An Industry United

This election season, boxmakers emphasize making their voices heard on top priorities

The 2024 presidential election will not change the boxmaking world in an instant, says incoming AICC Chairman Gary Brewer.

“Everybody always waits and thinks that November is going to flip a light switch,” says Brewer, president of Package Crafters in North Carolina. “It never does. It never will. It’s certainly something to talk about, but there’s just too much uncertainty out there right now. I want to invest. I really do. I want to continue to grow. I want the men and women who help produce my product every day have an easier day.”

Still, boxmakers want to know. Can elections refill a hollowed workforce, slow inflation, ease burdensome regulations, and deliver favorable tax policies? Perhaps not on their own, but industry leaders agree that engagement with elected officials of both parties is essential to raising awareness of the economic contributions of boxmaking and the need for policies that spark investment and create jobs.

Top Priorities

Workforce development is “probably our top compelling issue,” says Brewer. “The labor pool is certainly not what it once was. The solution to a depleted workforce doesn’t come from the race for the White House but from local leaders supporting community colleges, trade shows, and the training programs needed to prepare young people for attractive careers.

“These are the things to help people get engaged in the industry and get them interested in corrugated boxes,” says Brewer.

After workforce development, controlling inflation headwinds is an imperative because a slowdown in inflation will prompt the Fed to lower rates, Brewer says. “When you lower interest rates, that encourages and spurs investment, and that ties to workforce development,” he says. “We want to invest in new equipment, given the labor pool that we have, to help those young men and women succeed with the latest and greatest technology.”

There, he notes, the solution is not embedded in the people elected to office but in market forces.

Finally, taxation must not increase while inflation continues to hamper investment. Inflation not only limits the bang for the buck, but it also prevents investment in the first place. It causes the outlay for purchases to skyrocket.

Actual tax rates on business haven’t changed for decades, Brewer adds, but can government spending be controlled enough to prevent tax hikes? “You can’t spend your way into success,” he says. “Spending needs to be under control so that tax rates remain stable.”

Business owners need to see tax deductions, write-offs, and credits “ramped back up,” Brewer adds. “If inflation comes down and interest rates come down and then we have credits and deductions, we are going to invest like wildfire. We want to invest. We want to grow. When we invest, what does that do to the people that build the machinery? It’s a trickle effect. If we’re investing and buying, everybody’s busy.”

The upcoming election could have an impact on beneficial provisions from the Tax Cuts and Jobs Act of 2017 that sunset at the end of 2025. Allowing such items as the qualified business income 20% deduction and bonus depreciation on qualified property to expire would just be “hiding a tax hike,” Brewer adds.

Those expiring provisions mean that the industry has “important work ahead,” says Julie Landry, vice president of government affairs at the American Forest and Paper Association (AF&PA). “We look forward to working with tax writers in Congress to build on the 2017 tax reform law, including preserving key policies surrounding research and development, interest deductibility, and full expensing that are crucial to our capital-intensive manufacturing industry.”

AF&PA, she adds, “advocates for a strong and sustainable paper and wood products industry. We believe it is critical that both state and federal policies not jeopardize access to essential paper products or hinder countless modernization projects for our industry.”

Reaching Out

As the old saying goes, “All politics is local.” For businesspeople, the local connection extends to supporting candidates who “encourage investment that’s about job creation without restrictive or overreaching legislation,” says Brewer. “Let the markets roll. Let the free market take care of itself. Don’t handcuff or restrain businesses from doing what they want to do. We all like to invest. We all like to grow. We all like to employ.”

Outreach to candidates and public officials includes letters, emails, meetings, and the time-honored factory tour. Officeholders love to put on a hard hat and visit the factories in their districts, building their own brands and visibility. For businesses, it’s a chance to voice opinions to influential political leaders, whether or not they align with your views.

“You naturally want to talk to the folks who have the same views that you do,” says Brewer. “That’s the easier conversation, but step up and make a phone call or send an email or invite those candidates and leaders that may not align with you, and talk to them. Show them. Encourage them to see what you do, and tell them why it’s important to you as an owner or why it’s important to all of those people and the families that depend on you to get their livelihood.”

The November Effect

While the U.S. presidential election draws more than its share of attention, the outcomes of down-ballot races can have as much of an impact, if not more, on the marketplace for boxmakers. Many congressional champions for the forest and paper products industry are retiring in this election cycle, notes Landry.

“Regardless of the results, we look forward to working with federal and state elected officials to reinforce the importance of our industry, and our sustainability achievements, to the U.S. economy,” she says.

It is imperative that elected officials realize the influence of international policies in the U.S., says Landry. As it’s currently written, the European Union’s recent Deforestation Regulation (EUDR) “imposes unachievable requirements. This puts significant trade of products at risk between the EU and the U.S. We applaud the work that has been done already by our elected officials to voice serious concern, but there is more work to be done, as this regulation is set to be implemented later this year.”

Electing pro-business, pro-investment officials in Washington, D.C., would benefit the industry, but the process will take time, Brewer says. Boxmakers must “keep their powder dry” and wait to see what the election brings.

The unprecedented upheavals in the presidential race contribute to an uncertain climate, says outgoing AICC Chairman Matt Davis. He seemed almost prophetic when he said in June that he wouldn’t be surprised if Joe Biden didn’t run for reelection. He was right, with Biden dropping out of the race in July and being replaced on the Democratic ballot by Vice President Kamala Harris. “So much is going to change between now and November,” adds Davis, president of Packaging Express in Colorado. “I don’t know what that’s going to be. It’s kind of ‘buckle our seat belts.’”

Davis worries about the increasing divisiveness of elections creeping into his plant. “We kind of get turned off in some ways by the political climate and the way people treat each other,” he says. “It’s an opportunity for us to show what true leadership is. We come from the mindset of ‘love all and serve all.’ I think people should vote, but we’re not going to tell them who to vote for. We do think it’s important to participate.”

With all that uncertainty, the only thing to do is prepare for change. “We just control what we can control,” Davis says. “That, for us, is getting up every day and running the best box plant that we can. The economy seems unsteady right now. My advice to other members of our Association is to get out there and stay in front of your customers.”

The Sustainability Picture

In recent years, policy wins at the state and federal levels have positively impacted safety, sustainability, product stewardship, and advancing the circular economy. As the political landscape changes, the industry must remain diligent to guard against backsliding.

“The growing regulatory burden, including recent EPA air regulations, are threatening U.S. manufacturing jobs and the economy,” says Landry. “Meanwhile, extended producer responsibility (EPR) policies and the EUDR stand to impede efforts to advance a circular value chain.”

Industry players, including AICC and AF&PA members, “are long-standing leaders in sustainability, and election outcomes will not change that trajectory,” Landry adds.

Among industry sustainability initiatives, AF&PA’s “Better Practices, Better Planet 2020” initiative includes many sustainability goals that have been met, and her organization is making progress toward updating them for 2030. Member mills and facilities are located nationwide and “are often the economic backbone of rural communities,” she says. “We will continue to advocate for policies that enable our sustainability commitments and ensure people have access to the essential and sustainable paper products they rely on.”

EPR will remain on the table in 2025, Landry says. As the bills become more complex and sweeping, they become likelier to “create barriers to the market-based solutions that have driven the success of paper recycling.”

“Given the very high recycling rates of paper and paper-based packaging, any EPR system must fully and fairly credit industry’s early, voluntary actions,” she says. “EPR can be an effective policy tool for products that are difficult to recycle, have low recycling rates, or where healthy end markets do not exist. But none of these issues apply to paper.”

Paper and paper-based packaging products should be excluded from “the innovation-stifling fees and burdens of EPR programs,” she says. “It is also imperative that fees generated by products in high-performing recycling programs not be used to subsidize development of recycling infrastructure for competing materials.”

Corrugated is one of the most sustainable products available, Brewer says. Boxmaking, he says, is “a very longtime solution sitting around waiting on a problem. With what I see lately, this is a plastics problem, not a paper-based problem.”

Davis hopes for elected leaders who are good stewards of the environment and pro-business. “We don’t want anything that’s so dramatic that it prevents us from doing what we’re trying to do,” he says. “We are essential to the economy. Corrugated is a renewable and recyclable product. The unfortunate thing is, sometimes, that we get lumped into all kinds of packaging and plastics, and we’re not. If anything, we need to keep getting the message out that paper-based products are a lot better.”

AICC members can support such outreach to elected officials by taking advantage of AICC’s educational and training offerings and then sharing AICC’s positions with their elected representatives to demonstrate the industry’s constant betterment efforts toward resilience and sustainability, Brewer says. “It’s the cycle,” he says. “Carry our message, but also consume our benefits and our offerings to help yourself succeed and thrive.”

Landry also encourages incoming elected officials to join the U.S. House and U.S. Senate Paper and Packaging caucuses, which inform members of Congress about the value of the paper and packaging industries in their states and districts. “AF&PA and AICC members can also play an important role in shaping decisions that impact the industry,” she says. “We encourage members to get involved through our organizations’ grassroots programs and connect with their policymakers to share how policies and their decisions affect our businesses, our jobs, and our communities.”

All Americans benefit when policies are both achievable and sustainable, “with the goal of preserving access to the paper-based products people need and use every day,” Landry adds. “We look forward to working with those who are elected in November to strengthen American manufacturing and continue to advance sustainability in the paper and wood products industry.”

As independent boxmakers leverage personal service and customization as a strategic advantage in the age of consolidation, AICC members are “poised to do well in the future,” says Brewer.

It’s a cycle of investment and job creation that lawmakers appreciate and want to hear about. “We continue to spend money and invest and improve our workforce and our offerings, our equipment, and our products,” he says. “I really think we’re on the cusp of a good run. We just have to get through our current situation, let the policies take effect, and let the fun begin.”

M. Diane McCormick is a freelance journalist based in Pennsylvania.