Nathan Dube

By: Nathan Dube on March 1st, 2022

Print/Save as PDF

Potential Packaging Costs Increase In Wake Of War

Equipment | Packaging Materials | Supply Chain Services/ Contract Packaging | Fulfillment

By now, you, like the majority of the rest of the world, are probably aware of the crisis in Ukraine. War is never an event that we look forward to, and it has lasting, often significant consequences.


For packaging companies and their customers, one of these consequences may very well be a notable cost increase for materials, services, and machinery.


But, how exactly is the war in Ukraine responsible for causing such changes in the prices of these items?


From cost increases in the resin market to the potential skyrocketing gasoline and crude oil prices, there are various ways in which this conflict may result in serious financial repercussions throughout various industries the world over.


This article will explain what types of cost increases you can expect in the wake of the war. After reading this article, you will be armed with knowledge about these dynamics.


Hopefully, with this knowledge in hand, you will be able to formulate ideas to navigate these potentially severe cost increases.


The Financial Repercussions Of War For Packaging Supplies


The Financial Repercussions Of War For Packaging Supplies


A few days ago, Russia invaded Ukraine after weeks of posturing about the possibility of such actions. Through attacks coming from land, sea, and air, the initial strike and the subsequent episodes have been severe.


And while these events are, for many of us, quite literally a world away, we likely are collectively feeling the intensity of these actions reverberate through an already struggling global supply chain.


In the section below, we will cover several different dynamics that will be affected by the conflict we are seeing across seas at this time.


Gasoline Prices May Increase The Cost Of Various Packaging Products


Gasoline Prices May Increase The Cost Of Various Packaging Products


By Friday of last week, the national average gas price in the United States of America rose to $3.57 per gallon. These costs came up 3 cents from the previous day.


According to AAA, this is a sharp increase compared to the $2.68 per gallon a year prior. Supply chain experts are suggesting it is more than likely that gas prices could top $4 per gallon in the coming months.


Experts are more than a little concerned that the war in Russia and Ukraine may seriously disrupt the oil industry in that area of the world.


Such events are expected to lead to potentially high increases in the cost of gasoline.


As the second-largest oil producer globally, Russia has the power to cause notable changes in the global petroleum market.


With the disruption caused by their sudden invasion of Ukraine, continued price increases for gas are expected as the conflict continues.


While president Biden has said that he is working to prevent any significant increase in gasoline cost, it is currently unclear if that is a promise he can deliver on based on current world events.


Any significant increases in the cost of gasoline will cause further issues for shipping and logistics.


These cost increases will likely be felt throughout the supply chain for various packaging products as manufacturers and distributors alike scramble to adjust their pricing as the cost for gas continues to soar.


A portion of these costs will most likely be passed on to consumers and businesses alike. With packaging materials costs having already increased many times over the past year due to continued problems in the resin market, there is no telling what the full effect of these events may be.



Resin Market Issues May Lead To Higher Costs For Packaging Materials


Resin Market Issues May Lead To Higher Costs For Packaging Materials


As we are seeing costs increase in the global oil market, it should be no surprise that plastics industry experts are predicting potentially high-cost increases for plastic-based consumer goods.


As most packaging plastics are made from resins derived from petroleum, industry watchdogs are concerned that the cost of plastics will continue to rise.


And for packaging materials made from resin-derived formulations such as polyethylene, the crises in Ukraine could result in big cost increases for many types of plastic packaging materials.


This is not welcomed news for many companies as previous disruptions in the resin market have already caused multiple significant cost increases for plastic materials over the past two years.


From the ever given container ship debacle to the COVID19 pandemic, many previous black swan events have already pushed the cost of resins to staggering heights.


With yet another global catastrophe playing out in Ukraine, it is well advised to keep a close eye on resin prices to be prepared to incur higher purchase pricing for your plastic packaging materials.


How Can You Prepare For Increased Plastic Packaging Costs?


How Can You Prepare For Increased Plastic Packaging Costs?


As we continue to battle the ripple effect of global crises, it is essential to stay afoot of these events and pay close attention to the markets most affected by them.


But what is the best way to educate yourself on these items? Who can you turn to for actionable knowledge at this time?


If you would like to get a better idea of what the cost increases for your packaging materials currently are and will be soon, it is well-advised to stay in contact with a packaging expert.


They will be able to help you navigate these cost increases and consult with you to help you make the proper financial decisions regarding your packaging purchasing decisions.

About Nathan Dube

As the Digital Marketing Specialist at Industrial Packaging, I am honored to create content for such a phenomenal company and work with one of the greatest teams in the Packaging Industry. Whether creating a video, writing blog posts or generating other pieces of content and multimedia, I am always excited to help educate and inspire our prospects and clients to reach their highest potential in regards to their packaging processes and needs.