Painful Paper Cuts Continue as Supply-Chain Shortages Persist

It’s become the single most common topic for every printer in the country — paper supply. It doesn’t matter if you are a direct mail printer, a packaging printer, or a general commercial printer, paper is the No.1 challenge across the board.

And it’s not just anecdotal. In the most recent PRINTING United Alliance/NAPCO Research State of the Industry (SOI) Panel, while 64.3% of respondents actually expect to see an increase in sales for the year, just 37.5% expect that to translate to an increase in profitability, as the costs of paper and other substrates — when they can get them — continue to skyrocket. Even worse, 47.6% expect to see costs continue to rise as fast as their sales growth through at least mid-year, if not longer.

Unfortunately, most panelists see no end to the troubles in sight. And 93% expect shortages to continue through the end of 2022, and likely into next year, and 85.5% expect to see additional increases in paper costs during the next few months. This is on top of other inflation-related costs going up, such as labor, transportation, ink and toner, and energy.

Responding to the Challenge

Knight Abbey Printing and Direct Mail in Biloxi, Mississippi, is one of the companies struggling to source materials. The general commercial printer and direct mail house has 66 employees, operating two sheetfed offset and eight digital presses, with a strong client base in the casino market.

Tonya Spiers, president, notes that when it comes to paper, “We cannot hardly get any uncoated stock, envelopes, and now coated sheets are becoming an issue. I have been told the reason why is due to paper mills on strike; plants shutting down; and the lack of mill employees, [truck] drivers, and shipping containers.”

Cory Sawatzki, VP of purchasing for the AlphaGraphics chain of franchised operations — with more than 270 locations across the country — notes that for his owners, the “biggest [challenges] are coated sheets 13x19˝ and down, as well as certain envelopes. Paper is hard to get across the board, but those are the main ones.”

Like most printers, both have had to turn to a variety of strategies to keep the presses running, although Spiers notes that “we have had to turn away some jobs due to these shortages.”

Sawatzki points out that it has meant his team has had to get very creative with substrates, including being far more flexible with elements such as the thickness or type. “Educate yourself on the paper details,” he says.

Both Sawatzki and Spiers offered a few additional key pieces of advice to help printers navigate these uncharted waters:

• Understand all the alternative papers/substrates out there, and how they differ from each other.
• Know the thickness minimums the U.S. Postal Service requires for mailing to ensure alternative stocks will still be accepted.
• Plan print jobs out several months — if not more — in advance to allow for time to source paper.
• Be in constant communication with customers. Keep them updated on the status of their necessary substrates, and be prepared to offer several alternatives along the way.
• Encourage clients to place their orders for larger jobs, or annual plans, rather than as-needed.
• Cultivate relationships with as many substrate vendors as possible — even if you don’t currently use their products.
• Make sure all the vendors you work with have sheeters, opening up potential substrate options for the cut-sheet space. If not, either plan to purchase one, or develop a relationship with a trade printer that offers that service.
• If feasible, plan to pick up and transport your own substrates. Transportation and shipping delays exacerbate the supply issues, so if you can send a truck to a mill to collect your order, you will regain some control.
• Consider alternative fiber papers, such as eucalyptus. It’s more expensive, but if customers are willing to pay the premium, these papers can be a great option for many jobs.

How Long Will the Paper Shortages Last?

Unfortunately, Spiers notes, this isn’t a temporary situation that printing businesses can afford to just try and ride out. “I feel like the remainder of 2022 will continue to be a struggle. I have nothing to base that on other than what I am hearing from the vendors and based on how things have been this year,” she adds. “None of us expected it to be this bad — we expected to see improvement, and that is not happening. It’s getting worse.”

Sawatzki fosters a similar outlook. “Conditions will get slightly better over time. I believe the U.S.-based paper [manufacturing] will remain low from an availability standpoint, mainly due to mills not reopening, or converting to board or brown. But some relief will come when overseas supply comes back. That will take time, and the fuel costs in Europe and here will continue to drive prices up. The last thing on cost would be to watch the cost of shipping/freight here in the U.S. I think that is 90% of the reason paper manufacturing here is not something people want to do.”

The challenges are certainly starting to take their toll, even for those who have weathered every difficulty that the past few years have brought to the table. “This paper shortage has been very difficult for me as an owner,” Spiers says. “It is consuming a lot of my time to help with planning, and to monitor the price increases we are getting hit with to make sure we are charging for those increases. I cannot plan properly for growth (such as buying additional or new equipment) due to fear of the unknown. I try daily to stay motivated for our staff, but that is becoming hard as well,” she admits. “It is hard to deal with what you do not know.”

These experiences are being echoed across the board — no print provider seems to be spared on this front, with even those who have been able to source paper facing costs that are rising at alarming rates. It is certainly not what commercial shops had expected to deal with as orders continue to ramp back up as the business impact of COVID starts to wind down. And while the rest of 2022 will continue to be challenging on this front, those printers that remain the most flexible, the most creative, and the most steadfast, will see strong returns in 2023 and beyond.