In 2021, we are expecting to see a shortage of labels and an increase in both pricing and lead times. This is due to many factors including an increase in demand for lumber and corrugated cardboard. You need labels for products, product fulfillment, identifying supplies, and more, but before you can do anything else, you find out that labels are suddenly hard to come by and pricier than usual. What should you do? We’ll offer some tips to help, but first, let’s look at what’s causing the shortage in the first place.
Several factors have combined, contributing to the label supply shortage in 2021. Most are related to the deadly pandemic that has devastated much of our population:
Increased demand due to an increase in online shopping and subsequent shipping. Sellers need more blank shipping labels than ever before.
Increased demand from retailers and manufacturers who need more corrugated cardboard for packaging and shipping products.
Lumber and paper shortages. Due to the pandemic, there are fewer workers available in these industries, yet demand has skyrocketed. They simply can’t keep up! A few years ago, a 2-x-4 cost about $3, but now, it’s nearly $10. Scarce lumber and paper resources are in short supply amidst unprecedented demand.
Trucking surcharges. The trucking industry is also struggling to keep up, resulting in increased shipping costs.
We can only hope that production will catch up soon, but in the meantime, how can you minimize the impacts? There are a few ways you can save money and get your labels on time without spending too much extra effort.
- Become a master inventory planner. Start by taking a master inventory of your labels and then forecast how many labels you will need over the next six to nine months, or even further out if possible.
- Account for longer lead times from your suppliers. You may be accustomed to getting your orders within a few days of ordering, but with a global label shortage, lead times will increase. It may take several weeks — or longer — to receive your label order.
- Conduct regular label inventories (daily or weekly, depending on volume), and move up your “order by date” to avoid running out of stock due to label production and shipping delays.
- For regular label stock, order more labels than you currently need. Now is not a time for “just in time inventory” practices. You’ll use the labels up eventually, and you’ll get them at today’s pricing. Plus, you’ll avoid the stress of trying to buy labels in the midst of the label shortage.
- Consider ordering extra labels in various sizes and shapes for general purpose labeling. Having extra labels on hand can help you be prepared for other occasions.
In conclusion, the best way to avoid price increases and wait times for blank labels is to manage your inventory, order early, order extra labels, and diversify your order by mixing up the sizes and types of labels you need to ensure that your label supply always meets your demand.