Paper prices have increased massively in 2022 alone and there’s no sign of them coming down anytime soon. Due to the turmoil in the world and the impact it has had on the global supply chain, it comes with a range of increases hitting all at once. We’re being hit in both our professional and personal lives with soaring costs, product delays and convoluted supply chains.
With recent events, it’s difficult not to focus on why one reason has more of an impact than others in the grand scheme of increases over the past two years. Therefore we want to be transparent in the difficulties the industry is facing at the moment.
Russian invasion of Ukraine
The Russian invasion in Ukraine has disrupted the supply and production of paper with many European companies choosing not to purchase from Russian paper mills. With businesses making the decisions to cease links with Russian suppliers from a moral standpoint and wanting to bolster the impact of government sanctions - it’s put even more strain on the disrupted supply network.
Paper mill strikes in Finland
Thousands of employees working in UPM mills in Finland have been on strike since January. Having extended the strikes again - the machines are set to be left unmanned until at least the 12th March. The strikes are a result of UPM’s decision to make division based deals with unions instead of a collective arrangement for all employees. The ramifications are felt by printers, print buyers and paper merchants as well as having a knock on effect to the businesses they supply.
Increasing gas prices
The increase in wholesale gas prices have had an effect on us personally when it comes to heating our homes and putting fuel into our transport. However most mills in Europe are reliant on gas energy and have issued colossal energy surcharges in order to remain profitable. With wholesale gas prices going up 250% since January 2021, this has been factored into the price we pay for paper now.
Increase in shipping container costs
In addition to the issues faced with limited supplies and increasing manufacturing costs, logistics and transportation has its fair share of problems too. The past 18 months has seen a 900% increase in the cost of a shipping container. This results in mills in deep sea destinations like China and South America not being able to supply to Europe - with the cost of a container being higher than the value of the paper stored inside it.
How Fenns can help
While external circumstances put strain on the industry as a whole, our strong relationships with suppliers and knowledgeable team means we have measures in place to ensure disruption is kept to a minimum. Here’s a few of the contingencies we have in place:
- Ring fence stock for customers with existing agreements in place to ensure they have the supplies they need
- Work with supply chain to swap out Russian products and find replacements
- Good supply management to ensure supplies are in stock and will continue to be, taking into account increased lead times and substitutions
Our account managers actively work with you to ensure that you’re able to have the supplies you need in a sustainable fashion. Panic buying and stockpiling creates issues further down the supply chain so purchasing responsibly ensures there is plenty to go around for everyone. We endeavor to be transparent in communication and offer expert advice to enable you to plan for the supplies you need during this tumultuous time.