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Some of our larger volume printing customers are undoubtedly concerned about the increases in paper costs. To protect its customers from these increases, ColorPage has found creative ways to buy paper in bulk and improve internal procurement efficiency. Paper manufacturers began raising their prices by 5%-10% on all grades and finishes about a year ago. Since prices had been falling or were flat for several years prior, it was not clear immediately if these increases would hold. By December 2017, however, it had become clear that important factors were driving changes in the paper market. Another round of 5%-10% increases was announced… and there are even more increases expected in the coming months.
What is causing paper costs to go up so dramatically over a short period of time? Paper industry experts have explained that dynamic factors are behind the shifts in the printing paper markets. The following are among the most important:
The falling demand for commercial printing papers over recent decades has caused paper manufacturers to close mills and, in some cases, go out of business. For example, over the past 7 years, approximately 27% of the coated sheet production capacity in North America has been shut down.
After several years of declining prices, wood pulp costs jumped up sharply (16%) in 2017. Pulp prices have increased primarily due to the rapid growth of consumer spending and a greater demand for packaging materials associated with e-commerce and delivery of online orders.
Although we have been able to control the increasing paper costs through improved bulk purchasing and investing in larger warehousing space, increases have become unavoidable. At ColorPage, we are committed to keeping our customers informed about changes in the economic environment that impact your marketing, publishing and/or advertising business. We are also making investments in our technology platform and doing everything we can to keep our print manufacturing costs as competitive as possible.
There are possible alternatives and options available that will minimize the impact of the paper cost increases on your budgets. Please contact your ColorPage account representative to schedule an appointment to discuss the creative solutions we offer to help you manage costs in this challenging environment.