Oil prices have recently soared to over $100.00 per barrel. The price of gasoline is inching to $5.00 per gallon in some areas of the country. The impact of gasoline is easy to see, but what about packaging materials? Plastic and foam, two common materials used in packaging are both used as packaging materials in a variety of packaging products. Foams and plastics used in packaging are by-products of oil. So will this higher oil price trend impact your packaging costs?
There is not a simple answer, for example, the impact of the price increase depends on the product. An inexpensive toy that uses plastic for its packaging may be more impacted because the packaging cost may be a fairly large part of the cost, whereas packaging for an expensive machine is insignificant when compared to the product cost and may be insignificant relative to the other costs to produce the package.
There are quite often design and material options for alternative packaging methods. We at Packnet are conscious of the packaging costs and will work with our clients to mitigate costs and provide the best value when reviewing processes and analyzing the total cost.