Last year was a particularly rough year for the pricing pressure cooker. This did not take anyone by surprise as the issue of material costs was listed as the top issue for both converters and suppliers in FPA's State of the Industry Report 2004.
The root of virtually all the pricing evil last year can be attributed to the significant and sustained increase in crude oil prices throughout 2004. These increases directly affected the costs of inks, films, paper, and energy. Coupled with the seemingly never-ending spiral of medical insurance and costs (which make college cost increases seem like deflation), package printers experienced cost increases on many fronts, while still being squeezed by the customer side of the supply chain to keep prices down.