Today’s paper market themes include price increases, mill allocations and late deliveries, low inventory at the mills, rising input costs (pulp, labor, energy, chemicals, freight), machine conversions, surcharges, and port congestion and container shortages.
Where We Are
- – Global pulp prices are up 20% in the last four months. (source: RISI Fast Markets)
- – Input costs are still on the rise.
- – U.S. trucking market is softening slightly.
How We Got Here
- – Pandemic
- – Issues with supply & demand
- Port congestion
- Schedule reliability
- Warehouse congestion
- Container imbalance, congestions, and chassis shortage
- Rail car shortage (especially in Canada)
- Trucking challenges
- – Rising input costs
- – Supply chain issues
Forces Impacting Paper Logistics / Supply Chain
- – Russian invasion of Ukraine (impact of Russian sanctions)
- – Economic uncertainty:
- Weakening consumer confidence
- Inflation and rising interest rates
- Reversal of quantitative easing
- Phasing out of COVID-19 stimulus
- – U.S. midterm election
- – ILWU contract negotiations this summer
- – Additional COVID-19 lockdowns in China
- – Potential strikes and associated logistics congestion
- – Energy costs
Understanding where we are and how we got here is imperative in determining how we can move forward. Stay tuned for next month’s post featuring how marketers are responding to the global paper shortage. There will be bonus tips for maximizing your brand’s success.
