May 11, 2026

Managing your business in a time of price instability and supply chain challenges

I wouldn’t use the word unstable to describe paper and raw-material pricing today,” says Jeremy Cohen, vice president and general manager of Acme Corrugated Box Co. “But when the index pricing is stagnant for long periods of time, which we’ve just gone through, price erosion in corrugated becomes a real problem.”

That problem is exacerbated, in part, by a recent decline in demand. “When demand is soft but supply is prevalent, that’s when most buyers shop,” Cohen says. “Over the last six months we’ve seen a lot of our customers shop and request price reductions because people are in the market looking to fill box plants with volume. Some of the big integrated players are light on volume, but they need to be able to run their box plants. So they lower price to fill the plant. It isn’t necessarily that prices are unstable; it’s just that box prices have been steadily under pressure because demand is soft and supply is prevalent.”

But that isn’t the only contributor to today’s raw-material pricing situation and the current market downturn.

The Pricing Picture

“If you look at most general economic reports, consumer discretionary spending continues to drop, because affordability is a real issue for people,” says Cohen.

One possible reason: The wage inflation that occurred during and immediately after the COVID-19 pandemic has stopped, while the cost of goods continues to rise. “People are keeping money in their pockets and not spending as much,” Cohen says. “And when people don’t spend, things don’t get shipped, and boxes don’t need to be made.”

There also is a growing use of less costly alternative packaging. “Boxes have been relatively cheap throughout their history,” says Acme Corrugated President Bob Cohen (Jeremy’s father). “Now, as they are becoming more expensive, people are finding lower-cost alternatives. We’ve seen that more and more in the last two years.”

For example, Jeremy points out that previously Acme customers might have ordered jumbo gaylords for internal warehouse use. Now they are shifting to reusable plastic containers. “Your home Amazon deliveries used to be 100% corrugated,” he adds. “Now you’re seeing a lot more paper bags, even in cases where the products would be better served by a box.”

For equipment manufacturer BW Papersystems, the situation hits a bit differently. Paper and related raw-material price fluctuations don’t directly impact their own business. But they do play a role in customers’ decision whether to invest in new equipment.

“Every customer has their own investment strategy and capital-expense strategy based on their business and what they’re wanting to accomplish in the short term, medium term, and long term,” acknowledges Neal McConnellogue, BW Papersystems’ president of corrugated and chief commercial officer. “Paper prices are going to be a factor in that. It’s something we pay attention to. While it doesn’t drastically change what we do, it’s a variable we monitor closely so we can discuss the right solutions to help customers meet their specific business needs.”

That doesn’t mean, though, that equipment manufacturers themselves are unaffected by supply chain disruptions.

Component Complications

For machine manufacturers, raw materials might include steel, glass, plastics, and electronics. Within that context, equipment suppliers are experiencing their own sourcing challenges.

“We are buying raw steel and a variety of manufactured and electrical/electronic components to make our equipment,” McConnellogue says.

In the three-plus years since the pandemic, one of the more challenging parts of his business has been navigating the supply chain in terms of material supply, parts flow, component inventories, and pricing variations.

“Electronics and control-oriented devices have probably been the categories most disrupted for us because they’re typically made outside of the U.S.,” McConnellogue says. “That makes them vulnerable to tariffs and supply chain disruptions. So we’ve put a lot of attention into addressing that situation. We have tremendous relationships with our suppliers and our supply partners. And we work together to navigate the supply chain to minimize disruption to our business and to our customers’ business.”

Because there are now more uncertainties surrounding availability and delivery, lead times have increased. “You have to forecast well and plan effectively to get ahead of the wave,” McConnellogue advises. “Having said that, we continue to deliver equipment within our typical time frame of nine to 12 months, depending on the specific machine.”

Adding to the uncertainty is the potential impact of tariffs, a topic that McConnellogue says is “front and center for us” and is regularly discussed. “The situation has been so turbulent and inconsistent, sometimes changing week to week, month to month. We are watching tariffs closely and are having more dialogs with suppliers on that topic than we’ve ever had in the past.”

“I know tariffs are hitting some box plants hard,” Bob Cohen notes. “We haven’t experienced that yet. The European market is oversaturated, with maybe 5 million tons of additional capacity versus demand. Every one of the European suppliers that we have has been willing to absorb the tariffs just to move their product out the door.”

“They are doing whatever it takes to conduct business,” adds Jeremy Cohen, “because they can’t run their mills without exporting to people like us.”

Those European suppliers have figured out what they need to do to succeed in the current business climate. Cohen believes boxmakers must do the same.

Honing Your Competitive Edge

Boxmakers can do little about paper pricing and most of the factors stressing the supply chain. But they can take steps to ensure that their operations are equipped to remain competitive, despite potential disruptions. “You have to be a low-cost producer to remain competitive in the marketplace,” Jeremy Cohen believes.

To do this effectively, he says, you first have to source paper at a competitive price. Bob Cohen points out that Acme sources paper globally, prioritizing strength characteristics over other attributes. “We’re kind of agnostic about whether it’s recycled or kraft,” he says. “We’re looking for the best value we can give our clients.”

The company also seeks out alternative products that may not be on other companies’ radar. “We run some proprietary grades, and we run some proprietary flute combinations,” Bob Cohen says. “We’re always looking to innovate, and often that means straying from the current orthodoxy of how you run a box plant.”

Another important trait of a low-cost producer is efficiency, Jeremy Cohen states, which includes an efficient operation, efficient labor, and reduced waste. “In 2020 we started a building expansion to increase our square footage but also to implement a lot of changes to how we process work in the plant,” he says, referring to the company’s development program to improve efficiency. “We have added a new corrugator, a new high-rack work-in-process storage system, new automated infeed conveyors. Where we used to have five forklifts per shift handling material between the corrugator and our converting operation, we now
have none.”

He notes that, with the aid of these systems, almost every sheet that comes off the corrugator now is usable, and internal waste has been reduced. “And we continue to invest in high-speed, automated production lines, converting lines, flexo folder-gluers,” he says.

Finally, Jeremy Cohen believes it’s especially important for low-cost producers to know where to draw the line on the jobs they accept. “If a competitor comes in with aggressive pricing for one of our existing accounts, we have to evaluate whether we can still serve at that price level and make money.”

Sometimes, saying no may be best for your bottom line.

Like the boxmakers they supply, equipment manufacturers cannot prevent marketplace disruptions, but they can prepare for them. For BW Papersystems, that means developing a robust stocking model for raw materials and new machine components, so they are not forced to operate “hand-to-mouth, if you will,” McConnellogue says. “We also have suitable inventory to support our installed base so we can support our [existing] customers on a daily basis.”

The company has built a local-for-local approach to its manufacturing, which helps to lessen the impact of tariffs and overcome some supply chain challenges. “We manufacture and build equipment in North America for the North American market,” McConnellogue explains. “Similarly, we have built up our capacity in Europe to support Europe and the EMEA region. And we have flexible capacity between those sites to support regions where we’re not embedded with a manufacturing facility. For example, we can serve Latin America from either North America or from Europe.”

Ready and Responsive

When asked what advice he would offer other AICC members facing pricing and supply chain hurdles, McConnellogue says, “Plan and prepare, so that you can work to get ahead of potential supply chain disruptions. Focus on developing capacity and emphasizing flexibility. We all need to be constantly monitoring whatever may be affecting our ability to do our business well and then be prepared to adjust as quickly as possible to any disruptions—including changes in policy and geopolitical climates.”

The Cohens suggest that an uncertain market may offer the best opportunity to grow. “As the markets change, as they get softer, that’s usually when we make our deals on equipment and make plans to expand our capacity,” notes Bob Cohen. “We’re opportunistic. We always invest in down markets.”

That mindset reflects a firm confidence in the future despite current circumstances. “You have to be an optimist in this industry,” Bob Cohen adds.

Disruptions may mean that independents are not always able to compete on price. But the Cohens are convinced that any independent that prepares for uncertainty will be successful in the long run. “If we’re going up against our major integrated competitors on anything other than price, we’re going to win that business,” Bob Cohen declares. “That’s because we’re going to be far more responsive, far more flexible, far more dependable. That’s just the facts on the ground.”