A paper shortage? Really? As a Direct Marketer you understand how paper is a major component cost of direct mail. And by now you’ve heard about the current worldwide paper shortage. While it is accepted that the Pandemic is driving events. Let’s look at some of the specific causes and effects of the paper shortage. Share how we can inform your Direct Mail efforts for 2022.
Ripple effects in the Supply Chain
No one factor lead to the today’s paper shortage. Yes, COVID-19 got the ball rolling, changing the fundamental way people worked and interacted on a daily basis. People worked from home, or left the labor market, causing shortages in the production of goods and the delivery of services. Marketing budgets were reduced and direct mail volume declined.
Paper mills began cutting back production due to labor shortages and reduced paper demand. Additionally, many mills converted production lines from paper to corrugated cardboard for boxes and paperboard for packaging, given the tremendous increase in on-line shopping (e.g. Amazon, Walmart, etc.) during the Pandemic.
The economy eventually adapted somewhat and mail volume returned at, or greater than, pre-COVID levels. However, paper manufacturers had already scaled back operations, and continued to deal with labor shortages. The market shifted much faster than the industry could accommodate, causing mills to run into problems meeting the increased demand for products.
With reduced production volumes, mills have started turning away new lines of business and lead times for paper procurement has grown from 2 weeks to 12 weeks or more. Mills have also instituted an allocation system, using a printer’s purchase history as a barometer of how much paper will be supplied to them.
Another component of this equation has been a challenging transportation environment where there have been shortages of qualified drivers to move raw materials to manufacturers.
What does the paper shortage mean for Federal’s customers?
As always, our goal at Federal Direct is to provide our Direct Mail clients with the best products and campaign management possible.
- We have long-established relationships, and paper allocations, with the major paper mills to ensure that our clients have all the support they need for 2022
- We are working closely with our Clients, reviewing upcoming campaign volume projections with them, to ensure we never run out of paper
- Federal Direct is monitoring the latest trends and updates in the market to ensure we stay ahead of the curve.
As a Direct Mailer, is there anything else one can do?
#1: Share discussions with your direct mail provider early. Very early.
Bring your design, data and production partners to the table early so you have options and time for paper delivery.
#2: Be flexible about paper grade/paper type. (Or timing.)
Your direct mail provider is likely very happy to work through alternatives. Be willing to consider them when bottlenecks appear. Common paper sheets are more likely to be stocked. They are perfect for other customers—could they work for you? If you have a new need, it’s more difficult to fulfill…
#3: Consider multichannel, it’s affordable.
Adding digital marketing as part of an integrated multichannel mix, especially if you have to alter your original mailing plans due to paper cost restrictions, can add impact to your campaign and increase responses.