Paper Market Update: Longer Lead Times & Rising Prices
Over the past few months the paper market has become more challenging to navigate due to consolidation and allocation restrictions at many paper mills. These factors, combined with the rising prices of pulp and current demands on the transportation industry (shortage of truck drivers and hourly driving restrictions), have led to a disparity in supply and demand, paper shortages, reduced flexibility, and longer lead times for paper orders.
In speaking with many service providers in our extensive partner network, the team here at Production Solutions (PS) anticipates these paper market fluctuations will continue over the next 12-24 months.
So, what does this mean for mailings? Here are the key points:
- Minimal Impact for “Standard” Paper Stocks (Lead Time): This includes “common” stocks such as white wove, white offset, and coated. PS continues to work with our service providers to ensure the standard paper grades are available at this time. However, if there are any unexpected production needs, it’s best to notify your production team 10-12 weeks prior to your mail date to ensure availability.
- More Planning Needed for “Specialty” Stocks (Lead Time): This includes “uncommon” stocks such as linen, grooved, and colored stocks. Planning 12-14 weeks in advance of your mail date is suggested to guarantee materials will be available when needed.
- Expect a Price Increase in Q3 2018: So far in 2018 there have been two price increases and we anticipate another one in the August/September timeframe. Stay in front of this by forecasting and planning for the potential impact on your budget.
These market conditions are unique and something that hasn’t been experienced since the mid-90s (which we can’t believe is over 20 years ago). While this uncertainty can be troubling, you can rest assured the PS team is doing all we can to stay ahead of the changes and reduce any impact on our clients’ programs and budgets. PS will continue to stay close to the market and keep you informed of further developments.
Bottom line: pre-planning is essential! As author Alan Lakein put it, “Planning is bringing the future into the present so that you can do something about it now.”