We can all agree that 2020 was a challenge. However, 2021 will also bring its own unique set of pressures. The surge in demand subsequent to the global pandemic has placed considerable strain on supply chains. We in the foam industry are facing some of the strongest upward pressures on costs in recent memory. PE Resins have increased rapidly since the summer. These increases are the largest since 2009, and while these increases are expected to fall back as more supply comes on line, it is causing a sharp increase in production costs now.
Global freight costs have risen tremendously the past 4 months and those of us shipping relatively low-value products filled with air are particularly squeezed. Additionally, after a sharp rebound in freight demand in the second half of 2020, truckload and less-than-truckload (LTL) carriers are seeking higher rates for 2021, Finally we are seeing increased difficulty in securing available space to ship.
These factors as well as others have led to back-to-back price increases in the extruded PE industry as well as on our roll goods. We are challenging ourselves to look inwards to reduce costs as well as working with customers to find efficiencies to minimize further price increases. We do appreciate your business and feedback during these challenging times.
Any changes will be communicated in advance directly to you by your business development manager.