2022 Paper & Postage Increases Update

Wishing one and all a GREAT 2022.

Remember, I am just the messenger.

So, don’t shoot the messenger.

That said, I wanted to keep you in the loop of what both the Paper Industry and USPS are announcing now or soon.

This is so you may all prepare, plan and strategize correctly for the upcoming changes.

The only way to avoid the unforeseeable increases surely to come in the future after these announcements are set into play, is to;

1. Gather all of your upcoming projects specifications
2. Send me the information
3. Quote them
4. Decide each ones details
5. Have me place orders for quoted stocks now and I may try to acquire them, find similar ones or place an order request for them if mills will take them

Details of the 2022 Paper Rate Increases and Supply Concerns

Despite market conditions having already tightened to an unprecedented degree, the supply hits keep coming in the form of further capacity reductions.

The latest news is the impending exit of Resolute’s Calhoun mill from uncoated freesheet and pulp production by mid-February, which will remove about 160,000 tons of annual capacity. While Domtar is restarting a machine at Ashdown with 185,000 tons of annual capacity, the Calhoun exit combines with the production disruption at Domtar’s Windsor mill and the shift of the second machine at PCA’s Jackson mill to containerboard to more than offset the impact of the Ashdown restart on uncoated freesheet supply.

Other recent capacity reductions include the exit of Evergreen Pactiv’s Pine Bluff mill from coated mechanical in October and system-wide downtime from Paper Excellence.

Additionally, numerous problems in supply chain and transportation networks continue to exacerbate paper supply issues.

? Verso will be acquired by BillerudKorsn?s, a European packaging producer with long-term plans to convert the Escanaba mill to virgin boxboard. The first machine conversion is not scheduled until 2025, so these plans do not impact the near-term outlook for supply and demand, especially since we do not expect any coated paper capacity reductions through the end of 2023 due to the strong outlook for operating rates and profitability. This move adds yet another mill to the already long list of graphic paper assets that have converted or plan to convert to alternative packaging grades.

? Disruptions stemming from the rapid spread of the Omicron coronavirus variant are beginning to emerge, with many offices and schools announcing new or further delays to post-holiday reopening in January. Given the extent to which limited paper availability has been the main constraint for demand in recent months, our baseline forecast scenarios assume short-lived delays and a fairly muted impact for the latest pandemic development. However, there is a risk for a repeat of 2020’s massive demand shocks if closures become widespread and long-lasting.

? With demand recovering modestly in 2021 and new supply shocks continuing to mount on top of the drastic capacity reductions already in place, limited availability and outright shortages have become the norm in North American paper markets.

The result, is another year filled with many price increases throughout the year for uncoated freesheet and coated papers, likely for all grades. If they are anything like 2021, they ranged from 3% to as high as 15%.

There are currently pending January price increase announcements from what we have been told already.?

UNCOATED FREESHEET

Risks from major pandemic-related demand disruptions figure most prominently for uncoated freesheet due to the potential for widespread or long-lasting school and office closures. So far, most of the announced delays are short-lived, with major corporations delaying their post-holiday office reopening by a couple weeks in January. ??

The response to rapid coronavirus case growth may disrupt or delay any recovery in underlying demand that is left, but expect the negative impact of the rise of the Omicron variant to be relatively muted and short-lived, lasting only a few weeks at most. Given the extent to which demand has become limited by paper availability, the effect may not even show up in apparent consumption unless even greater logistics disruptions occur, with school and office closures simply giving buyers a chance to catch up on building badly depleted stocks. Indeed, expect the uncoated freesheet market to tighten even further in the first half of 2022 despite the January restart of a machine at Domtar’s Ashdown mill adding 185,000 tons of annual capacity back into the market.

While they do show a very slight final step up in the demand recovery of about 1% compared to the second half of 2021, the main reason they expect operating rates to ascend higher is the fact that the Ashdown restart will now clearly be more than offset by further reductions elsewhere..

Additionally, the latest capacity news is Resolute’s announcement of the impending end of the Calhoun mill’s pulp and uncoated freesheet production; tissue production will continue on a nonintegrated basis. This closure is expected to occur by mid-February and will remove 160,000 tons of annual capacity, bringing the net permanent capacity change to about 65,000 tons. These permanent changes come on top of the recent downtime at Domtar’s large Windsor mill, which effectively took 600,000 tons of annual capacity offline for about six weeks.

Despite the increased negative risks surrounding the demand forecast, we expect paper to be even more difficult to acquire until the eventual return of structural demand declines rebalances supply with demand or until international shipping issues are resolved enough for imports to fill the gap. The Calhoun announcement comes as a bit of surprise given the current market conditions of demand outpacing supply and prices rising rapidly, but Resolute’s announcement noted operational challenges that disrupted production in November and December and a $60 million loss for pulp and paper operations in the 12 months ending in September 2021, a period which included six months of industry operating rates below 90% but also six months in which operating rates averaged 94.6%.

Wow, that’s a lot to absorb, but better to be in the know than surprised.

What can you do:

1. Call Tom Kubinski, 612-760-3700, as soon as you can to discuss all your upcoming projects.
2. Lets get the quotes figured out
3. Then decide which projects are around the corner, next 2 months at least, and finalize the specs.
4. Then have me start trying to acquire quoted stocks, similar stocks, or try and place an order request if the mills will even accept them.
5. By doing this, I have had GREAT success with not missing any of my clients needs on time.

?

Details of the 2022 USPS Postage Rate Increase

December 16th, 2021Eric Nash

The U.S. Postal Service has announced new postage rates to be implemented on Sunday, January 9, 2022. Listed below are the highlights of the proposed 2022 USPS?postage rate increase?for customers buying postage online for DOMESTIC services.

First Class Mail Letters

INCREASE PER MAILPIECE - 2022 Rates vs. 2021 Rates

Mailpiece Weight--go to site to see the grid breakdowns

Letters - 1 oz.-go to site to see the grid breakdowns

Letters - Additional Ounces-go to site to see the grid breakdowns

Metered Mail Letters (Stamps.com Rate) - 1 oz.-go to site to see the grid breakdowns

l Letters (Stamps.com Rate) - Additional Ounces-go to site to see the grid breakdowns

Envelope - 1 oz.-go to site to see the grid breakdowns

Flat/Large Envelope - Additional Ounces-go to site to see the grid breakdowns

Postcards-go to site to see the grid breakdowns

Postage rate increase in August 2021, the USPS will NOT be increasing?First Class Mail?letter prices in January 2022. However, starting in July 2022, the USPS will be increasing First Class Mail letter prices two times per year.

2022 First Class Mail Letter Rate Increase Highlights:

• There is NO rate increase for First Class Mail letters, large envelopes or postcards in January 2022.
• The next First Class Mail postage rate increase is scheduled for July 2022.
• The Metered Mail rate discount for online postage will continue to be $0.05 cents.
• NEW: Starting in January 2023, Mailing Services will have scheduled postage rate increase occurring two times per year – in January and in July.

Priority Mail Express (Commercial Base Pricing)

INCREASE PER PACKAGE - 2022 Rates vs. 2021 Rates-go to site to see the grid breakdowns

Overall, prices for?Priority Mail Express?will increase by 4.3% (Commercial Base). A 1 lb. package going to Zone 8 using Priority Mail Express will increase $2.30, costing $42.15 in 2022 compared to $39.85 (does not include holiday surcharge) in 2021.

2022 Priority Mail Express Rate Increase Highlights:

• Rate increases for Zone 8 are increasing significantly.?A 1 lb. package traveling to Zone 8 is increasing by $2.30 (5.8%), and a 10 lb. package traveling to Zone 8 is increasing by $5.45 (5.8%).
• Rates for packages weighing 5 lbs. or more traveling to Zone 5 or higher are increasing by at least $2.55 (4.9%).
• The maximum discount for Commercial Base based pricing compared to Post Office (Retail) prices is 16% (same as 2021).
• NEW – STARTING APRIL 2022:?There will be a $1.50 fee for packages that are greater than one cubic foot or have a box length greater than 22 inches if the customer did not provide dimensions or provided inaccurate dimensions inside the online postage provider (e.g. Stamps.com).
• NEW – STARTING APRIL 2022: There will be a new “nonstandard fee” for packages that must be sorted manually by the USPS when the dimensions of the package exceed sortation requirements. Rates will be adjusted based on box dimensions. Packages with length over 22 inches will have a $4.00 surcharge, packages with length over 30 inches will have $15.00 surcharge and packages over 2 cubic feet will have a $15.00 surcharge.

Priority Mail Express Flat Rate (Commercial Base Pricing)

INCREASE PER PACKAGE - 2022 Rates vs. 2021 Rates

Mailpiece

2022

2021

Increase

Flat Rate Envelope

$23.50

$22.75

$0.75

Legal Flat Rate Envelope

$23.75

$22.95

$0.80

Padded Flat Rate Envelope

$23.95

$23.25

$0.70

Shipping rates for?Priority Mail Express Flat Rate?products will increase in 2022.

2022 Priority Mail Express Flat Rate Increase Highlights:

• Priority Mail Express Flat Rate Envelope will increase $0.75 to $23.50 from $22.50.
• Priority Mail Express Legal Flat Rate Envelope will increase $0.80 to $23.75 from $22.95.
• Priority Mail Express Padded Flat Rate Envelope will increase $0.70 to $23.95 from $23.25.

Priority Mail (Commercial Base Pricing)

INCREASE PER PACKAGE - 2022 Rates vs. 2021 Rates-go to site to see the grid breakdowns

Priority Mail?will see an average increase of 2.7% (Commercial Base). A 1 lb. package going to Zone 8 using Priority Mail will increase $0.88 cents, costing $9.68 in 2022 compared to $8.80 (does not include holiday surcharge) in 2021.

2022 Priority Mail Rate Increase Highlights:

• Packages traveling to Zone 8 are increasing by at least $0.88 for all weights.
• Packages weighing 8 lbs. or more traveling to Zones 5 through 8 are decreasing significantly. As an example, a 20 lb. package traveling to Zone 8 is decreasing by $12.37 in 2022.
• Packages weighing 11 to 24 lbs. traveling to Zones 1&2 through 8 are decreasing between $0.40 (10 lbs., Zone 1&2) to $12.37 (20 lbs., Zone 8).?
• Rate increases for Zone 9 (U.S. territories) are increasing by 15%.
• The maximum Priority Mail Commercial Base discount compared to Post Office (Retail) prices is 30% (down from 40% in 2021).
• NEW – STARTING APRIL 2022:?There will be a $1.50 fee for packages that are greater than one cubic foot or have a box length greater than 22 inches if the customer did not provide dimensions or provided inaccurate dimensions inside the online postage provider (e.g. Stamps.com).
• NEW – STARTING APRIL 2022:??There will be a new “nonstandard fee” for packages that must be sorted manually by the USPS when the dimensions of the package exceed sortation requirements. Rates will be adjusted based on box dimensions. Packages with length over 22 inches will have a $4.00 surcharge, packages with length over 30 inches will have $15.00 surcharge and packages over 2 cubic feet will have a $15.00 surcharge.

Priority Mail Flat Rate (Commercial Base Pricing)

INCREASE PER PACKAGE - 2022 Rates vs. 2021 Rates

Mailpiece

2022

2021

Increase

Flat Rate Envelope

$7.75

$7.40

$0.35

Legal Flat Rate Envelope

$8.05

$7.70

$0.35

Padded Flat Rate Envelope

$8.45

$8.00

$0.45

Small Flat Rate Box

$8.25

$7.90

$0.35

Medium Flat Rate Box

$14.25

$13.75

$0.50

Large Flat Rate Box

$19.20

$19.30

($0.10)

APO/FPO Large Flat Rate Box

$17.70

$17.80

($0.10)

Shipping rates for?Priority Mail Flat Rate?products will increase in 2022. The Priority Mail Flat Rate Padded Envelope will increase $0.45 to $8.45 in 2022 compared to $8.00 (does not include holiday surcharge) in 2021. Rates for the Priority Mail Medium Flat Rate Box will increase $0.50 to $14.25 from $13.75 currently. Rates for the Large Flat Rate Box will decrease by $0.10, to $19.20 from $19.30 (does not include holiday surcharge) in 2021.

2022 Priority Mail Flat Rate Increase Highlights:

• Priority Mail Small Flat Rate boxes are increasing only $0.35 (3.0%).
• Priority Mail Large Flat Rate Box is decreasing by $0.10 (-1.0%).

Priority Mail Regional Rate (Commercial Base Pricing)

INCREASE PER PACKAGE - 2022 Rates vs. 2021 Rates-go to site to see the grid breakdowns

Rates for?Priority Mail Regional Rate Boxes?will be increasing for all shipping Zones for Box A in 2022. A 5 lb. package going to Zone 8 using the Regional Rate Box A will increase by $0.90 to $13.54 in 2022 compared to $12.64 (does not include holiday surcharge) in 2021.?Regional Rate Box A is priced at a 2 lb. regular Priority Mail rate, yet can contain products that weigh up to 15 lbs.

2022 Priority Mail Regional Rate Increase Highlights:

• Regional Rate Box A is seeing price increases ranging from $0.54 to $3.00.
• Regional Rate Box B is seeing price increases ranging from a decrease of $0.89 to an increase of $1.04.
• Regional Rate Box A Zone 8 is increasing the highest value at $0.90 (7.1%).
• Zone 8 is seeing the highest increase at $0.90 (7.1%) for Regional Rate Box A.
• Rate increases in Zone 9 (U.S. territories) are increasing by $3.00 (12.8%) for Box A and $1.04 for Box B.

First Class Package Service (Commercial Base Pricing)

INCREASE PER PACKAGE - 2022 Rates vs. 2021 Rates-go to site to see the grid breakdowns

Mailpiece Weight

Zones

Ounces

Overall rates for?First Class Package Service?will increase by 7.4%. A 15.999 ounce package for First Class Package Service traveling to Zone 8 will increase $0.30 to $6.28 in 2022 from $5.98 (does not include holiday surcharge) in 2021.

2022 First Class Package Service Rate Increase Highlights:

• First Class Package Service is seeing rate increases range from $0.37 (11.0%) to $0.30 (5.0%).
• First Class Package Service is seeing higher rate increases in lower weights – the increase is as high as $0.36 (12.0%) packages that weigh 1 to 4 ounces.
• The maximum First Class Package Service Commercial Base discount compared to Post Office (Retail) prices is 26% (down from 28% in 2021).

Parcel Select Ground (Commercial Base Pricing)

INCREASE PER PACKAGE - 2022 Rates vs. 2021 Rates

Weight

(lbs.)

Zones

1 & 2

Zone

3

Zone

4

Zone

5

Zone

6

Zone

7

Zone

8

Zone

9

1

$0.21

$0.22

$0.23

$0.24

$0.25

$0.64

$0.88

$0.88

2

($0.31)

($0.12)

($0.09)

($0.33)

($0.21)

($0.05)

$0.06

$0.06

3

($0.41)

($0.36)

($0.33)

($0.49)

($0.61)

($1.37)

($2.80)

($2.80)

4

($0.41)

($0.35)

($0.31)

$0.03

($2.20)

($3.14)

($4.39)

($4.39)

5

($0.40)

($0.24)

($0.37)

($1.04)

($3.51)

($5.00)

($6.58)

($6.58)

6

($0.40)

$0.08

$0.01

($1.70)

($5.72)

($7.87)

($10.13)

($10.13)

7

($0.23)

($0.41)

$0.11

($3.38)

($7.24)

($9.82)

($12.05)

($12.05)

8

($0.15)

($0.34)

($0.35)

($4.57)

($8.86)

($11.91)

($15.02)

($15.02)

9

($0.26)

($0.30)

($0.28)

($5.67)

($10.56)

($13.53)

($17.70)

($17.70)

10

($0.21)

($0.24)

($0.21)

($6.87)

($12.17)

($15.41)

($19.44)

($19.44)

Overall rates for?Parcel Select Ground?will decrease by 12.1% in 2022. A 3 lb. package going to Zone 8 will decrease by $2.80 to $12.25 in 2022 from $15.05 in 2021.

2022 Parcel Select Ground Rate Increase Highlights:

• Parcel Select Ground 1 lb. prices are increasing between $0.21 (3.0%) in Zone 1&2 and $0.88 (10.8%) in Zone 8.
• Packages weighing between 3 lbs. and 25 lbs. in all Zones are seeing prices decrease in 2022, with the discounts ranging from $0.21 (10 lb. Zone 4) to $33.52 (20 lb. Zone 8).
• For packages weighing between 26 lbs. to 70 lbs. traveling to all eight shipping Zones, the rate increase is a flat 5%.
• NEW – STARTING APRIL 2022:?There will be a $1.50 fee for packages that are greater than one cubic foot or have a box length greater than 22 inches if the customer did not provide dimensions or provided inaccurate dimensions inside the online postage provider (e.g. Stamps.com).
• NEW – STARTING APRIL 2022:??There will be a new “nonstandard fee” for packages that must be sorted manually by the USPS when the dimensions of the package exceed sortation requirements. Rates will be adjusted based on box dimensions. Packages with length over 22 inches will have a $4.00 surcharge, packages with length over 30 inches will have $15.00 surcharge and packages over 2 cubic feet will have a $15.00 surcharge.
• NEW SERVICE:?USPS Connect Local is a new delivery service being introduced under Parcel Select.?The service will allow local small businesses to deliver products same-day or next-day if the address is served by their local delivery unit.?Sunday delivery will be available for an additional fee.?To use USPS Connect Local, you must have a valid customer agreement with the USPS.

Media Mail

INCREASE PER PACKAGE - 2022 Rates vs. 2021 Rates-go to site to see the grid breakdowns

Weight

(lbs.)

2022

2021

Increase

Media Mail?rates will increase by an average of 12.1% in 2022. A 1 lb. package traveling to Zone 8 will increase $0.30 cents to $3.19 in 2022 compared to $2.89 in 2021.

2022 Media Mail Rate Increase Highlights:

• Heavier packages are seeing higher rate increases.?While 1 lb. rates are going up by $0.30 (10.4%), a 70 lb. package is increasing by $5.13 (12.4%) and a 70 lb. package is increasing by $5.13 (12.4%).

Stamps.com Will Automatically Update to the New USPS Rates on January 9, 2022

Stamps.com will automatically update all USPS rates inside the software and web-based version (Stamps.com Online) on Sunday, January 9, 2022. If you are a Stamps.com customer, no additional actions are needed and you will AUTOMATICALLY see the 2022 USPS rates in the platform.

Categories:Postage Rate IncreaseTags:2022 usps rates,?Postage Rate Increase

Be Safe

Be Well

If You Dream It, Shapco Can Print It.

Papa Kubs, aka Tom Kubinski

Printing Consultant Who Helps You Make Good Impressions

Don’t forget to check out the latest issue of TK’s Korner for industry tidbits, cost saving ideas, coating techniques, so much more..@ https://tkskorner.com

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