How the Paper Shortage Is Impacting Direct Mail

2021 was a turbulent year for the print and direct mail industry. After a tumultuous 2020 that saw everyone scrambling to adapt to emergencies, shutdowns and so much strife, we are now facing new challenges. The “new normal” is starting to take hold, and it's very different. This shift is larger than most of us have experienced in our working careers.

Oh sheet! Let’s talk about paper

The number one topic in the industry right now is paper. The simple fact is, the product we produce is manufactured, and that manufacturing process has a supply chain to feed it raw materials that turn into incredible direct mail pieces. During the pandemic, that chain broke. Let’s unpack what happened.

The impact of COVID-19 on paper

COVID-19 has been at the forefront of so many shifts in our current social and operational issues, it’s almost hard to find an area that has not been affected. The ripple effect is still going on almost 2 years later.

When COVID-19 first hit, the response was mixed between calm all the way up to panic because no one had ever experienced something like this before on such a global scale. Offices emptied, budgets were slashed and everyone tried to figure out how to work in this new world.

An unexpected benefit; online shopping skyrocketed. More than anyone, possibly even Amazon, ever expected.

Paper volume needs were at an all-time low, so paper mills converted to support this trend by leaning into producing corrugated cardboard for shipping boxes. As time went on and marketing budgets returned and mail volume started to exceed pre-COVID-19 times, the paper supply chain wasn’t able to support the demand. The market shifted so much faster than the industry could accommodate. With reduced production volumes, mills started turning away new lines of business and lead times for paper procurement grew from 2 weeks to 12 weeks. Mills also began an allocation system, using a printer’s purchase history as a barometer of how much paper would be supplied to them.

How transportation plays into the equation

Supply chain at its core is the process of getting raw materials to manufacturers to create individual pieces. Another component of this equation has been a challenging transportation environment where there have been shortages of qualified drivers to move raw materials.

What does the paper shortage mean for Lob customers?

With the paper supply chain in the delicate state that it's in, Lob has stepped in to ensure that our network has all the support it needs. We’ve put the full resources and buying power of the entire Lob Print Development Network behind this issue. Our number one goal is to ensure the best customer experience despite the current state of the paper industry.

Actions we’ve taken

• Worked closely with our print partners providing them volume projections to ensure we never run out of paper
• Enlisted the largest paper market buyer in the North American market to gain access and allocation as early as possible for all the printers in our Print Delivery Network

• Monitoring the latest trends and updates in the market to ensure our actions stay ahead of the curve.

• Leveraging the power and infrastructure of our Print Delivery Network to gain access to the pre-existing supply chain efficiencies that our partners have established across decades of operation.
  

Conclusion

While the supply chain world is throwing us a curve ball, we are focused on putting plans into action to mitigate as many negative effects as possible to our customers. We will continue to monitor the situation and take all necessary actions.