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Paper Shortages Hit Mail Industry; Is Relief Ahead?

Printers, Mailers Scramble; Relief In Sight, But Prices Stay High

WASHINGTON, DC – The paper shortage that gained traction in the Fall of 2021 exploded into a full fledged crisis in the early months of 2022, as printers and mailers scrambled to meet the requirements of current jobs and plan future ones.

Paper prices surged in the last six months, doubling in some cases, as printer allocations were imposed to ration supply.

But paper is a commodity; its price fluctuates based on demand, which experts see waning as inventories are replaced.

The bottomline: there should be improvement in paper supply in the months ahead. How much you will pay is anyone’s guess. Some coated paper producers announced price increases May 1.

“Paper mills and merchants are projecting allocations and continued limited supplies well into 2022,” states Ken McDonald, Vice President Supply Chain, IWCO Direct in an online post.

“However, as paper mills work to replenish inventories and demand levels off, most experts anticipate some relief after the second quarter, with pulp and wood prices likely to moderate,” he writes.

According to a report from the PCI Group, ” “The core raw material for paper is pulp. Its costs increased sharply in 2021, and 2022 projections show a slight decrease.”

“According to the data, production is catching up, but costs remain higher than pre-pandemic. The scarcity of products also appears to be leveling out,” PCI Group writes.

In December Quad Graphics reported that, “Supply chain disruptions, transportation network challenges and various reasons for downtime at mills added stress to the already limited paper market. Coated freesheet inventories were low to begin with and haven’t been able to keep up with further shortages caused by plants going offline.”

In its April update, Quad reported inflation was causing numerous surcharges, sending paper prices even higher:

“Between March and April this year, paper producers worldwide implemented various surcharges for coated and uncoated papers. This was due to the escalating costs of paper production and shipments, including but not limited to: energy, fuel, freight, chemicals and pulp costs.”

What Can You Do?

Here are some tips to surviving the paper crisis:

— Bid jobs. You do it anyway, but use bidding to find lower cost suppliers. Give printers several paper options to quote to find values.

— Delay printing non-essential matter.

— Mailpiece changes. Redesign your mailing to use less paper and/or postage.

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