Those of us who have been around the packaging industry for any length of time watched as jobs and manufacturing went overseas, quickly followed by packaging. Our claims of better quality, faster deliveries, etc. fell on deaf ears as buyers were increasingly attracted to Asia, lured by the great deals that seemed to be available everywhere outside the USA. I recall one particularly excited buyer who said “Free tooling, delivered pricing, comparable quality at less than half the price, how can I possibly resist?” Many did not try to resist but many of those same companies and buyers are now bringing their manufacturing and/or their packaging home again.
What happened to the great deals?
With a bit of a tweak to the old adage, I am saying when something is too good to be true, it probably won’t be for long. An explosive increase in business resulted in some unavoidable problems. These include:
- Labor costs rising
- Environmental concerns resulting in regulation and increased costs
- Transportation costs increasing dramatically
- Quality control and safety issues
- Lead time and delivery problems
- Communication and ethics issues
In other words, many of the problems we had here, that helped drive buyers there, are bringing them back again.
Domestic Quality of Packaging
“Is it like that foreign cardboard?” many would ask as I pitched our 100% recycled content corrugated, or our 100% PCW recycled corrugated board packaging. What they were asking is, is it going to have that same yellow color, that same shoddy appearance and in some cases, even the same unpleasant smell? People understood and acknowledged the difference between higher quality domestic and lower quality imported packaging products.
I would be the first to admit that generally the quality of foreign made packaging, especially foreign made corrugated has substantially improved over time and in most cases, the gap between us and them is not as far apart as it used to be. However, it is still not the same.
While they continue to have a tremendous advantage in labor intensive packaging areas such as handmade, specialty packaging; on mass produced packaging we have maintained the quality advantage with more productive and consistent equipment and better quality materials. Why do you see outbound containers of our waste material at almost any seaport? Simply put – our waste is not only more plentiful, it is also generally of better quality. This results in consistent fibers, stronger packaging containers and better print quality.
What is the first thing to go, when a packaging manufacturing plant (or country) gets too busy?
This question would result in a good, lengthy debate because there are so many accurate answers. Some might say quality, and honestly, neither foreign nor domestic packaging manufacturing is immune.
Others would argue that pricing is the first indicator since a busy plant does not have to “give it away” or more strategically, once you successfully buy the market share you want, you are able to raise your prices to where you want them to be. Or perhaps it is just basic economics with fast rising costs driving fast rising selling prices?
In my opinion, the first indicator of a plant that is overwhelmed is lead times and ship dates, which may increase resulting in my last point listed above. “I am tired of being lied to” one disappointed customer recently said to us as they asked us to take on their substantial packaging volume so they could begin weaning themselves from a foreign supplier that they had grown far too dependent on. BTW, we shipped the first order in 7 working days only because we had to make new print plates for the customer.
Another customer was on the verge of missing a critical new product launch date thanks to a blown ship date for some internal packaging they were importing. We were able to create a molded foam insert for them and deliver it within two weeks so they could ship product out on time. Were we more expensive? Of course we were, but “not as much as I anticipated” was the customer’s blunt response.
What is Right about Domestic Packaging?
I can’t speak for the entire packaging industry but after a few decades I know many of our friends feel the same way – we are going to try to give you the best product possible, on time, at a very competitive price. We are also going to create American jobs in the process, helping people afford to buy the products you are selling.
We may not have the lowest price in today’s worldwide supply chain, but the difference may not be as great as it once was. Maybe that same buyer I mentioned above is today saying, “Great quality, minimal inventory, delivery dates I can count on, at a very competitive price, how can I resist?”
For a frank and honest discussion on your foreign made packaging challenges, please contact us at Salazar Packaging or call us at 630-551-1700. I am very confident, we can help you bring your packaging home.