In the production world, paper is the topic du jour. The paper industry is going through some big challenges, which creates potential difficulties for everyone in the direct mail business—particularly those of us who are printing and mailing packages, and our clients who have budgets and deadlines. Let’s look at what’s going on in the paper industry, and how we can help clients who may be grappling with situations they aren’t used to.
One challenge is paper availability. Last year, the market for uncoated free sheet was around 7,500,000 tons. Since then 1,200,000 tons have been taken out of the market (or are scheduled to be taken out) creating a 15.8% reduction in tons of uncoated free sheet in the United States. That’s a lot less paper.
Operating rates have fallen over 95% this year. Paper mills are no longer in an over-capacity situation and they are pushing price increases. Due to these increases, most mills have their customers on allocation that does not allow for buy-ins.
Another issue that isn’t helping is the trucking industry. New federal regulations enforce the eleven-hour limit on driving shifts, and at the same time, there’s a shortage of qualified drivers. With tightly controlled hours and too few drivers, 2018 is seeing higher logistics costs.
Some printers and mail houses are using a combination of trucking and railway shipping to improve costs and delivery times, but either way, moving paper from one place to another is a bit of an expensive question mark these days.
Keeping customers happy
The best way to navigate these challenges with customers is to provide them with the highest level of communication and transparency. It’s impossible to guess when or what the next paper increase will be, or when lead times will be pushed out.
But being upfront with your customers about what’s going on and what their expectations should be will help you serve them better. It’s also a good idea to let them know that they need to get in touch with you about jobs earlier rather than later, to make sure mail dates stay on schedule.
Thinking about your next direct mail project?
The challenges in the paper industry make this the perfect time to have more than one production company in your back pocket for all your projects. EdgeMark Partners has an extensive network of print/mail suppliers to get what you need, when you need it, at the best prices. When you work with us, you may not even notice the issues plaguing the paper industry.