Weathering the Paper Industry Storm

Todd Palkowitsh, Purchasing Manager, Freeport Press

It’s no secret that the printing paper industry is facing some pretty significant challenges right now. Some industry veterans are calling it the worst paper market seen in modern printing. Yes, we’ve seen some of the same turbulence in the past; but there’s an additional factor at play now. The recent consolidation, repurposing and closure of so many mills have limited buyers’ ability to find paper. This leads to instability throughout the market and pushes lead times out, sometimes as much as 16 weeks.

Here’s what’s happening to drive availability down … and prices up

  • Pulp demand is at its highest levels ever, as packaging, boxes, replacement of plastics, and exports (especially to Asia) are all consuming more pulp.
  • Paper is now competing for its share of pulp, whereas it used to be the primary use for pulp. The Chinese government has also put regulations on imported pulp and banned the use of wastepaper, further eroding the pulp market and raising prices.
  • Many paper machines are being “repurposed” to liner board (boxes) and packaging board.
  • Demand for paper in the direct mail and catalog segments is up, adding to the pressure.

With paper mills operating at an unsustainable 95% – 100%, they are rationalizing away from any unprofitable business. So they are backing away from producing less expensive grades and lighter basis weights, and are pushing premium grades if customers need paper supplied quickly. Throw in rising costs on raw materials and transportation and we’ve got an undeniably volatile market with long lead times, rising prices, and production delays.

Your safe port in the storm

Fortunately, at Freeport Press we saw this coming from a long way off. We had the foresight to incorporate multiple programs in our efforts to shield our customers from the worst of the paper shortages.

First and foremost, we have great relationships with the mills and have instituted a multi-pronged approach to meet demand. Through our consignment programs and dedicated stocking programs, we’ve invested a lot of resources to ensure a robust paper supply. We also have full allocations from our mill partners on stocks we consistently purchase.

Of course, knowing what’s coming as soon as possible will assist us in allocating paper to the right months for the right jobs.

While we may not always have everything anyone could need, we will always have options should the particular stock you want be unavailable in the time frame needed. It’s the best way we know to keep the presses running and keep your projects heading out the door on time.

Work with your sales representative to ensure proper paper allocation. The sooner we know your commitment on paper, the sooner we can work with the mills to get you what you want, when you want it, to keep your job on schedule. This ultimately is the key to weathering the challenges paper is giving us today.