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Buying boxes in January: the annual availability crunch

Used box supply tracks industrial activity with a six-week lag, and everybody notices the gap at the same time. What actually happens to stock between Thanksgiving and February.
Published
January 23, 2024
Written by
Sandor Vitkevich
Reading time
8 minutes

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Key takeaways

  • Used box supply is a lagged copy of industrial activity — empties appear roughly six weeks after the production that generated them.
  • The crunch hits one specific item: the standard 48 × 40 × 36 five-wall in grades 2A and 3A.
  • Half sizes, tall boxes and octabins usually stay available, so flexibility on specification beats purchasing leverage in January.
  • November has the widest availability of the year and is the right month both to book Q1 and to sell an accumulation.

Every January we have the same conversation about thirty times. A customer who has bought comfortably all year cannot get the footprint they want, assumes we are holding out for a better price, and is surprised to learn that the floor genuinely is thin.

Where used boxes come from

Used stock is not manufactured to demand. It arrives as a by-product of somebody else’s production. When plants run, containers empty and become available roughly four to eight weeks later, once they have accumulated enough to be worth collecting.

Which means the supply curve is a lagged copy of industrial activity. Late November and December are short weeks, holiday shutdowns, and inventory drawdowns rather than production. Six weeks later, in mid-January, the empties that would have come from that activity do not exist.

Typical annual pattern in our own inbound volume
PeriodInbound supplyDemandPractical effect
January – FebruaryLowHighTight on every standard footprint
March – MayRisingHighBalanced; best time to start a new programme
June – AugustSteadyModerateWidest choice of grades and sizes
September – OctoberHighVery highPeak-season buying competes with peak-season supply
NovemberHighModerateThe best availability of the year
DecemberFallingLowQuiet, and the right time to book January

What actually runs short

Not everything, and that surprises people. Half sizes, tall boxes and octabins usually stay available because demand for them is thinner. The crunch hits the standard 48 × 40 × 36 in five-wall, grades 2A and 3A — precisely the box that eighty per cent of the market wants.

If you can run a 34-inch height instead of 36, or a four-wall instead of five for a lighter load, January stops being a problem entirely. Flexibility on specification is worth more in January than any amount of purchasing leverage.

The three ways round it

  1. Book in November. Reserved inventory costs the same as buying it later and removes the risk. Our best-run accounts place their Q1 reservation the week after Thanksgiving.
  2. Widen the specification. Tell us the load and the stack height rather than the box, and we will find you two or three footprints that work instead of one that does not.
  3. Run a standing order. Stock held against a standing commitment is not sold to the floor, which is the whole point of having one.

If you are selling rather than buying

January is your month. Buyers pay the top of the range for clean material when the floor is thin, and collection capacity is easier to schedule because everyone else is quiet. An accumulation that has been sitting since October is worth more now than it will be in June.

The longer pattern

Underneath the seasonal cycle, used box availability tracks manufacturing activity generally. When the regional index softens, empties get scarcer about a quarter later, because plants run fewer shifts and generate fewer containers. Buyers reading this in a strong year should plan for the year after — the lag is real and it catches people out.

Questions

Follow-ups on this post.

Do your prices go up in January?
No. Availability tightens rather than pricing. A seasonal price spike in a commodity customers can defer is a very good way to teach them to defer, and we would rather keep the standing accounts.
How far ahead should we reserve?
Book Q1 requirements the week after Thanksgiving. Reserved inventory costs the same as buying later and removes the risk of a footprint being unavailable for a month.

Sandor Vitkevich · January 23, 2024 · Buying

Written at the ReGaylord reload yard, 3259 Fiberglass Rd, Kansas City, Kansas. If any of it is wrong, or you have better data, tell us — several of these posts exist in their current form because a customer argued with an earlier one.

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