2022 FIBC Market Update

May 13, 2022

Even though things have been anything but normal since early 2020, now, more than two years later, COVID-19’s far-reaching impact continues to affect the global supply chain. Nearly every facet of society still struggles to balance supply and demand, including the FIBC industry.

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What's New?

As usual, the spring season has been slow for incoming purchase orders, but those in the business understand that this is just the calm before the storm. Over the next few months, expect to see orders increase - putting additional pressure on lead times and availability.

And now, we can add the Ukrainian-Russian conflict to factors negatively impacting the flow of goods and services. Unfortunately, the overall outlook for the FIBC market for 2022 is looking similar to 2021 in terms of both price increases and shipping delays.

Prices Will Continue to Rise

When Russia first invaded Ukraine, no one could have guessed just how long the conflict would last — or have predicted just how devastating the results would be for the rest of the world. But as the invasion continues day by day, the economic impact becomes clearer. 

Global oil prices continue to rise and remain unstable, directly impacting the cost of ocean freight. Plus, this rise in oil prices also has a downstream effect on the price of plastic, since crude oil is a core raw ingredient in the production of plastics. In turn, this inflates the cost of flexible intermediate bulk containers (FIBCs), which are made from polypropylene, a form of plastic.

Unfortunately, you can expect to see this trickle-down situation directly impact your pockets with increased packaging and freight costs throughout the market. It is uncertain when, or if, we’ll return to “the normal” cadence of the flow of goods — both raw materials and finished goods.

Lead Times Will Remain Extended

Lead times remain prolonged and inconsistent across nearly every industry. Manufacturers are unable to produce products because they can’t get the needed raw materials. And even when finished goods are ready to ship, the increase in demand, unpredictability of transit schedules, increase in oil prices, labor shortage, limited shipping space, and numerous other related issues continue to put pressure on already-overloaded ports.

For example, these transportation issues came to a head in Southern California in late 2021 with a “then” high of 81 container ships being stuck offshore for an average of 16.6 days while they waited their turn to unload. In 2022, this number of waiting ships has barely been reduced.

And earlier this year, Charleston, South Carolina, experienced this same mayhem, with a record 30 container ships anchoring off the coast while they waited to unload, with an average wait time of seven to eight days each.

These transportation delays directly affect lead times. What was considered an acceptable lead time of eight weeks is now 12 to 16 weeks for materials. And we’re actually expecting to see the FIBC lead time increase even more – from 20 to 22 weeks.

How You Can Navigate the Current FIBC Market

The number one thing you can do to navigate this market shortage is be as proactive as possible. Plan FIBC bulk bag purchases as far in advance as possible to offset the long lead times and avoid additional rush fees.

But don’t ignore your options. Consider utilizing off-the-shelf bagging selections instead of custom-ordered packaging. As one of the largest bulk packaging suppliers in the country, Southern Packaging worked hard to double our stock inventory at the beginning of 2022 to assist our customers in fulfilling their bulk packaging needs during this tumultuous time. And if off-the-shelf packaging isn’t a solution for your production process, Southern Packaging also offers high-quality custom bags.

We’re strategically located near Dallas, TX making shipping convenient to our customers from coast to coast. And our inventory is available for immediate shipping so you can have the products you need when you need them.

Don’t delay in planning your packaging needs for the busy months ahead. For more information on FIBCs and stock FIBC bulk bags, connect with us today!