Paper Concerns & The 2022 Supply Chain
Inflation, along with the broken supply chain predicament, is impacting everything consumers purchase on a daily basis. Be prepared and plan ahead on your upcoming Print Production in 2022.
Paper Concerns & The 2022 Supply ChainPaper Choices – Flexibility Is Key. Often, the paper that is available may not be the first paper choice you were initially seeking, or may not arrive within the timeline needed for a project. Flexibility is key during this time period, and knowing early on what you want and when you need it affords the opportunity to secure paper, or identify and line up suitable stock substitutes as needed until paper mills adjust to the current economy and conditions. Paper suppliers are requesting as much advanced notice on incoming paper orders as possible. This isn’t just a “paper issue” any longer, as consumers are already well aware. Inflation and the broken supply chain predicament are impacting everything consumers buy on a daily basis.
Inflation Surges – Highest In 40 Years. Consumer prices soar again and push U.S. rate of inflation to 40-year high. The Labor Department report released showed consumer prices rose to 8.3% in May of 2022, as food and energy costs push prices to highest in more than 40 years.. Consumers are paying more for everyday necessities including groceries, gasoline and cars. Big picture: Higher inflation is set to persist in 2022 because of ongoing shortages of labor and supplies that are unlikely to ease quickly.
Supply Chain Challenges – The printing industry is experiencing ongoing delays from all suppliers both Domestically and Internationally (paper, ink, cartons, freight lines, shipping containers with supplies stuck offshore, etc.) Unfortunately delays, sudden changes in pricing and backlogs to inventory levels and services are showing up in literally every aspect of business.
Low Supply / High Demand – Paper mill orders are full, with limits now being imposed on paper purchasers to prevent stockpiling of paper. Resultingly, lead times are being extended and quick-turn paper orders are rare. Price increase announcements have been coming with increasing frequency. Coated freesheet, uncoated, newsprint, groundwood — paper type isn’t the issue. Increases are occurring across the board, and indications point to more increases on the way. The afore mentioned contributors – pulp prices, rising energy costs, and pervasive freight issues – are significantly eroding mill margins, which in turn spurs the mills to raise prices to try to recoup their losses. The price of pulp alone, already high due to foreign pulp speculation activity, has skyrocketed over 35% in 2021 as a result of increased lumber demand during the pandemic, among other factors.
Paper Prices – There has been a profusion of paper industry news in 2021 and 2022. Printers and publishers alike are dealing with the impact. Mill closures continue, as do mergers, acquisitions, and mills shifting focus to produce packaging materials. Production capacity is diminishing. Raw materials (pulp, chemicals), fuel and energy, and transportation costs are experiencing double- and in some cases triple-digit increases. The effects of the pandemic, inflation and supply chain problems are contributing factors as well.
Stay Informed: Consult with your Interprint Representative today on your upcoming projects for 2022 to be best prepared. We are manufacturing and pushing hard to deliver as quickly as possible.
Specific Products And Resources That Are Experiencing Extraordinary Circumstances
Lumber – Lumber prices are up anywhere from 100%, 200% and much more in some cases vs. year ago! Why? It’s not about a shortage of trees. Canadian lumber tariffs and an unexpected intense spike in home remodeling and home building brought upon by the pandemic are the primary factors, as well as transportation delays.
Corrugated Shippers & Cardboard Boxes -Think endless Amazon orders and take-out deliveries. 2020 and 2021 saw some manufacturers paying up to 22% more for boxes—all a result of our stay-at-home lifestyle during COVID.
Crude Oil – Crude oil is much higher since the beginning of the year, with prices expected to go higher yet. As the economy surges back, Americans are driving and flying again and will feel the effects. Oil production hasn’t kept pace with demand and the U.S. in particular may be slower to rebuild supply due to new initiatives to reduce hydrocarbon assets and goals toward net zero emissions.
Workforce – The national workforce shortage – deemed a “national economic emergency” by the U.S. Chamber of Commerce – is a direct result of the pandemic. The main drivers of the labor shortage are fears of returning to work and getting the virus, child care due to at-home schooling, elder care as nursing homes became unattractive due to COVID outbreaks, and the $300 per week in emergency federal unemployment, which has kept many who otherwise would be in entry level jobs at home. Although the extra unemployment benefits are set to expire in September 2021, at least half of the states have announced plans to cancel them ahead of schedule, to hopefully motivate more people to seek jobs. The rollout of vaccinations and the resultant drop in COVID infections have set the stage to reverse the drivers of the labor shortage, but over what period of time is still unknown.
Transportation – Trucking and shipping woes continue, with reduced freight load-to-truck ratios – particularly in the North American south and west – driving transportation costs up significantly. Availability of drivers, ports disrupted by COVID outbreaks, and the resulting disarray of container locations/availability all contribute to a less predictable delivery process.
Domestic & International Paper Costs Continue To Rise – Please Read Further Or Click On The Links Below: