Supply chain shortages started in 2021, and the shortage in paper and envelopes will likely most likely continue into 2023. This shortage does not bode well for business continuation and growth since most companies have significant paper product requirements.
Paper and envelopes are still a major necessity regardless of the expansion of digital communications, in areas such as legal documents, court orders, contracts, marketing brochures, direct mail, school supplies, printing paper, envelopes, and so much more. While you previously simply called your printer for new print jobs, reprints of brochures, or a direct mail campaign without concern. Due to paper and envelope shortages, the resulting print completion could be delayed and would cause your business to postpone the timing of promotions, announcements, and date-sensitive offers.
Why is there a paper shortage, and is there an end in sight? Primarily, a record number of available jobs sit unfilled, which is halting production throughout the U.S. As experienced within businesses throughout the U.S. that are struggling to fulfill employment vacancies, the paper industry is no exception.
According to the Thomas Index Report for the week of March 21st, “One of the largest industries in the world, the pulp and paper sector is a critical link in the industrial supply chain. The U.S. is the second largest global producer of paper and board, manufacturing more than 70 million tons of material annually. Employing just over 48,000 workers across 216 domestic mills, the U.S. paper mill industry was valued at 34.6 billion dollars last year. But as e-commerce deliveries began to surge in 2020, many of these U.S. mills converted to produce cardboard instead of paper to meet new demand. Financial research company ERA Forest Products Research explains that this led to 2.5 million metric tons of North American paper capacity going offline since early 2021 — that’s a 20% reduction from 2019 production levels. As a result, demand for paper on the Thomasnet.com platform is up 111% year over year and 61% over last quarter’s figures.
Rachel Curry, a finance and investing journalist reporting on the paper shortage states, “Before the pandemic, paper mills were operating at decreased capability due to limited demand, but that has all changed. As demand surges, paper mills are reconfiguring to try to keep up, but often it’s too much to handle. The mix of labor and product shortages, plus having to change internal and external rules to support COVID-19 guidelines, has made everything a juggling act. As for foreign production, general supply issues and increased import and transportation costs are creating obstacles for the paper industry. Right now, the cost to transport any product from Asia is about triple what it cost before the pandemic.”
When can you expect the paper shortage to end? Nahan, a leading catalog printing company in Minnesota, told The Seattle Times that it expects the shortage and increased paper prices to persist throughout 2023. And as printing demand tends to spike during the summer, paper prices could increase even more in the fall of 2022, which is now.
Let’s talk for a minute about envelopes. The situation is no better if not worse. Trish Witowski, a specialist in direct mail and marketing, “the envelope shortage has been a huge headache for printers, direct marketers, and envelope manufacturers – it’s an ongoing issue that will plague us for a while yet.”
I continue to emphasize the importance to plan ahead with your printing needs to ensure your completion dates are met. This is no longer important, it is critical. Planning ahead and subsequently ordering ahead to meet paper needs with your printer can ensure availability in time to meet your deadlines.
Another concern is the rising prices of paper and envelopes. When setting your print budget for paper and envelopes it is critical to identify increasing prices to accurately set your budget. A good printer can often secure paper and envelopes by preordering and oftentimes lock in the price. This will help you maintain your budget as well as a delivery date. A solid partnership with your printer is critical during this paper shortage period.
Witkowski identifies three elements that apply to both paper and envelopes that you should take into consideration when thinking about your next project.
- Planning – plan as far ahead as you possibly can
- Flexibility – be open to different ways to achieve what you want
- Teamwork – find a printer who will be a problem solver
From innovative solutions to the ability to lock in delivery dates and costs due to their usage history, Think Patented is your best resource to help you navigate through these difficult times. You can work with Think Patented to manage your paper and envelope needs with less negative impact from the current shortage situation.
Contact your Think Patented account executive today, or call 937.353.2299, for your next printing project. It’s never too late to begin your planning with a proven partner.