So, what’s driving these Copy Paper increases, and what can you do about it?
Key Factors Behind Increases
- The Economy: The economy is humming, and all domestic mills are at, or near, full capacity. It’s is a good time for the paper mills to command a higher price for this commodity.
- Georgia-Pacific: One of the largest paper companies, Georgia-Pacific has made a decision to get out of the copy paper business. They are redirecting their energies to other products in their offering. This allows the remaining mills to command a higher price due to decreased domestic production.
- Preventative Maintenance/Mill Down Time: All domestic mills routinely take equipment out of production in order to perform preventative maintenance and repairs. This puts further constraints on production capacity and drives prices up even further.
- Rising Costs: The paper mills have experienced significant increases in the cost of pulp, labor and transportation. And they are pushing those cost increases through to consumers.
- Concerns Over Import Paper: Uncertainty over import products, and potential tariff and/or exchange rate concerns, has made sourcing overseas a bit riskier for paper merchants and distributors
- Detailed Analysis: For an excellent, in-depth recap of current market conditions, provided my Domtar (one of the largest mills in North America), simply click on the link below
So What Can You Do About This?
- Reduce Usage on Copy Paper: Reduce the amount of paper your organization is using. For example, store and exchange as many documents as possible electronically. We’ll likely never get to a “Paperless Society”, which has been predicted now for over 30 years. But by going more electronic, or making simple changes like printing on both sides of the paper (duplexing), you can reduce your costs.
- Look for Savings to Offset Copy Paper Increases: Your business products supplier should be coming to you with opportunities to reduce costs in other areas. Specifically: Office Products, Janitorial Supplies, Toner & Ink, and Managed Print Services (MPS). You can’t control the increases in paper, but in many cases you can reduce the impact to your budget by saving money elsewhere.
- Switch Copy Paper: It’s a little know fact that paper mills can get as many as 100 different “brands” of paper off of the same master rolls. The paper is identical, but put into different cartons and even private label brands. This is not to say that all paper is created equal. But don’t be fooled into thinking that only “Brand X” will work for you. There are literally hundreds of options to choose from, and some are priced more aggressively than others. You can and should request a test ream, or test carton, before switching. If you do that you should have little to worry about.
- Consider Imports: Despite some concerns about tariffs and exchange rates, there are still some good import options out there. There are some excellent quality sheets coming from Canada, Europe, South America and Asia, among other markets. Rising domestic costs are making these sheets more attractive. Make sure you can count on a continued supply before switching, but this is one good option to consider.
- Buy Copy Paper Differently: Transportation costs are a key driver in the ultimate cost of copy paper. Generally speaking, the more efficiently you order and receive paper, the lower your cost will be. For example, if you can order 5-10 cartons at a time, or better yet 1 or more pallets at a time (40 cartons), you can often secure a lower cost.
- Protect Your Copy Paper Supply: In this tight environment, some distributors literally cannot find paper – at any price. Ensure that your supplier is protected against “allocation” risks, and that they will always be able to get you the paper you need.
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By: Greg McLeod, CEO – 1Source