Market Update – July 2022:  Is It Disruption If It Has Become the Norm?

Market Update – July 2022:  Is It Disruption If It Has Become the Norm?

Sitting down to write a Quarterly Update can be challenging, exciting and a little ho-hum. Right now, it is kind of boring. I feel like a broken record, almost “Groundhog Day” like. Alas, the 3rd Quarter of 2022 will be somewhat more of the same with a few added twists. Then again, isn’t that all we’ve had since March 2020 – added twists?

2022 Midterm Elections and the Impact on Mail

  • Ballot Mail continues to grow.  More counties are using sophisticated partners with sophisticated equipment to ensure their ballots are delivered to their voters.  The equipment used is at the leading edge of the printing and mailing industry.  That equipment will be tied up from July through October.
  • Campaign Mail is expected to be plentiful this year. With the last of the primaries occurring by August and there being more amendments and ballot measures being considered by local authorities, campaign mail won’t have a declining volume until after approximately November 4th (the Friday before the election on November 8th). This will absorb much of the capacity on mailing equipment.

Flexibility is Required by All and Supported by the US Postal Service

Flexibility is needed for everyone – even the US Postal Service. Due to the current paper and supply chain challenges the USPS is giving mailers the opportunity to submit mailings on paper that they may not have previously considered. This will allow mailers to still execute those important touchpoints but may result in slower handling due to machine compatibility.

The Impact of Transportation is Growing

With an increase in fuel costs, a long-term shortage in drivers, and the reduction in physical containers the logistics nightmares aren’t going away. Unfortunately, it is expected to continue well into 2023 and beyond. The impact of the Russian attack on Ukraine along with the supply chain impact on the fuel industry will continue for all sorts of reasons that don’t belong in this communique.  

Labor

Every business owner I’ve spoken to has mentioned the challenge of finding workers. Add skilled workers to that mix and you start to see the problems ahead for manufacturing across the board. NextPage is fortunate to have a deep and highly skilled workforce, one that we continue to invest in and do our best to offer a great place to work. If you know someone that needs a career path or really loves the printing industry, send them our direction.

Paper – YES, it Really is Still a Challenge

Our proactive approach has paid off. We have tripled our inventory levels on key paper stocks. And, while certain grades of stock are impossible to find, we can usually find a workable solution. Early planning and flexibility will ensure success. 

Packaging – Board Stocks are Hard to Find

The growth in the packaging market continues and that creates challenges for the supply chain related to what are called “board stocks”. Think really heavy stock that is typically coated on one side. These stocks are in demand and if a brand owner didn’t have their supply chain secured, they are seriously challenged. This is a tough situation across the industry. I recently heard that one pharmaceutical brand was unable to fulfill one of its medications because it had been designed to distribute in a box. They can’t get the board stock to make the boxes and are now forced to redesign their packaging.

Some Things Bears Repeating (I know I’m a broken record).

  • Flexibility – Buyers will be successful if they are flexible on their stock choice. There are some stocks we simply may not be able to obtain on your behalf at this time. 
  • Prior Planning – It is important that you connect with us and advise us of your plans for the remainder of 2022 as soon as possible. YES, I did say the remainder of the year. We will work to secure the raw materials in advance and help you understand the budget impact on your efforts. And, while we are at it, let’s start on 2023 early.  
  • Budgets – We are expecting additional increases in raw materials.  One vendor just raised the price of printing plates by 13%. With inflation at 8% we are recommending budget planning in the 10% plus range for 2023.
  • Communication – We have always believed that communication was at the core of a successful relationship. Our commitment is to be upfront and clear about what we know, when we know it. We will do our best to over-communicate with you. We ask that you do the same with us. 
  • Live Jobs – If you have a job you are placing at NextPage and you call for a quote to complete your purchase order, tell us so. If we need to source paper, we will go ahead and issue a purchase order while we are sourcing so we can secure the needed stock on your behalf. It isn’t unusual to search and find a stock, finalize the estimate with the client, the client says, “I’ll let you know,” and the next morning, or that afternoon the paper is no longer available.
  • Estimates & Pricing – Any estimate that we provide is only valid for 7 days and pending paper pricing and availability. If you are asking us to provide you a budget for projects to be completed months later, we will work with you to ensure proper planning. 
  • Postage Increase – USPS typically increases rates for letter mail in January, that increase took place on July 10, 2022. The price of First-Class mail will fall into a twice-yearly review and the price increase is based on the Consumer Price Index.  
  • Staffing Levels – NextPage maintains a highly skilled and committed workforce.  Our team is committed to care for our clients so we can take care of our families.    

And, I will say it again, COMMUNICATION is key. Please let us know well in advance of your goals and plans. The NextPage team will move heaven and earth to try and accommodate every request.

Thank you for your business and here’s to a successful third quarter! 

Gina M. Danner :: CEO