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Critical Events of the Label Supply Chain Crisis March 2020 – Present
When the COVID-19 pandemic began in March of 2020, no one could have predicted the global supply chain crisis that has followed.
What started as a click bait panic to buy toilet paper has extended into almost all aspects of our lives.
From semiconductors to shipping containers, the world is running out of just about everything.
These issues have proliferated all the way to the label and ribbon industry. Businesses are now running short on shipping labels.
How did we end up here?
What specific events have led to shortages, price increases, and lengthy fulfillment delays in the label industry?
Our team has chronicled every significant event in the pressure sensitive label industry since the beginning of the pandemic.
Check out our interactive timeline below!
March 2020
COVID Shutdowns Halt Supply Chains
As the COVID virus spreads globally, all links in the supply chain grind to a halt, ceasing the production of goods.
Stay at home mandates begin to go into effect nationwide, causing businesses to close and lay off employees, ports to remove ships from service, and consumers switch to e-commerce shopping which grows to
0%
between
Q1 & Q2
Q1 & Q2
BOPIS, Curbside & Online Orders Skyrocket
As a way to stay in business and keep customers supplied, companies take an omnichannel approach to consumer access.
Many temporarily shuttered brick-and-mortar storefronts begin to implement BOPIS (buy online pick up in store) which grows
0%
from the
previous year
previous year
Daily online grocery sales increase
0%
in just
4 weeks
4 weeks
April 2020
Direct-to-Consumer Shipping Expands
The spike in demand for shipping direct-to-consumers increases to a rapid expansion.
Traffic growth for items like fitness equipment grows
0%
in April
compared to the same month the previous year. Because of this, label orders for packaging, shipping, and pick up orders expand rapidly.
August 2020
Hurricane Laura Damages Petroleum Reserve
The Category 4 storm slams into the southern US coast on August 20, directly hitting one of the nation’s strategic petroleum reserve sites.
More than
0%
of oil production in the Gulf of Mexico and at least one-third of synthetic rubber capacity in the US are shut down between Texas and Louisiana in preparation.
Rail shipments are also disrupted as inbound traffic is diverted.
September 2020
COVID Amplifies Truck Driver Shortage
The decline in truck drivers continues from previous years with
0%
fewer drivers
The industry fails to entice younger drivers while older drivers age out and retire earlier than expected.
Regulations prevent drivers from working extended hours, meaning they are unable to put in as many miles.
Waves of Establishments Go Out of Business
Many small businesses that temporarily shutdown in March experience permanent closures.
A report from Yelp.com’s Local Economic Average shows almost
0
businesses
officially close due to the unpredictable economy from COVID.
October 2020
Hurricane Zeta Further Pauses Petrochemical Production
The destruction that follows the Category 3 storm along the Southern US leaves areas in the Gulf scrambling to regain power.
Two-thirds of the US Gulf crude oil volumes are shut in ahead of the storm. It is the
0
named
storm
storm
to make landfall in the Gulf that season.
Direct Thermal Anti-Dumping Lawsuit
The US Department of Commerce initiates a look into Japan, Germany, Korea, and Spain to determine if they are dumping imports of thermal paper into the market at less than fair value.
Offshore manufacturers begin limiting imports into the US to mitigate dumping fines.
November 2020
Cost to Ship Goods Hits All Time High
U.S. retailers stocking up ahead of the holidays contributes to high freight rates.
The high demand for imports from Asia to the U.S. push container rates past
$0.00
per
container
container
This also increases high demand for empty containers to be rushed back for reloading.
Lack of Available Containers Worsens Lead Times
Bustling ports struggle to load and unload fast enough to keep up with the backlog of containers from the fall and rebound of global trade.
As availability for
0FT
containers
wanes, companies pitch the use of
0FT
containers
as a substitute.
Labor shortages also attribute to containers stranded in ports and rail yards, unable to be picked up, delivered or recycled back into service at a steady rate.
January 2021
Label Industry Rolls Out Price Increases
Label laminates and converters like Avery Dennison, MacTac, and UPM Raflatac can no longer absorb the increased costs.
They begin emailing customers about impending price increases on their label stock.
Polypropylene face materials are especially affected, with surcharges of
0%
or higher
Lead Times Increase to 4 Weeks
Lead times for receiving orders extend well past standard production and shipping capabilities. DLS warns of
0 DAY
lead
times
times
for non-stocked items.
Company-wide emails are sent out to customers recommending they place orders ahead of time to remain stocked.
February 2021
Unusual Weather Disruptions Affect Chemicals
Unexpected winter storms and cold temperatures rock the Southern US where many oil refining and chemical manufacturing facilities reside.
Pipes freeze and power is lost to chemical plants. In Texas, the freeze shuts down
0%
of
polyethylene
polyethylene
0%
of
polypropylene
polypropylene
0%
of PVC
production
production
Prices for these materials see their biggest jump in
0 YEARS
April 2021
Spinnaker Coating Sends Material Update
Major coating company Spinnaker releases a supplier letter about the supply chain issues affecting their business.
Topics like price increases and material shortages on films, adhesives, papers, and packaging are addressed.
They state they are "limiting orders to historical levels" to ensure they can continue to serve their business.
June 2021
Multiple Countries Ban Silicone Imports
The US, UK, EU, and Australia ban imports from Xinjiang, China due to human rights violations of forced labor using Uyghur slaves, including children.
This region accounts for
0%
of the
world's
world's
production of silicone.
The act violates international trade rules and damages the global industry and supply chains.
July 2021
Lightning Strike Closes LyondellBasell Chemical Plant
A lightning strike on July
0
affects LyondellBasell's Equistar Chemicals polypropylene (PP) plant in Lake Charles, Louisiana.
It knocks out the power center, shutting down all plant production lines. Waiting times for supply availability extend further.
LyondellBasell Acetyls Declares Force Majeure
On July 28, 2021 LydonellBasell informs customers of a
0
pound
acetic acid leak at their LaPorte, Texas site from the previous day, July
0
Due to the unexpected incident, they declare Force Majeure on propylene glycol methyl ether acetate (PMA), which is used in coatings and inks.
The incident impacts PMA supplies, which were already tight in the US prior to the incident.
August 2021
Delta Variant Surges
Positive COVID cases due to a new strain begin to soar, especially in southern states like Florida.
Staffing across the supply chain is affected, further disrupting production and extending lead times.
0
deaths
are recorded in a two-month span.
Hurricane Ida Shuts Down Plants in the Gulf Regions
Multiple Louisiana oil refineries and chemical plants close in advance of the Category 4 storm.
They account for nearly one-fifth of the nation's refinery capacity. More than
0%
of the US's
Gulf crude oil
Gulf crude oil
and
0%
natural
gas
gas
go offline.
September 2021
Evonik Joins Force Majeure Declarations
An inability to obtain key raw materials and chemicals causes chemical specialty company Evonik no alternative but to declare Force Majeure on September
0
Through email, they warn customers of delays in delivery and possible reductions in delivered volumes until supplies return to normal.
2nd Round of Price Increases Hit
Laminators and converters send out a 2nd round of emails as material, production, and transportation costs continue to increase.
UPM Raflatac implements a
0%
increase
on paper label stock after an increase of
0%
polypropylene
label stock
label stock
earlier in the year on March 8, 2021.
Global Container Prices Soar
Prices for 40-foot shipping containers reach record-setting numbers after continuing to climb from the previous year.
According to Freightos, rates peak mid-September at
$0
while Drewry marks prices at
$0
Even when prices begin to drift lower, they are still monumentally above standard rates.
October 2021
Energy Prices Spike Globally
Due to a steep rise in prices for energy, particularly natural gas, chemical producers in eastern Germany are on the verge of shutting down plants.
Currently, they have the highest energy costs in Europe. In the US, natural gas prices have shot up more than
0%
from last year.
LA & Longbeach Ports Begin Operating 24/7
As a way to alleviate the strain on ports, President Biden announces measures to resolve the congestion of ships waiting to berth and be unloaded.
Record numbers of container ships wait weeks to dock. Anywhere from
50-100
ships
sit in the waters just off the coast.
November 2021
New Omicron Variant Skyrockets COVID Cases in U.S.
California reports the first known U.S. case of the Omicron variant at the end of November 2021.
A higher contagious strain with milder symptoms, the Omicron variant accounts for
0%
of new COVID cases by mid-December, just 20 days after its first detection.
The impact adds more stress to the already strained health care system.
January 2022
Post-Holiday Returns Peak at 60 Million
UPS is set to handle more than
0
million
returns during peak shipping season, between November 14 through January 22. Costs associated with returns increase in the reverse supply chain market, with estimates of a
$0
returned
item
item
costing on average
$0
to
process
process
UPM Strike Impacts Label Supply
The Finnish Paperworkers' Union issues a strike against UPM at the start of the new year, citing a new collective agreement. This could gravely affect the roughly
0
billion
labels
labels
Europe annually uses for sectors like food and beverage, pharmaceutical, industrial chemicals, logistics, and more.
Europe Dangerously Low on Paper
Intergraf, the European printing industry association, warns that paper stocks will not last until the strike is resolved.
Based on member feedback, by mid-February,
0%
of paper
needed
needed
by European printers cannot be obtained and they will be unable to fulfill orders.
Avery Dennison Declares Force Majeure
Due to increased shortages of their paper supplies, Avery Dennison announces they must treat the UPM strike situation as a force majeure event.
They warn customers about order restrictions, product alternatives, and will not accept any new business at this time.
February 2022
AKT Issues A Strike Warning
Finland’s Transport Workers’ Union (AKT) warns the Finnish Port Operators Association of an imminent strike over disagreements regarding salary adjustments.
In support of the paper mill strike, they refuse to handle any UPM products, shutting down Finnish ports amid bottleneck situations happening with current supply chain constraints.
March 2022
Longest Strike in Finnish Paper Workers History
By early March, the UPM strike extends for a
0
time
passing
0
days
with no resolve and making it the longest in the history of the Finnish paper workers.
The strike could run until April unless an agreement is reached beforehand. Some estimates put the disruptions at as much as €20 million, which equates to approximately
$0
million USD
a week
a week
While a reprieve from the supply chain situation remains unclear for the foreseeable future, manufacturers and suppliers will continue to do their best to meet consumer demands.
To guarantee your shipment of items, like thermal labels, order as soon as possible and be prepared for delays in delivery.
Have questions about how the supply chain crisis is impacting your business?
Contact us at 800-875-7000
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