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Brian Pankratz

~ Let's Talk Packaging

Brian Pankratz

Category Archives: manufacturing

Plastic Prices Rising

04 Thursday Mar 2021

Posted by Brian Pankratz in Info for Buyers, manufacturing, Plastic Packaging

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blisters, clamshells, custom plastic thermoforming, custom thermoforming, food packaging, mercury plastics, New packaging designs, packaging, packaging and containers, Packaging solutions, plastic extruders, plastic prices, plastic pricing, Resin cost, thermoforming

The plastics industry has continued to recover from the COVID pandemic as well as the recent unprecedented polar storm which paralyzed the Texas petrochemical industry.  Added pressure from the recent spike in fuel prices have caused an increase in freight costs.  Unfortunately, this perfect storm of long and short term disruption, has caused an increase in plastic prices and market volatility for the foreseeable future.  Let’s take a closer look at these factors in order to understand and hopefully neutralize some of this upward pressure.

The Polar Storm
On February 15th, 2021, The USA Today article reported “more than 150 million people were under a winter storm warning, winter weather advisory, or ice storm warning in 25 states.” These cold temperatures caused major energy problems, resulting in 3.5 million power outages in Texas alone. Texas is considered the petrochemical hub of America, with the majority of their facilities being shut down for several days and in some cases weeks, the plastics industry will be in recovery mode for several months to come.

Transportation
Transportation cost is a key factor in the manufacturing cost model. Since 2017 freight costs have been increasing, but in the last six months those costs have increased significantly. Powerful storms, such as the hurricanes this past fall and the ice storms this past winter create unforeseen obstacles and an additional demand on the industry to support recovery efforts. The most contributing factors for the rise in freight costs is a strong demand in freight, increased diesel fuel costs, and a low supply of carriers and drivers. This is an ongoing issue and carriers are predicting future increased rates as this is not a problem with a forthcoming solution.

Short-Term
The short-term outlook for plastic prices continues to be unstable. Most plastics have already seen drastic increases with reports that there are more to come. Resin prices have already increased 10% to 30% dependent upon the resin. Over the coming months, multiple price increases are expected with instability of the supply and the ability of the gulf coast chemical facilities to meet demand once again.

Long Term
There are no guarantees, but the increases we are seeing in plastic prices in the short term are expected to recover slightly in the summer months. The relatively short 2 week shut down of the gulf coast chemical plants from the polar storm will take a minimum of 3 months to recover. Transportation is still expected to be an issue, so increased shipping costs will still need to be factored in for future pricing.

Plan Ahead
There are several things to considered to help manage your bottom line. Below are a few to consider:

  • Understand your price breaks: Pricing is typically based on how many pounds of material are used to produce the quantities you requested. Request quantities that offer price breaks. Increasing your order quantity can be one way to keep your costs down.
  • Plan ahead: With price increases imminent, review your current inventory and ensure you have enough product on hand to get you through the high peak months ahead.
  • Contact your carriers: Renegotiation is key. Contact several carriers as well as third party logistic companies that can help manage shipping costs.
  • Contact Mercury Plastics: I agree that this point is a little self-serving, however, Mercury Plastics, Inc. has a competitive edge over most other thermoformers. Mercury extrudes various plastic sheet in house and has other unique capabilities that limit the need for other manufacturers. Extruding helps to reduce lead times and a better control over increased plastic prices. Mercury understands the price breaks, we have a robust future plan and negotiate with our carriers in order to reduce the upward pressure.  We are strategically positioned to be able to provide our customers with an insulating barrier to the coming storm.

The best way to work through unstable times is to ask questions to understand your options and to plan ahead. Start the process today by filling out the Request for Quote Form.

Like to know more about custom thermoforming and understand the costs for your product. Contact Brian Pankratz at Mercury Plastics, Inc. to learn more, bpankratz@mercuryplasticsinc.com.

PVC Clamshells Are Out!

03 Thursday Dec 2020

Posted by Brian Pankratz in Cost Savings, Info for Buyers, manufacturing, Packaging Design, Sustainability

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blister, blister packaging, clamshell, containers, cost savings, custom thermoforming, PET, PVC, recycling, request for quote, RPET, sustainability, thermoforming, Walmart

On Feb. 26, 2019, Walmart announced a new initiative for plastic packaging. One key area of focus is to, “eliminate the non-recyclable packaging material PVC in general merchandise packaging by 2020.” Walmart also introduced a new recycling playbook and recycled content goals. The sustainable initiatives by Walmart inspired other large retailers to adopt similar goals.

Walmart continues to target polyvinyl chloride (PVC) packaging, but the reality is, manufacturers should want to make the change regardless of what Walmart or any other large retailer mandate. Here is why:

Costs
PVC is more expensive to produce and convert than PET.  Although larger retailers are heralding the ecological benefits of PET, the bottom line is always the bottom line.  The bottom line is PVC IS MORE EXPENSIVE THAN PET.  This one fact alone should be motivation enough for manufacturers to switch to PET. Savings (and profitability) can be realized by switching to PET. To compare your current PVC packaging to PET, enter your info HERE.

Eco-friendly
PET is the most widely used and recyclable material used in packaging today. It can be easily recycled in most municipalities.  PVC is not considered a sustainable material and is considered an environmentally poor choice for packaging materials.

Versatility
PET materials excel in a wide variety of applications including, clamshells, trapped blisters and sealing to paperboard, however, PET really shines in food packaging solutions. There are also PET designs that can reduce or eliminate the need for sealing the clamshell.

The switch to PET is an easy and beneficial change that can help with profitability. Start the process today by filling out the Request for Quote Form.  

Like to know more about custom theromoforming and understand the costs for your product.  Contact Brian Pankratz at Mercury Plastics, Inc. to learn more, bpankratz@mercuryplasticsinc.com.

Subscribe to this blog to stay up to date on industry trends and new developments by Mercury Plastics, Inc.

CUSTOM THERMOFORMING IN REVIEW

29 Wednesday Jul 2020

Posted by Brian Pankratz in Consumer Satisfaction, Info for Buyers, manufacturing, Marketing, Packaging Design, Product Development

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blister, blister pack, clamshell, custom thermoforming, packaging, packaging and containers, packaging blog, packaging companies, packaging design, packaging designs, packaging digest, packaging news, Packaging solutions, packaging supplier, thermoforming, thermoforming companies

The consumer packaged goods (CPG) market averages 30,000 new product releases each year. To put that into perspective, a typical big box store like Walmart, is comprised of approximately 120,000 items. With so many choices, custom packaging has the ability to help you stand out from the crowd. You may choose the path of least resistance and select an existing stock clamshell in order to keep your initial investment low. This decision can lead to serious consequences in lost sales and inability to get advantageous product placement as well as shipping costs for packaging that does not properly fit your product

Cost
The main reason people choose stock packaging, is the cost associated with tool investment. Oftentimes, the upfront costs of a custom tool seem prohibitive. While there is a cost for a custom tool, it is minimal over the life of a product and a cost that can and should be planned into the overall cost of the project. There are many factors with stock packaging that can lead to overspending and quality issues. Knowing what these factors are can help to reduce any unforeseen issues as your product volume increases.

Volume
Volume is one of the main factors that helps to determine whether it would be advantageous to choose custom packaging over stock packaging. Larger parts will quickly justify the initial investment of custom packaging. The way to determine where your cost benefits are, is to discuss your options with a custom thermoformer, such as Mercury Plastics, who understands the market and can guide you through the costs associated with custom packaging.

Design and Appearance
Packaging design matters to the consumer. We have all bought products merely based upon unique packaging.  Custom packaging helps your package stand out allowing you to sell more product, which lowers costs and increases revenue. We understand that your product is special, the packaging should reflect the care and attention to detail and countless hours that you have put into development. There are many details that can be added to a custom thermoformed package in order to get the consumers attention. Adding unique features into a custom thermoformed package can be done with little to no additional cost to the piece price.  Take the time to talk to someone that can help you with your design options.

Custom packaging allows for a better fit, can use less plastic creating a lower price point, and can also yield a higher sales volume. Know your options and how custom thermoforming can benefit your product.

Like to know more about custom theromoforming and understand the costs for your product.  Contact Brian Pankratz at Mercury Plastics, Inc. to learn more, bpankratz@mercuryplasticsinc.com.

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Mercury Plastics, Inc

Recent Posts

  • Plastic Prices Rising
  • PVC Clamshells Are Out!
  • CUSTOM THERMOFORMING IN REVIEW
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  • Questions to ask when designing packaging: Understand the product
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  • Reasons Why Packaging Designs Fail – Design
  • The 4 steps to every consumer purchase – Week 4

Categories

  • Consumer Satisfaction
  • Cost Savings
  • Info for Buyers
  • manufacturing
  • Marketing
  • Packaging Design
  • Plastic Packaging
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  • Sustainability

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