Combatting supply chain delays for cannabis brands
You’ve got your design, selected your materials, tested and approved for local compliance and you’re ready to get your cannabis packaging into production. But - today’s global supply chain is presenting new challenges. With over 10 years of experience in packaging, we had (nearly) seen it all until the global pandemic introduced new complexities. 2021 saw unprecedented demand on shipping cargo due to a surge in consumer demand and backed-up supply chains. Logistical issues have become commonplace, from labor shortages and scarcity of available equipment to severe congestion at ports and inland hubs, all of which have contributed to a prolonged strain on the transportation industry - the result? Extended transit times and unprecedented costs. We take a look at the current supply chain challenges and how to best mitigate them.
Supply chain woes
Mastering the art of supply chain management has always taken time and acumen but as COVID-19 took hold in early 2020, fresh obstacles arose. With factories shut down overseas to combat the pandemic, the supply chain backlog began to spiral. In parallel, consumer demand grew to an all-time high. Global lockdowns forced people to stay home causing a pandemic sales boom leading to multiple supply chain woes: from the global chip shortage to port congestion where dozens of vessels continue to remain idle off the West Coast ports of Los Angeles and Long Beach. As of December 2021, the cargo volume alone at the Port of Los Angeles had increased by 22% from the previous year with record numbers of containers processed in its 114-year history. With the pressure on shipping surging, we’ve witnessed the inevitable increase of shipping costs to meet the demand with market rates reportedly running as high as $30,000 from Asia to the East Coast. The widespread shipping delays are expected to continue as the Lunar New Year holidays approach.
At KacePack, we provide express marine shipping for made-to-order goods. With a dedicated channel infrastructure, we can avoid lengthy congestion at the ports.
To add to the colorful supply chain complexities, China has been undergoing a power crunch forcing numerous factories to halt production in an effort to ration energy supply to meet lower carbon emission targets. The power outages have affected multiple industries across several regions in China. Local governments in Zhejiang, Jiangsu, Yunnan, and Guangdong provinces have asked factories to limit power usage or curb output. Some factories have been forced to stop operations completely for two to three days a week. The cannabis industry is by no means immune, we are all feeling the effects. While we fully support efforts to reduce carbon emissions, working with a wide breadth of verified manufacturing partners has limited the effects these power outages have had on our customers’ orders.
Volatile material prices
The uncertainty surrounding the global pandemic, surging consumer demand, and supply chain backlogs have collectively caused a ripple effect on the prices of some raw materials as well. At times this has been further exacerbated by things like extreme weather events. When it rains it pours! Our long-term and direct supplier partnerships provide us with accessibility to an ample supply of raw and upcycled materials - this helps us to evade the knock-on effects of short-term price fluctuations. In the event of longer-term volatility causing raw material prices to inflate beyond expectations - ie. we have exhausted all avenues of maintaining prices - we always strive for transparency and communicate any unavoidable price adjustments to our customers.
How KacePack can help
At KacePack, we’ve taken steps to guard against these very real obstacles. We provide reliable, dedicated support ensuring the highest quality product and service. We take care of sourcing, QC, and logistics, providing you with guidance and visibility every step of the way.
Through 2021, we were working behind the scenes to provide quick access to our most popular cannabis packaging products. From January 2022, you can buy eco-glass jars, caps and liners, recyclable tins, paper boxes, child-resistant tubes, and bags, and receive shipments within 14 days to U.S. and Canada from our U.S. warehouse*.
Long term solutions
We’re in this for the long haul. With four years of experience within the cannabis packaging industry, serving a range of clients from small niche brands to large publicly listed enterprises, we’ve come up with long-term solutions to mitigate the current supply chain challenges.
- Domestic U.S. warehousing: From January 2022, we’re holding domestic inventory of our most popular products to ensure you can receive your goods quickly with low minimum order quantities. We will be adding more popular items to our growing U.S. inventory over the year and have the capacity to hold inventory for our North American clients**.
- Production closer to (your) home: Keen to meet rapidly evolving customer needs, we are in the process of setting up production within North America while continuing to proudly work with multiple manufacturing partners in Asia. By nearshoring, we will be able to supply made-to-order goods even faster than before.
*Selected items available from February 2022 only. For delivery outside of the U.S. or Canada, please contact us.
**Minimum commitments apply.