The State of the Paper Supply Chain
We’ve seen paper shortages before, but not to the scale of the past few years. First, the global COVID-19 pandemic caused paper prices to rise as high as 15% because of material and shipping limitations. Then, at the beginning of 2022, the printing and paper industry found itself in a supply chain crisis along with the rest of the world.
There were unprecedented paper shortages as many mills switched their production capabilities, closed down parts of their operations, had trouble sourcing workers, and even went out of business during the pandemic. Overall, these changes caused delays and shortages in the paper supply chain that we still see today.
Learn more about where the paper supply chain issues started, where we are now, and where this global paper shortage seems to be heading.
Last Year’s Paper Product Shortage
In 2022, paper mills had difficulties producing enough supply to meet demand due to many facilities dealing with a shortage of workers and materials. The issues at paper mills aren’t just domestic but widespread across the globe—European and Asian paper mills are in similar situations with the shortages, and with rising costs for shipping containers, even importing paper isn’t a good solution because of the high shipping expense.
On the international paper mill front, the Finnish Paperworkers’ Union went on strike in January 2022. The strike affected production at multiple mills belonging to UPM Biofore, one of the largest paper suppliers in the world. The strike ceased in April 2022, but the effects were felt throughout the industry even after workers returned to the mills.
These issues created a pricing catastrophe for the paper industry unlike anything seen before. Mills have spent the past year trying to catch up but unfortunately, continued paper supply chain issues mean there are still widespread inventory problems. All of this results in exorbitant prices due to the new sky-high manufacturing costs.
The Global Paper Shortage in 2023
After that bleak summary, here’s the good news: many standard paper products are still available without hassle. Supply has improved for some items, like sheetfed papers, over the past year. Prices have also seen minor relief, even if they haven’t quite returned to normal yet (and they may never).
Consumers of paper and printed products are starting to prepare four to six weeks out when possible for jobs now; even though print set-up lead times are shorter, they want to ensure they have the paper they need to complete the job.
We’re seeing other factors that, while not directly related to the paper shortage, will soon cause significant changes to the industry. Increased energy costs worldwide are making it more difficult and expensive to run paper mills and print shops. European mills are especially affected because they’re facing natural gas shortages. The Russia-Ukraine war is causing significant blockages to the supply chain in that area and increasing the cost of fuel. Plus, Russia’s role as a global supplier of uncoated paper to Europe—and bans on Russian exports by many countries due to the war—will continue to cause paper shortages. Closer to home, two large paper mills in the United States are closing, and when they are gone, we will see even less supply available.
Overall, recovery from this situation will take a while because of how drastically these paper supply chain issues have changed the industry. We expect the paper industry will still grapple with these challenges through 2023 and possibly even longer. However, we will see improvements from this global paper shortage—the key is to remain patient through these changes.
What it Means for Offset vs. Digital Printing
You may be wondering if the paper shortage is affecting all printing equally. Fortunately, the answer is no. With offset printing—done with a printing press that transfers ink onto custom-designed plates—the cost of doing business and the time needed to print has increased across the board due to the paper shortage. The quality of these prints means choosing offset printing is still worthwhile for many print products, despite the rising costs.
But for digital printing—which is on-demand, similar to a home printer—the run lengths are shorter, and the expense is lower for ink, toner, and other materials. So even as the price of paper increases, along with the time required to source the paper, digital printing costs are lower, and the timing is faster. Ultimately, some runs of products are best as digital prints, and the more affordable cost associated with this type of printing means the price stays lower even as paper and shipping prices rise.
We Can Help with Paper Supply Chain Issues
No matter what the paper industry is facing, The Phoenix Group of Companies will be your reliable partner. Due to the recent supply chain issues, we now maintain a paper inventory three times greater than the volume we carried before the pandemic. We haven’t just relied on our increased supply; we continue to search for paper daily, both from our existing sources and new, alternative suppliers.
When ordering paper in this challenging market, the best thing to do is plan at least four to six weeks ahead, place your order early, and remain open to changes due to supply chain issues. We can source alternatives that meet your specifications if the exact paper you want is unavailable. Once we find an alternative that works for you, we advise ordering it quickly while it’s still available. Many paper suppliers won’t hold the product while you decide because of the high demand—we’ve seen paper available in the morning and sold out by the afternoon, so don’t miss your chance to get what you need.
Above all else, don’t worry—this isn’t the first time we’ve witnessed the paper industry cope with supply shortages, and we’re sure it won’t be the last time. That’s why you need a print provider like Phoenix to help you complete your essential communications.