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!
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
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
Daily online grocery sales increase
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
compared to the same month the previous year. Because of this, label orders for packaging, shipping, and pick up orders expand rapidly.
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.
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.
COVID Amplifies Truck Driver Shortage
The decline in truck drivers continues from previous years with
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
officially close due to the unpredictable economy from COVID.
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
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.
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
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
wanes, companies pitch the use of
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.
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
Lead Times Increase to 4 Weeks
Lead times for receiving orders extend well past standard production and shipping capabilities. DLS warns of
for non-stocked items.
Company-wide emails are sent out to customers recommending they place orders ahead of time to remain stocked.
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
Prices for these materials see their biggest jump in
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.
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
production of silicone.
The act violates international trade rules and damages the global industry and supply chains.
Lightning Strike Closes LyondellBasell Chemical Plant
A lightning strike on July
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
acetic acid leak at their LaPorte, Texas site from the previous day, July
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.
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.
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
Gulf crude oil
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
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
on paper label stock after an increase of
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
while Drewry marks prices at
Even when prices begin to drift lower, they are still monumentally above standard rates.
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
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
sit in the waters just off the coast.
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
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.
Post-Holiday Returns Peak at 60 Million
UPS is set to handle more than
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
costing on average
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
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,
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.
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.
Longest Strike in Finnish Paper Workers History
By early March, the UPM strike extends for a
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
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