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Mailers Need to Plan Accordingly to Minimize The Impact of Industry-wide Printing Issues.
The direct mail industry was plagued by supply chain and labor issues in the latter half of 2021 resulting in delays and increased costs. While some issues have been alleviated, nationwide supply chain-related shortages continue, and all indications are that issues will continue through the better part of 2022. Below are some of the issues we are seeing, their implications, and how our agency is helping clients to navigate through them.
What Are the Issues?
The most obvious concern is the lack of paper grade stock (writing paper) being produced for direct mail. The explosion of home delivery brought on by COVID resulted in increased production packaging-grade stocks (such as cardboard) at the expense of other papers.
There are reports that some domestic suppliers are going to convert back to paper grades, but that takes time. Adding to that is the threat of a potential work stoppage at one of the country’s largest paper manufacturers given recent employee protests for increased wages and benefits. Overseas suppliers are starting to fill the void, but port and shipping slowdowns are hampering deliveries.
Supply chain production issues extend beyond paper to ink, glue, and even materials for printing plates. Envelope manufacturers are also facing a labor shortage plus reduced overall capacity adding to potential production delays.
What Is the Impact on Mailers?
Production delays are becoming common. Even some “set” production schedules are being upended due to:
- Mills shorting their paper deliveries. In some cases, this happens with little or no warning, as paper manufacturers attempt to stretch supply.
- Extended envelope production timeframes. Agreed-to timeframes are being unilaterally stretched by producers. What previously took 2-3 weeks to produce can now stretch two or three times longer depending on the stock involved.
- Project bidding slowdown. Printers are holding off providing bids because they can’t find the paper to meet the production plan.
It should come as no surprise that paper costs, as well as the entire cost of production, are increasing. Paper alone has jumped 10-15% in recent months and we expect further price increases throughout 2022.
What Can Mailers Do?
Here are some steps we are recommending to our clients as we plan and execute mail for the foreseeable future:
- Plan as far out as you can. That helps us get vendors on board so they can put in their stock requests on your behalf as far in advance as possible. Some mailers are planning a year out right now.
- Commit to paper. If you can add an actual dollar commitment to your plans, then the paper can be bought as available and held to meet your needs.
- Be flexible with timing and budgets. To be frank, you may not have much of a choice with either. If timing is the most important variable, then consider switching stocks to what’s available to avoid delays. This could mean higher stock costs, rush freight, or even moving the job to another printer.
- Combine multiple mail drops. Turn smaller monthly printings into quarterly printings to take advantage of available resources. As an alternative, print base creative for multiple drops at one time and hold for finishing as needed.
- Consider non-envelope alternatives. While postcard or self-mailer stocks may not be much easier to procure, there are some benefits to a single-step printing strategy in this environment. If you’ve been considering a test along those lines, now could be the time.
Our fingers are crossed that relief will come sooner rather than later. But as stated above, mailers need to be prepared to weather this storm for the remainder of this year.
What Are We Doing to Help?
Gunderson Direct is taking a proactive approach in an effort to help our clients deal with these ongoing issues. These steps include:
- Solidifying relationships with key vendors to improve sourcing stocks for our clients.
- Researching alternative vendors who can offer stocks and timing that our current resources can’t.
- Constantly monitoring the landscape to minimize surprises and to help guide our clients with regard to resource availability and timing.
- Strategizing with clients and vendors for production alternatives that match client goals with marketplace resources.
Please reach out if you have any questions or we can help you plan production. Our production experts are available to meet and discuss any of these issues or steps we can take on your behalf in greater detail.
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