I have been told that pricing may not be able to be held for blanket orders and purchase orders where it may take months to get material. Why?
DONE: Again, we have a perfect storm. Here is what is happening to all label converters right now. We order material for jobs; we won’t see it for many weeks. In the meantime, raw material companies announce a price increase, which takes effect on all shipments within the next month. That means our costs for material will go up well after we cut the purchase orders. And, with quarterly cost increases, there are many orders that won’t ship until two price increases have taken effect. What used to be an orderly process is now completely chaotic. We quote jobs with the best knowledge we have, but the disclaimer is that all orders are subject to material availability and potential material cost increases. None of us like running our businesses this way, but it is our reality today. We are especially cognizant of how difficult this makes things for our customers. Everyone in this market needs to ensure their customers understand that supplies are very tight and costs are not firm until raw materials come to the converter. That’s why we have been staying very communicative with our customers. We recognize this is a partnership and it is our duty to keep them updated, no matter if the news is good or bad.