Why packaging costs are rising in 2026, and what to do about it

Before starting, however, it is worth noting that the packaging industry is not the only one facing the challenge of rising prices.

Although headline inflation has eased from the peaks seen earlier in the decade, businesses are still operating in an environment where energy, labour, transport, and raw materials remain expensive by historical standards. In many cases, prices have stabilised at a higher level rather than falling back.

The question many are now asking is whether the price rises are inevitable (and unavoidable) or whether there is any way businesses can overcome them.

Fortunately, the answer, at least when considering corrugated packaging, is several ways you can mitigate cost increases.

You can maintain or even reduce your overall costs by making your packaging work harder, ensuring it is the optimum specification, and taking advantage of applicable added-value services.

However, before doing so, you must understand why the average packaging cost is rising and the specific ways you can counter it.

The first point to address is supply and demand, and how changing consumer behaviour has significantly increased the use of corrugated packaging.

Although the rapid acceleration of the eCommerce industry has slowed down, online fulfilment is now firmly embedded across many sectors. Many businesses that once relied heavily on retail distribution now ship a far higher proportion of individual orders directly to customers.

This shift in consumer behaviour means individuals now have many goods delivered to their homes rather than purchasing in-store. This means businesses are using more eCommerce packaging to ship individual items rather than larger transit packaging to ship multiple items. Effectively, this drastically increases the need for packaging (it takes considerably more boxes and materials to ship individual items than to bulk-ship to a store).

The popularity of food delivery services such as Abel & Cole and HelloFresh has grown, further increasing demand. Subscriptions to everything from wine to knitting supplies also increase the use of eCommerce packaging.

With much of this shopping behaviour now the norm, the overall demand for corrugated packaging has increased.

And as simple economics tells us, when demand goes up (and supply does not follow suit), prices are soon to follow.

Paper remains the single most significant cost component of corrugated packaging, and its prices continue to influence box costs across all sectors.

Although supply chain disruptions have eased, paper prices remain elevated due to sustained global demand, higher energy costs for production, and increased reliance on recycled fibre. Environmental compliance requirements have also added complexity and cost to paper manufacturing.

These pressures affect all corrugated board grades, meaning increases are rarely limited to specific packaging types. As paper costs rise, those increases filter directly through to the price of finished packaging.

That said, material costs are also one area where businesses have the greatest opportunity to respond.

In many cases, reviewing board grades, redesigning packaging to reduce material usage, or switching to more efficient box styles can significantly reduce exposure to rising paper prices without compromising product protection.

Energy costs remain a major contributor to packaging price increases, even though the extreme volatility seen earlier in the decade has eased. Energy prices in 2026 are still 45% higher than in 2021/22.

The impact of this is felt almost everywhere.

Paper production, box conversion, printing, warehousing, and transport are all energy-intensive processes. When the cost of electricity and gas increases, those costs are felt at every stage of the packaging supply chain.

For packaging manufacturers, higher energy prices increase the cost of running machinery and maintaining throughput. For customers, this translates into higher unit costs over time rather than one-off increases.

As with material costs, the most effective way to mitigate energy-driven price increases is to reduce complexity and volume. Using lighter board grades, simplifying designs, and consolidating packaging ranges can all help to offset higher energy costs indirectly.

Whilst your corrugated packaging is likely UK-produced, the material in its manufacture is likely from further afield (particularly in Europe and the Far East).

Energy costs are also affected because crude oil, gas, and other commodities are traded in US dollars. Even minor fluctuations in the GBP can ripple across transport, raw material, and ancillary packaging costs. For products such as specialist foams, protective films, or engineered inserts, currency changes can significantly influence pricing.

You may also find that standard products, such as foams, tapes, and specialist inserts, such as Korrvu packaging, are manufactured and priced in foreign currencies. Peli protective cases and Sealed Air products are just two examples, manufactured in the US and priced in dollars at the point of sale.

Whilst currency fluctuations are difficult to mitigate, using UK-manufactured products may help alleviate some of the associated costs. Service Level Agreements (SLAs) and contracts with your packaging supplier may also insulate you from some of the worst price increases caused by market forces.

One other area in which fiscal policy may affect packaging prices is interest rates.

Base interest rates remain above historical norms at 3.75%, which can indirectly affect packaging costs. Manufacturers often rely on loans to invest in equipment, upgrade facilities, or expand capacity. When rates rise, the cost of servicing these loans increases, and some of that expense is passed on to customers.

Even when your business is not borrowing directly, interest rates shape the cost base of your suppliers.

Higher financing costs, combined with inflationary pressures, can make manufacturers more cautious about investing in efficiency improvements, which in turn keeps unit costs higher.

The solution is to work with suppliers who have strong financial management and long-term stability. Manufacturers with well-maintained equipment and controlled debt exposure are less likely to pass on volatile financing-related cost increases.

Transport continues to play a significant role in overall packaging costs, even though conditions have stabilised compared to the volatility seen earlier in the decade.

Fuel prices, which peaked at around £1.80 per litre in 2022 following global disruption, had fallen to around £1.35 per litre by October 2025. However, despite this reduction, fuel remains noticeably more expensive than pre-2019 levels. For packaging suppliers and logistics providers, this means transport costs have normalised at a higher baseline rather than returning to historic lows.

Beyond fuel, global logistics challenges persist, especially the ongoing shortage of shipping containers. Despite improvements in some regions, container availability remains constrained compared with pre-pandemic levels, keeping international freight costs elevated. This has a direct impact on the prices of imported packaging materials and supplies, such as tapes, films, protective inserts, and sundry products not manufactured in the UK.

Packaging is particularly sensitive to these pressures because of its bulky, space-intensive nature. Even modest increases in transport or freight costs can significantly affect the delivered price of boxes and components. At the same time, continued high demand for third-party delivery services, driven by sustained eCommerce volumes, adds further upward pressure.

Similarly, right-sized or custom packaging helps reduce courier and freight costs by better using pallet space and reducing waste. By allowing more items per shipment, optimised packaging can help offset higher transport costs, ultimately reducing your overall business spend even in a market where logistics pressures remain elevated.

Labour costs remain one of the more overlooked contributors to rising packaging prices, even as wider employment conditions have changed since the early 2020s.

In 2026, further increases to the National Living Wage and National Minimum Wage have added to cost pressures across the packaging supply chain. Manufacturing, warehousing, and logistics are all labour-intensive operations, and mandated wage rises directly increase the cost of producing, handling, and distributing packaging. These increases are unavoidable for employers and are typically reflected in higher unit costs over time.

At the same time, the employment landscape has shifted. UK unemployment has risen from 3.6% in 2022 to around 5.1% in 2025, easing some of the extreme recruitment competition seen earlier in the decade.

However, this has not resulted in lower labour costs for manufacturers. Many roles within packaging production require specific skills, experience, or training, and these positions are not always easy to fill, even in a softer labour market.

In addition, labour availability remains constrained by longer-term structural factors. Fewer EU nationals working in the UK following Brexit, combined with an ageing workforce and changing employment expectations, continue to limit the pool of experienced manufacturing and logistics staff. Retention, training, and absenteeism, therefore, remain ongoing challenges for packaging businesses.

Together, rising statutory wages and persistent skills shortages mean labour remains a significant cost driver. Even as unemployment increases, the overall cost of labour does not fall back. Instead, these pressures increase packaging manufacturers’ operating costs, which are ultimately passed on to customers as higher packaging prices.

The Plastic Packaging Tax, introduced in 2022, continues to influence the cost of films, tapes, bags, inserts, and other plastic packaging. Packaging that contains less than 30% recycled content is subject to a per-tonne tax, increasing the cost of virgin polymers, while demand for recycled material has pushed prices higher across the board.

Sustainability requirements go beyond taxation; businesses must now also comply with Extended Producer Responsibility (EPR) regulations, which require reporting on and financing the collection, sorting, and recycling of packaging they place on the market.

Meanwhile, the Packaging Waste Regulations continue to set obligations for material recovery and recycling, including targets for recycled content.

These regulatory frameworks add both administrative and operational costs, particularly for products with mixed materials or non-recyclable components.

The impact is felt in multiple ways: sourcing certified materials can carry a premium, adapting production processes to meet compliance requirements can increase operational costs, and packaging audits and reporting take both time and resources. Together, these factors are driving up overall packaging prices, not just for plastic items but across all materials.

For businesses, the opportunity lies in careful evaluation. Reviewing whether plastic components are essential, exploring alternative materials, and consolidating packaging formats can reduce costs while ensuring compliance. Working with suppliers who understand EPR and Packaging Waste Regulations can also simplify reporting and help integrate sustainability requirements without unnecessary expense.

By proactively addressing both tax and regulatory requirements, businesses can ensure they meet compliance obligations while minimising cost exposure – a critical consideration in today’s packaging landscape.

Whilst not directly linked to inflation, the number of manufacturing processes and how your packaging manufacturer operates both directly impact the cost of your packaging.

This influence can be even more acute if your packaging supplier’s general overheads and costs rise.

Due to high demand, many packaging suppliers often do not run their plants efficiently. Many are also juggling customer requirements, influencing how jobs are prioritised rather than doing things in the most efficient manner.

Inefficient machinery and conversion processes can add unexpected costs to your packaging.

Besides this, if the cost of running a machine (in terms of labour and power) is increasing, and your packaging requires two or three passes (e.g., for secondary scoring, folding, stitching, or printing), then any small increases may be multiplied by two or three.

As with increased labour costs, the question is whether your packaging uses the most efficient manufacturing processes, and, if not, what can help fix (or at least improve) this. The cost savings should follow.

Although this article has already highlighted interest rates and financing costs for new equipment as a potential source of increased costs, the other extreme (e.g., outdated or poorly maintained equipment) can have an equally significant impact.

Both the pandemic and a general lack of economic confidence (partly caused by Brexit) have meant that many packaging businesses have put off, or been unable to, upgrade ageing and inefficient machinery.

The knock-on effect of this lack of investment is that the manufacturer of your packaging is not efficient, but what can you do?

Again, check whether there is any way to simplify the manufacturing processes for your boxes. If they can’t, and the costs of inefficient production are increasingly being passed to you, it may be time to look at new suppliers.

Due to changing consumer shopping habits, many packaging businesses have seen significant increases in enquiries and order volumes

Of course, if you are using what is known as a packaging “merchant” – effectively a company reselling products manufactured by a third party – they are experiencing all of the same issues you may be.

This scenario sees price rises (or at least a proportion of them) being passed on quickly to customers. However, you have one of the most straightforward solutions in this situation.

Working directly with a packaging manufacturer can effectively cut out the “middle man” and often achieve much more favourable pricing.

It is worth bearing in mind that whether this is possible depends on the type of packaging you use (stock or custom), the volumes you handle, and potentially your ability to absorb the upfront tooling cost when switching.

However, from a long-term perspective, this can make serious inroads into reducing the average cost of your packaging.

If you purchase through a reseller rather than a manufacturer, the reseller may pass on general price increases while maintaining their margins.

Perhaps the only completely avoidable issues that many businesses face are using packaging that is over-specified, not suited to specific products or markets, or simply inefficient.

So it is worth considering that if you can’t reduce the cost of your packaging, one alternative is to use less of it.

Whilst this sounds obvious, your business may be overlooking the fact that it is using excessive packaging – particularly “secondary” packaging.

An example of this could be switching from standard taped boxes to cartons with self-locking bases. These not only assemble more quickly but also halve the amount (and therefore the cost) of the tape you use to seal them.

Suppose you use specialist bags or papers, such as VCI corrosion inhibitors or anti-static protection. Could these properties be incorporated into the outer container (again, eliminating the need for additional items and adding them when packing)?

You could even consider changing the sizes of your boxes. A tailored box, usually smaller than the nearest stock option, would reduce the amount of void fill you require and the costs of purchasing, storing, and adding it. As a side note, this would also minimise volumetric shipping costs and allow you to get more items per pallet – another potential cost saving.

The bottom line is to consider if your products are over-packed, whether you can eliminate or combine certain elements, and how you handle them.

A mix of global, national, and industry-specific factors influences packaging costs in 2026.

Are you using too much packaging? Is it the correct size? Does it use the optimum material (offering a balance between cost and protection)? Is it easy and efficient to manufacture? Is it easy and efficient to use? Is it helping your transit costs?

Answering all of these questions ensures your packaging is as efficient as possible; if you haven’t addressed them all, the cost savings you may be able to achieve could come as quite a surprise.

Equally, once you know why your packaging costs are rising, it is much easier to understand how to address them.

By ensuring your packaging is as lean and efficient as possible, you are likely to see significant gains in cost performance – helping to balance out the unavoidable factors currently driving prices up.

Remember to factor in all potential considerations, and don’t be afraid to discuss your concerns with your packaging supplier.