Odd Lots – The Cardboard Boxpocalypse and the State of the US Economy

Bloomberg | Hosts: Joe Weisenthal & Tracy Alloway
Guest: Ryan Fox (Containers and Packaging Analyst, Bloomberg Intelligence)
Date: September 15, 2025

Episode Overview

This episode takes an unconventional but revealing look at the US economy through the humble cardboard box. Joe and Tracy are joined by Ryan Fox, a leading packaging and containers analyst, to explore why box shipments are considered a macroeconomic indicator, what declining box demand tells us about consumer health, how prices are set, the intricacies of the box industry (including its giants and quirks), innovation, and why recycling isn’t as simple as it seems.

Key Discussion Points & Insights

1. The Cardboard Box as a Macroeconomic Indicator

• Boxes as Economic Barometers

  • Tracy and Joe present the idea that a cardboard box is not just packaging—it's a signal of the health of the real economy, especially consumer demand and retail activity.
  • Tracy highlights the recent "boxpocalypse": US box shipments fell to the lowest Q2 reading since 2015. (02:56)
  • Box shipments are tied closely to goods bought and sold; their decline raises questions about consumer confidence and spending.

  "If no one's buying boxes, what does that say about retail spending, the health of the consumer and the direction of the broader economy?"
  — Tracy Alloway (03:36)

• Understanding the Industry’s Metrics

  • Box shipments are measured in billions of square feet—400 billion square feet would wrap around the earth 30 times. (05:07)
  • Most boxes go to food and beverage manufacturers; about 50% end up in grocery stores. (05:07)

  "Box shipments have fallen in the first half about 2.3%... Largely due to uncertainties stemming from tariffs."
  — Ryan Fox (05:07)

2. How Boxes Are Made – The Science and Craft

• What Makes a Box Strong

  • Ryan educates on corrugated fiberboard, the structure (layers: liner and medium), and nomenclature (e.g., double wall boxes, flutes) that provide boxes with strength. (06:15–07:42)
  • There is extensive box testing—ISTA (International Safe Transit Authority) certifies that boxes survive logistics chain stresses. (08:04)

  "So cardboard is actually not this. This is a corrugated fiberboard box... This particular one is a double wall. So there's five layers: The flat sheet is called liner. The wavy part in the middle is called medium."
  — Ryan Fox (06:15)

• Preferred Box Types and Innovations

  • Discussion about user-friendly boxes: die-cut boxes, zipper pulls, and "wow factor" packaging. (09:05)
  • Notably, advancements aim for easier collapsing, opening, and visual appeal.

3. Industry Players and Market Structure

• Major Companies
  • International Paper (now larger after acquiring DS Smith) and Smurfit Kappa (after merging with WestRock) are the largest box makers globally. Others: Packaging Corp. of America, Georgia-Pacific, Pratt Industries. (11:42–12:40)
  • The US industry is highly vertically integrated (companies own both paper mills and box plants), unlike Europe. (20:28)

4. Capacity, Demand, and Pricing Dynamics

• Shift in Production and Demand

  • Not much new US mill capacity until the pandemic, when investment surged (notably for 100% recycled "containerboard"). (13:08)
  • Pandemic years saw a spike; now, shipments for H1 2025 are down 12% from the pandemic peak. (14:34)
  • 416 billion sq ft shipped in 2021; only 190 billion sq ft in H1 2025. (14:34)

  "My personal opinion—I would say we're in a consumer goods recession because of what we've seen."
  — Ryan Fox (14:34)

• Box Pricing—Not All About Supply and Demand

  • Traditionally, high plant utilization and low inventories caused price hikes; low utilization and high inventories caused drops.
  • Post-pandemic, these relationships broke: prices rose despite high inventories and falling demand. (17:36)
  • Ryan alludes to a pricing algorithm (Bloomberg Corrugated Box Cost Index, BCBCI) that explains 93% of past price moves—yet 2025 prices outstrip cost fundamentals, implying margin expansion due to industry structure. (19:27)

  "In the US 90% of the industry is vertically integrated… So there really isn't much of an open market the way there is in other regions."
  — Ryan Fox (20:28)

  "Some might call this kind of organic margin expansion, others have more colorful words for it."
  — Ryan Fox (20:28)

5. Inventory & Efficiency Trends in Boxes

• Amazon and ‘Cart to Carton Commerce’
  • Amazon alone accounts for just 8% of all US boxes (2024). (25:36)
  • There is constant pressure to "right size" packaging—reducing void space, weight, and shipping costs. Innovations include mailers and lighter, more sustainable packaging. (23:58–26:54)
  • Most box consumption is B2B; only 20% of recovered boxes come from homes. (24:20)

6. Data Quality and Market Nuances

• Granularity is Lacking

  • The industry’s data collection is imprecise—classification assignments aren’t verified, so analysis is directional rather than exact. (31:20)
  • Nonetheless, some subsector trends are visible, like larger declines in boxes for food and beverage. (32:14)

• Competition and Returnable Alternatives

  • Some retailers, like Walmart and Sprouts, are pushing for returnable plastic containers to reduce waste—could cut further into cardboard demand. (32:40)

7. Industry Investment & Outlook

• Why Invest in Boxes?
  • Despite the demand drop and oversupply, the industry’s appeal is stable, reliable dividends, and safety rather than big growth. (34:13)
  • Real pricing power is debatable—even premium products struggle for higher margins due to commodity alternatives. (34:50)
  • Pack Expo (annual trade event) is the gathering place for new innovations and hot issues—sustainability is top of mind. (35:50)

8. Sustainability, Policy, and Recycling

• Extended Producer Responsibility (EPR) Laws

  • New state-level policies (notably in Oregon) shift recycling costs from consumers to producers via per-pound fees. (36:08)
  • Companies seek to reduce weight to lower these new fees, pushing for lighter, yet strong, boxes. (40:25)

• Economics of Recycling

  • Recycling costs about $500/ton; the resale value is just $100–$140/ton—recycling economics are generally poor, except for corrugated boxes, which "make household recycling work."
  • US recycles ~66% of corrugated boxes (lower than the previously touted 93%). About a third of recycled cardboard is exported, with overseas demand for US virgin fiber remaining high. (38:47–39:49)
  • Lower-quality packaging is common abroad due to lack of access to high-grade recycled or virgin fiber. (41:26)

9. Predictions & Wrap-Up

• Outlook for Boxes & Macro
  • H2 2025: Shipments forecast to drop further (down 2.5–3%). Demand will be weak, tied to tariffs, policy, and waning consumer strength (record credit card debt). (42:41–43:46)
  • Tracy observes that while box shipments plunge, official retail sales data has remained resilient, questioning how predictive box data can really be. (44:35)

Notable Quotes & Memorable Moments

• On Box Metrics:

  "Box shipments have fallen to the lowest second quarter reading since 2015. That's according to the Fiber Box Association."
  — Tracy Alloway (02:56)

• On the Appeal of a Good Box:

  "As adults, you've really gotten into adulthood when you get that box and you're like, that's a really good box."
  — Ryan Fox (08:36)

• On Consumer Goods Recession:

  "I would say we're in a consumer goods recession because of what we've seen. First half of 2025 box shipments were down 12% from the height of the pandemic. That's a massive fall off."
  — Ryan Fox (14:34)

• On the Recycling Reality:

  "It costs $400–$700 a ton to do the collections and processing... The [recycled] net ton has a street value of $100–$140 a ton."
  — Ryan Fox (38:44)

• On Industry Innovation:

  "We're trying to make stronger paper that's lighter in weight... There is a push now to see if we can lightweight the paper, make it as strong but with less weight."
  — Ryan Fox (40:25)

• On Packaging’s Role in Inflation:

  "I think one thing that's still really underappreciated about the packaging industry is how much it feeds into broader inflation."
  — Tracy Alloway (45:27)

• On What You Really Buy at the Store:

  "It's interesting to think about any good that you buy, period... Often that includes packaging, but often it's just never really clear at all what it is except this bundle of goods and services."
  — Joe Weisenthal (46:35)

Key Timestamps for Important Segments

• [02:56] — Introduction to the "Boxpocalypse" and macroeconomic significance
• [05:07] — Deep dive into box shipments, measurement, and market mechanics
• [06:15–07:42] — Box construction explained: liners, mediums, flutes, corrugation
• [14:34] — Discussion on recession signals and sharp shipment declines
• [17:36 / 19:27] — Box pricing, index construction, and breakdown of traditional supply/demand
• [23:58–26:54] — How e-commerce and "right-sizing" are changing the industry
• [31:20] — Data quality and interpretive challenges
• [36:08] — EPR laws and implications for packaging innovation
• [38:44] — Economics (and pitfalls) of recycling
• [42:41] — Outlook, forecasts, and policy drivers for the rest of the year
• [44:35] — Reflections: How useful is the box as a macro indicator?

Memorable Moments & Humorous Asides

• Tracy taught her dog to rip apart Amazon boxes (04:12), but he went on strike.
• Joe jokes about being a (brief) box analyst and loving everything about boxes.
• The "cart to carton" term for e-commerce was introduced and praised.
• Packaging Expo (Pack Expo) is described as the industry’s "biggest get-together," held in Las Vegas.
• "Wrapping it all up" – the obligatory packaging pun at the episode’s close.

Conclusion

This episode demystifies the unglamorous but essential world of cardboard boxes, showing how their fate is bound to the wider economy. Through industry anecdotes, technical insights, and sharp macro analysis, listeners come away understanding both the utility—and the limits—of tracking the box economy to gauge consumer health and inflation. For those interested in the real-world mechanics behind economic stats and the invisible infrastructure of commerce, this Odd Lots is essential listening.