You are correct. In 2021, we saw quarterly cost increases for raw materials that averaged 7% - 9% each quarter. And that was in addition to cost increases that occurred throughout the year for everything else we purchase such as: cores, cartons, plastic bags, shrink and stretch wrap, pallets, and ink. Plus, as we all know, freight and labor costs continue to escalate.
Now, in 2022, we have seen a continuation of the cost increases for raw materials, with 9% -11% increases in both Q1 and Q2. Think about it; we are experiencing rapid, on-going inflation, and at the same time, seeing a significant deterioration in service with two to four month lead times, allocations, and unreliable deliveries.
It is a common occurrence for us to expect material to arrive today that we have waited over ten weeks for, only to receive a notice that we won’t see the material for another month.
Every major label coater and laminator is telling us to expect prices to go up each quarter in 2022 with no lead time relief in sight. It is a very difficult situation for us, our customers, and the end users.