Big Cardboard is thriving after 2020’s online ordering bonanza

Mo’ money, mo’ boxes. During the pandemic, as online ordering and delivery surged, the demand for cardboard boxes and packaging materials piled up. Now we know how high.

A record 407 billion square feet of corrugated materials were produced in the US in 2020, according to a study by commercial real estate advisory firm Newmark.

• The packaging industry is expected to grow by 3.5% each year for the next five years, while eMarketer predicts e-comm sales will grow 13.7% in 2021, to $908+ billion.
• More than 80% of online orders use corrugated packaging.
• “E-commerce uses seven times more boxes per dollar of retail sales than an equivalent purchase at a brick-and-mortar establishment,” Mark Russo, associate director of New Jersey research and national industrial for Newmark, told Retail Brew.

Outside the box: Packaging companies have grown their warehouses and distribution operations accordingly.

• Over the past five years, leasing volume within the packaging industry has been 45% higher than the 20-year average, Newmark found.

What’s at risk? “Greater costs, more inefficiency,” Lisa DeNight, director of national industrial research at Newmark, told us. “The price of packaging materials has risen with surging demand, [which] has also led to supply chain volatility.”—JG