Market Trends of North America Corrugated Board Packaging Industry
Strong Demand from the E-commerce Sector
The e-commerce industry has emerged as a prominent industry over the past decade. Prominent e-commerce companies like Amazon are using corrugated board boxes for secondary packaging. The demand for corrugated boxes is expected to increase with e-commerce packaging due to the high-quality graphics capabilities and strength of white-top and other higher-value paperboard grades. They are available in standard boxes and can be customized. The customization is not limited to the size but includes flaps and printing. Corrugated box supports inkjet and laser printing, which gained popularity in the e-commerce and subscription e-commerce sectors.
Increased demand for packing boards for online sales due to the COVID-19 pandemic promoted the corrugated paperboard packaging industry's growth. The importance of online retail sales to the modern economy is highlighted by Amazon's latest Prime Day. Amazon and other merchants' shipping boxes reflect e-commerce, and they are one of the most important factors boosting the demand for corrugated packaging in the United States and Canada.
The e-commerce companies have been focusing on replacing single-use plastics with corrugated boxes and paper bags. This created various opportunities for paper and paperboard packaging vendors. In its frustration-free packaging program, Amazon mentioned that due to the easy customization of corrugated board packaging, the company achieved the right-sized packaging for products, reducing the overall logistics cost. Lighter materials help lower greenhouse gases.
E-commerce is expected to become a substantial and high-growth opportunity for the corrugated board packaging market in 2023, according to the Future of Corrugated Packaging. Despite the economic slowdown, which generally affected e-commerce package/retail sales, e-commerce retail sales have continued to rise, providing significant potential for corrugated packaging suppliers.
The increasing demand for corrugated packaging in e-commerce and increasing raw material prices fueled the need to recover and recycle old corrugated containers (OCC). For instance, according to the American Forests and Paper Association, in 2021, more than 35 million tons of old corrugated containers (OCC) were recovered for recycling in the United States, an increase of roughly 13 million tons compared to 2001.
United States Holds a Major Market Share
The United States is anticipated to lead the North American corrugated box market because of its sizable population, which generates a sizable client base for the corrugated box industry in the area. The United States is one of the major regions in North America that is showing signs of a growing paper market due to the initiatives taken by the government for environmental safety. The demand for paper is growing due to the changing preference of people for biodegradable and sustainable packaging materials.
According to the US Department of Commerce, couriers and messengers in the United States produced over USD 137.9 billion in operational revenue in 2021, up from USD 117.3 billion in 2020. UPS is the largest courier and delivery service provider in the United States, accounting for over 37% of the market, followed by FedEx with 33%. These figures show that corrugated boxes are in high demand in the United States.
According to the Food and Agriculture Organization of the United Nations, in 2021, the United States consumed over 65.6 million metric tons of paper and paperboard. This represents an increase of more than 3% compared to 2020. Just behind China is the United States, the second-largest user of paper and paperboard globally.
Therefore, although paper and paperboard consumption dipped from the end of 2019 till the end of 2020, the market has rebounded since last year due to the adverse effect of the COVID-19 pandemic. The increase is due to the robust demand from the corrugated packaging industry.
Cardboard box exports from the United States are also steadily increasing. According to International Paper, one of the country's top suppliers of containerboard and corrugated cardboard 2021, the United States exported corrugated packaging totaling 416 billion sq. ft. Corrugated box shipments from the United States are anticipated to reach 560 billion sq. ft during the forecast period.
