The REAL Reason Behind the Printing Paper Shortage
…and why prices will continue to rise
If you’ve been producing printed products over the past year, you’ve heard of the challenges of rising prices and the shortage of paper. Our company has been dealing with it every day, and we want to share with you what’s behind the difficulties.
The shortage is easy to understand but difficult to overcome. It’s been made a little bit worse by the difficulties associated with Covid and transportation delays but, we don’t think the shortage is likely to go away after the supply chain disruptions smooth out.
Simply put: a number of paper mills have been permanently closed, and some of the remaining mills have turned to producing packaging products instead of the printing paper that we all use.
“We’ve been seeing lots of paper mills close over the past few years. And they won’t be starting up again anytime soon. We’re going to be dealing with a shortage for the foreseeable future.”
— Robert H. Rosen Printing Industry Advisor
Paper mills have been struggling for decades to make a profit and many have been sold to investors outside the industry. Those investors have learned lessons from the airlines, who got tired of losing money and discovered that they could charge higher prices if they reduced supply by cutting the number of flights.
Paper companies have been closing mills for years. Now we’re stuck with a limited supply of paper and unexpectedly high demand for that paper as companies have increased marketing efforts. The results have been ugly. Paper prices have soared over the past year, with prices rising 30% to 50% (or more) for some grades and weights. The pace of price increases is not slowing. One more analogy to help, this year paper mills in North America are like a sold-out concert. They’ve sold all the tickets they can produce and there aren’t any ticket scalpers outside the venue.
When paper is available, it’s taking weeks and months longer to arrive. Sometimes, there simply isn’t enough to go around — even for a company like HighNote that’s a favored customer of all the paper suppliers. All distributors received a cut down of paper supply.
One more element has made things even more difficult: the paper mills are enjoying their new-found ability to raise prices — sometimes raising prices without notice — even on orders that have already been placed. It’s a difficulty we’re dealing with every day.
We’re not looking for sympathy. We are doing our very best to ensure adequate supplies of paper and with your help we can manage the paper situation much better. Here’s how we can work better together on this challenge…
- Paper requires much longer lead times for delivery, so please do whatever you can to let us know your needs as early as you can.
- Certain paper grades or brands may be unavailable in time for your projects. Please give us some flexibility in suggesting and sourcing alternatives.
Please understand that we don’t set the prices or delivery times for paper. We are merely reflecting the situation in the marketplace at a given moment.
We appreciate your continuing support. While there’s no sign of an easing of the situation, we will get through this together.
Please let us know what we can do to help you meet your needs.
Sincerely,
President