The great book shortage of 2021

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From Vox:

If there’s a particular book you’ve got your eye on for the holidays, it’s best to order it now. The problems with the supply chain are coming for books, too.

“Think of the inputs that go into a book,” says Matt Baehr, executive director of the Book Manufacturers’ Institute. “There’s paper, there’s ink, and there’s getting the book from point A to point B. All of those things are affected.”

The ongoing Covid-19 pandemic has been exacerbating existing problems in the global supply chain for nearly two years now. Add to that pressure a global labor shortage, a paper shortage, the consolidation of the American printing industry, and an increased demand for books from bored stay-at-homers across the US, and you’re faced with what Baehr says is a “perfect storm” of factors to create what some observers are calling a book shortage.

However, that doesn’t mean holiday book shoppers will be faced with empty shelves at their local bookstore come December, cautions Barnes & Noble CEO James Daunt. “There is no book shortage as such at the moment because the nature of the publishing cycle is that these books are planned many months ahead,” Daunt says.

Most of this fall’s major releases have already been printed or have their printing runs scheduled, and any delays to those scheduled print runs are expected to be minimal. Still, some titles have seen their publication dates bumped by weeks or even months. Of those, some now won’t reach shelves until next year.

The place where readers are most likely to find themselves in a crunch, though, is with surprise bestsellers. Every year, there are books that do much better than either publishers or booksellers expected them to and sell out their initial print runs. Normally when that happens, booksellers immediately order more books, and publishers are able to print those books and ship them out rapidly. In 2021, that’s going to be a lot more difficult. If a publisher unexpectedly sells out of a book early, it may not be able to send new copies to bookstores until well into 2022.

. . . .

More people are reading books

According to industry tracker NPD Bookscan, printed book sales have increased 13.2 percent from 2020 to 2021, and 21 percent from 2019 to 2021.

“Usually a good year means going up maybe 3 or 4 percent,” says NPD books analyst Kristen McLean. “The growth that we saw last year and this year is pretty unprecedented.”

McLean says it’s clear that the pandemic is what’s driving the growth in book sales, in part because of what kind of books are selling well and which aren’t. As global lockdowns began in March of 2020, sales of traditionally high-performing categories like self-help books and business books plummeted, while sales of educational books for home-bound kids and first aid books for emergency preppers took off.

Since then, McClean says, book sales have tracked closely to the trends of the quarantine era: a lot of bread books early on, a lot of books on social justice and race in the summer of 2020 during the George Floyd protests, and books on politics during the presidential election season. Then, after the election, sales of adult fiction began to really take off — a trend McLean pointed to as telling.

“That’s one of the things I look at really closely,” McLean says. “When someone buys a nonfiction book, that could be because it’s a reference book, or because they want to understand something that they’ve heard. But when someone buys an adult fiction book, generally that’s for pleasure reading. So that is a good leading indicator that people are really engaging with books.”

Reading is one of the hobbies that people have started to pick up over the course of the pandemic. And overwhelmingly, they’re reading printed books, not ebooks.

“Ebook sales did go up last summer,” McLean allows, noting that many of the social justice titles of the summer, such as Ibram Kendi’s How to Be an Antiracist, rapidly sold out in print, driving readers to ebooks for their immediacy. Generally, however, ebooks are holding steady at just 20 percent of the US market.

“There’s just more people who want to read and prefer reading print,” McLean says.

. . . .

The paper shortage begins with the wood pulp shortage. According to a report from the printing company Sheridan, the price of wood pulp rose from $700–$750 per metric ton in 2020 to almost $1,200 per metric ton in 2021. Sheridan cites an environmental initiative in China that shut down 279 pulp and paper mills as one of the major drivers behind the spike in pricing, as well as a global backlash against plastic and the rush to replace plastic products with paper alternatives.

Meanwhile, with shoppers increasingly ordering products online, the price of cardboard in which to ship goods has gone up with demand. So paper factories have begun to invest more in producing cardboard, shifting their resources away from making book-grade paper in the process.

“You have a combination of both fewer mills producing book paper and greater demand for wood pulp elsewhere, so that there is both a price and availability issue,” explains Brian O’Leary, executive director of the Book Industry Study Group.

A shortage of raw materials is also wreaking havoc in the inks market. According to a report by the Business Research Company, the same Chinese environmental initiative that led to a shortage of wood pulp has also led to decreased availability of resins, monomers, photo initiators, oligomers, and additives. Moreover, ink manufacturers are rapidly consolidating. All of these issues combined means ink prices are steadily rising.

. . . .

Most book printing happens in the US. Books with heavy color printing, like picture books, are sent to China, but in order to keep the cost of shipping low, most publishers do the rest of their printing domestically. That’s getting more and more difficult to manage.

Until 2018, there were three major printing presses in the US. Then one of them, the 125-year-old company Edwards Brothers Malloy, closed. The remaining big two, Quad and LSC, attempted to merge in 2020, but then the Justice Department filed an antitrust lawsuit. Quad responded by getting out of the book business entirely; LSC filed for bankruptcy and sold off a number of its presses. Smaller printers have continued to operate, but the infrastructure to keep up with the demand for printed books in North America is in shambles.

So if demand is up, why are so many printers shutting down?

Part of the issue is that printers find themselves squeezed by Amazon in both directions. As a major book buyer, Amazon has a lot of leverage to negotiate on price, allowing it to purchase its books from publishers at very low cost. Publishers pass the resulting losses along to their printing presses. Following the rules of capitalism, printing presses would like to pass the loss along to their workers in turn — but in the rural distribution regions where most of these presses operate, the other major employer is Amazon warehouses. And Amazon has set the floor for wages at $15 per hour.

“I don’t necessarily think this is a bad thing,” O’Leary says. “But you’re competing for labor.”

The labor shortage also means that even when printers raise their wages, they don’t have anyone to hire. The industry is chronically understaffed. “Printers, binders, the true book manufacturers, they could all hire an additional 10 to 20 percent of their current workforce without even batting an eye,” says Baehr.

Meanwhile, very few new players are entering the game. Part of the reason is that it costs a lot of money upfront to enter the industry. “It’s a capital-intensive business, printing,” says O’Leary. “You have to spend from several million to more than $10 million on a printing press, and you generally amortize that over a long period of time.”

So right now, publishers and printing companies have to pay more for the paper that makes up any given book, more for the ink that prints the words in the book, more for the time at a printing company to get the book printed, and more for the labor to staff the press to get the book produced.

Then come the problems with shipping.

. . . .

“Los Angeles — which is a major port of entry for the United States — New York, and New Jersey are all pretty full up,” says O’Leary. “We’re hearing reports of delays of weeks for getting things cleared.”

“Containers are not moving out of ports and onto trains quickly enough,” explains Chris Tang, a UCLA business professor specializing in global supply chain management. “And on top of that, all of the warehouses in the Midwest are full. So everything is stuck.”

. . . .

Even more pressing, however, is a shortage of truck drivers. There just aren’t enough trucks on the road to pick up as much stuff as we’re currently shipping around the world. “We’re talking tens of thousands fewer truck drivers than we need,” says O’Leary.

And as stuff sits in warehouses, waiting to be picked up by increasingly scarce truck drivers, the price of storage goes up, adding to overall shipping costs. “It used to be around $3,000 per container,” Tang says. “Now the price is closer to $20,000.”

. . . .

One of the big underlying problems when it comes to printing and shipping books is the same labor shortage that’s currently roiling the rest of the country. There aren’t enough press operators to get books printed, and then there aren’t enough truck drivers to get them to bookstores. Wages have gone up, but there still aren’t enough people working.

. . . .

In the long term, it’s likely that as current agreements between printers and publishers expire, the printers will begin to charge publishers more for their services to better manage the rising costs of paper, ink, and labor. At that point, book prices will likely go up. No one is entirely certain what that increase will do to the book retail market, but it’s unlikely that demand will keep scaling up indefinitely.

Link to the rest at Vox