PCA Ships 11% More, Chases $70 Containerboard Price Hike

Packaging Corporation of America grew overall shipments 11% year over year in the third quarter, and executives said containerboard price increases are now "our supreme focus" and are "driving our results at the moment."

President Tom Hassfurther delivered that message on Thursday's earnings call. He said price realization beat forecast in Q3. PCA has realized "substantially" all of the first $50 per ton increase this year and about half of the second $50 per ton increase. The rest lands in the fourth quarter.

"When we're in price increase mode, we're 100% focused on price increase because those opportunities don't come along that often, and that's incredibly important to our business in the long term," Hassfurther said.

What do the Greif mills change?

The containerboard assets PCA acquired from Greif in September 2025 contributed significantly to Q3. The acquired mills produced 203,000 tons — "an exceptional number," said CEO Mark Kowlzan, given maintenance outages during the quarter. PCA will stop breaking out the Greif containerboard business separately from its legacy operations in future earnings results.

"We're pleased with the cadence of the volume," Kowlzan said. Not every segment cooperated. The agricultural segment, "especially related to the lettuce issues" from this year's cyclosporiasis outbreak, stayed weak. PCA expects those volumes to recover in Q4 2026 or Q1 2027. Beef protein remains distressed too. E-commerce keeps growing, but slower than in recent years.

Costs press the other side of the ledger. Higher freight costs hit the balance sheet along with "significant increases in recycled fiber, purchased power and chemical costs," Kowlzan said. Management expects those costs to keep climbing.

Where is capacity heading?

PCA started up a new winder at its Jackson containerboard mill in Alabama in late September, capping a yearlong installation. "I fully see the Jackson mill over the course of the next 1.5 years or so will become a 1-million-ton-a-year mill," Kowlzan said.

Two upgraded Greif-acquired mills — Massillon in Ohio and Riverville in Virginia — have delivered "exceptional performance" this summer and fall. Kowlzan acknowledged PCA took criticism for jumping into repairs immediately after buying the assets, but said the quick action positioned the mills "to start delivering results."

How does Q4 look?

Hassfurther expects a "pretty strong fourth quarter from a volume standpoint." October bookings are up about 5% so far, though billings lag. Distressed agricultural volumes should recover in Q4 or Q1 2027.

The containerboard market remains tight, and executives expect further tightening as seasonal demand picks up. Production will dip in Q4 because three mills schedule annual maintenance outages. Corrugated shipments should match last year's Q4 level and exceed Q3.

The third wave of price hikes adds the next earnings lever. Fastmarkets RISI recognized a $70 per ton increase in September — down from the $140 PCA initially announced. Realization starts in Q4, with most arriving in Q1 2027, on top of the remaining half of the second $50 increase due this quarter.

Freight remains the swing cost. High diesel prices will push freight costs up again in Q4, so PCA is optimizing delivery routes to save money.