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Price and shipping increases

Why are prices still so high and so may things still out of stock?

Why are prices still so high even though the COVID pandemic related restrictions are gone? Why are so many items still out of stock? We have been fielding inquiries on this topic in various forms lately and feel that it’s time to shed some light on the issue. It’s complicated!

*9/29/21 Update: Manufacturers are expecting delays/shortages to continue well into 2022. It isn’t uncommon for production runs of highest demand/highest profit products to be extended and prioritized, in an effort to increase production efficiency. This will often result in even longer lead times between re-stocking of other products.

It’s all connected…

It is easy to forget how industries are interconnected and how global events and market shifts impact the accessibility of items we expect to be available when we want them – especially here in the states. Both global and localized components are at play here. Factors like weather, conflict & unrest, trade wars & foreign relations, domestic policies, accidents & natural disasters, pandemics and fraud are just a few of these components. These can all impact the ability to and the cost of taking a product from scratch ( a farmer’s field, a raw materials mining site, a recycling & processing center etc) – to the manufacturer(s)  and eventually to your door.

While the pandemic has had an impact on every step in the process of production and getting products to customers, there were (and continue to be) many other elements as well. Truth is, for as far as our world has come in the way of technology and the good it has made possible, it has not diminished how connected and dependent we all are to changes in our world.

What’s causing these pricing increases?

Prices are influenced by fluctuation of the markets, which respond to any number of factors. These include (but are not limited to) impending unrest around the world, changes of leadership and projections of raw materials. Any product that relies on a crop is dependent on the weather & workforce that provides for suitable crop planting, growth, harvest, processing, manufacturing and distribution of goods.  Stressors at any part of that process can cause prices to rise.  It also results in additional time/materials to get those raw materials harvested. In some cases, prices may be increased in attempt to slow down the consumption of or the hoarding of those materials.

So many shortages…

Once raw materials are acquired, cost is still dependent on a motivated workforce (of which there’s a serious shortage), reliable manufacturing facilities, those who maintain them, and transport logistics both domestic and abroad.

Shortages (and cost increases) in lumber and steel will impact how quickly some of these logistics shortages are resolved. While there are old plants not on operation, it’s not for the lack of trying. The cost of bringing those plants up with current safety and efficiency regulations is cost-prohibitive.   The shortage in aluminum continues to constrain beverage packaging, prompting an increased use of glass.

Logistics & Shipping shortages…

pallets wrapped

Freight carriers and logistics companies continue to have a shortage of qualified operators and drivers.  You can get more insight on that challenge here. Recently, some LTL carriers have begun to apply pallet limits on BOL.

There is a shortage of pallets required to ship orders via freight, and on which most products are stored and moved on. Lumber shortages have hampered the ability of pallet producers to keep up with the sudden demand.

Because of the disruption in logistics and transport, there have been shortages in freight containers (required to move product across the ocean or the nation by rail). Really, the problem is an imbalance of where the containers are located. When Covid-19 forced national lock-downs, cargo ships full of imports headed to the US, containers were dropped in ports along our coastline. They then chose to, or could not wait around to pick up the equal amount of either empty containers. Containers piled up, congesting ports all the more. This rush also put unexpected strain on receivers and distributors.  They must have qualified lift operators on-hand, as the time frame in which goods must be removed from containers is immediately upon arrival. The increased traffic continues to cause backups at ports, adding to the delay of products. 

Additional challenges…

The shipping vessel lodged in the Suez Canal halted the movement of goods. This caused delays and a jump in the cost of cargo ship rentals. International foreign polices and logistics challenges have resulted in diminished recycling relationships -aluminum, glass recycling in particular.

Many of these components may not have resulted in quite as dramatic price increases on their own. The impact was magnified even more with companies implementing cost-cutting practice limit their inventory in recent decades.

Industry specific impacts…

Wax price increases – Weather events caused damage on many acres of soybean crops and several states are currently in drought conditions. This diminishes the crop yield and will likely increase the farmers cost prior to harvest. The result will ultimately drive an increase in the price. We have been watching the soy futures…as they change, so do our costs and so must our prices. (See this recent Agri Census  article)

Fragrance oil price increases – All of the above has impacted raw material pricing. That steel shortage caused a significant increase in the cost of steel drums fragrance oils are shipped.

Glass shortages and price increases – The demand spiked (more significantly than ever) at the beginning of the pandemic and through-out that summer. Why? As pandemic related production and logistics issues in sourcing aluminum, “tin” cans increased, food and beverage packaging plants began switching to glass to fill in the gap. Glass jars were suddenly being used in many more purposes than expected. Although there was also an increase in home-based canning and preserving, the biggest hit to the glass supply was in the commercial side of things.

Shipping cost increases – UPS Ground recently changed their “over-weight” threshold to 50lbs. Our wax company (as most others) packs 50lb of wax in a bag & box. The additional weight of the simple packaging puts a case of wax at 53lbs; “over-weight”. Our wax manufacturers are willing to sell 45lb cases, but at a significantly higher price. The cost of running an additional line to package it gets passed along. 

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  1. Leah Posted July 17, 2021 at 9:49 am | Permalink

    Thank you for being so thorough in your information on cost increases. It all makes perfect sense and it’s helpful to have it spelled out like this. I get asked from my own customers about my own price increases since the pandemic hit (I make candles), and my short response is simply that the cost of my materials increased. That’s just how the world works. Thank you, again, for taking the time to explain all of this for your customers.

    • Fillmore Container Posted July 17, 2021 at 12:14 pm | Permalink

      The more we understand about the issue, the better we can plan, and hopefully the more grace folks in each step of the process will have with those around them. 🙂

  2. April G Posted July 17, 2021 at 9:52 am | Permalink

    This was very informative. Thank you!

  3. Amanda Scherp Posted July 17, 2021 at 10:31 am | Permalink

    UPS rates are way higher than FedEx and USPS! Try using different shipping carriers.

    • Fillmore Container Posted July 17, 2021 at 12:12 pm | Permalink

      Unfortunately, shipping cost alone is not the root of the pricing/supply problem. Often, when customers do quick comparison quotes, it’s not an apples-to-apples comparison, and they’re unaware of how complicated a change or addition of other carrier is in application. In this climate ALL of the carriers have increased basic shipping rates, applied additional fees, and have made weight and dimensional weight restrictions tighter. We do our homework, because we want to save our customers money. Which means that we also need to make sure that the entire shipping process is a efficient as possible for all involved. Most of our customers are small businesses who rely on timely delivery as part of their business plan. Lost USPS packages that result in production delays, inability to fulfill orders, etc can end up costing so much more that the little more in shipping 🙂 Our volume of packages and freight allows us some room for negotiating, our relationship with UPS has been a good one considering all that is going on in the world right now. Also, we require reliable tracking (not available with USPS) and the software/platform systems for ordering, quoting, shipping, inventory etc ALL need to be compatible.

  4. Darlene Karsten Posted July 17, 2021 at 11:05 am | Permalink

    I’m still with you as a customer. My business is barely moving too. We all have to weather this to come out on the other side.

  5. Sharon Wright Posted July 17, 2021 at 11:06 am | Permalink

    Thanks for all of the information!

  6. Michael R Ratti Posted July 17, 2021 at 1:50 pm | Permalink

    Thank you for taking the time to write and explain this to us all. Your explanation was simple and very effective..I will continue shopping and support Fillmore Container for my needed items….

  7. Danise M. Smith Posted July 17, 2021 at 1:52 pm | Permalink

    Thank you for a concise and well written explanation of the reasons for price increases.

  8. Melissa Posted July 17, 2021 at 11:22 pm | Permalink

    Thanks for all this great information. Very well explained.

  9. AnnaInOhi Posted July 18, 2021 at 12:29 pm | Permalink

    And yet sadly I watched last month Volunteers of America in Columbus, Ohio raise the prices on canning jars 2 X the cost of brand new let them pile up because people refused to pay that price and then put them in a trash compacter and destroy them rather than mark them down. I am so thankful that I’ve been buying them for years and friends/neighbors who have given up canning gave me theirs and thankful last year that I ordered a decent amount from you all of one piece canning lids which work out fantastic btw so at least this year it’s less stressful. Thank you for staying on top of things and informing everyone of what is going on in our world.

  10. Ruth Naldrett Posted July 18, 2021 at 6:31 pm | Permalink

    I have only ordered once from you and was very pleased with how my purchase arrived – well packed and in good condition. Because of my experience with your company and service coupled with the time and effort you put into explaining all these details, my respect and confidence in you is high.
    Thank you

  11. Misha Be Posted July 22, 2021 at 2:09 pm | Permalink

    Thank you for thoroughly explaining. This should be more widely circulated for folks to understand.

  12. Melissa Posted July 23, 2021 at 12:39 pm | Permalink

    We understood the impacts of the overseas materials, shipping, soy futures and glass shortages due to various reasons but in all honesty…completely overlooked the pallets, the steel drums and other issues impacting the industry. This was very insightful. While we remain very busy and have found ways to order in more larger bulk quantities to weather the ups and downs moving forward…it definitely is a new way of doing business that has pushed us to grow and adapt. Finding good in the bad! Thank you!!

  13. Mimi Palm Posted July 23, 2021 at 1:24 pm | Permalink

    Thank you for providing these details and background information. It’s very informative! Thank you for really taking the time to inform your customers.

  14. John Posted January 3, 2022 at 2:28 am | Permalink

    Thank you for the information, but this doesn’t explain the issue with your Anchor Hocking glass. That’s produced right here in the U.S.

    Stoelzle Glass Group acquired the Monaca, Pennsylvania facility. They reported producing 300 tons of glass per day in April 2021 – that’s right in the middle of this pandemic.

    In August, 2021, with the acquisition complete, Stoelzle now 7 glass production sites, 3 decoration sites, and a total of 3,100 employees between the U.S. and the U.K.

    With only 20% of all glass in the U.S. coming from imported sources, I find it hard to believe this issue is as global as stated. Unless we’ve also run out of sand here at home.

    Have you reached out to them for their explanation? Maybe you’ve heard something different than they told me.

    • Fillmore Container Posted January 4, 2022 at 10:26 am | Permalink

      Hi John, It continues to be a complicated and challenging situation. Even if that 20% import value was accurate (leading up to covid), when that went away as ports were closed, and as processing of inbound was slogged by challenges, the impact of that 20% shifting immediately to domestic product is a massive shift. On top of a significant shift toward glass packaging (for reasons of food/beverage safety, consumer preference, and supply challenges in the metal industry), the combination of demand and inability to be manufacturing at optimal levels will continue to keep lead times longer and landed costs greater.