Let’s look at the economics of using paper for information storage and what to expect with future supply, demands, and costs.

Supply Chain Issues and Inflation

Over the past two years, the COVID pandemic disrupted many supply chains, and the pulp and paper industry relies on more than just a steady diet of trees. The process of converting pulpwood to office paper that arrives at your office or local supply store involves workforce, machinery, electrical and other energy sources, chemicals, transportation, and more:

  • Industries’ wages are increasing due to labor shortages.
  • The paper mill machinery cost of operations and maintenance is rising due to higher raw material and fuel/electricity costs.
  • Various chemicals for bleaching, binding, stabilizing, and coating are required to convert cellulose into paper. Most of these chemicals are manufactured in Asia, a region of the world with supply chain stress.
  • The price of crude oil continues to rise, while the concerns about the environmental effects of burning fossil fuels may affect future production.
  • Trucking has been hit by fuel cost increases, fewer available drivers, and reduced freight load-to-truck ratios, meaning lower overall efficiency.
  • The average cost of transporting a shipping container has increased from approximately $1,700 to over $6,000.
  • Demand for lumber has skyrocketed since 2019. The price of a board foot of lumber is currently double that of two years ago due to Canadian lumber tariffs, an unexpected big spike in home remodeling and home building brought on by the pandemic, and transportation delays.

Finally, as of December 2021, the annual inflation rate in the U.S. is at 6.8%. While we all hope this number will come down soon, inflation is a reality when demand exceeds supply.

Costs Are Increasing and Will Continue Rising

As you would expect, when the associated costs of making a product increase, so do the final cost to consumers. In April 2021, paper producers announced an overall price increase from 6 to 15 percent on paper products. Paper mills are still trying to fill backlogs of orders at the end of 2021. Some mills were forced to shut down due to staffing issues during the pandemic. Although the U.S. imports a lot of paper, other countries face the same backlogs for their domestic and international customers and deal with the same supply chain issues.

Paper Is More Expensive than Digital Documents and Storage

Due to all the factors mentioned, the cost of paper has exceeded the cost of storage. Even if your organization knows the benefits of going paperless, the economics of going digital is now obvious.

Below, is a practical example to illustrate:

paper supply chain issues and inflation

 

One sheet of bulk paper is 364 times the cost of storing a digital document! We haven’t even talked about the cost of storing and retrieving thousands of paper documents or continuous price increase of ink and other consumables.

Learn more about the benefits of going paperless and how to transform the way you work.