The military conflict in the Middle East has dealt a crushing blow to a sector already suffering from falling consumer demand. Box makers find themselves in a classic predicament: due to soaring logistics costs, they are forced to raise wholesale prices at the very moment when demand for their products is at an all-time low, Bloomberg reports.

Problems for corrugated cardboard manufacturers began immediately after the pandemic-induced e-commerce boom ended. First, consumer demand collapsed due to record inflation, then Donald Trump's import tariffs hit profitability. Now the industry is facing a third shock: the blockade of the Strait of Hormuz, which triggered a global energy crisis and a sharp rise in diesel prices.

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"The consumer overall has become much more hesitant," admitted International Paper CEO Andy Silvernail. "We expect this trend to continue for some time, as economic uncertainty remains. This uncertainty was initially fueled by trade wars and tariffs, and now by the conflict in the Middle East."

According to Silvernail, while the company has not yet seen "dramatic shifts in order patterns," overall market demand in both North America and EMEA has been significantly weaker than expected. This situation is exacerbated by the record low in US consumer sentiment in April.

The decline in demand, driven by both consumer austerity and the long-term trend toward alternative packaging materials, has already led to a wave of plant closures across the industry.

According to the Fiber Box Association, corrugated material shipments in 2025 were the lowest in 10 years. This negative trend continued in the first quarter of 2026, posting the worst seasonal results since 2015.

The situation became so dire that industry pricing agency Fastmarkets RISI raised benchmark containerboard prices for two consecutive months: in March and April. Such a consistent price increase had not been seen in five years.

Following the benchmark changes, manufacturers themselves, including giants International Paper and Packaging Corp. of America, launched a wave of price increases for their products.

"These actions risk an even more severe blow to demand, especially given that major consumer goods companies are currently grappling with exactly the same issues," concludes Adam Josephson, founder of Sakonnet Research and a former paper and packaging industry analyst.