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Critical Events of the Label Supply Chain Crisis March 2020 – Present

A pop art illustration of a plane, a shipping barge with containers, and a forklift unloading those containers

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

An illustration of a cell with the term COVID-19 inside and struck out

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
An illustration of a storefront connected to a mouse and keyboard

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

Daily online grocery sales increase

0% in just
4 weeks

April 2020

An illustration of a woman sitting on a pile of packages

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

An illustration of a tornado in the middle of an oil field

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

An illustration of a delivery truck with packages sitting next to it

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.

An illustration of a storefront with a closed sign

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

100,000 businesses unpredictable economy from COVID.

October 2020

An illustration of a tornado pathing towards an industrial facility

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

to make landfall in the Gulf that season.

An illustration of some legal books, a gavel and the scales of justice

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

An illustration of a money bag, calculator, gold coins, and a line graph going up and to the right

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

This also increases high demand for empty containers to be rushed back for reloading.

An illustration of a container ship with the sky in the background

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

An illustration of a money bag, and a line graph going up and to the right with the word increase at the bottom

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
An illustration of an open laptop with an exclamation mark and a clock

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

for non-stocked items.

Company-wide emails are sent out to customers recommending they place orders ahead of time to remain stocked.

February 2021

An illustration of an industrial facility with wind gusting and snow falling

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
0% of
polypropylene
0% of PVC
production

Prices for these materials see their biggest jump in

0 YEARS

April 2021

An illustration of an open envelope with an exclamation mark

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

An illustration of the earth with an import truck, a container ship, and a stack of packages

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

production of silicone.

The act violates international trade rules and damages the global industry and supply chains.

July 2021

An illustration of a factory being struck by lightning

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.

An illustration of an official document labeled force majeure

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

An illustration of a microscope and a cellular organism

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.

An illustration of a tornado passing through an oil field

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

and

0% natural
gas

go offline.

September 2021

An illustration of a force majeure letter emerging from an envelope on a computer monitor

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.

An illustration of a line graph going up and to the right behind piles of gold coins

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

earlier in the year on March 8, 2021.

An illustration of a line graph going up and to the right behind a calculator, money bag, and a pile of gold coins

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

An illustration of a fuel pump next to a gas can

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.

An illustration of a container ship sailing

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.

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