It was over 40-years ago when these three guys started their careers in the paper industry. Phil Milazzo as General Manager, Craig Pamperin as Sales Manager for Steen Macek Paper and I started our careers at Butler Paper, Avery, and Consolidated Papers respectively. Today we all continue to share the same passion and understanding of the business.
Recently I sat down with Phil and Craig to get their perspective on the paper situation as a paper merchant. With the hope of helping others, they shared the following insights:
“The printing and paper industry is now feeling the full effects of the global supply chain crisis. We have seen paper shortages in past years but never anything like this. Also, everyone knows many mills have been moving production from printing papers to liner board while also closing their least productive mill operations.
Then along comes the pandemic! Workers become in short supply. Major supply chain issues erupt around the world. Orders for paper begin to come in at an unprecedented rate and the domestic mills start to fall behind. Before long, the mills were oversold, and their systems were not designed to deal with the oversold condition. Industry chaos follows as a result.
In the meantime, there is an actual uptick in the demand for print and the domestic mills simply cannot keep up with the demand without the help from imports. Unfortunately, the European and Asian mills are in the same boat and perhaps worse. They have the added exorbitantly inflated costs for containers and overall shipping charges. All these factors continue to play a key role in what has already become an enormous pricing nightmare.
In summary, as we begin the New Year, we will experience all the ramifications of a perfect storm, the likes of which we have never seen in the paper industry. Current manufacturing conditions at both coated and uncoated mills include reductions in allocations and limited access to what used be in-stock inventory. Price increases are not over. In addition, we are still experiencing the temporary suspension on entering new orders at many mills. All this as the mills try to get caught up and replenish inventories of all types of paper including envelopes.
While we cannot speak for others, we can tell you that our current inventory is at exceptionally low levels, and we can only assume we are not alone. Replenishment dates are all over the map and range from 30-days to 120-days and some even further. Our advice is to plan for the worst and hope for the best. As salespeople in a service-driven business, it is not easy to paint this picture or tell this story. Nonetheless, we want our customers to be informed and prepared for the challenging times ahead. Paper will continue to be in very short supply in the months ahead!”
Phil and Craig at Steen Macek are available for discussions with anyone. pmilazzo@smacek.com and cpamperin@smacek.com
From the desk of Marty Ochs.
Marty
