U.S. paper market supply shortages persist, and printers of all kinds are still struggling

Aug. 22, 2022

         Whether direct mail printers, packaging printers, or general commercial printers, paper supply remains the number one challenge they face. In a recent survey conducted by the Printing Alliance of North America in conjunction with Napco, while 64.3% of respondents expected sales to increase this year, only 37.5% expected that this increase in sales would translate into an increase in profitability. increase as the cost of paper and other substrates, which make up a high proportion of their costs, continues to soar. To make matters worse, 47.6% of respondents expect costs to continue to grow as fast as their sales through at least mid-year, and beyond.


  Unfortunately, the majority of respondents believe that the troubles at hand have no end. 93% expect paper shortages to continue until the end of 2022 and possibly into next year, while 85.5% expect paper costs to increase further in the coming months. This is also on top of rising labor, transportation, ink and toner, and other inflation-related costs such as energy.


  Meet the challenge


  Biloxi, Mississippi-based Knight Abbey Printing and Direct Mail is one of the companies working hard to secure paper supplies. The general commercial printing and direct mail company employs 66 people, operates 2 sheetfed offset presses and 8 digital presses, and has a strong customer base in the gaming market.


President Tonya Spears pointed out that when it comes to paper, "we can hardly buy any uncoated paper and envelopes, and now coated paper is becoming a problem. There are many reasons, including paper mill capacity conversion, Production stoppages, closures, and a lack of factory workers, truck drivers and containers.”


   Corey Savatsky, vice president of purchasing for the AlphaGraphics franchise chain with more than 270 locations nationwide, noted that “the biggest challenges are coated paper 13x19˝ and below, and certain envelopes.”


  Like most printers, Two Plus had to resort to various strategies to keep the presses running, although Spears noted that “we had to drop some jobs due to a lack of certain grades.”


   Savatsky notes that this meant his team had to get very creative with the substrate, including being more flexible on elements like thickness or type.


   Both Savatsky and Spears offer some other key advice to help printers navigate these uncharted territories:


  Learn about all available paper/substrate options, and the differences between them.

   Plan your print jobs months in advance to allow time for paper purchases.

   Maintain continuous communication with customers. Keep them up to date on the status of essential substrates and be prepared to offer multiple alternatives along the way.

   Encourage customers to place orders for more jobs or annual plans than on demand.

   Build relationships with as many substrate suppliers as possible - even if you don't currently use their products.

   Make sure all suppliers you work with have cutters to open up potential substrate formats for the cutting space. If not, either plan to buy or form a relationship with a trade printer that offers the service.

   If feasible, plan to pick up and ship your own substrate. Shipping and shipping delays exacerbate supply problems, so if you can send a truck to the factory to pick it up, you'll regain some control.

   Consider alternatives to fibrous paper, such as eucalyptus. It's more expensive, but if customers are willing to pay a premium, these papers can be an excellent choice for many jobs.


   How long will the paper shortage last?


  Unfortunately, Spears points out, this is not a temporary situation and printing businesses can afford it and just try to be safe. "I feel like the rest of 2022 will continue to be a tough fight. I have no basis for anything other than what I've heard from suppliers and what's going on this year, we didn't expect it to be this bad, and we hope it has It improved, but it didn't happen and it's getting worse."


        Savatsky had a similar view, "It's going to get a little bit better over time. I believe paper manufacturing in the U.S. will remain low from a paper supply perspective, mainly because factories haven't reopened, or Switch to corrugated or containerboard. But when overseas supplies come back, there will be some relief. It will take time and fuel costs in Europe and here will continue to drive prices up. Last thing on the cost side is US shipping/freight Cost. I think that's one of the biggest reasons why people don't want to make paper here."


        The challenges are definitely starting to have an impact, even for those who have gone through every hardship the past few years have brought. "As an owner, this paper shortage is very difficult for me," Spears said. "I spend a lot of time planning paper usage and monitoring the impact of the price increases we're experiencing to make sure we can pass on those increases. The cost of the business. Because of the fear of the unknown, I can't plan the growth of the business properly, such as buying more new equipment. Every day I try to keep our employees motivated, but it's also getting harder and harder to deal with the unknown Or things that are hard to control are hard.”


   Many other printers have had this experience, and none of the printing suppliers seem immune to this, and even those that are able to source paper face costs that are rising at an alarming rate. This is certainly not what commercial printers are expecting, as orders continue to rise for many as the impact of the Covid-19 pandemic on their business fades. While the remainder of 2022 will continue to be challenging on this front, those printers who remain the most nimble, creative and committed will see strong returns in 2023 and beyond.

        RX-packaging has always had a good reputation in raw material suppliers, and the orders are relatively stable, so the products given by the suppliers to RX have a great advantage over other peers in terms of delivery time and price. And RX is constantly working on the research and development of environmentally friendly materials based on the policy of sustainable development.