Thinking inside the (cardboard) box
I have a “go-to” joke whenever I meet or am otherwise forced to hang out with financial planners, investment bankers, crypto traders or the like. “I’ve got a tip for you,” I lean in to say in a whisper. “Corrugated paper. That’s right, cardboard. All you have to do is keep two or three tons of it in your house. Last quarter, I made 3 cents per ton! Do the math!”Get more news about
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Of course, the joke is all in the delivery, and the joy is in the reveal. When they figure out they’ve been had, if only for a few seconds? Well, it’s delicious, and some recompense for the fact that they make waaay more money than I do.I’ve been telling variations of this joke for decades, most recently with a financial planner here in town over lunch. It’s been several months, but he hasn’t gotten over it.
But here’s the thing: Covid turned a lot of things upside down, including this joke about the ridiculousness of investing in boxes. By one estimate, the international market for corrugated paper, which industry insiders do NOT like to call cardboard (it’s a couch/sofa thing), will reach the size of the gross domestic product for either New Zealand or Greece — $205 billion. In the United States, the market for cardboard boxes and containers is $77 billion, according to IBISWorld, or $1 billion more than the retail furniture industry. Which reminds me of another joke.
Long-time Furniture Today publisher Joe Carroll, my adoptive father, loved to tell the joke of the furniture store that put a sofa and the box it came in on display in the store’s front window.Customers kept buying the box rather than the sofa. Joe’s sage industry insider advice? Keep ordering the box! Well, that joke has been turned upside down, as well. The corrugated box industry is booming. The sofa business? Meh. Unless you’re Vietnam.
A year ago, I finished up a series in this space that provided a history and state-of-the-industry report on the oceangoing, truck-carried container industry, and it is quite the whale song. Now, in the midst of the shopping season, we check in on the cardboard industry, a whale of a different kind.
To connect to the theme of a column last month, American use and re-use of cardboard should be noted, compared to, in particular, plastic and glass. According to the American Forest & Paper Association, we recycle only about 5% of our plastics, about a third of our glass bottles, but more than as much as 91% of our cardboard (as of 2020). Consumers aren’t generally aware why, but they do know that cardboard should be recycled and, relative to non-fiber-based materials, that it can feasibly be recycled most everywhere. The extent to which packaging materials are affecting buying choices isn’t known, but it isn’t a stretch to suggest that they are a factor.
Because loblolly pines, or Pinus taeda, grow so fast and in so many climates, including and especially Alabama and Georgia, they are relatively easy to replenish. This is good news for the planet, but bad news for my neighborhood. International Paper’s Rome facility reports receiving 8,000 tons of trees coming in every day, and a frightfully large number of them rumble past our house along Highway 101, chugging up the hill like out-of-shape distance runners with stage four emphysema. They rattle the window panes.Back to Joe Carroll’s sofa box, the opportunity for improvement for shippers, including all of the e-commerce players in furniture, is to reduce waste. There is an optimal size box for any product, from lamp shades to sofa-sleepers. If the box is too large, there is a higher risk of damage and a cost associated with shipping all of that empty air. Consumers are aware of this, too.
