It has been a little while since I last reported on the state of direct mail production. In that time, direct mail has continued to endure a host of challenges: COVID-19, supply chain issues, labour and resource shortages, natural disasters, rising fuel prices, inflation, paper producer strikes, and paper mill closures – to name a few.
But, at the risk of jinxing things, I think those of us who love and live direct mail are starting to find our way out of the darkness.
Over the past few months, we have started to see positive signs
Paper availability is improving as supply chains are stabilizing. Fine paper – particularly coming from Europe – continues to be a little hit and miss. However, for the most part paper suppliers have found new sources or existing sources to address the instability they faced.
Production suppliers are largely operating at capacity. With COVID-19 shut-downs waning there are fewer disruptions. Labour availability remains a concern, but it is not limiting supplier’s production capacities to the extent that it had been.
Paper and envelope costs are coming down a bit as a result of growing stability. From 2021 to 2022 some comparable paper stock prices jumped by as much as 60% over the previous year. This year we have seen prices decrease by a little more than 5% compared to the 2022 peak prices.
Uncertainties around direct mail production costs remain
I don’t know that costs will ever get back to where they were pre-2022. I am also fairly certain that cost declines will come much slower than their increases did. Inflation and the continuing geo-political instability in Europe will be the parachute that slows the falling of costs.
The uncertain labour market could also prove to be a driving factor. Employers from many sectors report having trouble finding workers. While employers are not dealing with labour issues to the extent that they were during the pandemic, the labour market has not returned to what it was.
We can also expect to see labour interruptions stemming from collective action. As contracts and bargained agreements expire, employees of unionized production facilities will begin negotiations for cost-of-living adjustments in response to inflation.
Where does that leave us for the busy upcoming fall 2023 and winter 2024?
To summarize all of this, I would say that you will be able to get your mailings produced with less lead time than you needed last fall. And you should, for the most part, be able to produce your mailings on your paper of choice. However, expect to continue paying what you are paying now.
