Strapping is undoubtedly a vital part of packing and logistical industries and perhaps one of the most versatile products for securing loads worldwide. Unfortunately, both supply and demand for strapping products dropped sharply in 2020 with international covid lockdowns. In June 2021, many economies are recovering, and international trade is booming to make up the slack of revenue. With this surge in consumer demand since the lows of the coronavirus recession, the cost of freight has skyrocketed. However, this isn’t just a slight price increase. Steel costs are at an all-time high, impacting everyone who is buying or selling steel products, including steel strapping systems.
Steel Market Background: Let’s get up to speed.
Today’s steel market is in a state of flux because of international trade disputes and a recent spike in demand for metals. However, In the early spring of 2020, when COVID-19 took hold around the globe, domestic and international steel mills shut down due to the pandemic mandated by governments for safety reasons. However, the manufacturing pause did not impact production costs immediately, and pricing for steel was still relatively stable from August 2020.
Once mandated lockdowns lifted, numerous industries had to resume their typical business practices and play catch-up, especially for the steel industry. Even though the high demand for steel products is beneficial for steel companies, it’s a problem for steel mills. Steel mills have increased demand but cannot produce enough product to meet that demand, so the market becomes volatile, and consequently, price increases were inevitable.
Steel Price Timeline
October 2020 – Steel prices increased between + 6.0 – 7.5% from August 2020
December 2020 – Major increases occurred + 15% from August 2020.
January 2021 – The cost of steel had jumped up +35% from August 2020.
March 2021 – Another additional cost, steel, is up over +70% from August 2020.
Expect Price Increases in Other Raw Materials
The trend of increased raw material pricing also impacted other industries:
Essentially, with the rise of material input costs, the costs of running a business will be high in the next financial year. Even if the price of steel stabilises within the next few months, the cost of steel strapping will remain high, especially if the world continues sporadic lockdowns due to the persisting nature of the pandemic.
Your steel strapping prices are going to increase.
With the current economic environment where global prices and industry margins will remain well above the normal average for the next 12-18 months (at a minimum), steel strapping will no longer be the 1st choice for cargo securing loads. As a result, small businesses have the opportunity now, with the new financial year just kicking off, to start preparing and forecasting future logistical costs and begin researching alternatives to their steel strapping systems.
Whilst taking stock of what your business needs – you need to ask:
- Has steel strapping been a beneficial system for your Company?
- Has there been handling difficulties as steel strapping is not as flexible as cord strapping?
- What is the cost of additional PPE required to use steel strapping and what is the cost of potential injury?’
- Have you experienced product damage (scratching or marking) or had to invest in extra protection for your products under the steel strapping?’
- Were there any safety risks to your team due to the use of steel strapping?
Overall, we all know that steel strapping is durable. However, the cons against the product do not outweigh the positives of switching to composite cord strapping, especially now that the main negative of steel strapping is its price and how this cost will impact your business in the next two quarters.
X-Pak Strapping – Time to make the switch
All industries face challenging economic and environmental times, and X-Pak knows how to make tough times a little easier. How can we help? We are leading distributors in heavy-duty poly cord strapping in Australia, which is as durable as steel strapping without the expensive price tag.
X-Pak strapping is your answer to your new strapping system, which is the robust and efficient alternative to steel strapping. X-Pak Strapping, commonly known as ‘Synthetic Steel’, is manufactured from high tensile polyester fibres with a UV coating. X-Pak cord strapping is suitable for a range of load-securing applications.
Poly composite strapping has several advantages over steel strapping. It is easier to use and safer to handle because it is less likely to recoil when cut. It has a unique structure that reinforces itself with a UV-rated plastic coating. These embedded fibres along its length to resist snapping and tearing help maintain even tension throughout your load and hold together even if accidentally nicked during transport. X-Pak Strapping is also resistant to most chemical solvents, corrosion, weather, etc.
The X-Pak Strapping system only requires one tool for fast and easy use. It’s joined with a heavy duty galvanised buckle that meets Australian standards for safety and certified loading straps. Our qualified staff can advise and support by demonstrating the ease of the system and help devise a plan to make the switch.
Most importantly – X-Pak Strapping is more affordable than steel strapping.
Other Benefits to X-Pak Strapping.
- X-Pak strapping retains excellent tension on rigid loads.
- It also has excellent recovery properties to help a load absorb impact without the strap breaking.
- X-Pak strapping won’t stain or rust like steel strapping can.
- X-Pak strapping won’t damage the bundle when secured, being light to work with and flexible.
- X-Pak strapping won’t snap or break, causing injury.
- It is lightweight and much easier to work with, and won’t damage the bundle it’s securing.
- It maintains its shape even under rigorous weather conditions.
- X-Pak strapping is resistant to high temperatures, ultraviolet rays and moisture.
What’s Your Next Step?
You know it’s time to make a change, and you know that there will be pressure to reduce costs the next financial year. Our advice is:
- Read as much as you can about what is happening with local and international markets
- Be diligent with your budget
- Please discuss with your team about your current system and see from their perspective about changing to X-Pak Strapping
And finally, get in touch with X-Pak and have a conversation with our team about options and see if we can assist in the change from steel to X-Pak strapping. The change will benefit
your team, your customers and your budget.