There are a number of market forces that are currently impacting the label manufacturing and converting industries. The two words that nobody wants to hear are on everyone’s lips: “price increase.” What’s happening that’s creating the need for price increases?
COVID Impact Driving Significant Disruptions
COVID and its aftermath are causing significant disruptions and chaos in global supply chain dynamics. Raw materials and chemical manufacturers have been hit with a surge in demand for their products while at the same time facing labor shortages and increased downtime due to sickness, quarantines and new safety protocols. This has created a situation where inventories are low and lead times for orders continue to increase on a daily basis.
The transportation industry is also experiencing its share of problems. Truckload and LTL transport rates are rapidly increasing, driven by the continued driver shortage due to COVID illnesses and quarantines, increasing fuel costs, and the surge in e-commerce demand by consumers and businesses alike. Because of this, domestic truckload rates are up between 11–36% year over year, and LTL rates have increased ~5% in 2020 and are expected to increase another 8-10% in 2021.
General Data Is Also Being Impacted By Disruptions and Increased Costs
As a result of these and other pressures impacting the market, our suppliers have already imposed price increases and are telling us to expect more price increases for the foreseeable future. While material prices are one of the largest components of the overall cost of a label, General Data is also experiencing a number of direct and indirect cost increases due to COVID-related labor shortages, as well as increased costs for transportation, new costs for cleaning and sanitizing equipment and workspaces, and increasing costs for items such as stretch film, corrugated cartons, and pallets.
How Will This Impact General Data Customers?
General Data’s management, supply chain and sourcing teams are actively working to minimize the impact this situation is having on our business and relationships with our customers, but in some instances we have been forced to extend order lead times and have had to implement price increases on some materials. As we move forward, please understand that we anticipate announcing a general price increase on all stock and custom products in the very near future. In addition, as the industry works through these issues, lead times on all orders can and will continue to increase, so please plan accordingly.
Please understand that we anticipate announcing a general price increase on all stock and custom products in the very near future. In addition, as the industry works through these issues, lead times on all orders can and will continue to increase, so please plan accordingly.
General Data will continue to use our strong purchasing power to maintain a reliable supply chain and ensure continuity of supply to our customers. Keep in mind that General Data’s broad product line of label materials means that there may be alternate product options available to you in the event that a particular face stock is hit with a significant price increase. Your General Data Account Manager will help you explore all the different available options so you can choose the best fit for your application and budget.
If you have any questions on any of this information, your General Data Account Manager is available and always happy to help. Please feel free to reach out to your Account Manger directly, or contact us here.
