Tom Hassfurther: Anthony, I think it’s a fair question, but far more complicated than I think you have in a lot of other materials. And I’d also like to add that in containerboard, not every sheet is the same. And you have a lot of variance between everything between 100% virgin and 100% recycled and a lot of technology in between there on performance liners, et cetera. So there’s just a whole myriad of things that go into the process that would have to be taken into account. And it’s not as simple as just taking that raw fiber or something like that as your single material.
Mark Kowlzan: Yeah, I just wanted to emphasize that maybe once upon a time, when a decade ago, things were more stable in general with inflationary activity and fiber would move up and down and — but now the last number of years, we’re in a world where inflation is back on track at the way it was decades ago and you’re seeing across-the-board all your input costs up dramatically. And as Tom said, it would be too complex to try to tie that into some type of mechanism. But don’t forget again just like 25 years ago, transportation was a very minimal cost factor in moving containerboard and paper products around the country. Now transportation factor is in as a major — very significant major element to the cost, just that one component.
Anthony Pettinari: Got it. Got it. I’m just wondering in kind of previous periods of very strong inflation or maybe going back to the ’70s or was the paper industry using things like surcharges? I’m just trying to think about other kind of pricing mechanisms that have been used historically. Obviously, not talking about any kind of future actions. But Bob listed out that you know those categories that are all seeing inflation. I’m just wondering as you look at the history of the industry, were there sort of other ways that producers were able to pass those along?
Tom Hassfurther: Anthony, this is Tom again. We’re exploring all the potentials and we’re doing it in detail with our customers. And so I think we’ll just see where this unfolds over time. But — and we’re learning a little bit too on our side because we’re getting it from all our suppliers and we’re getting all of the above from all of our suppliers. And that’s part of the inflation problem and the cost problem that we’re incurring. So we’re taking everything into account and — but this will be solved directly with our customers.
Mark Kowlzan: Yeah, suffice it to say, we’ll be far better off going forward.
Anthony Pettinari: Understand. I appreciate it, and appreciate it’s a difficult question to answer in this kind of format. But appreciate the color. Thank you.
Mark Kowlzan: Thank you. Next question, please.
Operator: Our next question comes from Philip Ng from Jefferies LLC. Please go ahead with your question.
Philip Ng: Hey, guys. Your box shipments were obviously really strong during the quarter. It seems like you’re outpacing the market handily. Tom, you kind of talked about some of the investments you’ve made on the box side in market, I think you talked about momentum kind of building there. Has that been like a big area of differentiation that’s kind of helped you take share a little faster and grow a little faster than your peers? Anything you want to call out in terms of these investments you’ve made that makes PCA even more competitive than years past?
Tom Hassfurther: Well, I think, Phil, the — yes, there’s — it’s been a big plus for us. There’s no question about it, otherwise we wouldn’t have embarked on it. I’ve said many times, we don’t build it and hope they will come. We do what our customers need us to do and invest where they need us to invest. And that’s what we’ve been doing. And it’s coupled with making our system more efficient, getting ourselves aligned properly in the right marketplaces, getting ourselves aligned with the right customers. And that’s — I think that’s a huge plus. Now in addition to that, I think what helps us a lot is the fact that we’re building a better-quality product every day, we’re able to turn much faster and meet demands and work as a — and work as a complete system. Makes a huge difference for us and our customers definitely appreciate it, and I think that’s showing up in the business that we’re capitalizing on.
Mark Kowlzan: If you went back over the last five years, if you think about labor input cost and labor unit applied per square foot of product or ton of product, we’ve significantly improved the productivity and cost structure of every one of these converting facilities and full-line box plants. We’re producing — we quadrupled in many cases, doubled the productivity on average out of a box plant. And so it’s given us incredible flexibility on how we grow with these customers and the capability to service these customers and do it in a very efficient manner. And that’s where, again, we’re able now to continue that momentum and we’re not playing catch-up. We’re in very good — all of our box plants, our paper mills were in very good position as far as our cost structure and efficiencies to compete.
And so we just lay in the new investments that, as Tom has said, we grow with the customer. And so again, but we’ve been doing this for decades. There’s nothing that we just came up with the idea five years ago, we’re going to do this. We’ve been working at this for a couple of decades and we’ve been fine-tuning this and making it better. And it’s just in the last five years, we focused heavily within the box plant system with this organizational change we made in 2019.
Philip Ng: Super. That’s helpful. And I guess a question on the pricing side of things. Since only $40 to the $70 linerboard increase got reflected in the index, just from a logistics standpoint, are you issuing rebates to your customers? And then I guess separately, the trade publication kind of reported maybe perhaps some of the independent box makers were a little reluctant to push price just given a more mixed demand backdrop for them. How did the box price increase progress? And do you kind of expect it to kind of proceed like normal?
