The Latest

| 4 min read

The State of the Production Industry: 2023 Forecast

2022 has been tough on the direct mail industry. It’s been a year marked by soaring costs, labor shortages, supply chain issues, record inflation, a looming recession, the threat of a rail strike, a devastating hurricane, and the ongoing war in Ukraine. As a result, the industry has had to be exceptionally proactive, flexible, and adaptive to ensure clients’ strategies, budgets, and fundraising goals were being met.

While we aren’t out of the woods yet, there are glimmers of some stability coming in the year ahead. To help you navigate the ever-changing landscape, here’s an overview of the state of the production industry, what to expect in 2023, and five tips you can incorporate in your fundraising strategy.


Freight & supply chain

Thankfully we have averted a major crisis with a railway strike—for now. On December 2, President Biden signed a resolution from Congress imposing a tentative contract agreement. However, the crisis isn’t over as the agreement hasn’t been signed yet. The Railroad Workers Rank-and-File Committee along with the four largest Rail Worker Unions feel the contract is illegitimate and are still fighting for workers paid sick days. Until an official agreement is signed, there could still be the potential of a “wildcat” strike, similar to the Great Postal Strike of 1970.


So what can you expect in 2023? Unfortunately, labor challenges amidst the entire transportation supply chain, volatile energy prices, and geopolitical instability and conflicts will continue through at least the first half of the year. The good news: shipping container pricing is dropping. During the height of the pandemic, prices quickly spiked to around $25,000 per container—a 1000% increase from pre-pandemic pricing. Current pricing is around $8,000, which is much closer to historical norms.


Print & paper

Paper prices continue to rise but are beginning to level off as paper importers are changing from using clogged West coast ports to Eastern ports and European manufacturers. This has removed some of the pressure on availability that has been an issue for the past year and a half.

Additionally, a major manufacturer recently announced that they plan to add 75,000 tons per year of capacity from one plant alone to fill demands for food packaging as well as commercial inkjet and other specialty papers.

As a result of all this, the days of constant paper increases seem to be in the past—we hope. Come 2023, the industry should see steadier pricing and wider availability of standard stocks. However, as you’re mapping out your strategy, it’s important to note that certain papers have been discontinued and specialty stocks are and will likely remain costly and hard to come by.


Postage

Postage increases continue as part of USPS’ Delivering for America plan. We saw several increases throughout 2022 and so far, two more hikes are scheduled for 2023: January 2023 and July 2023.

Here’s a snapshot of what to expect from the January 22, 2023 postage increase:

  • Nonprofit Automation Letters: 3.82% increase
  • Nonprofit Automation Flats: An average of 6.8% increase, but it could increase as high as 15%
  • First-Class Mail: 5% increase

To offset the rise in postage in 2023, review USPS’ promotion calendar to take advantage of discounts, including two new offerings: Reply Mail IMbA™ and retargeting.


What you can do?

It’s time to look ahead to 2023 and develop a plan to outlast the expected—and unexpected—challenges sure to come. Here are five ways you can stay nimble as you develop and execute next year’s fundraising campaigns:

  1. Review 2022. Take a clear-eyed look at 2022 and note what worked, what didn’t, and where you could improve for 2023. Where did campaigns fall flat? What inspired your biggest campaign? How can you prevent 2022’s hiccups from happening in 2023?
  2. Explore USPS promotions. Even with postage costs going up, you can still save! USPS is offering 3-6% discount on postage when you sign up for one or more of the 2023 promotions. USPS is accepting pre-approval promotions requests beginning on December 15, 2022 through the Mailing Promotions Portal, and the enrollment period will begin in the Business Customer Gateway system on January 9, 2023.
  3. Start planning sooner than you think. Everything is taking longer than expected these days, from shipping times to printing times to general communications. Plan your campaigns as far ahead as possible to save you and your team a little stress down the road.
  4. Develop alternatives and back-up plans. Between not being able to find specific stocks to not knowing if the stock you chose will show up on time, it’s essential to build alternatives into your plan. If Plan A can’t happen, what’s your Plan B or even Plan C?
  5. Utilize other marketing channels. Squeeze more juice by integrating email marketing, text messaging, digital advertising, and tele-fundraising with your direct mail packages. More touchpoints = more revenue.

Looking for more information?

For more information or assistance with your production strategy, contact us at info@thelukenscompany.com.

Questions?We’d love to help.

Contact Us