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How Can Label Shortages Bring Global Supply Chains To A Halt?

egough • Mar 24, 2022

label shortages supply chain issues

Hundreds of supply chains across Europe use self-adhesive labels on their products. The labels are used by manufacturers, transportation, retailers, and all other steps in the supply chain. You can step into any supermarket or convenience store, and you will see all kinds of products that use these labels. Be it food products, soft drinks, personal care products, cosmetics, medicines, and more.

UPM Communication Papers is the world’s leading producer of various graphic paper products. Their Finnish paper mill is responsible for supplying paper to two of the three biggest label printing operations across the UK and other label operations in the rest of Europe.

The Finnish UPM paper mill employees have been on strike since January 1st, 2022. The strike also received support from the Transport Workers’ Union. The reason for the workers going on strike was the inability of the company and the worker’s union to agree to the terms of a new collective labor agreement. The strike is expected to go on till April of this year.

As a result of the ongoing strike, combined with an already existing shortage in the paper market, there are predictions that there will be a major impact on various product supply chains across the UK and Europe. UPM sold over 300 shipments of their paper in October 2021 and barely 50 shipments in January 2022. Suppliers of food products and soft drinks will be particularly impacted. Amongst the label shortages, Amazon is also on high alert and expects disruptions to their global deliveries.

Many bodies stressing the urgency of the situation created by label shortages, including the British Plastic Federation and the Food and Drink Federation, have held talks with the Department for Environment, Food & Rural Affairs (DEFRA). However, there is only so much DEFRA and the UK Government can do regarding labour unions and labour laws.

Without labels, many products cannot be properly packaged and sold. Food products seem to be taking the biggest hit. There will be product shortages and supply chain disruptions in the next few weeks. Even if the Finnish paper mill workers’ strike ends today, the chances of things returning to normal are slim. There are already disruptions and delays set in place, and it would take at least a few weeks before global supply chains could return to their normal ways of functioning.

This debacle is very similar to the disruptions the food sector faced in the summer of 2018 when there were shortages of food-grade CO2. Several factories producing CO2 had closed down, which meant disruptions in gas production. The main reason cited for the closures was that the production of CO2 was not economical.

Overall, the label shortages across Europe are a big problem for many supply chains. Most impacted of all will be food products. There will be shortages of various food products in the markets, due to which consumers will face problems.

Without the proper packaging and labels, the products cannot be sold. Food, drinks, medicines, and other products are under serious threat.

MIDCOM offers custom labels for many applications. Call us today at (877) 995-4322 to talk to one of our Label Specialists or fill out the form below.

Get More Information On Custom Labels

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