UK online shopping boom fuels cardboard shortage as households hoard boxes

The nation’s online shopping habit is causing a cardboard shortage as empty delivery boxes are hoarded in homes or stuck in council recycling bins.

UK households have amassed 135m cardboard boxes during the pandemic, keeping valuable raw material out of the recycling chain and pushing up packaging prices, according to the packaging specialist DS Smith.

“People are consuming a lot more at home than they have in the past because of the lockdowns,” said Miles Roberts, DS Smith’s chief executive. “So there is a lot more packaging that’s ended up in the home.”

Pre-pandemic, when most deliveries were made in bulk to high street shops and restaurants, packaging found its way quickly back into the system via recycling companies.

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But DS Smith, whose big customers include Amazon and consumer goods companies such as Nestlé and Unilever, is now at the mercy of consumers and council recycling policies – amid a big shift to online shopping that looks set to last.

“Before we were collecting pure fibre, old boxes, from the back of a retailer, which had all been properly sorted,” he added. “Today we are given a bin that’s got everything in it and is only collected every two weeks. That means there is a higher cost to process and it has taken longer as well.

“One of the challenges for us is that, with so much packaging now in people’s homes or in their garages, how do we get that paper back into the recycled network; how can we get it back into our mills so we can convert it into paper and reuse it again?”

DS Smith has a “14-day box-to-box model”, meaning it can take the boxes it makes, then collect, recycle and convert them into new boxes all within a fortnight. But recent research by the company found a fifth of Britons had a stash of between five and 10 boxes, while 10% had up to 20.

The company is also stymied by the absence of a unified recycling policy across the UK. It was having conversations on a “local authority by local authority” basis in an attempt to improve the situation, Roberts said.

“There isn’t a common policy at all,” he said. “So you have to go to each local authority and say: ‘Can we start to put in different bins for different materials,’ because that means it’s easier to collect and cheaper to reprocess and that is good news for consumers.”

The comments came as the group reported a near 40% drop in pre-tax profits to £231m on flat sales of £6bn in the year to 30 April. It experienced see-sawing sales during the health crisis as demand initially fell back, only to rebound strongly.

The pandemic had brought mixed blessings, said the Hargreaves Lansdown analyst Laura Hoy. DS Smith’s boxes were much in demand but rising input costs and the need to make its operations Covid safe had dented profits.

“With the cost of materials continuing to rise, DS Smith is passing those expenses on to customers via higher packaging costs,” said Hoy. “This makes sense and should offset those inflationary headwinds but there’s a tipping point at which volumes will start to decline if prices rise too dramatically.”