires a dependable and undisrupted supply chain. The increased demand and limited availability of materials and services has had a huge impact on turn times and the final cost of goods. It takes creativity and careful analysis in order to stay on top of the fluctuations and navigate the disruptions. That’s why we are closely monitoring seven core markets that effect our business, allowing us to gauge the impact on us as well as how it impacts our valued distributors.
Markets we’re watching and a snippet of current findings
- Paper Market All graphic paper costs have increased and availability on just about every grade of paper is limited
- Label Market Pricing pressures, substantial inflation and paper pulp price increases compounded with domestic freight and ocean transportation disruptions are causing imbalances to the market
- Retail Signs and Graphics Market Pivots in product demand, rising costs and surcharges are a few of the conditions shaking things up
- Packaging Market Demand is elevated while earnings are down and prices are way up
- Promotional Market The promo market continues to grapple with rising prices and inventory issues
- Logistics Market Fuel costs, truck scarcities and TL rate increases continue to challenge freight markets
- Labor Market Employee scarcities, a high number of job openings and demand for higher pay will take a while to sort out.
Some good news for our customers in all of this is the benefit you have with working with EGP. Prices are increasing across the board in our industry and we are seeing much higher increases than ours rolling out in competitive companies. Because we have scale, it minimizes the percentage of increase so you don’t have to absorb the entirety of the price increases