Why Is Paper So Expensive?

November 29, 2021

“I can’t get my paper for 12 weeks? And it’s going to cost 12% more than my last order?”



Buying paper has become a convoluted process, putting stress on inventory management, procurement and vendor-client relationships.

The paper industry is experiencing a confluence of factors, a perfect storm of negative impacts. First, there’s the supply side. Globally, paper mills have been closing for years, reducing sources for many standard printing and publishing grades. Some mills have also converted from commercial printing grades to packaging grades, further reducing overall paper supply.

Second, there’s the cost of manufacturing. This year, mills have experienced dramatic increases in the cost of pulp and the chemicals needed to produce paper along with rising labor costs.

The third factor is transportation. Fuel and energy prices are up, plus there are disruptions in the global supply chain impacting international and domestic shipping. There is a shortage of trucks and drivers to move paper and other goods in North America.

And the fourth factor in the perfect storm is demand. Demand for paper is increasing. After the second quarter downturn in 2020, the demand for printing, marketing, direct mail and publishing has increased significantly. Printing shipments are up 22% year over year for the second quarter, while still far below what they were in 2019.

Is it really a “Perfect Storm?”

The perfect storm analogy implies triggers that came on suddenly and unexpectedly. The situation we face in 2021 is more like “climate change.” The signs and contributing factors have been there for a while, with the exception of volatile print volumes seen during the COVID-19 pandemic. However, these factors are all coming to a head in 2021. Printers need more paper. Mill inventories are at a five-year low. Less paper is being produced. It costs more to make paper. And it takes longer and costs more to ship it.

Since 2017, mill closures and mill conversions have reduced the overall supply of commercial-grade printing papers resulting in 39% less coated groundwood and 48% less coated freesheet paper being produced. Groundwood papers are primarily used in magazines, newspaper inserts and catalogs. Freesheet papers are primarily for transactional documents, commercial printing and direct mail.

For those buyers placing orders directly with mills, the industry term “LDC” used to mean “Last Date to Change” paper orders with the mills. Changes included changing paper types and increasing quantities. With current market conditions, mills are pushing buyers to place orders earlier, and LDC now means “last date to cancel or reduce” orders. Mills generally are not accepting paper changes or increases in quantities.

The global economic impact of COVID-19 resulted in additional mills closing and more planned conversions to packaging products. Demand for printing papers began growing as companies began increased marketing efforts during the third and fourth quarters in 2020. Increased demand has reduced mill inventories – further reducing overall supply at the end of 2020 and into 2021.

Paper mills can accurately predict the total volume of paper produced from each machine on an annualized basis. Annual tonnage of paper produced is tracked for every mill. Interruptions in supply chain and labor challenges have negatively impacted overall production. Several large national print service providers have indicated mills are not taking new orders for the balance of 2021. Large printers have contractual agreements from mills to supply allotments of paper. And large buyers of paper are being told by their distributors and mills that they will not accept new orders.

Transportation Delays

The global supply chain challenges extend beyond the news about shipping containers. Importing paper has also become less predictable. A procurement manager told me about a railcar full of paper that has been stuck in a Chicago rail yard for over eight weeks due to freight train delays. There are significant shortages of drivers and trucks in North America. Over the next decade the trucking industry will need to hire roughly 898,000 new drivers (90,000 drivers per year) to replace retiring truck drivers and meet industry growth.  It is estimated that America will be short 175,000 drivers by 2026.\

Demand is back.

In 2019, the comparison of annual shipments to capacity across all mills in North America was 89% for coated freesheet. In 2020, it dropped to 81%. There’s a different story for 2021. From January through April, the shipments-to-capacity comparison is 102%. And the forecast for the rest of the year is 93%.

Mill inventories are down 50-75% across paper grades compared to 2020. In response to increased demand, mills are maximizing efficiency by reducing the total number of basis weight offerings and eliminating some product lines. Print service providers have reported having to order different stocks because of lack of availability of specific brands and paper weights. It’s the only way they can meet production demands for delivery.

This year the paper mills in North America are like a sold-out rock concert. They have sold all the tickets they can produce. And there aren’t any ticket scalpers outside the gate.

Weathering the Storm

What’s a printer or procurement manager to do? Communicate regularly with your paper suppliers, client service team and customers. Gather data to better predict volumes required and understand the lead times needed for ordering. Inform your operations staff to manage inventory closely and report any ad hoc requests that require significant amounts of paper or envelopes.

Industry forecasts predict short supply for many paper grades through the first half of 2022. To anticipate delays in shipments and the impact on your production cycles, stay in communication with your suppliers, closely monitor orders and confirm delivery dates. Clients can handle bad news much better than surprises. They will understand increased costs and longer lead times. They will appreciate if you are providing them information so they can make informed decisions about their printing and mailing programs.

Share this...

What Our Customers Are Saying

  • Partnering with app has been one of the best choices we made. We have worked with them for a number of years and it has always been a great experience. I know I can rely on them to give us the best service possible. The team at TC is top notch and I know the future will only bring better things. Our salesperson makes sure to keep us up to date with any mailing solutions we need.


  • We have used app as our presort service for the past five years. Although our output volumes have significantly increased during this time, their knowledgeable staff has maintained the same high levels of quality, efficiency, and care with our mail. I look forward to our continued business together and highly recommend app for anyone looking for a professional, reliable, and friendly presort service.

    Insurance Industry

  • Great communication & collaboration while working with this vendor.

    State/City/County Government

  • Very professional, great company to work with.

    State/City/County Government

  • app has been a great partner to work with. They helped create an outstanding team environment that helps us achieve our mailing/processing goals and demands whenever a new challenge arises.


  • app has done a great job growing along with our company, keeping up with the increased business and higher monthly mailing volumes associated with that growth. Our salesperson is always on top of quotes for projects, helps keep us on point for our escrow balances, and her expertise has helped to find cost savings for our company. The Senior Data Processing Technician does an incredible job with all the day to day processing, as it runs seamless. His attention to detail helps to account for the accuracy he displays on all the Special Mailing projects, as well as the new projects that he has to implement that are thrown his way. app is a top notch vendor to utilize when looking for savings and accuracy on all your mail solutions.

    Financial Services Organization

  • Our company has been working with app for the last 7 years and have always been completely satisfied with their performance. They are customer service oriented and always meeting the time frames we have for sensitive jobs.

    Furniture Chain

  • When our company first opened an office in Florida in 2012, we used TC to ship all of our mail for us. In 2014 our corporate office decided that we should be unified with all of our offices throughout the country so they moved us to another presort facility. We had many problems with that other facility (mailings not reaching their destination in a timely fashion, etc).
    At the beginning of the year we switched back to TC and we could not be happier. We have not had customer complaints about mail not getting somewhere on time. Our salesperson is very helpful and is always willing to answer any questions we may have. We are very glad we are back with TC and will recommend them to anyone!

    HOA Management

  • I’ve been extremely satisfied with app customer support, professionalism, and quality of work. I have thrown many different projects at app and they always comes through for us. My favorite part of dealing with them is they never reply to a request with “NO we can’t do that”, they always start out with “Let’s see what we need to do to take care of that for you” and that is “CUSTOMER SERVICE”. Our everyday mailings, proof of mail, fulfillment and presort is always taken care of very professionally, their pick-up drivers are on time and courteous.

    Insurance Industry

  • We have solely used app mailing services for 2 years. Our account managers work diligently to not only meet, but exceed our expectations. Any questions and new efforts are quickly answered and assisted in planning. It’s so refreshing to do business with an affordable and professional family-owned and operated company.

    Direct Mail Catalog Provider

  • Our company goes to app for all of our printing needs. They always respond quickly to our requests for quotes and get the product out to us in a very timely manner. We use them for mailers, informational cards and specialized projects as well. Their prompt service and outstanding customer service is what keeps us coming back!

    State/City/County Government

  • We have been with app for many years and we have been very pleased with their service for us. TC has friendly staff and drivers, willing to be of help even when we need extra services like trays & sleeves. Their pricing is very competitive and they are willing to work with us on large projects as well as small. We will be using them in the future and would highly recommend their services.

    International Non-Profit

  • Working with app has truly been a great all around experience. They accommodate our schedule changes, and the drivers always provide quality customer service. We appreciate our relationship with app, and look forward to a continued partnership.

    Recycling Industry

  • TC was easy to do business with and delivered the campaign that we needed several times.

    Healthcare Provider

  • I have had the pleasure of working with app for the past 12 years. We have produced a number of projects together- both large and small, and a number of ongoing ones. During this time, the service has been outstanding and it is their attention to detail that really shines. Once I turn it over to app, I no longer have to worry about it. And that more than anything says more about working with them- it’s nice to have a partner who walks the walk. I would whole-heartedly recommend app for pretty much any direct mail and fulfillment project that you would have. It’s worry free!

    National Franchise Owner

  • app has delivered consistent quality service to us for over five years. Their prompt, professional and reliable customer service is what sets them apart, saving us time and money without any headaches.

    Logistics Industry

  • The staff over at app helps our daily mailings fulfill with ease. They are always eager to help, and wonderful to work with.

    Credit Union