Cardboard box demand has fallen to its lowest level since 2016, a sharp reversal for a sector that expanded rapidly during the pandemic and one that some analysts warn could signal broader economic weakness.
International Paper, the country’s largest box producer, will close two Georgia mills by the end of September, removing nearly 9% of US containerboard capacity in less than a year. The Savannah and Riceboro closures represent about double the capacity lost during the 2009 recession. Analysts say the scale of shutdowns is without precedent in recent decades.
Box shipments that surged when online shopping spiked have since declined. Per-person use is now more than 20% below its 1999 peak, according to industry figures and the Fibre Box Association reported second-quarter shipments at their lowest since 2015.
The downturn is taking place even as producers continue raising prices. Linerboard, the industry’s most common grade, now sells for about $945 a ton, compared with $725 in 2019. Buyers have pushed back against some increases, but consolidation among the largest producers, including International Paper, Packaging Corp. of America and WestRock, has strengthened pricing power.
Weaker consumer spending, housing market softness and corporate caution are among the factors driving the decline. E-commerce firms such as Amazon have also reduced reliance on corrugated boxes by shifting to lightweight mailers and right-sized packaging. The Wall Street Journal reported that a historic wave of pulp mill closures is affecting not only packaging producers but also timberland owners who supply them with raw material.
International Paper has emphasized that the Georgia closures are part of a broader transformation plan rather than a direct response to weaker demand. In August, the company announced the $1.5 billion sale of its Global Cellulose Fibers business to American Industrial Partners and a $250 million investment to convert its Riverdale mill in Selma, Alabama, to lightweight containerboard.
“These decisions are essential to positioning International Paper for long-term success, enabling us to focus on the geographies, customers and products where we can create the most value,” Tom Hamic, president of the company’s North America packaging division, said. He added that International Paper will support the roughly 1,100 workers affected in Savannah and Riceboro with severance packages and outplacement assistance.
The closures will cut about one million tons of containerboard capacity each year. The Riverdale conversion is scheduled for completion in the third quarter of 2026.
Industry analysts expect US box shipments to fall between 2.5% and 3% this year. Capacity cuts are forecast to stabilize or lift prices into 2026, even if demand remains muted. Other packaging producers are also repositioning. Greif has signaled a shift away from parts of its box business toward higher-margin markets such as pharmaceuticals and specialty packaging.
The reversal is striking given the surge in demand just a few years ago. During the pandemic, corrugated boxes became essential for shipping everything from groceries to appliances, lifting shipments to record highs. Producers are now contending with slower growth in goods consumption, persistent inflation and uneven recovery in housing and durable goods.
For International Paper, the recent moves are part of a wider repositioning. The company acquired DS Smith earlier this year, expanding its presence in North America and Europe, and is sharpening its focus on packaging solutions while moving out of non-core operations.
The company reported $18.6 billion in sales in 2024 and employs more than 65,000 people worldwide. Its cellulose fibers division, which generated $2.8 billion in revenue last year and employs 3,300 people across nine manufacturing sites, is slated to move under new ownership once the AIP deal closes.
Despite weakening demand, industry leaders continue to benefit from supply management and consolidation that supports higher prices. Analysts caution that prolonged weakness in consumer spending could weigh on volumes into 2026.
Resource Recycling reached out to International Paper for comment, but at the time of going to press had received no reply. Investors will have a clearer view of International Paper’s progress when the company reports third-quarter earnings on October 30.
