May/ June AICC BoxScore by AICC, The Independent Packaging Association

May/June 2018 Vol. 22 Issue 3

CONSISTENCY

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A PUBLICATION OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION

May/June 2018 Volume 22, No. 3

ALSO INSIDE Sustaining the Lead Substrate Update Quietly Making Noise

TABLE OF CONTENTS May/June 2018 • Volume 22, No. 3

COLUMNS

50 FEATURES

FLUTED VS. PAPERBOARD Years of testing and discussion are paying off, showing converters new creative direction

SUSTAINING THE LEAD Even as sustainability becomes the norm and not the exception, innovative converters continue to strive for more

SUBSTRATE UPDATE An examination of paper substrate technicalities in the current environment

QUIETLY MAKING NOISE Leaders at Cal Poly continue to drive the industry’s educational force

CHAIRMAN’S MESSAGE

SCORING BOXES

LEGISLATIVE REPORT

MEMBERS MEETING

SELLING TODAY

TACKLING TRENDS

ANDRAGOGY

LEADERSHIP

MARKETING MIX

DESIGN SPACE

THE ASSOCIATE ADVANTAGE

WHAT THE TECH?

STRENGTH IN NUMBERS

THE FINAL SCORE

DEPARTMENTS

WELCOME NEW MEMBERS

GOOD FOR BUSINESS

MEMBER PROFILE

ICPF UPDATE

BoxScore is published bimonthly by AICC, The Independent Packaging Association, PO Box 25708, Alexandria, VA 22313, USA. Rates for reprints and permissions of articles printed are available upon request. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of AICC. The publisher reserves the right to accept or reject any editorial or advertising matter at its discretion. The publisher is not responsible for claims made by advertisers. POSTMASTER: Send change of address to BoxScore, AICC, PO Box 25708, Alexandria, VA 22313, USA. ©2018 AICC. All rights reserved.

Visit www.aiccboxscore.org for Member News and even more great columns. Scan the QR code to check them out! BOXSCORE www.aiccbox.org

OFFICERS Chairman: Al Hoodwin, Michigan City Paper Box Co. First Vice Chairman: Joe Palmeri, Jamestown Container Companies Vice Chairman: Jay Carman, StandFast Packaging Vice Chairman: John Forrey, Specialty Industries/Krafcor/ NuPack Printing Vice Chairwoman: Jana Harris, Harris Packaging/ American Carton DIRECTORS-AT-LARGE Kevin Ausburn, SMC Packaging Group Matt Davis, Packaging Express Eric Elgin, Oklahoma Interpak Marco Ferrara, Cartones Sultana Finn MacDonald, Independent II Nelva Walz, Elegant Packaging DIRECTORS Doug Rawson, Superior Lithographics David DeLine, DeLine Box Company Justin Mathes, Vanguard Companies Mike Schaefer, Tavens Packaging & Display Gary Brewer, Package Crafters Inc. Guy Ockerlund, OxBox Pedro R. Aguirre Martinez, Tecnología de Cartón Joe Hodges, Mid-Atlantic Packaging Larry Grossbard, President Container Group Peter Hamilton, Rand-Whitney Corporation John Franciosa, McLeish Corr-A-Box, Coyle Packaging Group Kim Nelson, Royal Containers Ltd. President: A. Steven Young, AICC Immediate Past Chairman: Tony Schleich, Lawrence Paper Company, American Packaging Division Chairman, Past Chairmen’s Council: Mark Williams, Richmond Corrugated

Secretary/General Counsel: David P. Goch, Webster, Chamberlain, and Bean Counsel Emeritus: Paul H. Vishny, Esq.

SUBMIT EDITORIAL IDEAS, NEWS & LETTERS TO: BoxScore@theYGSgroup.com

EMERGING LEADER BOARD DELEGATES Josh Sobel, Jamestown Container Companies Terri-Lynn Levesque, Royal Containers Ltd.

CONTRIBUTORS Mike D'Angelo, Vice President Maria Frustaci, Director of Administration and Director of Latin America Cindy Huber, Director of Meetings and Conventions Chelsea May, Member Services Coordinator Laura Mihalick, Senior Meetings Manager Taryn Pyle, Director of Training, Education and Professional Development Alyce Ryan, Marketing Associate Richard M. Flaherty, President, ICPF

ASSOCIATE MEMBER DIRECTORS Chairman: Ed Gargiulo, Equipment Finance Corp. Vice Chairman: David Burgess, JB Machinery Secretary: Pat Szany, American Corrugated Machine Corp. Director: Joe Morelli, Huston Patterson Printers Immediate Past Chairman: Jeff Pallini, Fosber America ADVISORS TO THE CHAIRMAN Kim Nelson, Royal Containers Ltd. Ed Gargiulo, Equipment Finance Corp. Jim Akers, Akers Packaging PUBLICATION STAFF Publisher: A. Steven Young, syoung@aiccbox.org Editor: Virginia Humphrey, vhumphrey@aiccbox.org EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com Vice President: Jack Davidson Senior Managing Editor: Ashley Reid Senior Editor: Sam Hoffmeister Copy Editor: Steve Kennedy Associate Editor: Drew Bankert Creative Director: Serena L. Spiezio Art Director: Jason Deller Account Manager: Brian Hershey

ADVERTISING Information: Virginia Humphrey, vhumphrey@aiccbox.org Opportunities: Howard Neft, InTheKnow Inc. 847-899-7104 • thneft@aol.com Taryn Pyle 703-535-1391 • tpyle@aiccbox.org AICC PO Box 25708 Alexandria, VA 22313 Phone 703-836-2422 Toll-free 877-836-2422 Fax 703-836-2795 www.aiccbox.org

ABOUT AICC AICC, The Independent Packaging Association, is uniting and celebrating the success of inspired, independent packaging companies. We are a growing membership association which has served independents since 1974. WHEN YOU INVEST AND ENGAGE, AICC WILL DELIVER SUCCESS.

Chairman’s Message

88%

very January, your board of directors and AICC staff meet over a three-day period—our Winter Board Meeting (WBM)—to discuss the current health of your Association and to update our long-term plan. Based on the results, the various AICC committees then meet to determine how to best implement the board’s plan. To prepare for the WBM, your board receives details on financial health, as well as committee updates and marketing data. In this year’s board book were two sentences by Virginia Humphrey, our great director of membership and marketing: “71 percent of AICC general members have seen a 45 percent growth in sales since 2010. By comparison, industry statistics for the same period show an 18 percent growth in sales for the entire industry.” That data was vital to this year’s WBM. As we went around the room and compared our own growth rates, we could see that the engaged members were the companies who had higher growth. Based on this clarity, the board updated our mission/vision statement to: When you invest and engage, AICC will deliver success. Over the next year, you will see AICC providing you with more success stories of how members took advantage of the many programs and educational offerings that have helped our individual organizations succeed in the marketplace. Since I joined AICC in 2011, we have experienced an 88 percent increase in sales. The seven years prior, our company experienced only a 17 percent increase in sales. How did we make this happen? We were an engaged member: • We attended the national meetings. www.aiccbox.org/page/meetings • We signed our young leaders up for AICC’s Emerging Leaders program. www.aiccbox.org/page/leader • We participated in AICC educational courses, such as those that covered corrugated and folding carton fundamentals. www.aiccbox.org/page/education • We engaged our entire company’s workforce and all new hires to take the free online safety basics course. www.aiccbox.org/page/packagingschool If you want your company to succeed and grow, the answer is to engage and participate in AICC, whose main goal is to ensure your success. Or we will give you your money back. That part of the story is coming soon.

Al Hoodwin CEO, Michigan City Paper Box Co. Chairman, AICC

BOXSCORE www.aiccbox.org

Scoring Boxes

HOW A DETERIORATING TRADE BALANCE HURTS INDEPENDENT BOXMAKERS BY DICK STORAT

t is no secret that changes in a country’s trade balance can have a significant impact on a country’s economic conditions. A nation’s trade balance is the difference between its exports and imports of goods and services. If exports of goods rise more than imports,

domestic manufacturers will supply not only the amount of goods needed to satisfy domestic consumption, but also additional goods required by the growth of the nation’s trade balance. In short, manufacturing output will grow to supply the growth of consumption plus

Exports, Imports, and Trade Balance* The trade balance for manufactured nondurable goods worsened by $55 billion between 2013 and 2017

$600000 $500000 $300000

PERCENTAGE CHANGE 2013–17 2016–17 Exports -1.5% +2.3% Imports +11.6% +0.6% Trade Balance -50.0% -2.6%

$200000 $100000 $0

$-100000 $-200000

-111,916

-128,070

2013

2014

$-300000

Trade Balance

BOXSCORE May/June 2018

Exports

-163,354

-171,736

-167,305

2015

2016

2017

Imports

SOURCE: U.S. CENSUS, RSA

$ Millions

$400000

*ADJUSTED FOR INFL ATION

growing excess of exports over imports. Conversely, if the nation’s trade balance is shrinking, domestic producers will be limited to producing less than the amount of goods consumed, as the decrease in trade balance will be supplied by foreign manufacturers. This is important for domestic boxmakers who supply the corrugated packaging that protects manufactured goods during transport for both domestic and export consumers. Since some three-quarters of corrugated packaging is used to package nondurable goods, the behavior of the nondurable goods trade balance can provide a good measure of the impact of trade on corrugated converters. According to the U.S. Bureau of Economic Analysis, inflation-adjusted consumer spending for manufactured nondurable goods rose by $258 billion between 2013 and 2017, amounting to $2.6 trillion last year. The chart at left shows the key parameters of U.S. international trade in nondurable goods over the same time frame, adjusted for inflation. Examining it can help us to understand

Scoring Boxes

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Exports, Imports, and Trade Balance* $70000

The trade balance for manufactured food goods worsened by $11.9 billion between 2013 and 2017

$60000 $50000 PERCENTAGE CHANGE 2013–17 2016–17 Exports -8.5% +4.2% Imports +13.2% +5.2% Trade Balance -46.3% -10.7%

$40000 $30000 $20000

14,791

$10000 $0

2013

Trade Balance

12,292

2014 Exports

4,236

3,230

2015

2016

Imports

2,887

SOURCE: U.S. CENSUS, RSA

$ Millions

trade’s impact on the economy and corrugated producers that supply packaging. Exports of nondurable goods amounted to a substantial $320 billion last year. Unfortunately, hampered by the 25 percent increase in the value of the U.S. dollar compared to a broad range of trading partners’ currencies between mid-2014 and the beginning of last year, exports of nondurable goods failed to grow since 2013. In fact, they fell by $4.8 billion, or 1.5 percent, during those four years. Over the same period, the rising U.S. dollar made imports more affordable, and imports of nondurable manufactured goods rose by 11.6 percent, or $51 billion. Defined as the difference between exports and imports, the trade balance measures the net flow of goods into a country. For nondurable goods in the U.S., it stood at a deficit of $112 billion at the end of 2013. Since then it has worsened by $55 billion, ending 2018 at minus $167 billion. That decline is significant, amounting to a 50 percent rise in the deficit in just four years. Excluding changes in inventories, U.S. manufacturers would supply 100 percent of the country’s needs for nondurable goods if there were no international trade. However, when trade flows are added, America’s factories can make not only the goods consumed at home, but also the net flows abroad (the trade balance). Unfortunately, when the trade balance is negative, domestic manufacturers have less than the full domestic demand to supply, as a portion of it is supplied by goods arising from the excess of imports over exports. In short, change in production equals change in consumption plus the change in the trade balance. From that relationship, we can assess how significant the impact is on domestic manufacturers and those supplying them with corrugated packaging. During the past four full years, the worsening trade deficit amounted to 24 percent of the growth

2017 *ADJUSTED FOR INFL ATION

BOXSCORE www.aiccbox.org

Scoring Boxes

in domestic consumptionâ&#x20AC;&#x201D;almost one-quarter of the total additional market opportunity to supply corrugated packaging to domestic producers! Put another way, even if the trade balance had not improved from its deficit of $112 billion at the end of 2013, the market for U.S.-made nondurable packageable goods would have expanded by $55 billion over the four-year period under discussion. Since food is a large and packaging-â&#x20AC;&#x2039; intensive market supplied by almost all corrugated producers to some degree, it is illuminating to examine the effects of trade on these markets. The chart on the previous page summarizes the key data for manufactured food and kindred products.

BOXSCORE May/June 2018

In this manufacturing sector, the U.S. enjoyed a significant positive trade balance of $14.8 billion at the end of 2013. Since then, however, inflation-â&#x20AC;&#x2039;adjusted worsening trade conditions eroded that trade balance to only $2.9 billion at the end of last year, an $11.9 billion decline. Exports declined by 8.5 percent since then and ended last year at $58.3 billion, a decline of $5 billion. Imports, on the other hand, soared steadily, rising 13.2 percent ($6.3 billion) over the same period. During that period, consumption of manufactured food products rose by $59 billion at a rate of 1.8 percent per year. Combining the rise in imports and the decline of exports almost wiped out the positive trade balance at the end of 2013.

What these data show is that 20 percent of the slow growth in U.S.-manufactured food consumption was met by imported products during the past four years. For independent corrugated converters who, for the most part, supply mature and slowly growing markets, the outsize impact of deteriorating trade conditions may have a larger role to play in the difficulty of identifying new or growing market opportunities than one might think at first glance. Dick Storat is president of Richard Storat & Associates. He can be reached at 610-282-6033 or storatre@aol.com.

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Legislative Report

DOL, AHP, AND YOU BY ERIC ELGIN

“

oL, AHP, and you? Eric, what are you talking about?” I’m glad you asked. We are nearing our 2018 Print and Packaging Legislative Summit, June 19–20, in Washington, D.C. This event brings together nearly 100 executives from corrugated, folding, rigid, and related printing and converting industries to visit their legislators to continue the push for policies more favorable to our manufacturing sector. (More about that in our next column!) While there, we will hear updates on the regulatory side of things. Recall that President Donald Trump in his first year of office issued an executive order stating that no new regulation could come from the government unless two prior regulations were eliminated, and this has been an excellent start. One obscure regulatory change that began last fall was in the Department of Labor (DoL), which oversees the Employee Retirement Income Security Act (ERISA). The original ERISA

BOXSCORE May/June 2018

legislation governs single-employer plans as well as multiple-employer plans, in which employers not related by common ownership join together under the same benefit plan. Last October, the president issued an executive order modifying the original rules to make it easier to form these multiple-employer plans. These “association health plans,” or AHPs, give small employers the ability to band together for the following purposes: • Offer benefits in the large-group market segment. • Offer more flexibility in plan designs and more plan options. • Avoid the Affordable Care Act (ACA) small-group market reforms. • Potentially lower the premiums using more competitive rating methods. The DoL issued a preliminary rule on January 5, 2018, and this was followed by a mandatory 60-day comment period, which ended on March 5. In the spring, the DoL considered the comments, and it will issue a preliminary final rule in

June. Another 60 days are required before the rule is completely finalized, which is expected in August or September. We see an opportunity for AICC to form one of these AHPs for the benefit of all members, and the AICC Board of Directors is working toward that now. Some of you may have already replied to surveys about your interest in this program, as well as preliminary data-gathering, which will be necessary in order to approach carriers who will be engaging in this market. So now you know all about DoL, AHP, and you. Stay tuned for more information about AHPs and how AICC members can benefit from them. Eric Elgin is owner of Oklahoma Interpak and chairman of AICC’s Government Affairs Subcommittee. He can be reached at 918-687-1681 or eric@okinterpak.com.

New Members

WELCOME, NEW MEMBERS! INX INTERNATIONAL INK COMPANY JAMES G. WEGEMER Director, National Accounts 150 N. Martingale Rd. Suite 700 Schaumburg, IL 60173 Phone: 630-624-8781 Fax: 847-969-9758 www.inxinternational.com jim.wegemer@inxintl.com INDEPENDENT PAPERBOARD MARKETING LAURIE GREEN Owner/Manager 4001 Airport Freeway Suite 130 Bedford, TX 7602 Phone: 817-267-8901 Fax: 817-685-7075 www.independentpaperboard.com laurie.green@ipmkt.com

THE SOURCE ALLIANCE MARK MALEY P.O. Box 669 Hudson, OH 44236 Phone: 330-352-1311 www.thesourcealliance.com mark.maley@maleysource.com ACTEGA NORTH AMERICA TRACEY FIKES Business Manager 950 S. Chester Ave. Suite B2 Delran, NJ 08075 Phone: 856-829-6300 Fax: 856-786-2860 www.actega.com/northamerica tracey.fikes@altana.com GEMINI NORTH AMERICA GARRETT BRADLEY President 611 NE Lone Hill Dr. Lees Summit, MO 64064 Phone: 816-305-8271 www.gemininorthamerica.com garrett@gemininorthamerica.com

THE PACKAGING WAREHOUSE, INC. DONN J. COSTANZO President 2696 Old Nation Rd. Fort Mill, SC 29715-8844 Phone: 803-802-3202 Fax: 803-802-7391 www.thepackagingwarehouse.com donnc@thepackagingwarehouse.com MIDDLESTREET GRAPHICS JOHN BOGGESS Senior Sales & Operations Manager 870 N. 22nd St. Columbus, OH 43219 Phone: 866-647-2734 www.middlestreetgraphics.com jboggess@middlestreetgraphics.com PAPELES Y CONVERSIONES DE MEXICO, S.A. DE C.V. CESAR ANAYA GARZA Director de Operaciones Cerro de la Silla No. 101 Col. División del Norte Guadalupe, NL 67190 Mexico Phone: +52-81-8127-7700 www.pcm.com.mx cesar@pcm.com.mx COMPAÑÍA ARIZLU S.A. DE C.V. JOSE OZIEL ARIZPE DÁVILA Director General Calle 14 No. 2653 Guadalajara, JAL 44940 Mexico Phone: +52-33-3811-5004 www.arizlu.com oziel.arizoe@arizlu.com

BOXSCORE May/June 2018

New Members

API PACKAGING SOLUTIONS RANDALL R. RIGSBY President/CEO 2510 Electronics Drive Anniston, AL 36207 Phone: 877-493-7717 www.api4design.com rrigsby@api4design.com RECYCLING ASSOCIATES MICHAEL VELLUCCI 1 Whipple St. Nashua, NH 03060 Phone: 603-886-4344 Fax: 603-886-0222 www.recyclingassociates.com mike@recyclingassociates.com MEMJET DON ALLRED Vice President, Packaging 10918 Technology Place San Diego, CA 92127 Phone: 858-207-9751 www.memjet.com donald.allred@memjet.com CI FOREST JIM RISCHAR 500 Broadway St. Suite 340 Vancouver, WA 98660-3323 Phone: 360-693-0373 Fax: 360-693-6875 www.ciforest.com/index.html jim.rischar@ciforest.com TYNDELL PHOTOGRAPHIC BEN TYNDELL President 13030 Wayne Rd. Livonia, MI 48150 Phone: 734-422-4477 Fax: 734-772-9263 www.tyndellphotographic.com ben.tyndell@tyndellphotographic.com

SUN CHEMICAL HEATHER BUCHHOLZ Marketing Program Manager 135 W. Lake St. Northlake, IL 60164 Phone: 708-236-3798 Fax: 708-562-0580 www.sunchemical.com heather.buchholz@sunchemical.com ARROW CONTAINER JAMES LASARRE JR. President 5343 Commerce Square Drive Indianapolis, IN 46237 Phone: 317-882-6444 Fax: 317-534-0383 www.arrowcontainer.com jlasarre@arrowcontainer.com

SUSTAINABLE SOLUTIONS INTERNATIONAL LLC GERRY MOUNSEY President 13575 Sandy Key Drive Unit 732 Pensacola, FL 32507-9662 Phone: 847-751-0640 www.sustainablesolutionz.com gmounsey@sustainablesolutionz.com CEL CHEMICAL & SUPPLIES, INC. SHARLAN KOZAK CEO 1927 Elrod Rd. Piedmont, SC 29673 Phone: 864-269-3488 www.celchemical.com sharlan@celchemical.com

Save the Date

AICC Southeast Summit & Golf Tournament Wed., Aug. 1- Tues., Aug. 2 Charleston, SC

Learn more at www.aiccbox.org/calendar

AICC delivers success.

BOXSCORE www.aiccbox.org

Members Meeting

AICC 2018 SPRING MEETING: HOW TO SUCCEED IN AN ERA OF DISRUPTION

“The Convention Content Subcommittee, led by Matt Davis, Packaging Express, along with our incredible AICC staff, did an unbelievable job with our goal to disrupt the format of our Spring Meeting and create an even more engaging environment for our attendees to network and share best practices. Our attendees left the meeting with a firm understanding of the future

Photos courtesy of AICC.

ith more than 600 people in attendance, not even storms and delayed flights across the East Coast could stop the AICC 2018 Spring Meeting from breaking records and disrupting Phoenix. The meeting explored the forces of disruption regarding e-commerce, retail, technology, and the containerboard and paperboard markets.

Al Hoodwin, president, Michigan City Paper Box, and AICC chairman, addresses attendees at the Spring Meeting.

BOXSCORE May/June 2018

paper market supply dynamics, along with the outlook for e-commerce and retail brick-and-mortar stores,” says Al Hoodwin, president, Michigan City Paper Box and AICC chairman. “Members were also provided insight on the packaging designs and requirements to create engaging and interactive packaging that our customers will soon demand. We have successfully educated and motivated our independent members to invest in the people, technology, and equipment to continue their growth and prosperity in tomorrow’s marketplace.” The revamped format, which added a general session and two new networking events, received rave reviews from attendees. Additionally, new technology was used to allow members to check in, print their own badges, and use a meeting app to participate in live polls, ask speakers questions, and message other attendees. Terri-Lynn Levesque, office manager, Royal Containers Ltd., says, “In keeping with this year’s AICC theme of strength in numbers, AICC certainly did just that at the Spring Meeting in Arizona—with a new format, an extra general session, more industry-relevant speakers, and additional networking events, which included a late-night mixer and great conversation over food. I had the opportunity to connect with more people at this meeting than at previous meetings combined. They really focused on the ‘customer experience,’ and it showed in every aspect of the meeting.” The Sales Managers Forum, a pre-conference two-day seminar, which began Sunday, April 15, was the first event to bring members together. Leaders R. Andrew Hurley, Ph.D., associate professor of packaging science,

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Members Meeting

Attendees chose from three workshops to build their knowledge in customer service, sheet feeder partnerships, or high-speed FFGs and equipment justification.

New members and first-time attendees were brought into the AICC family by spending time with AICC Ambassadors at a special networking event, reception, and breakfast.

Matt Davis, Packaging Express, and AICC’s own Alyce Ryan explained the app used during the meeting.

BOXSCORE May/June 2018

Sonoco Institute of Packaging Design and Graphics at Clemson University, and Wayne Stevenson, master’s degree student of packaging science at Clemson, explained the importance of understanding the prospects and research. The methodology presentation explained how to use metrics to improve conversion rates. Sunday evening also saw hundreds of attendees come together for a late-night mixer at the hotel, with drink tickets provided by Young Shin. Tommy Bradford of Bradford Co., program manager, says, “The Spring Meeting was the perfect setting to reconnect with friends and develop new and lasting friendships.” Monday began with a morning tour of Smurfit Kappa, Phoenix. Formerly known as Sound Packaging, the plant started out in May 1995, a green startup by Troy Gale, Mark Riley, and Tyler Howland. The sheet plant grew from the original 50,000-square-foot single building to an 80,000-square-foot facility in 1999. Then, it added a 50,000-square-foot off-site warehouse in 2005, and then a corrugator, Corrugated Professionals, in 2014. All are now part of the Smurfit Kappa North America operations. Then, as guests headed off for a desert botanical garden tour, meeting attendees joined either the “Fluted vs. Paperboard Workshop” or the Emerging Leaders (EL) training: “Power, Sex, and the New Normal.” The “Fluted vs. Paperboard Workshop,” led by Tom Weber, AICC folding carton technical advisor, and Ralph Young, AICC corrugated technical advisor, was a facilitated discussion to understand, support, and further develop the use of fluted materials as a substitute for paperboard in the manufacturing of both traditional and highly specialized folding cartons and rigid boxes (see Page 50 for related feature by Tom and Ralph). The session began with Al Hoodwin, Michigan City Paper Box, sharing his experience.

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Members Meeting

MILESTONES AND AWARDS Member Milestones CELEBRATING 125 YEARS

Weber Display & Packaging, Philadelphia, Pa. CELEBRATING 100 YEARS :

Acme Corrugated Box Co., Hatboro, Pa. Liberty Diversified International, Minneapolis, Minn. Tilsner Carton Company, St. Paul, Minn. CELEBRATING 50 YEARS :

Packaging Design, Burr Ridge, Ill. Volk Packaging Corporation, Biddeford, Maine

2018 Independent Safe Shop Awards Akers Packaging – Decatur Akers Packaging – Huntington Akers Packaging – Michiana Akers Packaging – Middletown Akers Packaging – Tecumseh Akers Packaging – Webster West Evansville American Packaging Corp. Corrugated Container Corp. Jamestown Container Master Packaging Vermont Container (Unicorr Packaging Group) Wonder State Box Co. Wunderlich Fibre Box Co.

BOXSCORE May/June 2018

Panelists and additional topics included: • Tony Reilly, Flutes Inc. — “Fine Flute Fundamentals: Paper, Basis Weights, and Flute Properties.” • Dave Moreno, Greif — “Fine Flute Fundamentals: Processes, Variations, and End Product.” • Michael Drummond, Packrite, and Darin Jones, Pacific Southwest Container — “Converting Basics: Process, Challenges, and Best Practices.” Sharlan Kozak, CEL Chemical & Supplies, was unable to attend in person, but joined via video conference to discuss “Chemical Basics: Starches and Additives for Quality.” The Emerging Leader training, facilitated by Scott Ellis, Working Well, brought together Leah Ashford, a certified professional coach and manager of training and development at E & J Gallo Winery, and AICC General Counsel David Goch, Webster, Chamberlain & Bean LLP, to moderate group discussions and breakouts to prepare attendees to lead their organizations into the new normal, where differences such as gender are valued and safeguarded. During the Associate Member Meeting, participants learned “What the Tax Law Changes Mean for Equipment Sales” from Mitch Klingher, Klingher Nadler LLP, and received an update on Corrugated Week and SuperCorrExpo. General sessions presentations during the meeting included: • “Overview of the Rapid Growth of E-Commerce & Its Growing Impact on the U.S. Corrugated, Containerboard, Paperboard & Recycled Industries,” with Matt Elhardt, vice president, business development, Fisher International, Inc. • “Industry Panel Discussion: What Are the Disruptive Forces Facing

the Global Containerboard Market?” Panelists included: –– Randy Banks, SHARP International –– Peter Butler, Evergreen Fibres, Inc. –– Serge Desgagnés, Kruger Packaging LP –– Jack Fiterman, Liberty Diversified International –– Charles Hodges, Hood Container Corp. –– Neil Osment, Neil Osment Associates –– “Tax Cuts & Job Act,” with Mitch Klingher, Klingher Nadler LLC Keynote presentations offered inspiration and new ideas to attendees: • John Rossman, former Amazon executive, explained how digital disruption continues to change the world. • Douglas Stephens, retail and consumer futurist, discussed the future of brick-and-mortar stores with “Re-engineering Retail: The Future of Selling in a Post-Digital World.” • Ed Rensi, former president and CEO of McDonald’s, philanthropist, and NASCAR enthusiast, shared decades of experience with attendees and outlined the secrets of his success. Three workshops were offered on Tuesday, giving a range of learning opportunities: • “The 5 Elements of Remarkable Customer Experiences,” with moderator Doug Stephens, encouraged small groups to develop something game-changing and shared how the world’s most respected brands go about designing and delivering exceptional customer service. • Flexo-folder gluers experts Scott Sander, Isowa, Dick Olsen, MHI, and Marc Farrar, Bobst North

Members Meeting

5TH ANNUAL INDEPENDENTS CUP CHARITY GOLF TOURNAMENT AICC Thanks the Meeting and Golf Tournament Sponsors & Supporters A.G. Stacker Inc. Akers Packaging Service Inc. Alliance Machine Systems International LLC American Corrugated Machine Automatän Baumer hhs Corp. Bay Cities BCM Inks U.S.A. Inc. Bennett Bobst North America Inc. BW Papersystems C&M Conveyor Inc. Cascades Cascades Sonoco

Durst North America Dusobox Dynaric Inc. EFI EMBA Machinery Emmeci USA LLC Equipment Finance Corp. Flint Group Fosber America Inc. Global Boxmachine Haire Group Hood Container LA LLC HP Huston Patterson Jamestown Container

JB Machinery Inc. KemiArt US Inc. Lewisburg Printing Co. Litho Press Inc. McLean Packaging Middlestreet Graphic Mitsubishi Heavy Industries NV Business Publications: Board Converting News & Corrugated Today Oklahoma Interpak Pamarco/Absolute Philipp Lithographing Co. Poteet Printing Systems PPC Technologies & Solutions

Quantum Inks RISI: Pulp and Paper Week Sappi North America Schwarz Partners Smurfit Kappa Phoenix Stafford Corrugated Products Standard Printing Co. Standfast Group SUN Automation Group Vanguard Packaging W.H. Leary Co. Inc. WestRock Young Shin, USA Limited Zünd America Inc.

Golf Winners CATTAIL COURSE FIRST-PLACE TEAM

SECOND-PLACE TEAM

THIRD-PLACE TEAM

CLOSES T TO THE PIN :

Howard Bertram Lloyd Kent Scott Sander John Burgess

Tom Murphy Bill Nolan Thomas Glas Tom Emery

Jose Guzman Johnathan Pappas John Bacot Mark McGinnis

Kyle Milley, Tom Glas, Tom Phillips LONGES T PUT T:

Doug Vandergriff

DEVIL’S CLAW COURSE FIRST-PLACE TEAM

TEAMS TIED AT SECOND PLACE

CLOSES T TO THE PIN :

Michael Lafave Serge Desgagnés Stephen Moore Jeff Abbott

Ben Liskey Tim Engle Zach Kowa Jared Mathes

Dave Burgess, Bob Ball, Chad Wagner

Tony Castellanos Bob Day Tony Scheich Tom Davis

LONGES T PUT T:

Matt O’Donnell

BOXSCORE www.aiccbox.org

Members Meeting

The tour of Smurfit Kappa–Phoenix was attended by more than 90 meeting participants.

The 5th Annual Independents’ Cup Charity Golf Tournament had more than 180 players.

America, discussed speed of machinery, the benefits, and ROI in a discussion moderated by Mitch Klingher in “High-Speed FFG Panel Discussion & Equipment Justification Methodology.” • John Lingle, Schwarz Partners, moderated a conversation with Jay Carman of Standfast Packaging Products, Joe Palmeri of Jamestown Container Cos., and John Perullo of CSI, about “Paper Mill & Sheet Feeder Partnerships: How Can They Make Independents More Successful?” Over the three days, new members and first-time meeting attendees were treated to a special networking event and reception, as well as a breakfast with AICC ambassadors and seasoned AICC meeting attendees to help them integrate into the AICC family and make the most of their meeting experience.

BOXSCORE May/June 2018

Eighteen AICC Ambassadors helped new members and first-time attendees navigate their first AICC meeting.

Jacqueline Henderson, sales, Abox Packaging, says, “As a new member and ‘first-timer’ at an AICC meeting, I was pleasantly surprised with the warm family-style welcome I received from each and every person I came in contact with in Phoenix. I came in really not knowing what to expect, but left feeling like I had a ton of new friends who are ready and willing to help me at any time. It is impossible for me to express how thankful I am for AICC. I know I have made friends that will last a lifetime.” During the meeting, AICC also honored members for both significant milestones and safety records. The 5th Annual Independents Cup Charity Golf Tournament, which hosted more than 180 golfers, raised approximately $30,000 to be distributed to: • Three Precious Miracles — Three Precious Miracles’ mission is to support the families of Native American

children who are displaced, so they can provide a loving, caring, and culturally sensitive home. The organization helps to provide basic needs to Native American foster children and grandparents raising grandchildren. • American Red Cross Disaster Relief — After a disaster, the Red Cross works with community partners to provide hot meals, snacks, and water, served at shelters or from Red Cross emergency response vehicles in affected neighborhoods. • J. Richard Troll Memorial Scholarship Foundation — The J. Richard Troll Scholarship Fund was established to honor the memory of the late J. Richard Troll, a founder of AICC and the International Corrugated Packaging Foundation (ICPF). The fund provides scholarships for select college or university students majoring in packaging engineering or a related packaging field.

PRINT & PACKAGING LEGISLATIVE SUMMIT June 19–20, 2018 • Washington DC

Co-Hosts:

SHAPE THE FUTURE OF OUR INDUSTRY ABOUT THE 2018 SUMMIT The Print & Packaging Legislative Summit is the signature government affairs conference hosted annually in our nation’s capital. This collaborative event brings together printers, suppliers and allied interests for a powerful program of issue advocacy, political education, public affairs discussions, interaction with Members of Congress and networking events on Capitol Hill. Join your peers as we address our legislators as ONE industry with ONE voice. The Print & Packaging Legislative Summit is cohosted by AICC, The Independent Packaging Association, Association for Print Technologies (formerly NPES), Fibre Box Association (FBA), Idealliance, Printing Industries of America (PIA) and Specialty Graphic Imaging Association (SGIA). The Summit will be held in conjunction with National Association of Manufacturers’ (NAM) annual Manufacturing Summit. Additional supporting organizations are continuing to join us. WHO SHOULD ATTEND Recommended attendees are Presidents/CEOs and other C-Suite executives of printing and graphic communications companies. Executives with responsibility for environmental/ health and safety, human resources, legal, postal, tax, technology and/or sales are especially encouraged to attend.

Sponsored by:

WHAT TO EXPECT The Summit will host legislators, printing and graphic communications professionals and policy experts for an industry-wide meeting and networking event. In-person grassroots lobbying meetings on Capitol Hill will enable you to take your company and industry story directly to decisionmakers in the US Senate and House of Representatives. WHAT YOU WILL LEARN • How hot-button policy issues may impact your company’s bottom line. • Best practices on how to advocate for your company and the industry before Congress, the Trump Administration, and other decision-makers. • How to promote the positive image of print, packaging and paper before key Capitol Hill audiences. • The impact of hotly contested mid-term congressional elections on legislation and public policy of importance to the graphic communications industry.

FOR MORE INFORMATION OR TO REGISTER: www.printpackagingsummit.com

Selling Today

BEST PRACTICE APPROACH TO ACCURATE TARGET MARKET PROFILING BY TODD M. ZIELINSKI AND LISA BENSON

ne of the most underestimated steps in new business development is target market profiling. Accurately pinpointing the profile for your target market will save you a considerable amount of time and money. Although it may take some time to develop a clear profile, the efficiency gained by pursuing only those people who need your products or services, have the authority to make the purchase, and meet other specific criteria will more than make up for the time spent in upfront development. One of the issues that companies face when profiling prospects is that they donâ&#x20AC;&#x2122;t go deep enough into the profile. Although looking at industries and SIC codes is a great start, this may leave you with a target list that includes companies that are not relevant for reasons other than the industry they are in.

Define Markets The first step in profiling your target market is to clearly define it. Using a logical, systematic, and repeatable approach will give you the best results. Start by creating a profiling worksheet with specific criteria that define what makes an ideal customer for you. Management should work with the sales team to define and continually evaluate the list or lists that are created. Starting with industries is a good way to begin, but limit selected industries to those in which your business model excels. For example, if you are selling corrugated, folding carton, or rigid boxes, it might be easy to fall into the trap of thinking everyone selling a product needs boxes, so we should target all companies.

BOXSCORE May/June 2018

You need to dig deeper and ask questions until you find your niche market. Are you competitive against other off-the-shelf commodity suppliers? Is your strength in custom solutions? Do you need to stay within a certain geographic location? Can you offer competitive noncorrugated solutions? Are the markets that the target company sells to a good match (B2B vs. B2C, domestic vs. international, large companies vs. small, etc.)? At a most basic level, define your true differentiator, and understand who is willing to pay for it. Define Financial Objectives Once you have the industry and market segments defined, you will want to refine the list further based on financial objectives. How you do this will depend on your goals. How many sales do you need to close to meet your revenue goals? To figure this out, you might need to look at the financial picture of your ideal prospective customers. Is overall customer revenue an important factor, or is customer profitability more important? In the market segment you are analyzing, does a highly profitable company spend more on what you are selling? A larger company may mean more bureaucracy and a longer selling cycle, so if you need quick sales, this might be an issue. You might find that company spend is more important. Are you interested in pursuing those with a specific transactional spend, or is lifetime value more important? Dialing in on what type of company makes the ideal customer for you segments your list further and brings you closer to your ideal customer. You

may even need to build multiple profiles if you cater to multiple industries and market segments. Look to Your Current Customers If you are looking at this and not sure where to begin, start by reviewing your best customers. What is it about them that makes them a great customer? Those aspects that make them a good customer are the important criteria that should make up your profiling worksheet. What they purchase from you (volume or spend) should be your benchmark. These are the companies that you will want to mimic. Often it takes the same amount of effort to engage a company spending, for example, $50,000 as it does $5,000, so if your best customers are spending $50,000, donâ&#x20AC;&#x2122;t waste your time chasing small sales. Define Contact Titles Another important consideration is contact titles. Have an understanding of the decision-making process for the company types you are targetingâ&#x20AC;&#x201D;decisions are often made by a group. If possible, it is best to have four to five contacts from each company. Use your current customer list to determine which positions are held by decision-makers and influencers. Define who they are and what is important to them, so that your messaging can be tailored specifically to them. Finding Companies and Contacts Once you have your profiling worksheet together, start looking for companies that meet your defined criteria. A good place to start is with competitors to your current customers.

BEHIND EVERY MACHINE WITH THIS NAME…

IS AN ORGANIZATION THAT PROUDLY

WEARS THIS NAME: EVOL Flexo Folder Gluers are the most rugged, dependable and long lasting box making machines. Many now have been running continuously for over 12 years—a testament to the quality with which they are built. And to keep them running at their peak, EVOL owners look to Mitsubishi Corrugating Machinery Service and Parts for regular maintenance or when the need for service or support occurs.

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Selling Today

To find other companies that fit your profile, you can search the internet or use paid data services such as Synthio, ZoomInfo, Jigsaw, and Data.com. Your public library may even have online research databases available that are free to use, such as ReferenceUSA. Keep in mind that the data provided by these services is not always accurate. It is imperative to do additional research to cross-reference the information. Going to a company’s website will give you an idea of size, credibility, target markets, number of locations, size of plant(s), and company contact information. To find individual contact information for the positions you are targeting, LinkedIn Sales Navigator is a good resource. It not only helps you locate the correct person, but it also integrates

with many CRM providers. Again, the information may not be accurate—people retire, change jobs, or otherwise leave the workforce and may not have updated their LinkedIn account. To verify you have the correct contact information, call the company. If you state when you call that you are sending information to John Smith and want to verify his contact information, the gatekeepers are often very helpful.

from the prospects that you aren’t a good fit, you will need to make adjustments. Your list should be reviewed and added to monthly at a minimum.

Update Continually Keep in mind this isn’t a one-time activity. These contacts should be added to your CRM or other database and updated regularly. Having a feedback process in place will be critical. If your sales and marketing team is finding the list is incorrect or they are getting feedback

Lisa Benson is senior marketing content consultant at Athena SWC LLC. She can be reached at lbenson@athenaswc.com.

Todd M. Zielinski is managing director and CEO at Athena SWC LLC. He can be reached at 716-250-5547 or tzielinski@athenaswc.com.

Know-how makes your business, our business. Providing equipment financing to the corrugated industry for over 20 years. Our industry knowledge and understanding of your business can give you an edge in the marketplace.

At People’s Capital and Leasing Corp., we provide: • Capital access for new/used equipment • Corrugated industry expertise • Comprehensive financial resources

CONTACT ME TODAY. Tom Davies, SVP tom.davies@peoples.com

203-338-6412

May/June 2018

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Tackling Trends

PACKAGING FOR A PURPOSE BY JOHN CLARK

hen you hear the term “shipping container,” you generally do not think of the Great Pyramid of Giza, but that is exactly what it is—in this case, a carefully designed and crafted container to transfer the Pharaoh Khufu to the afterlife. Today, the afterlife is probably beyond your shipping radius. Thankfully there are lighter, stronger, and more recyclable methods available than two-ton granite blocks. For all the pyramids’ outward appearance of volume, the actual usable space is little more than that of a three-bedroom ranch house. But the structural basics are still the same today as they were in 2600 B.C. You want to design for a purpose, choose the most appropriate materials, manufacture as quickly and cost-efficiently as possible, and more often than not, make it brown. The Challenge The packaging industry continually searches for new ideas and new processes to create structural components with greater strength and lighter weight. Weight generally translates into cost, while strength is a function of design and materials. The only building materials available to the Pharaoh’s architects to match the design expectations for the pyramid were granite blocks weighing more than 2 tons each. And at more than 5 million tons of total weight, they probably were not concerned about having to ship it to Memphis. Evolution Flash forward a couple millennia, and you come across Caesar’s Roman army, who not only knew how to build roads,

BOXSCORE May/June 2018

“ Thankfully, there are lighter, stronger, and more recyclable methods available than two-ton granite blocks.” but also figured out how to build an arch to span rivers and valleys. The arch directs pressure downward and outward, creating strong structures that have the ability to support heavy loads. Put another way, the Romans invented the stone and mortar equivalent of flutes and starch to provide rigidity to the structure. This breakthrough allowed the creation of large interior space to be open and usable. These spaces evolved into enclosed markets, grew into cities, and were connected by Roman roads spreading commerce throughout the empire. Goods needed containers to be transported, and the available technology and materials created barrels and crates to move goods and livestock. These wooden crates were functional, but expensive and time-consuming to manufacture. And as size increased, structural integrity fell off noticeably. Now jump to a time closer to our own, and the 16th U.S. president, Abraham Lincoln. The tall hats of the time favored by Lincoln were able to stand up due to a process of “pleating” paper to create ridges and valleys. This process provided great strength with little weight and was first used in commerce to ship glass objects. A gentleman named Oliver Long added a second layer of paper, encasing the pleated paper, and the corrugated sheet was born.

Revolution Today, the world of e-commerce, digital printing, CAD design, and specialty equipment would be totally beyond the scope of Khufu, Caesar, and Lincoln. But the technologies and products of today germinate from seeds sown long ago. This seemingly simple marriage of sheets of paper is now responsible for a huge portion of world commerce and is one of the indispensable and most important products in the world—extremely strong for its weight, able to conform into many shapes and sizes without losing integrity, totally recyclable, and collapsible for shipping and storage. In many ways it is the perfect product. Today’s factories, with extensive automation and increasing digital technology, are far removed from the builders of the pyramids. But they do have one thing in common: They both paid their employees. The legend of the pyramids being built by slaves was a myth. The land was so fertile, there was ample time for men to work on monuments for the kingdom, and they were paid in kind. The fact that they were paid in beer probably did not hurt recruiting. John Clark is director of analytics at Amtech Software. He can be reached at jclark@ amtechsoftware.com.

Andragogy

MARKETPLACE COMPETITIVENESS BY R. ANDREW HURLEY, PH.D.

recently attended a local FedEx summit on e-commerce packaging and was surprised by the attendance—lots of entrepreneurs and small to medium businesses. I learned a lot about the software that helps to distribute inventory across all of your digital marketplaces, systems that allow businesses to communicate the location and status of parcels in transit, and ways to rethink unboxing experiences. But the hottest topic of the day was returns. Simply put, e-commerce transactions can go very badly when a large box containing five-plus products is shipped to a customer’s doorstep, and then one product is returned in the large box. Did you know that one return can create a significant deficit, and sometimes the return shipping costs the company more than the revenue received for the original order? E-commerce giants such as Amazon and Walmart have negotiated fantastic deals with their carriers to ensure that returns have minimal impact. But for small and medium-sized e-commerce businesses, returns can be catastrophic. So, as an educator and researcher, I wanted to learn the “what,” “how,” and “why” of this situation. The video crew at PackagingSchool.com interviewed numerous business owners at the event, and one interview with Frank, an independent e-commerce business owner, really put things into perspective for me. Frank sells one of those amazingly popular tech toys that is all over the internet. But even though it’s in an incredibly competitive market, Frank’s company is doing really well. Sales are increasing, and his social media groups have 80,000 members and are growing. I asked Frank

BOXSCORE May/June 2018

how he does it, and a simple two-word explanation hit home: customer service. Frank takes a different approach to transactions—he charges, tests, and confirms each product before delivery. He set up an email campaign to ensure that customers understand what they’ll be receiving and to provide instructions for use while the product is in transit. Frank said that he’ll spend an hour with a customer answering their questions, and he noted that most problems result from a lack of education. The purchase intent was fine, but customer expectations were not translating into features. I asked Frank about returns, and he smiled and said it wasn’t a problem for him. He set up his website and e-commerce store to help buyers understand products at a human level, where products are organized and described by professional and recreational needs curated to the user. As a curated marketplace, Frank’s company is able to progressively disclose details and

information as he sees best to his customers. This, along with great attention to customers upfront, means they are much more likely to choose what is most appropriate for them to begin with, reducing buyer’s remorse and the need to return. Frank sees a bright future for small and medium-sized e-commerce businesses. If you’re challenged by the financial hurdle returns are causing, follow Frank’s lead and rethink your customer interface. Personalized service and curated marketplaces go a long way in creating customer loyalty for smaller vendors and may just result in reducing returns and unmet expectations. R. Andrew Hurley, Ph.D., is an associate professor of packaging science at Clemson University. He can be reached at me@drandrewhurley.com.

Leadership

CREATING CAPABILITY AND WILLINGNESS BY SCOTT ELLIS, ED.D.

f I am to believe what I have been told by employers lately, there are two kinds of people available in today’s job market: the unwilling and the incapable. Since addressing the topic in this column, I have continued to hear about temporary workers arriving on the production floor, only to exit before shift’s end stating that they were not interested in doing this kind of work. Another group is reported to come in unprepared to do the math and communication required, even if they are willing to do the work. While I understand the employers’ frustration, I do not share their level of cynicism. Most of the folks who are frustrated are searching in the same places they used five years ago, when conditions were very different. The cost of turnover in dollars, productivity, and morale can be offset by investment in different methods of locating, attracting, and retaining the willing and capable for careers in packaging.

Look Outside In the prior article (BoxScore, May/June 2017), I encouraged a change in strategy. Rather than exclusive use of one source, such as a temp agency, develop relationships with individuals within the many public and private agencies that exist to prepare and equip the workforce, albeit with variable effectiveness. Those who join these boards and visit these agencies are able to sort through the paper pushers and social workers to find individuals who understand your clear requirements and present you with résumés that meet them. This method requires: • that you commit personnel to locate these agencies and vet those who will find your potential workers;

BOXSCORE May/June 2018

• that you develop clear requirements for your entry-level jobs; and • that you incent these providers by interviewing and hiring a percentage of their candidates and possibly serving on their committees or boards. This is a first step toward developing a more capable and willing labor pool in your community. Those who plan to stay in business take the long view by investing time and resources in area schools. First, by becoming visible through donation of materials for theater and other school projects. Second, by providing such things as: • tutoring at the elementary level; • plant tours that show the reality of the technology and career opportunities in packaging; • involvement in high school tracks (e.g., media arts, industrial tech, computer science); • internships for community college graphic arts students; and • required projects for business majors and MBA students. Get Creative Here are a couple of examples that proved to be effective. While involved with a high school media arts career academy, I asked students to produce a 10-minute movie. Having promised artistic freedom, I challenged them to explore a question about subjects studied in high school: “What am I ever going to use this for?” Then they were given free access to a packaging facility, where they chose to show the connections between the world of packaging and math, English grammar, foreign language, science, computer science,

and graphic arts. I may have chosen to interview different people or score it with different music, but I was not the target audience. The little film was used in all of the academy programs in the area and shown at multiple assemblies. The result was one step in building a bridge between school and work. Students got a glimpse of real jobs in packaging as a destination rather than a place people end up. That was the day high school kids showed me that I needed to stop apologizing and joking about our industry as a place for C students. Another opportunity to prepare the workforce came when a community college started an industrial mechanics program that utilized equipment in transition from area companies. It was their practice to temporarily house machines that were being replaced by newer technology. The program benefited by access to recent generations of equipment, rather than the dinosaur equipment they owned, and manufacturers were able to move a machine out of their facility without a final decision about its disposition. Most machines were on-site for three to four months before being sold. In some cases the instructors and students performed electrical, hydraulic, or cosmetic improvements to the machine as a part of the agreement. The most it cost the machine owner was the price of an extra stop and a delay in the sale of the old equipment. As a result, students were better prepared on relevant equipment and were persuaded to see packaging careers as a viable option. Look Inside Once the basic requirements are firmed up, you may take a look inside your company for workers with the potential

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Leadership

and desire to advance. Here again, resources will need to be made available to equip candidates. Even where career-pathing is not a policy, it can be offered to those who nominate themselves. Resources are available to ease your progress, such as: • Cross-training grids that depict the work centers in a department and the levels of qualification for each employee are helpful for increasing bench strength and flexibility. In plants where it would be appropriate to display this chart, employees are also motivated by healthy competition. • Use this same grid to show that you value training. Those who train get higher ratings than those who operate and hoard knowledge. Take this another step by recognizing and

rewarding long-term employees for sharing their knowledge. • Keep a training log for each employee, and offer training and experiences that will equip workers to move up and around. A custom training curriculum worksheet is available at AICC’s Packaging School, along with sales and production tracks. This utilizes a combination of e-learning (free to all AICC member companies) and destination workshops. Using your company’s departments as the classroom, Kim Brown developed an e-learning resource called the “Internal Staff Development Guide.” There is a big difference between scholastic aptitude and the ability to succeed in real life. I have met many who struggled with theory and teaching methods in the classroom and now

thrive in the manufacturing environment. Let’s equip our current workers and prepare those who will join us later. The alternative is the status quo, where we get what we settle for. Scott Ellis, Ed.D., provides the brutal facts with a kind and actionable delivery when a leader, a team, or a company needs an objective, data-based assessment of the current state of operations and culture. Training, coaching, and resources develop the ability to eliminate obstacles and sustain more effective and profitable results. Working Well exists to get you unstuck and accelerate effective work. He can be reached at 425-985-8508 or scott@workingwell.bz.

Software looked good on paper?

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BOXSCORE May/June 2018

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Marketing Mix

CAN ADVERTISING HAVE AN IMPACT?

BY JOAN SAHLGREN

he Paper & Packaging – How Life Unfolds® campaign reminds a broad consumer audience of the value of paper and packaging products they may take for granted. In the market since 2015, the campaign first must reach an audience, and then its impact on consumer attitudes and their propensity to choose paper products can be measured. In fact, results from the August 2015 to November 2017 Attitude and Use Survey, conducted every six months by the Paper

and Packaging Board, show how key metrics on perceptions of paper and packaging products are changing for the better when people have seen the campaign. Among the target audience who recall seeing campaign ads, measures related to personal relevance have held steady or improved from August 2015 to November 2017. Some show significant improvement.* Survey respondents agreed with the following statements: • Even as technology becomes more advanced, paper continues to play an important role in our lives—up 6 percent to 79 percent. • Paper-based product packaging is an essential part of everyday life—up 15 percent to 71 percent. • Corrugated cardboard boxes are essential to the way I live my life today—up 10 percent to 70 percent. In addition, attitudes among the audience who recall seeing campaign ads have shown significant improvement around

BOXSCORE May/June 2018

the quality of paper bags and paper-based product packaging: • I prefer paper shopping and grocery bags to plastic—up 19 percent to 67 percent.* • Products that come in paper-based product packaging tend to feel more premium—up 16 percent to 68 percent.* • When a company decides to package its products in paper-based packaging, I think more highly of that company—up 23 percent to 67 percent.* Attitudes around the quality of corrugated boxes are already high and remain steady, with 81 percent who agree they “can rely on corrugated cardboard boxes to get my merchandise shipped/ delivered safely.” How can the campaign continue and expand its impact? New creative concepts were launched in February 2018 featuring paper and packaging characters as our industry’s newest ambassadors. They highlight how packaging protects the shipments and goods we count on and how paper helps us achieve things great and small in our lives. They’ll continue to remind consumers of the value of the industry’s products and can be found in ads on TV and digital, in print, and across social media. Visit www.howlifeunfolds.com to learn more. Joan Sahlgren is senior director of public relations at the Paper and Packaging Board. She can be reached at jsahlgren@ paperandpackaging.org.

*Denotes significant improvement. Survey fielded and results compiled five times over the period of August 2015 to November 2017 by Isobar.

Thank you Education Investors These companies are making a significant contribution to the online education available to all AICC members.

Education Investor Program The Education Investor opportunity is available to 15 AICC member companies for $15,000, each. Companies may partner to meet the threshold. It is a commitment that offers the companies great exposure and impact. For more information, contact Mike Dâ&#x20AC;&#x2122;Angelo, Vice President, 703.535.1386 or mdangelo@aiccbox.org.

Design Space

RARELY THOUGHT OF, ALWAYS NEEDED BY MATT WHITLOCK

henever anyone asks me what I do for a living, I happily tell them that I am a packaging design engineer in the corrugated industry. And, of course, I get the same response every time: “Huh?!” The easy answer that everyone understands is that I make boxes, but of course, anyone in the industry knows it’s way more than that. I’ve been a design engineer for eight years now, and every day brings something new, designing packaging for anything from bottles of liquor to pet coffins; it gets pretty weird sometimes. Of course, every customer wants the latest and greatest when it comes to making their product stand out. They all have their ideas of what they want the package to look like and how they want it to perform. The trick is getting them something they are willing to pay for. The hardest part in packaging design, I believe, is getting the customer to understand the

BOXSCORE May/June 2018

basics of custom packaging and the price tag behind it. Now, you have your customers with the big-ticket items, which make packaging cost-negligent—spending $10–$100 a package is no big deal. But then you have those customers who have been shopping for their packaging off of Uline and now are ready to get more custom and fancy with their boxes and graphics, but they don’t understand why their price went from $0.10 a box to $1.50 a box. This is where the challenge of every packaging designer comes into play: trying to find a happy balance between the customer’s vision and expectations and a reasonably priced package that performs the necessary functions, all while being able to run in your plant on your machinery with the least number of dirty looks from production. One way around the struggles of customization and cost is a newer trend

of digital. Digital printing and manufacturing is catching on like fire in the paper industry. This process helps alleviate the upfront cost of tooling and lets the customer change up sizes and graphics without incurring much change to cost. This allows designers to be a little more creative and not so restricted by what the machines in the plant can do. With this freedom, we are able to give the customers much more of what they want while helping keep the costs down for smaller runs and changing graphics. The best part of designing is getting free reign to use all of your creative knowledge to come up with fun and innovative ways to use corrugated outside of the norm, whether it be interactive packaging or something that isn’t a package at all. Recently, my company entered several entries into the AICC Package Design Competition held at the 2017 Annual Meeting in Las Vegas. Most of the entries

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were of packaging we had created for customers, from industrial packaging to retail displays, but the two fun projects had nothing to do with packaging at all. One of these projects was a selfpromotional item we had given out to customers to help remind them that we are their guiding light for all their packaging needs. Using only corrugated and our digital equipment, we created an 18-inch lighthouse that held a flashlight inside and could light up a room. We actually had some customers use them to light up their offices after a bad ice storm knocked out their power. The other project—the one I’m most fond of—had to do with a recent event,

the iMAGINE STEM festival, which took place at a local ballpark. This festival featured interactive exhibits from related organizations and let visitors experience how STEM careers connect with the community and engage with local businesses and schools. Our mission was to show kids the fun side of packaging and that it’s not just all boring moving boxes. The way we did this was to create a game the kids could play, and what game is better than classic Skee-Ball? We created a fully functional Skee-Ball game made entirely of corrugated, complete with a ramp and ball return. Not only was it a hit with the kids that day, but it was also then a hit with the attendees of the AICC Annual Meeting and the judges of the Package Design Competition, winning

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BOXSCORE May/June 2018

first place in its category and the People’s Choice Award. All I can say is that I never thought in a million years that what I would be doing for a living would deal with making boxes or with packaging in general, but I will tell you now that I wouldn’t have it any other way. So, the next time someone asks me what I do, I’ll smile and happily tell them all about this industry that is rarely thought of but always needed. Matt Whitlock is a packaging design engineer at Sumter Packaging. He can be reached at 803-481-2003 or mwhitlock@ sumterpackaging.com.

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GOOD FOR BUSINESS

AICC ANNOUNCEMENT ............................ 39 WHAT YOU SAID ............................................. 40 AICC INNOVATION ........................................ 42

BOXSCORE TIPS, TRICKS, AND SOLUTIONS TO BETTER BUSINESS

AICC ANNOUNCEMENT

he AICC Board of Directors has unanimously approved a transition plan that will name Michael D’Angelo president of the Association when current President Steve Young steps back in June 2019. Al Hoodwin, president and CEO of Michigan City Paper Box and chairman of AICC, made the announcement April 18, during the closing general session of AICC’s 2018 Spring Meeting in Phoenix, Ariz. Hoodwin noted that AICC’s Board has made succession planning an integral part of AICC’s long-term strategy. “When you look back over the past 44 years that AICC has helped the independent manufacturer grow and prosper,” said Hoodwin, “there has been one individual who has been a constant in this organization’s leadership: Steve Young. “So, when your Board had the great challenge of finding an individual to carry forward this remarkable organization, we found an individual who has over 35

years of experience working for one of our industry’s most well-respected suppliers, has served as chairman of ICPF, and in the past two years, has partnered with Steve Young in building a strong AICC operational team to deliver the tools and programs independents need to succeed in today’s marketplace. This individual is Mike D’Angelo,” Hoodwin said. Hoodwin reported that AICC’s Board will be making the “necessary arrangements for a smooth transition for Steve Young’s stepping back and naming Mike D’Angelo the next president of AICC.” Young will retain a consulting ambassador role beginning June 30, 2019. “Since I joined AICC’s staff in July of 1983, I have had the immense pleasure of learning about and working in the corrugated, folding carton, and rigid box packaging businesses. Best of all, it’s the independent side of the business,” Young said. “Through this work, I have come to know and make friendships with so many

Photo courtesy of Griffin Communications.

AICC BOARD SETS LEADERSHIP TRANSITION PATH

Steve Young (left) shaking hands with successor Mike D’Angelo.

of you, our AICC members. You have welcomed me into your plants, shared your successes and challenges, and have graciously allowed AICC to serve you and your companies. For this I am eternally grateful. I know Mike will do a stellar job and build on the strong foundations AICC’s leadership has laid over the past 44 years. During this transitional year I know that AICC members will all make him feel as welcome as they did me.”

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WHAT YOU SAID

AICC MEMBER COMMENTS PREDICT RISI’S REPORT

n its March 23 edition, RISI’s Price Watch moved the price of container board up $50 per ton following announcements in February from all the major linerboard and medium producers. AICC members, responding to a market- conditions survey in mid-February, confirmed then what RISI is now reporting: Softer business conditions will mean an increase in box prices will be very difficult for customers to absorb, given the three successive increases imposed by the producers in the past 18 months. AICC’s market conditions survey, one in a series of our regular “chairman’s check-ins,” was conducted February 16 through March 15. Forty-five members responded, representing just over 20 percent of our general member corporate

BOXSCORE May/June 2018

entities. The survey asked a quick eight questions covering business conditions, the then-announced increase, and the acquisition of KapStone by WestRock. In the following summary, we’ll compare what RISI is saying about current conditions and what you, AICC’s members, accurately predicted. On business conditions: AICC members reported that business conditions in January and February softened considerably following their peak in the November–December Christmas season rush. Comments such as “business slowed in January,” and “box demand was significantly higher in November–December 2017,” were received from members. But members reported being busier in the early part of the year, too. “November

and December were average, but January was very good,” said one. In this mixed bag of results, 44 percent said business in the past 60 days exceeded industry reports, 33 percent said their business matched industry reports, and 22 percent said business was below industry reports. RISI’s March 23 report confirms what AICC members report, quoting a converter as saying, “Box demand softened up significantly coming off the Amazondriven Christmas cyclical peak.” Operating rates and paper supply: AICC’s survey asked members about reported high-mill operating rates and whether members were experiencing any tightness in their regular paper supply chain. This question was asked because “high-mill operating rates” has been used

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frequently in this current price-increase cycle, implying an impending shortage of paper. By an overwhelming margin—71 percent—members reported no tightness in their markets. Among corrugators, 7 percent said they were experiencing some tightness in linerboard and 13 percent in medium. “We’ve been pushed back some on delivery times from our mill partners,” reported one member. “We are getting everything, but not always in a timely manner.” Fast-forward to March 23, and in RISI’s report, we read an ominous heading: “Growing tightness ahead?” RISI maintains that the market is “likely to grow tighter in April and May” due to seasonal increase in demand. Mills are taking more downtime, RISI reported, for maintenance. Still, is the threatened tightness in the market a reality, or merely a rationale for its $50 move? In the same

article, RISI says, “Most independents currently report ‘no issues’ with ordering enough paper.” Box announcements? AICC’s check-in survey noted that while all producers had announced $50 per ton in containerboard increases, only IP and Cascades (at that time) had announced increases in box and sheet prices. (Since then, GeorgiaPacific announced price increases of 10 percent on boxes and 12 percent on sheets.) We asked members whether producers had announced in their market areas, and 75 percent said no. Referring to box price increases on the part of the integrated producers, RISI’s March 23 issue asks: “How much resolve on box hike?” The article says, “While many sellers regarded the $50 per ton containerboard price hike as a ‘slam dunk’ and ‘done deal,’ the coming box and sheet price hike to pass through the

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higher paper costs is expected to be more of a challenge.” AICC members, in the survey results collected in the previous 30 days, predicted this. As of mid-March, one member wrote, “We have four major integrated plants in our market. Not one has announced or is even mentioning an increase in box prices.” RISI’s article confirms what many AICC members predicted in the February check-in survey: The containerboard producers, intent on pushing through an increase, have used a weak rationale and are, it appears, failing to implement any pass-through in the box market. For more information, read the results of AICC’s February check-in survey at https://tinyurl.com/aiccfeb18check. Visit https://tinyurl.com/aicccontcom to read a commentary on the containerboard increase, published by AICC in February.

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AICC NNOVATION

AICC ONLINE EDUCATION: SPRING AHEAD OR FALL BACK BY MIKE D’ANGELO

f you are reading these words, please make a promise to yourself to share this article with the person responsible for HR and/or training in your company. No, this is not about clock settings— although there is a “tick, tick, tick, tick” element to the topic at hand—it’s about getting, keeping, and educating your workforce. Nearly 100 percent of AICC members, your peers, cite that as the No. 1 issue that they face in their companies. If you are not aware, AICC offers its members free online education to each and every employee. This is your best way to get out in front of the employee issue—partnering with your Association and its Packaging School partner (www. aiccbox.org/packagingschool). The number of member companies and their employees accessing and completing courses online through AICC’s Packaging School is at an all-time high. Yet, despite AICC’s best efforts to promote this service, the percentage of users compared to the overall AICC employee member pool remains low. This is where you and your HR resources become critical—getting the word out to your employees. There are more and more success stories coming in on how AICC online education is making a difference in the onboarding processes at member companies and in overall employee satisfaction. One member has every new employee take AICC’s Safety Basics online course as part of onboarding. A member

BOXSCORE May/June 2018

that purchased a new flexo had their press crews take AICC’s Corrugated Fundamentals course prior to receipt of the new machine. The press manufacturer’s trainer reported that he had never seen more prepared and engaged people as part of a startup training process. More and more members are integrating AICC online courses into their own processes in useful and creative ways. Younger employees especially want their employers to invest in them and provide for them a path to improve and grow. AICC online education has a robust current course count of 40, with new courses added on a regular basis. Courses come from AICC’s partner, The Packaging School; from AICC’s professionals; and from the AICC Education Investor program, which already counts Fosber, BCM, Sun Automation, Pamarco, JB Machinery, Absolute, Printron, Kruger, and EFI among its contributors. These companies are contributing not only financial resources to the effort of industry education, but also subject matter experts and in-depth, practical knowledge on a broad range of subjects. In addition, during 2018 AICC has an aggressive plan in place to translate all online education content into Spanish to make packaging industry education even more accessible and valuable to you, our members. You don’t have to do this on your own. AICC staff can assist you at each step

along the way. Contact AICC’s director of education and training, Taryn Pyle (tpyle@aiccbox.org), to learn more. AICC is also available to come to your plant or to your next management meeting to present and review with you and your staff the world of AICC and industry education. Contact AICC Vice President Mike D’Angelo at mdangelo@aiccbox.org to see how you can take advantage of all that is available simply through the fact that you are an AICC member in good standing. Employee education = your success. It’s time to spring ahead or fall back. Tick, tick, tick, tick. Mike D’Angelo is vice president at AICC. He can be reached at 703-836-2422 or mdangelo@aiccbox.org.

ENGAGE YOUR TEAM IN-HOUSE TRAINING You define your painpoints or where you want to improve and AICC will develop a course and bring the right trainers into your plant to train your team. Contact Taryn Pyle at tpyle@aiccbox.org for more information.

FREE ONLINE EDUCATION Over 40 courses are available and the catalogue is growing every month! www.aiccbox.org/ packagingschool

EMERGING LEADERS Emerging Leaders (35 years of age or younger) participate in industry training programs and connect with peers throughout the year. Learn more about the Emerging Leaders Program at www.aiccbox.org/leaders.

Courses include: • Build a Visual Workplace with 7S • Communication for Coaches • NEW! Essential Principles of Water-Based Flexo Inks • Flexographic Ink Management • How to Spec a Box • Internal Staff Development Guide • Introduction to Polymers • Keeping Score: How to Read a Financial Statement • Maintenance Mapping • Overall Equipment Effectiveness • Packaging Foundations • Paperboard Cartons • Sustainable Packaging

MEETINGS, WEBINARS, & SEMINARS Check out our calendar for upcoming meetings, webinars, seminars, and summits to receive the best industry training and the chance to network with others in the packaging industry. View AICC’s upcoming courses and events at www.aiccbox.org/calendar.

ASK THE EXPERTS Start asking your - Ralph Young, Corrugated Technical Advisor industry questions today - Tom Weber, Folding Carton Technical Advisor at www.aiccexperts.org. - Doug Friel, Safety & Risk management Advisor

AICC DELIVERS SUCCESS.

Member Profile

MIDDLESTREET GRAPHICS BY VIRGINIA HUMPHREY

COMPANY: Middlestreet Graphics ESTABLISHED: 2013 JOINED AICC: 2018

Photos courtesy of Middlestreet Graphics.

PHONE: 866-647-2734 WEBSITE: middlestreet-graphics.com LOCATION: Columbus, Ohio PRINCIPAL OWNERS: Gross and Kaplan families Founded in 2013, Columbus, Ohio-based Middlestreet Graphics is one of AICC’s newest members.

hen it comes to printing on corrugated products, Middlestreet Graphics may be the new kid on the block, but they have a long heritage and history to draw upon. They are a division of G&J Pepsi-Cola Bottlers, a company that started out as Grand Pop Bottling. It was 1925, and two Cincinnati women had an idea. They approached their then-boyfriends and suggested they become equal partners in purchasing a bottling business. The driving force behind the company, Nell Gross and Esther Jarson, convinced Walter Gross and Isaac Jarson to make the purchase. Ten years later, they bought their first barrel of Pepsi brand concentrate and became an official Pepsi bottler. Ninetythree years later, they’re still in the same

BOXSCORE May/June 2018

family and are now the largest family- owned and -operated Pepsi franchise bottler, with more than 1,500 employees. But they are more than a bottler. With the creation of Middlestreet Graphics and the purchase of Durst color printers, they are now a high-speed printer that is ready and eager to serve the corrugated industry. They are also one of the newest members of AICC. “Fast-forward to 2013,” says T.R. Gross, senior vice president of strategic business initiatives and a principal owner. “We started this very modest print shop. At that time, it was really servicing the needs of our Pepsi company, our core business. In an effort to really figure out how we wanted to diversify our revenue streams, the ownership decided to invest several

million dollars into state-of-the-art printing presses.” Their newest printers—a Durst Rho 312 Plus and two Durst P10 250 HS Plus printers—arrived in August 2017, expanded their printing capability, and produced what John Boggess, senior sales and operations manager, says was outstanding print quality. David Hauptman, the production manager with close to 20 years of print experience, says these printers have some of the best print quality you can find, with exceptional speed. The printers, Hauptman explains, have six colors, plus white, which allows them to print on clear and transparent material. Gross says they knew of no other bottler within the PepsiCo system that was providing fully commercialized printing service. And now, according to

Member Profile

CAPABILITIES ABOUND When it came time to invest in new printers, Middlestreet Graphics looked hard at many companies before settling on Durst, a decision about which they have never looked back. “We had several manufacturers in to visit us,” says John Boggess, senior sales and operations manager. “We knew we were getting the best deal Durst had to offer. Durst’s transparency, truthfulness, and humility—they just have a human side vs. the other manufacturers we dealt with.” And so they purchased three printers from them: two Durst P10 250 HS Plus hybrid printers and a Durst Rho 312 printer. “Without a shadow of a doubt, we made the right decision on the equipment, without question,” Boggess says. By purchasing two of the P10 hybrid printers, Middlestreet Graphics is able to have redundancies for large runs and is also able to accommodate smaller runs that need a quick turnaround. Boggess says both presses are roll-to-roll capable so they have a lot of versatility in what they can print. Production Manager Dave Hauptman has been working in digital printing since 2002 and with Durst for the past 10 years. “When it came to Durst, I had knowledge and experience with them,” Hauptman says. “They had bar none some of the best print quality you can find. They have exceptional speed without sacrificing quality.” In addition to the speed and quality of the product output, he says they are built like tanks. They are highly

reliable and durable, meaning that after eight years of use, they can still print at the same quality that they did when they first came out of the facility that made them. Hauptman says the P10 Plus machines are the best of both worlds when it comes to price, speed, and quality. They can handle up to 100inch wide material, whether it is a hard cardboard, flexible material, or something soft like vinyl or mesh. The print quality is 1,000 dpi, which allows for really fine quality print. “On average, we can produce on one machine anywhere between 40 and 45 boards an hour, somewhere in the range of 1,400 square feet, without sacrificing any quality,” Hauptman says. “The color on these machines is fantastic.” He says they are running six colors plus white. They have the traditional CMYK, as well as a light cyan, light magenta, and white capability. T.R. Gross, a principal owner, says these presses really speak to how Middlestreet is now able to serve the corrugated industry. He says the P10s are made for corrugated material, and they have a sled system built into both of them, which helps them work with corrugated products. Hauptman says the Rho 312 is for soft materials such as banners, meshes, and papers. It is a machine with dual-roll capability, so they can put on two rolls of materials at 63 inches or less and run them in tandem. You don’t have to have the same images on one roll as the other, giving them a great deal of flexibility. To go with their new machines, they hired new staff who had been in

the industry and had experience with similar machines. He says the people they hired came from all different areas of the industry, so they had a swath of experience when it came to printing, finishing, materials, and different processes. Then when the machines arrived, Durst stayed for 10 business days to set them up, calibrate them, and train the operators. They stuck around once production started to help answer questions and make suggestions about how to do things. The arrival of the three printers has turned the once modest print shop into a busy business serving many industries. “It’s a lot more hectic,” says Hauptman. “The biggest way it has changed is the variety of materials we can print. We get more customers because we have this capability. White ink is huge. We would have never been able to print on clear material on our old machine. Now that customers know we have the capability to do so, they’ll ask for that. Also, the volume we are able to get through—we are in the middle of production runs now that we could never have dreamt of even eight months ago and definitely not two or three years ago.” Boggess says with the capacity of all three machines, there really isn’t any job they can’t accomplish with the speed-to-market objective. “We are really excited to potentially earn the business of our customers and bring to them real high-quality point-of-sale pieces to help them make a difference in their market every day,” says Gross.

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Member Profile

Middlestreet prides itself on outstanding customer service.

Middlestreet is one of Durst North America’s demo facilities.

Middlestreet’s designers work with each client to maintain brand standards and guidelines throughout development.

Boggess, Middlestreet has its business in three buckets. The first is servicing their internal needs—the G&J Pepsi-Cola Bottling company and its graphics and printing demands. The second is the PepsiCo system and all the franchise bottlers, as well as the corporate business units. The third is a business-to-business focus, which is where AICC comes into play. “We know there is a need for providing large-format printing needs,” says Boggess. “Some of the people we know don’t have that type of printing capability, and they look to other printers to provide wide format printing. We’ve used that as a niche for us, and it is definitely a nonthreatening one. Since we are under the Pepsi umbrella, we don’t have a full sales force or sales team that is out on the street beating down the doors like traditional commercial printers. We just want to really help the commercial printers out there as a nonthreatening entity that can provide high-quality printing services.” As an overflow printer, Boggess says, they want to play nice within the industry, not poaching business but providing digital printing and short-run printing support to corrugated businesses

while still staying focused on their core Pepsi business. Gross says Middlestreet Graphics has a first-class design team that designs all sorts of custom artwork for PepsiCo and some customers outside the system. “We know what it takes to provide marketing solutions that stand out in the marketplace, because we use them ourselves in our core business,” says Gross. He also says that being a part of the PepsiCo systems means they have competitive costs that they can pass on to their customers. They have access to materials that are bid through competitive pricing and have superior shipping rates that allow them to pass on the cost-savings. Their shipping is done using Pepsi’s global shipping rate with global carriers. “We’re branching out and believe that the corrugated packing industry is absolutely ideal for our particular B2B business model,” says Gross. “We bring quality, pricing, the press time, and the trust and confidentiality. In addition to printing, Boggess says, Middlestreet Graphics is able to provide members of AICC with creative design support that includes a foundation of knowledge with corrugated products.

“We’re a user of corrugated,” says Boggess. “We’re always coming up with different kinds of corrugated display pieces that get engineered for our own products. We’re using industry materials quite extensively, and so bringing that creative element to designing artwork or maybe through a structural creative display piece is something we are proud of doing well.” Boggess says Middlestreet Graphics has already begun working with corrugators, and the relationship has been a positive one that they’re looking to expand. Gross says as new members of AICC, they’re looking forward to meeting more members at conventions and regional meetings. “From one family-owned business to another, we’re happy to be a part of this and make a lot of friends in the business,” Gross says.

BOXSCORE May/June 2018

Virginia Humphrey is director of membership and marketing at AICC. She can be reached at 703-535-1283 or vhumphrey@aiccbox.org.

JOB DESCRIPTIONS FOR CORRUGATED & PAPERBOARD CONVERTERS Many roles and responsibilities have changed due to new customer needs, company goals, and available technology. Job descriptions should take into account the expanded skill sets now required. The descriptions included in this publication serve as a starting point or template to develop accurate job descriptions for all major positions in a typical mid to large converting plant. These positions have been divided into sections: Office/ Administrative, Sales/Customer Service, General Plant, all applicable to any plant regardless of substrate, then plant specific positions sections for corrugated, folding carton, and rigid box manufacturers.

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113 S. West Street, P.O. Box 25708 • Alexandria, VA 22313 USA • Phone (703) 836-2422 • Fax (703) 836-2795 • www.aiccbox.org

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BOXSCORE May/June 2018

e, Ralph and Tom, have just returned from the AICC Spring Meeting, where we facilitated a three-hour forum on the merging of microfluted products (E, F, N, and O) as compared to solid fiber paperboards, such as solid bleached sulfate, coated recycled board, and uncoated recycled board applications for folding carton and rigid box. The applications discussed applied to a majority of the corrugated, folding carton, and rigid box manufacturers present for the meeting. The exceptionally qualified presenters, AICC member panelists, and facilitators had more than 141 collective years of experience in the production and conversion of E flute, F flute, and thinner flutes for creative solutions involving nonconventional products that are lighter, use less fiber, save significant transportation costs, and can run directly through offset presses in some cases. There were twice as many attendees as anticipated, and we had to bring in extra tables and chairs

to accommodate the overflow. It was obviously a very timely subject in light of hearing cases of liners as low as 10# and mediums as low as 9#/MSF. The presenters were: • Al Hoodwin, Michigan City Paper Box • Michael Drummond, Packrite • Tony Reilly, Flutes Inc. • Dave Moreno, Greif • Darin Jones, Pacific Southwest Container • Sharlan Kozak, CEL Chemical The meeting started with the presentation from Al Hoodwin, current AICC chairman and rigid-box manufacturer, who recently made his first adventure into microflute. There was a cautious approach to selecting the right components of 33/23F/33. The new alternative carton ended up having 30 percent more top-to-bottom compression than needed. Machine direction and cross-direction Taber stiffness tests were also performed.

So, next time, lighter-fluted alternatives will likely be combined as engineering the best and most economical fit-foruse carton. F flute is becoming more available from sheet feeders and trade finishers. As a side note, E/F combined board has some promising opportunities at replacing conventional 40 and 44# ECT grades. There have been testing methods to directly relate fluted products to paperboard, but they have been widely unknown to many converters. Testing fluted materials under the protocols used for paperboard, such as block compression, Taber stiffness, and corner crush, will give folding carton and rigid box plants the opportunity to compare and quantify the results for the different substrates. These comprehensive test methods will take the guesswork out of the conversion and allow for a documented, repeatable, and statistical rationale to be presented to all internal and external stakeholders/clients involved.

A Taber stiffness tester is a bidirectional pendulum weighing system that provides accurate and responsive measurements in smallload increments.

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There have been testing methods to directly relate fluted products to paperboard, but they have been widely unknown to many converters.

What were the key drivers, as identified by our quite diverse and sharing AICC member and Associate audience? Please see below: • Digital and direct print onto fluted substrates. • Making certain microflutes are moldand bacteria-free for indirect food contact and pharmaceuticals. • Light weights—browns are increasing, although 9 and 10# are used today, 20# uncoated whites are coming, and paper grades were always available. • Still issues with SBS less than 10-point availability domestically. • Paperboard mills are closing, and merchant “open market” tonnage is disappearing into integrated companies. • E-commerce and the need to reduce the amount and weight of packaging.

• Club warehouses (Costco, Sam’s, and B.J.’s) are changing the retail experience. • Shelf-ready/retail-ready packaging. • More seasonal product changes and more product offerings (SKU proliferation). • Modern corrugators have many new capabilities to tightly control sheet warp with process controls that can adjust moisture, heat, and actual starch applications. • Asitrades can meter adhesives through both conventional anilox rolls and grooved rod metering systems that can apply different application rates for each particular flute profile as needed. • Sheet feeders, historically B, C, and double wall, have been adding F flute rolls.

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BOXSCORE May/June 2018

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• Lastly, how do we know what microflute profiles and material compositions to change to when going from paperboard to fluted products? Is there a method we can depend on to communicate to our clients to ensure success is built into our conversions? There were recommendations regarding die cutting from the single-face or double-face printed side of the sheet and the use of counter plates. If this or score cracking has become an issue with you, contact us for referrals. One of the presubmitted questions involved the use and amount of biocide in food-grade and pharmaceutical packaging. There is a difference between starch line and glue line dosings. All panelists, facilitators, and audience members were reminded that we are not competing with each other, and that the two distinctly unique product lines of microflute and paperboard are not mutually exclusive replacement strategies. They are additive and additional opportunities to advance packaging sales into markets that perhaps are not being currently served. A fairly high percentage of the audience already had the capability to produce microfluted products on their existing paperboard carton equipment but have chosen not to follow that path— until now! We believe now is the time to explore what this wonderful and creative microfluted alternative to paperboard can do for all AICC folding carton and rigid box members. It was proven without a doubt that within the AICC member and Associate organization, we have the technical, converting, and personnel expertise to support any member’s decision to step forward and take the next steps toward some freedom from the ever-tightening paperboard markets through the use of microflutes. We have research that has compared microflutes and paperboards through

Taber stiffness, block compression, and corner crush test protocols. In summary, it’s time to move beyond learning and investigating to get actual trials. After more than more than 25 years, the combiners and converters of these mini/microflutes have worked out the bugs. alph Young is the R principal of Alternative Paper Solutions and is AICC’s technical advisor. Contact Ralph directly about technical issues that impact our industry at askralph@aiccbox.org. Tom Weber is folding carton advisor for AICC. Do you have any questions? Ask Tom at 440-221-3103 or tweber@aiccbox.org.

Single-face lamination (bottom) is generally considered to die cut with more accuracy than single-wall lamination (top).

We believe now is the time to explore what this wonderful and creative microfluted alternative to paperboard can do for all AICC folding carton and rigid box members.

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BOXSCORE May/June 2018

SUSTAINING THE LEAD EVEN AS SUSTAINABILITY BECOMES THE NORM AND NOT THE EXCEPTION, INNOVATIVE CONVERTERS CONTINUE TO STRIVE FOR MORE By Robert Bittner

ver the last 15 to 20 years, converters of all sizes have been leading the charge to adopt more sustainable business practices, use more eco-friendly consumables, and produce quality customer packaging that is responsibly sourced and highly recyclable. It has not always been easy. Often, there were weak links in the production chain: coatings and inks for which there were no environmentally friendly options, mills without a clear mission for handling wastewater and emissions—and even customers, who balked at the often higher costs of incorporating sustainable materials in their packaging. Times have changed. According to some of the industry’s leaders in sustainability, those weak links have been addressed. Being sustainable no longer has to be some lofty, unattainable goal or the always-more-expensive choice reserved for premium jobs. Where customers are concerned, it no longer has to be the exception; in fact, it often is the expectation. That doesn’t mean the “problem” of sustainability has been solved. For paperbased converters, perhaps the largest and most visible industry in the world that relies on renewable natural resources, ongoing innovation in this area is vital

For the most successful sustainabilitydriven companies, environmental responsibility is not an add-on or an afterthought. It is an integral part of who these converters are. for sustained growth. And, as some boxmakers have discovered, there is still plenty of room to innovate when it comes to sustainability. Managing Sustainability For the most successful sustainabilitydriven companies, environmental responsibility is not an add-on or an afterthought. It is an integral part of who these converters are. Allen Ennis, executive vice president of sales and marketing for Pacific Southwest Container, says, “Back in the ’90s, sustainability was a buzzword, but a lot of us didn’t really understand it. Today, there’s a real appreciation for what it is and what it can do. It’s become part of our daily business life.” For Pacific Southwest Container—a privately held business focusing on

corrugated, litho-laminate, folding cartons, and protective packaging—sustainability is an active part of the business. “We manage it continuously, and we have management that is exclusively focused on it. “Regarding paper, we are Sustainable Forestry Initiative (SFI) certified and involved in the Sustainable Forestry Education (SFE) program. We use those agencies and protocols to ensure that we’re using paper from sustainable sources. We follow up annually with third-party audits to make sure everything we produce is sourced from organizations with responsible practices. “We have an environmental management system and platform to manage sustainability across the company. We’re even interested in understanding the forestry practices of the mills we work

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with. That’s very important to our customers as well. “Of course, we’re always looking at better ways to manage sustainability. We work constantly on integrating more and more environmentally friendly consumables into our process—from inks and solvents to lighting. “In the past, in the printing process, to give one example, it used to be very

going through all our tenets of sustainability and asking, ‘Do we do something more [in this or that area], or do we let it be?’—because we don’t want to start making moves that run counter to the moves we’ve made already.” For example, he points out that Vanguard’s total waste rate is a mere 4 percent. “So we’re only 4 percent away from 0. But capturing that 4 percent is not really economically

While solar panels and other energysaving solutions may be costly upfront, utility-based rebates and other credits can help expenses and savings balance out. difficult to find environmentally friendly solvents and coatings. That isn’t an issue now. Now, all of the categories are very well-defined. We’re finding it very achievable to be sustainable.” While much has been made of advances in inks, dyes, glues, and solvents, Ennis notes that advances in hardware have also been significant. “Modern equipment is more efficient. It uses less consumables, while still achieving good performance. There’s a lot of work being done across our industry with regard to supplemental equipment designed to consume less coatings, adhesives, solvents, etc. That area is still developing, but it’s come a long way.” Innovative sustainability management also means knowing where to focus the most attention. Mark Mathes, CEO of Vanguard Packaging, regarded as perhaps the most sustainable corrugated plant in North America, notes, “We’re constantly

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viable. That’s one area where [reducing waste even further] currently doesn’t make sense.” What does make sense for Vanguard is a holistic approach to sustainability that extends far beyond packaging. Beyond the Box In addition to its famous 400,000-squarefoot facility, built primarily underground in Missouri, Vanguard proactively seeks partnerships with suppliers who equip them for improved sustainability across all production areas. For example, at Vanguard’s urging, GF Puhl created a new corrugated scrap system in which two machines share a single blower, drawing 40 percent less electricity as a result. BCM Inks supplies Vanguard with pine tree rosin-based inks twice monthly instead of three times a week. All leftover ink is blended to create black ink. Finally, the company’s nonrecyclable

waste is put to work as an alternative solid fuel to help fuel the power plant of a local cement maker. Even the leftover ash from that plant is recycled, added into the concrete the plant produces—including the floors in Vanguard’s own facility. While Vanguard may be well-known for their many steps forward regarding sustainability, Mathes believes that any boxmaker can make similar strides if they are open to inventive solutions. “When we built the building we’re in now, I got all of my people together— production, managers, everybody—and we brainstormed one day. We asked everyone, ‘What can we do to be more responsible, more sustainable?’ And we came up with some of the best ideas that didn’t cost anything. All because we had enough sense to ask, ‘What do you guys think?’ “Here’s an example: When we were building this building, someone asked, ‘Doesn’t it take chemicals to clean the carpet?’ It absolutely does. They suggested that instead of installing thousands of yards of carpet we keep the concrete floor and just stain it. We took a similar approach when it came to ceiling tiles. Instead of installing a drop ceiling with thousands of ceiling tiles, we eliminated the ceiling tiles completely. We lowered the lights and painted everything above them black. Now the ceiling is essentially invisible. Our plant is just one example after another of things like that.” Mathes points out that Vanguard’s sustainability plan even includes a health-and-safety component, which has dramatically reduced hours lost due to illness. “Do you know how much time plants lose because of flu?” he says. “I know one plant that had to shut down for a week because of the flu.” In addition to sponsoring free flu shots for employees,

Vanguard took steps to eliminate one of the main contributors to spreading illness: shared metal surfaces. “Every sink in our facility and every toilet-flushing mechanism is driven by a solar panel mounted directly under the lights, so we’re reusing the energy that’s driving the lights to power those facilities. Nobody has to touch the metal. We haven’t been pounded by the flu in years.” Such measures are possible for operations of any size. While solar panels and other energy-saving solutions may be costly upfront, utility-based rebates and other credits can help expenses and savings balance out. Richard Goldberg, vice president of operations for President Container Group, says, “We partnered with a New York State energy rebate program called NYSERDA, which promotes all types of energy efficiencies that aid in sustainability. That led us to develop a solar farm—of 19,000 panels—and realize the associated monetary savings/ payback.” Mathes adds, “Every light in our facility is motion-sensitive. We got enough of a tax credit from our power company that it paid for all the special switches we needed. And when we put in high-efficiency fixtures, the rebate almost paid for those fixtures.” “Yes, some of the capital-enabled sustainability practices might involve large or material capital investment upfront,” Ennis acknowledges, “but savings will happen over time.” Taking the Lead Whether sustainability has been, as so many say, part of your corporate DNA from the very start or a focus that has developed over time, there are steps any converter can take to improve their efforts and reach their own sustainability goals. “My advice for others who want to improve their sustainability is to talk to

your colleagues,” Ennis says. “Talk to other people in the industry. All of these things we’re doing at PSC are readily available to everyone. The more we use them, the better it is for the industry, our customers, and our employees—and the environment.” Mathes agrees, adding, “For other AICC members who want to improve their sustainability efforts, you need to understand that there’s always ‘low-hanging fruit’ ”—that is, changes that are low-cost and easily implemented. “Grab that first. People get intimidated and think sustainability is way too expensive. There are always steps you can take regardless of how small your company and how small your budget.” Ennis also points out that sustainability must apply to business strategies as well. “An important part of focusing on sustainability means that your business needs to be sustainable. We need to find cost-effective ways to do these things. Being sustainable can be more expensive, but it doesn’t have to be. Cost-effective solutions are out there. We need to find economically sustainable ways to do these things. That’s a part of the conversation we should be having with every customer.” It is also important that these conversations about sustainability—among management, with suppliers, with customers—remain ongoing. That is how new equipment, new processes, even new products come to fruition.

Innovative opportunities continue to exist for boxmakers willing to pursue them. “We are learning of alternative fuel processing plants to utilize our recycled plastics that then provide certification of the plastics and other materials as a sustainable discharge from our factory,” Goldberg notes. At Vanguard, Mathes is continuing to see advances in digital printing. “We consider digital printing to be the next big wave in sustainability,” he says. “By eliminating label lamination, you eliminate the label completely—along with the energy and chemicals to print the label, you eliminate the freight to get the label to our plant, and you eliminate the energy and glue to laminate it.” Your plant and your customers may take you in a different direction entirely. But wherever your pursuit for innovation leads, Mathes believes there is only one way to be successful when it comes to sustainability: “Sustainability has to come from the top, and it has to be visible among the people at the top, or it’ll never push its way down. It is a top-downdriven issue.” Robert Bittner is a Michigan-based freelance writer and a frequent contributor to BoxScore.

AICC offers a “Sustainability Audit” checklist to its members to help them become more economically, environmentally, and socially sustainable. It can be accessed online at https://bit.ly/2IbSUmP.

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SUBSTRATE U P DAT E AN EXAMINATION OF PAPER SUBSTRATE TECHNICALITIES IN THE CURRENT ENVIRONMENT BY SERGE DESGAGNÃ&#x2030;S

BOXSCORE May/June 2018

one are the days when the Fourdrinier Kraft Paper Group technical committee of the American Paper Institute used the Institute of Paper Chemistry at Lawrence University (formerly Lawrence College), and sometimes the U.S. Forest Product Labs, for research and publishing their findings for the entire industry. We still have TAPPI, ASTM, and IOPP for third-party technical assistance and standards and methods. Canada also has research facilities such as FPInnovations, but is anyone examining linerboard structural and printing characteristics?

What Are Substrates? While Kruger is a white-top, colored, and 100 percent recycled brown linerboard producer, there are many other substrates that can find their way into corrugated, especially in the microflute grades. Let’s start with 50#/3MSF kraft/recycled bag and bleached bag papers, which are equivalent to 16.7#/MSF linerboard. Then, we move to 60–100# (8#–30#/MSF linerboard equivalent) coated one-side (C1S) label stock used in single-wall and single-face laminations. Now consider solid bleached sulfate (SBS) that can be manufactured as low as 7-point, or about the 21#/MSF linerboard equivalent, which is also used primarily for single-face and single-wall applications. Adding to this in the graphic substrate arena would be solid bleached linerboard in basis weight, generally from 33# to 47#. Do not confuse solid bleached linerboard with solid bleached sulfate. And then there are the imported KemiArt US grades, along with domestic producers, such as WestRock.

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If a mill system has an associated corrugated medium operation that can accept the coarse rejects from corrugated recycling, then the best fibers should be diverted to the linerboard operation.

EXPRESSING GRATITUDE First, thank you for allowing us to share our thoughts on substrates. This article was limited to just linerboard and substrates used by the folding carton and rigid box sectors of our industry, and not corrugated sheets, which can also be thought of as a substitute! Maybe it could be that, as the newest entrant into 100 percent recycled board with the latest technology in North America, we believed there was a story to tell. Second, I would like to thank the Association for having the insight years ago to develop seminars, webinars, brochures, The Packaging School in conjunction with Clemson University with more than 40 free online learning modules, many brochures—such as Understanding the Key Characteristics of Linerboard and Medium and Their Impact on Combined Corrugated Board—DVDs, leadership for the International Corrugated Packaging Foundation, connections with many packaging and printing schools, and the list goes on. Allow me give a shout-out to those who captured Ralph Young and his 35 years of knowledge about our industry and its technical aspects. He remains a great resource and is the gatekeeper of and conduit to untold resources and networks. He has written more than 60 BoxScore articles, answered more than 3,500 Ask Ralph inquiries, and taken countless phone calls. There have been almost 100,000 hits and 46,000 visitors to the blog! Check out the search feature on the website. That’s not to say that Ralph is the only one on the substrate side. We are grateful to those such as Allie O’Brien at KemiArt US and Steve Rote at Metsä Board, along with Randy Banks at SHARP International and industry consultant Sarilee Norton. Other linerboard manufacturers such as Jim Porter at WestRock and Tony Smurfit at Smurfit Kappa have also given back and made open contributions at national and international meetings for the good of all. We also need to be thankful to RISI and Fisher, who regularly sponsor conferences where open dialogue can occur. *Editor’s note: Kruger is the latest AICC member to support the Association’s Education Investor program.

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There are treatments to linerboard roll stock that can shorten your manufacturing time so that you will not have to treat the products before or during converting. These include wet-strength, high-porosity, grease resistance, waxable white-tops, and lightly coated treatments, as well as those that are made to a very narrow basis weight variation and a maximum 30-minute Cobb water pickup, so as to pass the requirements of UN HazMat. There may be at least one nontraditional substrate mill out there that buffers the product to achieve a higher alkaline pH so that the corrugated boxes can be used for archival records. Several recycled fiberbased substrate products that are neutral pH can also be used. Paperboard Let’s not forget to at least mention our sister side of paper packaging. First comes unbleached kraft (UBK), or what we might call real cardboard. Then comes solid unbleached sulfate (SUS) and its sister grade, coated natural kraft (CNK), and SBS, which we have already discussed. Somewhat new to the North American market is folding box board (FBB), which is a multilayer substrate that contains semichemical ground wood. It is generally imported from Europe, but we have seen a few domestic operations appear.

Growth It was timely that AICC looked at disruption in supply at its Spring Meeting in Phoenix. Our security analysts and media sources have reported press releases of newsprint conversions using some existing pieces, an operation shutting down three old machines and installing one machine in its place, a limited conversion of a coated paper machine, and a complete gutting of one machine and replacing all components to manufacture linerboard. All reports are that we will not run out of the lighter-weight linerboard here in North America, given that corrugated shipments are growing between 1.5 and 2 percent annually. Alternative Fiber Disruptions As the quality of recycled fiber from DLK and OCC #11 and #12 diminishes because of reuse and the importing of corrugated packaging outside North America, it becomes imperative that linerboard operations install multilevel and multistage cleaning systems. If a mill system has an associated corrugated medium operation that can accept the coarse rejects from corrugated recycling, then the best fibers should be diverted to the linerboard operation. Most mills that have not invested in advance cleaning technology for their operations in the last 10 years do not have this level of screening. Both linerboard strength and printability suffer when we have both coarse fibers and fine fibers in single-ply sheets, which are generally at 35#/MSF basis weight and below. At least one mill system here has been quoted in the media as blending up to 75 percent mixed office waste, along with OCC, into its containerboard products. DS Smith Recycling in Kent, U.K., has announced its ability to repulp

one-use coffee cups into new paper products. This latter company has created enough in their entire approach to corrugated packaging that they may know or find the way to make this happen for linerboard.

specification from a machine would be in the range of 1.5 and maybe 1 percent. Today we have seen even flatter profiles, with one new machine stating ±0.6 percent. The technology that has been available for monitoring and then

A quality program should be built on open and honest communications in which corrective action reports are produced and changes made. State of the Art in Linerboard Today The industry, and especially the younger members, have incomplete knowledge of kraft (virgin) linerboard, recycled liner, semichemical medium, and recycled medium, nor do they know the definitions as expressed by the American Forest and Paper Association. Suffice it to say that names and categories do not indicate value, corrugator performance, and load-sharing ability of the components, image reproducibility, trust, and personal relationships with the suppliers. One must look at the actual physical property values results and build a conduit so as to receive certificates of analysis on a regular basis. A quality program should be built on open and honest communications in which corrective action reports are produced and changes made. There are voluntary semiannual studies that show the ranges in various containerboard attributes, but not all that can give a buyer guidelines about the performance and value of the substrate they purchase. Both CD and MD moisture profiles need to have minimum variation. A good

adjusting moisture content on paper machines is now available for corrugators. Full-web constant scanning is now available from Valmet for corrugators so that every location in the combined sheet can be monitored. Newer systems are able to dye the sheet to provide a uniform “a” hue. Formation and basis-weight uniformity within the sheets are better on modern machines. We have seen that some linerboard manufacturers have become so successful in the marketplace that they become known as their brand and not necessarily associated by the manufacturer. While this is not necessarily new to containerboard, we have seen this in the case of the new XTR from Kruger’s TroisRivières mill. Serge Desgagnés is general sales director at Kruger Packaging LP in the Montréal office. He can be reached at 514-231-5781 or serge.desgagnes@ kruger.com.

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BOXSCORE May/June 2018

QUIETLY MAKING NOISE LEADERS AT CAL POLY CONTINUE TO DRIVE THE INDUSTRY’S EDUCATIONAL FORCE By Greg Tucker

ore than 25 years ago, the International Corrugated Packaging Foundation (ICPF) placed a Kongsberg cutting table and ArtiosCAD software at Cal Poly, San Luis Obispo (SLO). This donation was a bet on the university’s quest to evolve into one of the strongest packaging schools. The choices then were pretty slim. They were San José State or Cal Poly SLO, the latter being somewhat in the middle of the state between San Francisco and Los Angeles. One of the conditions we had to insist upon was the installation of a corrugated curriculum. The ICPF worked with Dwight Schmidt of then Inland Container Corp. and other industry leaders to create this curriculum. This became, and is still today, one of the most comprehensive tutorials for the paper and corrugated industry, which Cal Poly adopted and plugged into its packaging minor. The installation was met with much fanfare. Then-ICPF president Robin Jackson, and Cindy Flinn Baker, then chairman of AICC, participated in the ribbon-cutting of the new placement. This was also celebrated with what is called Poly Pack, one of the most informative expos of packaging held over several days. Not only was this an

These students were engaged in learning about packaging while building relationships with industry leaders and alumni, with a goal of getting hired by the best companies available. extremely informative celebration of packaging, it was one heck of a great time. One of the highlights of Poly Pack is the egg drop competition, which is held downtown during the farmers market. This competition is open to individuals, students, and corporations that can demonstrate their ability to take an envelope of the same set of packaging materials, place an egg in it, and drop it from higher and higher elevations from a scissors lift until the losers fail and the winner succeeds. The program was led by Dr. Larry Gay back then. Dr. Gay was a student’s teacher. These bright kids would do just about anything for Dr. Gay. He practiced “learn by doing” in a huge way. The Poly Pack event was created, managed, and celebrated by a student panel directed by the student president of Poly Pack year after year. The event allowed for

packaging education with industry leaders demonstrating the newest trends in packaging, a career fair that exposed the best packaging students available for hire or internships, a golf tournament, a wine tasting from Central Coast wineries, a banquet, and of course the famous egg drop. Prior to the advent of the banquet in the old days, the packaging alumni, friends of the program, and the advisory board would gather in an Italian restaurant and sponsor dinner for the students in the packaging program. These students were engaged in learning about packaging while building relationships with industry leaders and alumni, with a goal of getting hired by the best companies available. This energy was passed on to an underling by the name of Jay Singh. Everyone wondered whether Jay could keep the enthusiasm and interest Dr. Gay had delivered to the students. Jay had to

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Photos courtesy of AICC.

Dr. Larry Gay (left) and Dr. Jay Singh are the energy behind the successful Cal Poly packaging science program.

Students at Cal Poly, San Luis Obispo, work on a project on the Kongsberg cutting table.

garnish the relationships that Dr. Gay had set with the students and execute his vision for the program while continuing the “learn-by-doing” process with the program. Jay’s vision was extremely wide. He wanted to develop Cal Poly SLO into the mecca of packaging in North America by introducing research for the industry, utilization of the foremost testing lab, creation of a stand-alone packaging degree, the building of a Master of Science degree in packaging value chain, creation of a research consortium, and lastly, the building of the Packaging Value Chain

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Center. Much of this would be funded and supported in many ways. The lab would bring in revenue from industry and serve its need for unbiased testing. The research consortium would drive dollars by solving industry’s packaging problems. Solicitations of grants would play into the plan. Gifts from individuals, foundations, alumni, and trusts would be sought after; and all of this had to be accomplished by keeping Dr. Gay’s vision of student involvement intact. So, what happened? Jay hit the ball out of the park. The program went from a minor to a packaging major.

He developed the lab further through donations and gifts, and built one of the most comprehensive packaging testing labs in the country. He put the university on the global map by hosting the 18th IAPRI World Packaging Conference in 2012, which is held in a different country each year and for which he applied during his initial years at Cal Poly. Jay gathered the Packaging Research Consortium, currently in its ninth year of successful operation, together with 13 corporations and is setting his sights on 25 members. He built his consumer packaging concentration degree. He hired his first staff member, Dr. Keith Vorst. Then things began to snowball. He hired Dr. Koushik Saha, who enhanced “learn by doing,” involving students while building enthusiasm for the program in 2010. Then Ray Kisch came on to run the labs. In 10 years Jay added eight highly trained staff members to the program. More importantly, Jay and his team drove from 100 student undergrads to more than 350 undergrads. In 2017, the program developed the packaging technology concentration and the master’s degree in packaging value chain, and at the same time, the Packaging Value Chain Center was formed. The center was solidified with industry veteran Brent Moore as the director. This program went from five major undergraduate packaging courses to 12 major undergraduate courses. The master’s program added another 14 graduate courses, as well as an additional seven instructors outside of the core group of Cal Poly packaging program instructors. Now that Cal Poly SLO has become one of the most valued packaging schools in the U.S., outpacing all other leading packaging programs in North America, the program has moved on to launch the master’s in packaging value chain. This Master of Science degree and the

professional certificates in packaging value chain are offered by “the undisputed leader in experiential packaging education and technology that provides the global packaging value chain with premier talent and applied research.” This is a 100 percent online program that brings together real-world disciplines of data analytics, design, marketing, finance, supply chain, operations, and quantitative analysis, all centered around packaging education. This degree can be accomplished inside of a year and is extremely affordable. The university also offers online professional certificates within a few of the master’s program subsets of marketability, design, analytics, and logistics and supply chain. It’s now an accomplished packaging program complete with a thriving minor, two undergraduate concentrations, and a Master of Science degree and professional certificates program in packaging value chain at Cal Poly. The university is actively seeking the naming sponsor for the Packaging Value Chain Center, headed by Moore, and donations for its development from corporations, individuals, foundations, and alumni are needed. The program is looking for research projects with specific packaging problems from corporations and other

avenues. Mostly, Cal Poly is looking for believers who understand that the success of those companies is attributable to the value of investing in education for their employees. This investment in education is also what makes this industry strong. Jay and his staff have been quietly making noise in the packaging world. They need support for the things that they have accomplished. This is the foundation of the corrugated packaging world. From the very first investment of a prototyping table and software at Cal Poly SLO, our industry enjoys the opportunity to gain knowledge from the best packaging program in America. Knowledge is power! Invest in your children and your employees at the strongest program in North America. I constantly hear, “Why is the ICPF investing in universities that end up placing designers in our companies?” I cringe when I hear that. I quietly walk away and say nothing. However, we invested some seeds into a university that was beginning to build a packaging program, and we won. We now have invested in a powerhouse that can train our employees to be better competitors or leaders in our businesses. These seeds have helped bring forward a multidisciplined approach to

Jay and his team drove from 100 student undergrads to more than 350 undergrads. packaging that, if utilized, will propel any of our companies into the leadership of our industry due to the bright bench strength we can acquire by investing in this program. The mind is a terrible thing to waste! For more information regarding the Cal Poly, San Luis Obispo, packaging program, contact Jay Singh at jasingh@ calpoly.edu. For more information regarding the Center for Value Chain Packaging, contact Brent Moore at bmoore24@calpoly.edu. Greg Tucker is chairman and CEO of Bay Cities and a past AICC chairman. He can be reached at gregt@bay-cities.com.

Cal Poly packaging science students are assigned paperboard and corrugated packaging projects. Here, students “examine” their initial designs.

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The Associate Advantage

2018 AND BEYOND DAVE BURGESS JB MACHINERY VICE CHAIRMAN DBURGESS@JBMACHINERY.COM

ED GARGIULO EQUIPMENT FINANCE CORP. CHAIRMAN EGARGIULO@EFC-FINANCE.COM

PAT SZANY AMERICAN CORRUGATED MACHINE CORP. SECRETARY PSZANY@ACM-CORP.COM

JOE MORELLI HUSTON PATTERSON PRINTERS DIRECTOR JMORELLI@HUSTONPATTERSON.COM

JEFF PALLINI FOSBER AMERICA IMMEDIATE PAST CHAIRMAN PALLINIJ@FOSBER.COM

BOXSCORE May/June 2018

s I write this article, we are nearing the end of the first quarter of 2018 and hopefully getting close to saying goodbye to Old Man Winter. The AICC Spring Meeting has just occurred in Arizona, and it was awesome to see colleagues, friends, and customers—but more than anything, the sun! So, when I look at where we are as an industry, we seem to be in the same mode that we closed 2017 in. The industry is going crazy; there is a voracious appetite for new and more efficient, faster-running equipment, and all of a sudden, paper and packaging companies are making financial news headlines—the largest one being International Paper’s audacious unsolicited bid for Smurfit Kappa. It failed this time around, but many pundits are saying that if the intent is there, then eventually an agreement will be made, making International Paper by far the largest player in our markets globally. As suppliers (Associates) to this market, what does this mean for us, and how do we plan for the rest of this year and beyond? As in all market cycles—either up or down—there is always good news and bad. There are always new opportunities that open up, but an active market like this always give rise to the “I want it right now” mentality, whether it might be the right long-term solution or not. And if we aren’t careful about the products and services we market, there is the possibility that we will leave the industry with a liability and not an asset. What we must do as suppliers is be absolutely responsible.

As we all know, the corrugated industry purchases equipment for long-term use, not to fill short-term gaps, so let us all make sure that what we are selling is: • technically sound and capable of withstanding the rigors of this typically hard environment; • compliant with all of the increasing health and safety protocols—we don’t want anyone to get hurt while operating equipment; • capable of being adapted for future use—the business is rapidly changing, and it is important that any new equipment can be used for a long period of time, either in its intended form or with some future adaptation; • simple to operate and maintain—we typically don’t have highly qualified individuals in a box plant, so let’s give them the opportunity to perform at a high level every day; and • fun to operate—we are struggling to bring younger people into this industry, so we need operators to leave after a challenging day in the plant saying, “That was fun. Let’s do it again tomorrow!” We certainly have a huge responsibility as suppliers to this rapidly evolving industry, and we are being tasked with selling “solutions” and not just equipment. Let’s make sure that the advice we give and the solutions we sell fit the above criteria and help this industry continue to grow and prosper. This article was written by Dave Burgess.

What the Tech?

THE TIP OF THE ICEBERG BY CHUCK DELANEY

ith the dramatic growth in e-commerce, people are becoming more brand aware and have higher expectations for unique packaging looks. One way the brands separate themselves from the everyday Uline or Amazon packaging is through the use of digital printing. The subscription and e-commerce packaging sector is now realizing the power of digital and combining it with the use of unique substrates to help elevate its brands. Over the past several years, I have been involved in developing structural and graphic options for a variety of businesses and have made several observations about the uses of substrates. I will share a few of those examples. The substrate and package must reflect the brand promise and the

BOXSCORE May/June 2018

unique look that represents the product category being purchased. I have seen cosmetic firms reflect their bold and sophisticated looks using traditional coated-outside substrates, combined with gloss and matte UV inks to create eye-catching packages. We have also innovated with mixed media, such as laminating foil paper to corrugated, then digitally printed for an even greater consumer â&#x20AC;&#x153;wowâ&#x20AC;? experience. Another interesting use of substrates is to have the boldness of the brand be developed on the inside of the packagingâ&#x20AC;&#x201D;a simple exterior with one or two colors printed on kraft or mottled white outside and a unique digitally printed message, with images included, on the inside. An example was a piece produced for an entertainment company hoping

to give the customer an experience much like that of a child opening a gift. Lastly, a foliage grower wanted a unique package that could be personalized for a variety of annual holidays. Mottled white, kraft, and Kemi were the substrates used. I believe we are seeing just the tip of the iceberg in structural and graphic designs for e-commerce packaging. With creativity and the bold, innovative uses of paper substrates and mixed media, we can experience incredible growth in the corrugated, folding carton, and rigid box industries. Chuck Delaney is managing director of GROW Retail Technologies. He can be reached at 708-491-5090 or cedlaney@growrt.com.

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Strength in Numbers

INVESTING IN HIGH-SPEED CONVERTING EQUIPMENT BY MITCH KLINGHER

he latest class of fast-setup, ultrahigh-speed converting equipment is an absolute game changer from a production point of view. The output of each machine, run full out, can equal the entire output of an average-sized sheet plant. They are costly to install, occupy a large footprint in the plant, and require a lot of expensive maintenance. It is also difficult for human beings to keep up with them, so pre-feeders, fast stackers, dedicated banders, and robotics are required in most situations. Economists and analysts who follow the paper and converting industries can predict capabilities and capacities down to seemingly the nearest ton, but no one knows what the converting capacities are in any given market. What we do know is that there is immense extra converting capacity in almost every plant. Certainly, this is true of any plant not running three full shifts, but most converters have lots of open time on their existing equipment

and shifts. So why are converters so eager to purchase expensive fast-setup, high-speed equipment when their existing equipment may not be full? Often buying one piece of these new machines will enable a plant to shut down one or more existing machine centers, which can translate into significant direct and indirect labor savings and free up valuable manufacturing space for other endeavors. The newer equipment will print better and consistently make a perfectly square box to a precise tolerance, which is important for customers who use them with automatic case erectors and other applications in which consistency and precision are paramount. They may enable some converters to eliminate a partial shift, which is often not as profitable due to the additional supervision and material handling personnel needed, and may help limit overtime on existing shifts. The bottom line is that if your competitor can convert 10,000 boxes in half an

Cost of equipment Less trade-in Plus tax on trade-in (1031 exchange is gone)

Changes to annual costs: Depreciation assuming a 10-year life Increased maintenance costs Elimination of five plant employees

Increase to monthly break-even costs Assumed contribution percentage on new business Increased monthly sales required to break even

BOXSCORE May/June 2018

$4,000,000 (250,000) 80,000 $3,830,000

$383,000 215,000 (250,000) $348,000 $29,000 25% $116,000

hour and it takes you five hours, he will likely be able to charge a lower price for the order, putting you in a competitive disadvantage. The new tax law also makes buying equipment very attractive, since you can write off 100 percent of the cost of investment in equipment in the year of acquisition. Lots of profitable companies would rather speculate on a new piece of equipment than send money to the IRS. So, with all this said, let’s talk about some practical considerations when you are making a sizeable investment in a single piece of equipment. For illustrative purposes, let’s assume that the cost of the equipment installed is $4 million (let’s assume this includes training, spare parts, etc.), and that you will be able to close one machine center and eliminate five plant employees. You expect to have enough business to run the machine for 2,000 hours in the first year, and preventative maintenance will cost you $20,000 per month, whereas the maintenance on the existing equipment was about $25,000 per year. Your old machine that you are selling is worth $250,000. How will this investment affect your financial statements and your estimating system? In this fairly simple example, to pay for the machine, the company needs to generate an additional $116,000 of sales at an estimated contribution of 25 percent. Not the end of the world, right? The problem often lies in your estimating system architecture, which is geared to calculating a machine-hour cost. When you put a $4 million machine into your estimating system calculation, with an estimate of 2,000 hours, it is likely to add a $150 to $200 per hour cost to your system. It will

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also treat the increased maintenance cost as a variable cost and add $100 per hour to the machine-hour cost for that. At the end of the day, you will go to market with an additional $250 to $300 per hour cost in your estimating system, and most of the orders you run through it will look extremely unprofitable and may show little or no contribution. Typically, the company decides that they had better “pretend” that they are running the machine for at least two full shifts to lower the “hit” to the estimating system. Companies do this when their system spits out suggested prices that are way off from what the market is willing to pay. My view of the world is that, as shown in the example on Page 70, the company’s fixed costs have increased, meaning it needs additional contribution dollars to break even. If the company were out there looking for orders with a lot of contributions that are at or near the

BOXSCORE May/June 2018

25 percent contribution margin shown in the example, they might have an easier time coming up with a marketing and sales plan to fill up the new machine. One of the great problems in cost- estimating is how to reflect a very large capital expenditure in your costing system. When a single machine can cost more than $4 million, this problem is greatly exacerbated. Looking at orders based upon variable profit per hour versus fully loaded cost per hour may sound like a cheap accounting trick, but it can have far-reaching implications to profitability. This new class of equipment is greatly changing the converting industry. Based upon the historically low interest rates we are experiencing and the most favorable tax write-offs we have seen in U.S. taxation history, more and more converters will be making these investments in the next few years. Anyone who travels down this path needs to take a hard look at the

incremental costs and savings associated with the investments, the effect on their balance sheets, and the amount of leverage they can handle. The final factor for many will be how they reflect this investment in their estimating systems. If there is $1,000 of contribution in an order and you can run it in half an hour, that translates into $2,000 per hour. If it takes five hours of machine time to run the order, it is generating only $200 per hour. A potential tenfold increase in the hourly contribution generated by the machine can more than justify the high price tag. Mitch Klingher is a partner at Klingher Nadler LLP. He can be reached at 201-731-3025 or mitch@klinghernadler.com.

International Corrugated Packaging Foundation I N T E R N AT I O N A L

PACKAGING

CORRUGATED

F O U N D AT I O N

IT’S NOT TOO LATE TO RECRUIT NEW GRADUATES THROUGH ICPF

BOXSCORE May/June 2018

However, May and June are not too late in the season for recruiting those who have put off a career search until after spring graduation or after several weeks of post-graduation travel, or will be graduating at the end of the summer semester in August. Also, if a firm is flexible in seeking candidates who will be graduating this coming December, those posting entry-level positions on the Career Portal should identify that flexibility in their job descriptions. As with the upcoming graduates who are seeking careers, for various legitimate reasons there often are some student internship candidates who have just begun looking this month for mid-summer or fall semester internships. As a direct result of ICPF’s launch of corrugated curricula at an additional dozen universities and the introduction

of social media, for the past seven years there have been significantly more students in ICPF’s network who are seeking corrugated packaging internships and careers than there have been entry-level openings. But firms must keep in mind that sophomores and juniors are anxious to locate internships to meet graduation requirements, and upcoming graduates have student loans coming due soon after graduation. To play it safe, students often take the first viable offer they receive. Unless applicants are contacted the first week of their making application and the subsequent interviewing/hiring process does not extend much beyond three weeks, generally candidates are taken by competing firms and industries that have been more savvy in their hiring

Photo courtesy of Rutgers University.

f you have been following this column, you know I regularly remind executives that the best time to begin recruiting student interns and upcoming college graduates is in the fall. In October, many sophomores and juniors seek to lock in summer internships or co-ops. They not only want to secure summer internships early to ensure a connection to firms offering potential careers, but an increasing number of colleges require internships prior to graduation. For the majority of senior students, mid-fall also is the time they begin their comprehensive search to locate career openings for the following spring graduation. ICPF actively connects individually with students by using its corrugated packaging career social network and through the different events that it conducts or in which it participates throughout the year. Therefore, each year between late November and late February, the ICPF’s Career Portal is swamped with hundreds of requests from students who are seeking student internships and corrugated packaging careers. While many of these students are pursuing openings in structural design or wish to use a combination of their structural design and graphic design skills, just as many are seeking to start their careers or internships in sales, supply chain management, plant floor operation management, chemical engineering, and the lab. During the several months at the height of the recruiting season, the ICPF corporate partners that post positions on ICPF’s Career Portal and use its résumé bank receive an average of seven qualified applicants for each position posted on the portal.

Rutgers packaging engineering students participating in ICPF’s 2018 Teleconference on the Business of Corrugated Packaging & Displays and the Career Opportunities. More than 500 students and faculty from 19 campuses nationwide interactively participated with corrugated packaging industry speakers. Many of these students regularly visit ICPF’s Career Portal to directly apply for the openings ICPF Corporate Partners post there.

International Corrugated Packaging Foundation I N T E R N AT I O N A L

PACKAGING

CORRUGATED

F O U N D AT I O N

practices. Regardless of whether a firm posts a position now or at any other time during the year, success goes to those corrugated packaging firms that place a high priority on streamlining their application response/interview/ hiring process. Each year, more than a hundred students find internships and careers through ICPF’s Career Portal, its Résumé Bank, and its other resources. Some

firms work directly with the career centers at the 25 universities where ICPF has introduced corrugated packaging curricula into packaging engineering or has created structural design tracks within their graphic design departments. These university contacts are available to all firms on ICPF’s website. To learn more about using ICPF’s special Career Portal, contact ICPF at info@icpfbox.org or visit www.careersin

corrugated.org. Use of ICPF’s Career Portal and its Résumé Bank are provided as a benefit to ICPF Corporate Partners. However, if you are an AICC or FBA member that has not yet become an ICPF Partner, email us for information on the new introductory use of the portal that recently has been authorized by ICPF’s board of directors.

HOLIDAY WEEKEND IN NEW YORK — DECEMBER 7–9, 2018

arly bird registration is available until June 30 for ICPF’s 2018 Holiday Weekend in New York, scheduled for Friday–Sunday, December 7–9, 2018. Register by June 30, 2018, to save $200. Bring your spouse or guest for holiday shopping, touring, dining, Broadway plays, and enjoying New York’s holiday season—all while supporting ICPF’s educational mission. This year’s event will begin with a Friday evening reception at Sardi’s restaurant, which is frequented by celebrities from around the world. The opening reception is sponsored by Pratt Industries. ICPF guests will attend a Saturday matinee of George Balanchine’s The Nutcracker at the Lincoln Center, sponsored by BW Papersystems. Saturday night, participants will be treated to a reception and dinner at a renowned restaurant. The reception

is sponsored by Fosber America, and the dinner is sponsored by Bobst North America. Registrants also will receive a surprise holiday gift, sponsored by Gerber Innovations. In addition to saving by registering by June 30, ICPF’s New York holiday weekend event always sells out early. Space is limited! ICPF recommends couples register this spring and no later than September 1. Request a registration form by emailing registration@icpfbox.org or visiting www.careersincorrugated.org to download. Richard Flaherty is president of the International Corrugated Packaging Foundation.

BOXSCORE www.aiccbox.org

The Final Score

WILL THE CONTAINERBOARD INDUSTRY’S PRICING PRACTICES UNDO ITS GAINS?

his issue of BoxScore deals with paper: flutes, substrates, sustainability, value. All these wonderful attributes make corrugated and paperboard-based packaging the most cost-effective and value-added packaging product available. Indeed, it’s been that way for more than a century. And yet, given the way this past spring’s containerboard price increase was announced and implemented, it makes me wonder whether our containerboard industry’s pricing practices are undermining our best arguments for the use of corrugated and folding and rigid boxes. When AICC was founded in 1974, there were more than 25 companies selling containerboard and sheets. Looking at charts that go back to the mid-1980s, the top five producers then—Stone, Union Camp, International Paper, Champion, and Weyerhaeuser—had 34 percent of the containerboard market. Today, the top four—WestRock, International Paper, Georgia Pacific, Packaging Corporation of America—have 74 percent. As I see it, this concentration of supply has emboldened producers into a kind of market bullying, in which price increases, one after another, can be imposed without the need for justifications such as higher input costs or tightness in the market. “Because they can,” was the most oft-heard expression in regard to the spring 2018 increase. But it’s not just the increases that concern some in our industry. It’s the way these are communicated to the industry’s customers, including independent buyers of containerboard and sheets. Earlier this year I came across an article on price-signaling, the practice of one competitor announcing an increase via some public medium in an effort to “test” whether other competitors will follow. In an article from the global law firm Baker McKenzie titled “Price Signaling and Global Antitrust Enforcement: Practical Counseling Tips,” authors Kurt Haegeman and Grant Murray describe investigations of this practice in the European Union (EU), the United States, and elsewhere. Consider the following example that parallels our North American containerboard industry so closely. In the EU, the European Commission investigated 14 ocean container shipping companies that announce prices via a general rate increase (GRI) announcement. Here are the similarities: • These announcements don’t give the final price of the service, only the dollar amount of the increase. • Announcements were made three to five weeks before their effective date. • All other carriers followed closely with similar rate increases, effective on the same date. The article’s authors write: “The EU Commission was concerned that these practices would allow these competitors to ‘explore’ each other’s pricing intentions and ‘coordinate their behavior,’ and this might enable the carriers to ‘test’ … whether they could reasonably have implemented a price increase.” The article goes on to cite examples from around the world, dealing in telecommunications, oil and gas, and cement producers. Space won’t permit me to deal with these, so I refer you to the article. These actions by antitrust authorities do raise questions for me: Will this industry, which we all know is sustainable, costeffective, and competitive, be undone by the pricing practices of its largest players? When our customer base has already had three increases in the previous year, will they begin to look at alternatives such as plastics or other packaging materials? Our industry would do well to remember that our customers can send us signals, too—that despite the positive attributes of corrugated packaging, they can take their business elsewhere.

Steve Young President, AICC

BOXSCORE May/June 2018

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