Paper Covers Rock, But Where Is the Paper? Jumbo Roll Specialists Get Candid About Their Current Reality
American desires for a winning lottery ticket, world peace and their two front teeth are a tale as old as time. But for print professionals like John Burnette, paper tops every wish list. When asked if his supply chain partners could be doing anything more to help him be successful, he joked, “Find some imaginary mills and order some paper.”
A 25-year industry veteran, Burnette and his colleague Tom Schnitker have been selling jumbo rolls for the past two decades — initially working in a manufacturing capacity before crossing over to the distributor side as senior account executives for Chicago-headquartered GO2 Partners. Traditionally, jumbo rolls have been kind to them. This year alone they anticipate over $1 million in revenue. However, they didn’t mince words about their current struggles.
“The biggest problem has been managing any growth with existing or new clients,” Schnitker said. “Paper allocations and labor shortages due to the pandemic have everything in a holding pattern. Converters are afraid to commit to any new business or existing business growth since they are struggling to keep up with their current demand.”
Hostile market conditions have challenged the paper industry long before the pandemic dried up supplies. Notably, in 2019, Georgia-Pacific, a mill that had built a reputation as one of the world’s leading makers of tissue, pulp, packaging, building products and related chemicals, announced that it was exiting the communication papers business, taking off the table 650,000 tons (or 8%) of uncoated paper and roughly 650 jobs at its Port Hudson, Louisiana facility.
After a brief slowdown at the onset of COVID-19, consolidation picked up in 2021 with several key acquisitions making headlines. In February, Pixelle Specialty Solutions LLC, a manufacturer of specialty papers in North America, announced that it was acquiring the carbonless rolls and security papers business of Appvion Operations Inc.
On Sept. 21, U.S.-based coated paper supplier Verso Corp. entered into a confidentiality agreement with private equity firm Atlas Holdings LLC to further negotiate the latter party’s unsolicited takeover bid. Though in December, news broke that Verso had entered into a definitive merger agreement with BillerudKorsnäs — the fates of its Wisconsin Rapids mill and hydroelectric power plant remain uncertain for now.
Stories like Georgia-Pacific’s, where producers shut down capacity with relatively little forewarning, coupled with the rising cost of materials to make pulp, resulted in the discontinuation of certain paper grades, a push for allocation and across-the-board price increases worldwide for the paper industry. The pandemic isn’t doing the industry any favors, and whether relief will happen in 2022 is anyone’s guess.
According to data from Quad, prices for all grades of paper are on the rise. Wood pulp was up 25% in 2021, averaging $250 per ton. That brings us back to jumbo rolls. One roll equals 80,000 documents or more, so it’s no surprise that suppliers and distributors are feeling the weight of these 500 to 1,000 lb. products. If GO2 has paper, Burnette and Schnitker said end-users are looking at lead times of roughly three to five weeks. If GO2 has to order paper, they’ve found that some stocks are out eight weeks.
Schnitker was direct in his advice to peers considering selling jumbo rolls. “I would not recommend leading with jumbo rolls right now,” he said. “They are heavy on paper when talking percentage of total cost, and paper is very hard to get. Mills are passing along huge CWT increases and it doesn’t seem to be changing anytime soon.”
The Next Phase
Fortunately, that’s not where the story ends for jumbo rolls. Financial, retail, utilities, insurance, telecommunications, service bureaus and manufacturing are just a sampling of verticals that still need jumbo rolls. Burnette and Schnitker are happy to help — they’ve just had to get a little creative.
“From our point of view, the current paper and labor situation has turned most salespeople into ‘buyers,’” Burnette observed. “We are constantly reaching deep into the marketplace to find raw materials or converters who have available press time inside eight weeks.”
Being a distributor gives the GO2 Partners executives the chance to tap into multiple sources, which Schnitker believes is an advantage over major directs.
“Businesses that used to look at distributors with skepticism, ‘Why would I go to a broker when I can buy direct?’ are now changing their thinking and are understanding that we bring extreme value with our knowledge of resources, flexibility and freedom to source,” he remarked. “… Whereas a manufacturer, even though most manufacturers do source to some degree, they want to feed their own equipment.
“We have relationships even beyond what we ever knew were out there from a sourcing standpoint as a distributor,” Schnitker continued. “So, I would say that’s been helpful with one of our financial services clients to be able to find solutions where they typically only contracted with direct manufacturers in the past. ... We’re able to help them across multiple lines of business and multiple product lines.”
One thing to keep in mind about jumbo rolls is that they are a program sale, not a transactional sale. This means longer selling cycles that can take anywhere from weeks up to a couple of years to complete. But it’s business that repeats every 30, 60 or 90 days. So, after making that initial adjustment to account for new delivery times, companies can deliver product when it’s required. The trick is to have paper suppliers hit the agreed upon delivery date. What happens when that’s not possible?
“The first course of action is to work with the paper supplier to find out what’s possible and properly communicate the delays with the distributors,” said Bob Saunders, vice president of sales at Wise, Alpharetta, Georgia. “If the distributor is OK with the revised date, fine. If not, we do our best to provide alternative options. Some examples are moving the job to another Wise location that has the required paper, running a partial of the order to allow more time for the delayed paper shipment, or, in some cases, reviewing substitute papers, i.e., 20# versus 24#”.
For the most part, clients have been forgiving. As Doug Marecek, sales manager for Integrated Print & Graphics, a Div. of Ennis, Elgin, Illinois, pointed out, the direct mail market has always been time sensitive. In addition to paper shortages, he said clients have also had to consider trucking delays thanks to tightened workforces and schedules, leading them to reset their expectations.
“I have been in the industry for over 33 years, and I have never experienced anything like we are today,” Marecek shared. “From supply chain shortages and delays, trucking difficulties and general pricing increases on everything from paperclips to paper — the global pandemic has certainly created a whole new world. … [However,] we have been fortunate to maintain a steady supply of stock, which has actually helped us to secure orders that others could not service due to lack of raw materials.”
The Power of Partnerships
Let’s say Burnette got his wish and paper was in abundant supply. Problem solved for jumbo rolls, right? Not exactly. There are specific papers, specific unwinds, specific ways to handle perforations on the forms if they have them, and so on. There are even differences in east coast versus west coast papers. Schnitker explained that some paper contains softwood fibers, while others consist of hardwood pulp. That’s important to know because the two types react differently in the machines due to their varying moisture content. Schnitker recommended testing in equal numbers if the rolls are strapped to a pallet.
“The other thing is I’ve seen where you come from a heavy moisture environment to a really dry environment and the rolls get welts on them, so they’ll have like almost bubbles in some cases, so making sure that you have the right climatization throughout the process as they’re produced, as they’re shipped, as they’re warehoused, as they’re put into production, and allow them to climatize with the client too,” he said. “So, there’s just a lot of, maybe, unique requirements or things that you would just think ‘Hey, these are just big 50-inch heavy rolls that shouldn’t be a big deal to produce, especially if they’re blank white,’ but you do have to take a lot into consideration.”
To be a jumbo roll specialist, distributors need to get in front of a prospect and somehow tie their proposal in with an operational advantage. Perhaps that is being reactive. Maybe it’s the type of paper they use and what they’re doing to change with new imaging technologies. It could also be who their supplier is because, as we’ve seen, jumbo roll work isn’t as simple as mounting a roll, pressing the “on” button and hoping for the best. If mistakes aren’t caught, that low price could cost upwards of $1,000 if, say, there’s a dent on the side of the roll — not to mention the freight, Burnette said.
“The best advice for both distributors and manufacturers is to work closely together in a partnership,” said Saunders, whose company has partnered with Burnette and Schnitker on jumbo roll orders.
And because jumbo roll business is largely program business, as discussed earlier, there is more forecasting, inventory management, quality process management, communication and transparency involved.
“I would say with many of our programs, we have regular conversations with distributors communicating the current state of the market, reviewing open and future orders, along with inventory management of product in the warehouse,” Saunders said. “Most of the time that happens during the normal course of business, but in some cases, it is addressed in a quarterly business review.”
Although Schnitker and Burnette are comfortable in their knowledge of what is required, they do find value in collaborating with suppliers. “They know this business,” Schnitker noted. “They’ve been in it for a long time, too, so they understand how to produce it. … And Wise specifically knows what type of perfs to run, the tension to wind the rolls at the press — that’s been an issue too. If they’re too loose or too tight, that can cause them to telescope out, so that’s where we rely on someone like Wise to know how to do that.”
For distributors who may lack insight into core size, roll direction or rolling position, Marecek is ready to assist.
“Over the years, we have offered training sessions, which include plant tours and overviews with new hires for some of our clients,” he said. “Many distributors are not very keen on joint calls for fear of being cut out of the loop, but we have developed a level of trust in our partnership where this approach has added a new depth to the relationship that often benefits all three parties: the end-user, the distributor and us.”
If Schnitker could impart one tip to those selling jumbo rolls (aside from securing paper), though, it would be to become more intimate with the client’s process: Understand how they feed the rolls, what equipment they’re using and where they store the rolls.
“That way, it gives us insight into if something happens, we know where to point and where to start investigating,” he said.
“Yeah, that’s a great point,” his partner confirmed. “And this is something Tom and I have both done, is if we go after this business or we get a piece of this business, we almost insist that our quality control team, our engineers, go in and meet with whoever … the folks that are processing on their end, work together to make sure everyone’s on the same page.”
Perhaps Marecek summed it up best: “A knowledgeable salesperson offers solutions.”