Why Is There a Paper Shortage? Reading Between the Lines

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Sep. 14 2021, Published 12:50 p.m. ET

If you miss the early days of the COVID-19 pandemic when shoppers everywhere went from store to store looking for toilet paper, only to be greeted by empty shelves and distraught "one per customer" signs, you'll be happy to hear about the latest paper shortage. If, like most people, you have leftover trauma from the toilet paper shortage, the issue isn't so bright.

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Why is there a paper shortage, and what can consumers expect moving forward in 2021 and beyond?

The paper shortage of 2021

Remember how lumber prices skyrocketed during the pandemic? Some of that had to do with increased demand for single-family home construction. However, lumber supply was down due to lack of availability and lack of production during the pandemic. Currently, those same lumber supply issues are also putting a dent in paper production.

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Ultimately, the issue is a perfect storm of domestic product and foreign supply issues. Right now, a record number of available jobs sit unfilled, which is causing U.S. production to stall in many corners. Meanwhile, the COVID-19 Delta variant is causing disruption for paper mill production. The U.S. is just coming off of a peak from the latest surge.

Before the pandemic, paper mills were operating at decreased capability due to limited demand, but that has all changed. As demand surges, paper mills are reconfiguring to try to keep up, but often it's too much to handle. Given the mix of labor and product shortages, plus changing internal and external rules and regulations to protect against COVID-19, it's a juggling act.

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As for foreign production, general supply issues and increased import and transportation costs are creating obstacles for the paper industry. Right now, the cost to transport any product from Asia is about triple what it cost before the pandemic.

The paper shortage is impacting the availability for all kinds of paper.

Paper bags and paper packaging are disrupted by the paper shortage. This is a big issue considering many states have transitioned or are transitioning to a plastic-bag-free environment.

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School supplies like books and notebooks are also impacted. Office supplies like printing paper and envelopes are suffering as well. Both of these issues come into play amid the shift away from virtual learning and remote work and the return to schools and offices.

Meanwhile, one bride-to-be named Gabriella Santaniello told Today that she had a hard time sending out her wedding invitations. Her wedding is coming up in November and the invitations were delayed for weeks due to paper supply shortages.

Booksellers could face issues ahead of the holidays.

With an increased demand for books and paper overall, booksellers are having difficulty keeping up with demand. This could cause a serious issue for the industry as the holidays approach. About 25 percent of books purchased in the U.S. are bought during the holiday season. Companies like Barnes & Noble (NYSE:BNED) and Amazon (NASDAQ:AMZN) could suffer from a lack of available books to sell.

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