Availability, Pricing, and Delivery Times Remain Concerns for Paper and Envelopes
October 14, 2021The ongoing Covid-19 pandemic had shifted the paradigm of normal everyday life in many ways, including the cost and distribution of goods both domestically and internationally.
Paper, which has historically been a stable product has seen significant price increases just as demand is spiking. The prices have gone up 30-40% in 2021 alone. Along with price increase has been the major disruption of the in the supply chain. The supply chain has been severely impacted across the globe leading to delivery times of 60 – 120 days. There are many different factors working together that are leading to the delays including: disrupted flow of logistics, stranded containers, availability of raw materials and labor shortages.
Global Supply Chain Disruption
One paper company executive reports that just obtaining the raw materials needed to make paper grades has been a challenge. “The COVID-19 pandemic impacted our global and domestic supply chains, prompting us to engage in more advanced planning and further enhance our relationships with key raw material suppliers,” he says. “We’ve become more strategic versus tactical in sourcing: developing new resources for substitute raw materials, fast-tracking backup supply resources to alleviate shortages, and broadening and pre-qualifying our vendor partner base to eliminate potential supply chain gaps.”
Another executive states that they been heavily impacted by the availability of raw materials such as pulp, chemicals, foil, containers, and pallets — the whole supply chain has been constricted.” Everything from the skyrocketing prices of pulp, to the shortages of timber needed for the shipping pallets, to difficulties getting shipping containers picked up or dropped off, have all contributed to the problem, she says.
Multiple Factors
Major weather has had a huge impact as well, with everything from fires in the West to the winter cold snap in Texas impacting the production of raw materials needed to produce not just papers, but adhesives, foils, vinyls, as well as many other materials.
If all of that wasn’t enough, printers aren’t the only ones looking to procure the same raw materials, which is further driving up costs and reducing availability. Everyone is well aware of the spike in demand for bathroom tissue products as the pandemic unfolded last year. In general, there was significant demand for personal hygiene products, food packaging, corrugated packaging, and paper-based medical supplies.
Many of the mills that produce printing papers also make these products and, as demand has increased, they are being forced to balance the load between not only different grades of papers, but for different products as well. And the consumer demand driving that shift isn’t going to ease, even into 2022, so the pressure on the paper grades used in commercial printing operations will continue to be a factor.
No End in Sight
How long will these conditions persist? Across the board, the experts are fairly confident this is going to be the “new normal” at least through the end of 2021, and likely into the first quarter, if not the first half, of 2022. Demand will continue to outpace supply, and it is no small matter for mills to quickly ramp up production, this will continue well into 2022.
But it’s not all bad news — in fact the industry is actually very optimistic about the future, current supply challenges notwithstanding. We’re seeing all of these inventory challenges because business came back faster than all of us were able to react to. At the same time, it’s exciting and very hopeful. We just have to work through this together.
TC DELIVERS AND YOU
So what is TC Delivers doing to manage the changes and what does it mean to the end user? Great question, the management team at TC has actually been monitoring this for quite some time and is making attempts to modify the process. These steps include expanding our vendor base. We have been researching and negotiating with suppliers and manufactures nationwide to find the best combination of price, delivery, quality and service to best accommodate the needs of our clients. We also are being proactive in terms of delivery times by placing orders earlier and in higher volumes than normal.
Understanding the factors that are currently in play helps us be better partners. We believe it is very important to keep you up to date on these market conditions as they need to be considered by all parties as we move forward. We are making every effort to navigate these unique conditions, however, continued price changes and longer delivery expectations are currently the norm and we will make sure we continue to discuss these with our clients so you understand the impact on your individual projects.
