UPM Biofore is one of the world’s largest papermakers in the world. Over the course of the last 17 weeks, employees of UPM and Finnish Paperwork’s union have come to an agreement that will end their 112-day-long strike causing paper shortages throughout many different countries. The strike comes after an attempt to preserve a unified agreement for all UPM businesses rather than doing individual deals with each corporate unit as the company had wanted.
The strike encompassed some 2,000 workers (Reporting by Terje Solsvik) to go on strike as a result of these agreements being broken and has caused the paper market to become unstable as well as printing shortages in the UK. The cause of this strike has caused much concern for the industry leaving the leaders of the paper industry uncertain of when the supply chain will be restored.
Here are some facts about the paper shortage:
- Demand for paper has increased
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- Demand for uncoated freesheet paper grew 2%. Cutsize demand rose 6% in January despite lowered workplace mobility caused by the Omicron variant.
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- Russia’s war increases energy prices
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- Many European countries face huge spikes in natural gas prices causing paper mills to halt production.
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- US Mill Capacity Declined 6%
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- Mill inventories sit at 29 days of supply, 6 days below levels in 2021.
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- Fuel Costs are up
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- Americans are paying more for gas now than they have in the past seven years.
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- Load to Driver Ratio
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- In the first month of 2022 load to driver ratio increased to 11:1.
On Friday, April 22nd, 2022 an agreement between the union and the employees have come to an agreement that would finally end this strike. However, the backlash from these strikes have caused a lot of issues for UPM and their supply chain. Uncoated freesheet paper domestic shipments declined 2% as exports dropped significantly and the overall capacity shrank by 5.8%.
Office360 is dedicated to helping the ease of these shortages by providing you with transparency throughout these times and we hope to see this negative trend take a turn in the following weeks!