As a global book distribution and services company with operations and relationships as a wholesaler in addition to our publisher services, we at Ingram have a unique perspective on the challenges facing the publishing industry over the past year and into 2022.
With our industry knowledge and expertise, we’ve compiled a 2-part blog series on the key global trends affecting book production and consumer behavior, and how publishers have responded. In this part 1 article, we’ll focus on the trends affecting book production and distribution.
According to the PEW Research Center, inflation is happening in almost every country, with the US being one of the top countries effected. There's not a part of the book industry that's immune to the pressures that we see across the supply chain. Like a virus, inflation in the labor market impacts all materials needed to manufacture books.
To no surprise, the most significant of these impacts under recent constraints are paper shortages and shipping prices.
According to the Wall Street Journal, the cost of a container ship shipping from Shanghai to LA is projected to reach a 50% to75% increase.
FedEx and UPS have also reported a 6% increase for their transportation services in 2022.
From the charts below, we’ve mapped out the number of price increases throughout 2021 for the US and UK paper markets. In both cases, there was an average 10% to 12% increase. This has and will continue to spill into 2022 as the year moves on.
There are several factors contributing to the increased cost of paper, including:
· Staffing Issues - finding staff and keeping them healthy.
· Shipping Delays - transporting materials to manufacturers.
· Plant Closures – print plants closing or being converted.
These transportation delays and inflated costs are all starting to drive new behaviors in our clients and publishers—forcing the market to find plausible solutions to this growing issue.
There has been a push towards utilizing local manufacturing to combat the rising cost of shipment and transportation delays. Many publishers benefit from the printing in-market model when supplying their international distribution needs.
Finding printers in Asia, Europe, and other markets that can supply the needs in those regions cuts out the need for excessive international shipping.
Replacing print runs in the US or your home markets for short runs in markets where the book is being purchased can lead to:
· Less cost
· Faster delivery
· Reduced carbon output
The graphic below represents Ingram’s change in carbon emissions between printing locally in the UK versus shipping overseas or via air. As you can see, the local shipping vastly reduces carbon output.
A massive trend hoping to reduce the carbon footprint of shipping (while also alleviating shipping delays) is the use of warehouses. Since the mid-'80s, there's been a considerable shift to online bookselling, only to be exaggerated to new heights due to today’s Covid crisis.The impact of that is the booming growth of warehouses in various countries, with online trade fueling a lot of them. This is a trend we see continuing into 2022.
We can segment how publishers have been responding over the past year into five overlapping trends:
A growing number of publishers are looking at their entire catalog and asking, "Is my backlist more applicable for digital printing than it may have been in the past?" This sort of questioning is changing how publishers manage their inventory, allowing them to:
As we’ve settled into 2022 we’ve seen some printers in the market are not taking new orders through the first half of the year due to limited capacity. Combine this with delayed shipping times, and we’re now seeing publishers go to press four to six months in advance of their book’s publication date.
Supply chain and transportation delays are also impacting books getting from warehouses to retailers on time, resulting in slower retailer pickups. Planning ahead allows publishers to ensure their books are where they need to be on time, despite delays.
In today's market, it's best to have numerous print vendor relationships. In tandem with diversified files like ebooks and audiobooks, titles can be used at offset press as well as digital or print-on-demand printers—giving you the option of short-run in case of delays in your schedule.
When publishers diversify formats, they’re also giving consumers somewhere to go if the print book is not available.
We’ve also seen publishers printing to sales rather than printing to stock, which allows them to focus more resources toward evergreen titles and predictable selling titles. When publishers don't have a large amount of stock sitting in a warehouse, they're not incurring excess inventory fees, which allows for more flexible retail pricing on future printings.
Smaller print runs also give publishers the flexibility to print some titles in the US, some in the UK, some in Europe and Asia, etc. By taking advantage of printing in local markets rather than sending products over long distances, they can quickly get books to consumers and warehouses while mitigating transit issues. This also helps them print and distribute their titles in a more sustainable way, by lessening their carbon footprint.
In summary, supply chain issues have a lock on just about every industry, but it’s not the end of the world. By following trends and keeping an eye on the market, we can successfully mitigate risk and overcome issues through thoughtful and ethical solutions—which consumers pay close attention to.
Truth be told, Covid-19 and the rise in transportation costs have not only affected the way businesses run their operations, but also the way consumers shop and interact with brands on a day-to-day basis. Be sure to check out part 2 of this series, where we dive deeper into key trends in consumer behavior and how it’s affecting both publishers and readers alike.