What is causing pricing issues?
With the rise of ecommerce, corrugate is more in demand (aka those boxes your online order comes in). Companies are switching their paper making focus to corrugate, which means less supply of regular old paper.
Previous reduction in demand = elimination of many papers AND mill consolidations. Fewer mills = rising paper pulp costs. According to Strategic Sourceror, the price of wood pulp is forecasted to increase at an annualized rate of 5.1% through 2019. Another source, the US Bureau of Labor Statistics shows that the Producer Price Index for pulp, paper and allied products has risen from 177.2 to 216.9 in the past year and is NOT expected to slow down. (June 2017 to May 2018)
In addition to pulp price increases, chemicals and diesel prices have also gone up significantly. According to International Paper, NBSK Pulp prices were up +37% vs last year in June, Producer Price Index for Chemicals were up +5.6% in Q2 vs LY and diesel Prices are up +28% in June vs LY. Higher input costs means higher output price.
Single stream recycling has resulted in contaminated paper. China used to buy our recycled paper for pulp, but they banned the use of mixed grade waste paper. This means they can’t use it for pulp, and this fact alone drove pulp prices up 40% when it hit last year.
Irma and Harvey resulted in the shutdown of up to 18 pulp and paper mills in the United States. It also led to costly supply chain disruptions such as transportation on railroads, roads and at ports and the cost of wood.
This perfect storm brings up memories of college Econ 101. Supply vs Demand. And now that demand outweighs supply, the mills that are left are in control and can raise their prices to become profitable again. And, if paper brands don’t want to accept the price increases? Well, too bad for them because another brand will and they won't be able to produce their paper (aka all brands are accepting the inevitable).
Ways For YOU To Save Money
If you printed something out that you don’t need, use it as scratch paper!
Print Double Sided
Print double sided to cut your usage in half if you weren’t already doing this. If your printer can’t do this, see below for a great quality printer option from Twist.
Think before you Print
Stop and think if you really need to print something out. Does each person at a meeting need a copy of your presentation, or can you project it/email it out? Does that receipt need to be printed out or can you just screenshot it and archive it in a folder?
Use Quality Printers
Quality printers don’t jam as much. Less paper jams leads to saving money on wasted paper. Other printer features such as printing multiple pages on a single sheet or shrinking website data to one page also help reduce paper usage. Check out this great Brother Printer here that is great for small businesses or contact our team if you would like to find the best printer options for your company’s needs.
Use the Right Type of Paper
Do you need fancy glossy paper for something only you are going to see? Make sure that you are using the right paper for the job. Check out the guide below for choosing the right paper!
- UFS Market Update Summary August 2018 [Powerpoint]. (2018, August 3). International Paper.
- U.S. Bureau of Labor Statistics, Producer Price Index by Commodity for Pulp, Paper, and Allied Products: Wood Pulp [WPU0911], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/WPU0911, August 2, 2018.