Pandemic-related supply chain disruptions have caused new problems for paper production, which was already in decline. Now, a spike in demand has combined with labor shortages to take an additional toll. What’s next for paper products in the U.S.?
Supply and demand: Where are we with paper today?
Paper demand from the printing industry has declined over the years, but Printing Industries of New England (PINE) reports, “In 2021, however, it has become clear that the mills underestimated the demand for paper.” Resuming production at pre-pandemic levels is complicated by shipping issues and labor shortages, which increase the cost of materials. In 2022, rising gas prices also affect product delivery costs.
Paper mills use source materials, including wood pulp, which are also in high demand for other fields, such as construction. This creates additional competition for these materials, which delays deliveries and drives up costs.
Marketing Firm IWCO says 2021 was a doozy of a year as “the direct mail industry saw rapid and constant change.” This included:
- Paper prices increasing by up to 20%.
- Paper demand rising by up to 10% for white paper products.
- Pulp prices up 40% from 2020.
- National load-to-truck driver ratios increasing to 12 loads for every driver.
- Crude oil price increases, which continue in 2022.
- Container shipping costs up by nearly 195%.
- 11 million job openings as of last October.
All these issues combined to contribute to the current paper shortage, but they don’t cover the full extent of the problem.
Putting the paper shortage into perspective
PINE points out the shortage we’re experiencing isn’t just paper, and it isn’t just the U.S. facing these issues. Some European countries report 40% of the paper they need simply cannot be found.
A toner shortage toward the end of 2021 was caused by an explosion at a Konica Minolta plant. Production resumed late last year, but PINE says, “Commercial printers…will certainly point to the Konica Minolta explosion as a tangible risk associated with production digital printing systems.” They’re reporting static electricity generated by the toner drying process as the cause of the explosion. The incident illustrates a vulnerability related to production of these products. Fortunately, this particular outcome is quite rare.
Labor is a more common problem. Printers are struggling as much with labor shortages as they are with missing paper. It’s a complicated issue that includes:
- A high percentage of women leaving the labor pool since childcare issues sparked by the pandemic.
- Baby boomer retirement.
- Scaled down trade school and college programs for training skilled workers.
Shortages extend beyond the plant floor. Printing Impressions interviewed a print executive who says, “For close to 20 years now, our industry has lost ground in attracting younger generation workers.”
Paper, ink, and labor shortages. Add in inflation, and you’ve got a host of unprecedented problems.
So, what’s next? How can publishers prepare?
What’s next for paper?
The demand for paper products and wood pulp is growing. IWCO suggests we should prepare for both higher demand and a more challenging supply and demand marketplace. Prepare for future product uncertainties by:
- Understanding and planning for your long-term paper needs.
- Preparing for what may be inevitable price increases.
- Watching your inventory closely and in real-time.
- Shoring up your supply chain with alternative options.
- Protecting yourself with supplier redundancy.
Use these practical suggestions to shore up resources and keep ahead of future disruption.
Finally, some bright news for the immediate future: PINE predicts the second quarter of 2022 will alleviate some of publishing’s paper shortage challenges. Printers should use the opportunity to shore up supplies in case production dips again.
Contact your Sheridan or KGL representative for a consultation or visit our contact pages (Sheridan contact page / KGL contact page) to learn how we can help streamline and simplify your publishing processes.