Wednesday, September 30, 2009

USPS Steps Up Mail-Processing Consolidation

The U.S. Postal Service has announced the possible closing or downsizing of 15 processing and distribution centers in the past two weeks, part of a newly aggressive effort to rationalize its mail-processing network.

While proposed post-office closings get most of the media attention, 32 of the much larger processing and distribution centers are the subject of Area Mail Processing studies (AMPS) that could result in some or all of their work going to other P&DCs. USPS has approved at least partial consolidation of 11 other P&DCs this quarter, as shown by its AMPS Web site. The site links to reports detailing the proposed and recently approved consolidations.

Those reports suggest the proposed consolidations would together yield well over $100 million in annual savings and result in elimination of more than 1,000 positions. Declining mail volume and increased automation have left the Postal Service with far more mail-processing capacity and locations than it needs.

In many cases, the consolidations help mailers by eliminating some of the 400 or so P&DCs to which they must transport mail to receive Sectional Center Facility (SCF) dropship discounts. But in other cases, the consolidations affect only the processing of outgoing mail (such as mail pieces postmarked for delivery to other regions) and leave the handling of dropshipped mail intact.

The consolidations typically move work to larger P&DCs that are 20 to 80 miles away. Temporary employees lose their jobs, while career employees must often make the longer commute to the larger P&DC to remain employed by the Postal Service.

Concerned about their towns losing jobs and their postmark, local officials often join postal unions in opposing AMPS consolidations. But USPS’ Office of Inspector General just released a report defending one of those challenged consolidations, a shift of outgoing mail processing from Canton, Ohio to Akron. Counter to claims from opponents of consolidation, the study found that service improved and that USPS expenses were reduced by more than $2.2 million annually.

Here is USPS's current list of P&DCs being considered for consolidation:
  • Binghamton, NY (partial consolidation approved, according to local press reports).
  • Bloomington, IN
  • Bowling Green, KY
  • Bristol, VA
  • Cape Cod (Wareham), MA
  • Charlottesville, VA
  • Dallas, TX
  • Dulles, VA
  • Frederick, MD
  • Green Bay, WI
  • Hickory, NC
  • Industry, CA
  • Kalamazoo, MI
  • Kilmer (Edison), NJ
  • Kinston, NC
  • Lima, OH
  • London, KY
  • Marysville, CA
  • North Reading, MA
  • Mojave, CA
  • Newark, NJ
  • New Castle, PA
  • North Bay (Petaluma), CA
  • Oxnard, CA
  • Palatine, IL
  • Rocky Mount, NC
  • Saginaw, MI
  • Salinas, CA
  • Southeastern, PA
  • Stockton, CA
  • West Jersey (Whippany), NJ
  • Wheeling, WV
Related articles:

Sunday, September 27, 2009

There's Little Clarity About Some SCA Papers

Is it coated or is it supercalendered? Only the paper mill knows for sure.

We keep getting reports of SCA papers being made on coated machines, along with suspicions that the papers are actually coated rather than supercalendered.

Reel Time Report surfaced the issue earlier this month by reporting claims that Verso’s new Clarity SCA+, which is being made on a lightweight-coated (LWC) machine, was actually a coated sheet.

“Producing an SC-A+ grade is not an easy thing to do. It seems nearly impossible on a machine designed to produce coated groundwood,” said the newsletter, which is available by subscription from Forestweb by contacting “The more logical path, from a production-cost perspective, is to simply produce coated groundwood and label it SC-A — maybe bleach the grade a little less, perhaps change the coating formulation some — but the fewer changes the better. That seems to be what Verso is doing.”

My sources tell me that Verso insists it is using proprietary technology to make SCA+ and SCA on a coated-paper machine, but at least one competitor insists that the SCA+ is actually coated. Some sources agree with Reel Time Report in questioning whether SCA+ and LWC can be made on the same machine, but one source notes that the Clarity line has the crackly sound of a supercalendered paper.

Verso has muddied the waters by making SCA on both the LWC machine and the supercalendered machines at the same mill in Sartell, MN. Both are called Clarity SCA, but the specs are different depending upon the machine. Between those differences and tweaks to the new product, printers are having fits trying to evaluate runnability and ink consumption on Clarity SCA, which many customers are eager to use because of its aggressive pricing, sources say.

Sources also tell me that AbitibiBowater has shifted some production of SCA from idled Canadian mills to its coated mill in Catawba, SC. That makes sense given the mill’s low-cost position, the strength of the Canadian dollar, and the black-liquor subsidy of American-made kraft pulp. But again it raises questions about whether the paper is really an SCA or just lightly coated.

We’re also getting reports of an SC sheet coming out of Myllykoski’s Alsip, IL, which only has a coated machine. That may stem from confusion with Myllykoski’s SC mills in the U.S. and Europe. But Myllykoski has been more reluctant than most competitors to take downtime at Alsip during this weak market, so perhaps that mill is producing some grades that are not on the official list of its products.

Catalyst Paper has also toyed with making a paper for the SCA market on its Port Alberni, BC LWC machine but has clearly told customers that the paper is coated. Sources indicate the future of that product is uncertain.

Some people would argue that none of this matters, that the issue is not how the paper is made but rather how it performs. Don’t tell that to the printers. Even the best SCA+ papers consume more ink than LWC and need different tension settings on the web. Because clay and other materials that provide gloss are embedded in the sheet rather than on the surface, as with coated paper, SC papers tend to have less surface strength and are therefore less tolerant of high-tack inks.

What is clear is that North American paper mills are battling overcapacity by using their coated paper machines to make an increasingly wide variety of uncoated papers.

See also The Rush to Make Uncoated Paper on Coated Machines.

Friday, September 25, 2009

If Only Real Newspapers Were This Sexy: The Yes Men Spoof the New York Post

A high-profile prank in New York this week proved that environmentalists do indeed have a sense of humor and that newspapers can still generate excitement.

A fake – and very clever -- free special issue of the New York Post was passed out to thousands of stunned New Yorkers Monday. What caught their eye at first was that the usually Neanderthal-conservative Post had apparently gotten religion about global climate change.

But the real stunner were the ads inside for such products as Tap Water (“It is . . . sugar-free, bottle-free, free, not yet owned by Coca-Cola ...”) and the hilarious getaway travel ad that was actually for Sex. ("Why Travel? You just wanted to get laid anyway, right?)

Note the small-type disclaimer on the Sex ad: “Actual costs may vary contingent on prior agreements and any applicable non-binding contracts. May include the price of some booze, a pizza, and 4 rented movies. Reciprocal activity may be considered obligatory depending on prior arrangements. This offer has no cash value, is non-transferable, and is only valid for consenting guests over the age of 18 (check your local laws.) Not responsible for bad choice of partners, premature ejaculation, erectile dysfunction (E.D.), general frigidity, budding addictions, and/or resulting disinterest in all other activities. Be sure to practice sex SAFELY. We do not assume any errors or omissions within the content of this ad.”

The parody is "a limp effort" having "none of the wit and insight" of the real tabloid, the Post sniffed. This from a paper known for such headlines as "Headless Body in Topless Bar" and the "scoop" that Dick Gephardt would be the Democrats' vice-presidential candidate in 2004.

Visually, the fake issue orchestrated by The Yes Men troupe is a dead ringer for the real Post, so much so that New Yorkers tell me they were fooled. There are the punny headlines, like “Flopenhagen: Will Things Go Rotten in the State of Denmark?” and “The Coal’d Hard Truth: They Get the Mine, We Get the Shaft”.

The poorly designed knockout type on Page 1 is classic Post. A printing geek tells me the only reason the type in the red box was legible is that the print quality exceeded that of the real New York tabloids. (His advice: Don't use sans-serif fonts in knockouts.)

For more on this elaborate prank, see:

Thursday, September 24, 2009

Postal Relief? How About No More Congressional Thievery?

The U.S. Postal Service may be a week away from defaulting on a payment to the federal government. I kind of hope that happens.

As someone who works for a company that relies heavily on the Postal Service to deliver our magazines, I'm supposed to be urging passage of legislation that would give USPS partial, temporary relief from a $5 billion-plus payment due next Wednesday to a retiree-benefits fund. (A House-Senate panel included the proposal in a broader bill that it passed today, but that must now go back to both bodies for votes.) After all, how often do postal management, postal unions, mail-dependent industries, and the majority of Congress agree on an issue involving money?

Instead, I told Publishing Executive in a recent interview that this "may be just the kind of crisis we need" to turn around a Postal Service whose current model is not viable. Don't get me wrong -- I think Congress should pass the legislation. But I hope it doesn't.

Let me explain my heresy:

The billions of dollars the Postal Service pre-pays every year into a retirement-benefits fund has nothing to do with retirees and everything to do with making the federal deficit look smaller. Congress is playing an accounting shell game, with the cost of the payments being passed along to mailers in the form of higher rates.

That has made mailed products increasingly uncompetitive with such electronic substitutes as email and Web sites, leading to volume decreases and excess capacity in the postal system. (For more information about the pre-payments problem and other ways Congress interferes with the supposedly independent Postal Service, see How USPS Could Bypass Congress on Saturday Delivery.)

I can't get excited about a proposed law in which Congress would basically be saying to USPS, "For the next couple of years, we won't steal as much from you as we used to." I fear with its passage Congress would say, "Now that we've bailed you out, you're not going to close any post offices in our districts or deliver only five days a week, right?"

The legislation would ease the Postal Service's financial crisis but not get at the root of the problem.

I hope Congress instead embarrasses itself by failing to act before the Sept. 30 deadline and allowing the Postal Service to do a government version of Chapter 11. Perhaps then it would realize that you can't run a postal system with 535 CEOs.

Perhaps then it will grant USPS the freedom it needs to reduce its costs structure by carrying out a sensible and humane downsizing of its workforce and facilities. Perhaps then Congress will consider depoliticizing the process of closing post offices the way it did with military bases.

The interview goes into more detail about fixing the Postal Service and also covers such topics as managing paper costs and the environmental debate about print versus digital content.

Wednesday, September 23, 2009

Subsidized U.S. Mills Fight Back Against Subsidized, Cross-Dressing Coated Papers

Two paper companies benefiting from multimillion-dollar U.S. government subsidies went on the attack today against subsidized coated paper from China and Indonesia.

NewPage and SAPPI, along with Appleton Coated, announced that they have filed "antidumping and countervailing duty petitions" covering imports of paper for sheetfed presses "having a GE brightness of at least 80."

"Under the antidumping and countervailing duty statutes, the International Trade Commission is expected to make a preliminary injury determination in November 2009 and the Department of Commerce is expected to issue preliminary determinations in the countervailing duty and antidumping duty cases in December 2009 and March 2010, respectively," the statement says. It says that relevant imports of coated paper increased 40% in the first half of 2009 versus the first half of the previous year even though shipments by U.S. mills declined about 38%.

NewPage led a previously successful antidumping effort against coated-freesheet paper coming from Asia, but some Chinese and Indonesian mills have skirted the resulting tariffs by including enough mechanical pulp in their papers to have them classified as coated groundwood rather than coated freesheet. The more generic "GE brightness of at least 80" is obviously intended to close the loophole for such coated-groundwood papers cross-dressing as coated freesheet.

Through the second quarter, NewPage had received $120 million and SAPPI $37 million this year in "black-liquor" tax credits from the federal government. The amounts are likely to double before the program expires at the end of this year. The credits are a sort of accidental subsidy of kraft pulp, the main ingredient in high-brightness coated papers. Appleton Coated is apparently not eligible for the credits.

To be fair, the black-liquor program is temporary, while the Indonesian and Chinese competitors are allegedly receiving more permanent government help in a variety of ways -- tax subsidies, input subsidies, cheap timber, loans, grants, etc.

The statement makes several references to environmental practices, sustainability, and the like. But it makes no direct mention of Indonesia being the international poster child for rape-and-pillage forestry or of the questionable environmental practices of some Chinese paper mills.

Monday, September 21, 2009

Carbon-Neutral Bibles? Amen to That!

The movement to reduce the carbon footprint of printed products got a blessing recently when Zondervan announced a line of carbon-neutral Bibles.

The Essential Bible Series will be available only in Walmart, "aligning with Walmart's environmental stewardship efforts," the announcement said.

"To achieve CarbonNeutral® publication status, the emissions produced by the printing, production, storage and distribution of the Bibles to Walmart were independently measured by a third party assessor, and reduced to net zero through carbon offsetting," it added.

Walmart, once the scourge of the green movement, has embarked on aggressive climate-change efforts that have made it something of a darling among environmentalists -- assuming the Birkenstock crowd can ever bring itself to trust anything from Arkansas not named Clinton.

The Zondervan announcement leaves a bit to be desired -- not clarifying, for example, whether the offsets cover emissions related to manufacturing the paper or specifying how the offsets will be used

But it is a step in the right direction if it helps move the discussion about "green" printing beyond just using paper with recycled content. In fact, recycled fiber is not well suited to making bible paper, which needs stronger fibers because it is so thin.

The new line of Bibles should do well with the "What would Jesus drive?" movement, which has tried to present climate change as a moral and spiritual issue. (The answer to the movement's question, by the way, is a fuel-efficient Japanese-brand car made in the U.S., as evidenced by Jesus' statement in John 12:49 -- "I do not speak of my own Accord.")

Sunday, September 20, 2009

Can the Flats Sequencing System Be Fixed?

It may be time for the U.S. Postal Service to go back to the drawing board on the Flats Sequencing System, which faces trouble on two fronts.

USPS is pressing ahead with installation of the football-field-sized FSS machines, even though the system recently fell short of standards for the second time in an acceptance test. The throughput rate improved over a test late last year but was still 23% short of the standard, USPS's inspector general's office recently revealed.

The inspector general's report recommended installing only one more FSS machine "until the system demonstrates operational stability and sucessfully passes the field acceptance test." The machines are supposed to automate the labor-intensive process of handling such flat mail as catalogs and magazines. (See "The Unofficial Guide to Flats Sequencing" for more information.) Only a handful of the 100 machines in Phase I of the FSS program have been installed.

USPS management acknowledged that FSS "did not meet the key contract performance requirements" and said it would conduct another acceptance test, but indicated it would not slow deployment of the machines.

"When fully deployed, the expected annual FSS savings are $600 million. As such, it is in the best interest of the Postal Service to take advantage of every available opportunity to sustain the deployment while ensuring that it does not adversely affect the forecasted savings and/or increase operational burdens," wrote David E. Williams, acting vice president at USPS, in response to the inspector general's report.

The math seems to be on Williams' side. Achieving annual savings of $600 million with an investment of only $1.4 billion looks like a good deal; even if the machines last only 15 years, that would represent a 40% internal rate of return. That gives the Postal Service and lead contractor Northrop Grumman plenty of incentive to fix the machines.

But then there's the second problem with FSS: Not only is it not yet living up to its design, but the design may already be obsolete.

The system was designed under the assumption that flats volume would continue growing into the future. Large postal rate increases, competition from other media, and the economic recession have reversed that trend, causing flats volume to decline at an annual rate of about 11% the past two years.

USPS management has responded by increasing the territory that will be served by Phase I machines. A few days ago, it added more ZIP codes to the program, bringing the total to 2,314 instead of the approximately 1,300 in the original design.

That means each machine will serve far more addresses than originally intended, some in ZIP codes that did not qualify for the program at first. And some of the machines will go to locations that didn't originally pass muster for Phase I. All of this suggests that the $600 million estimate, which has been around for at least a year, is no longer valid.

Insiders say postal executives have already concluded that the machines are too big and need to be tweaked in other ways. But estimating the level of flats volume 5 or 15 years from now, or what type of machine could best handle that, could be quite a challenge.

Failure of the machines to meet contractual standards so far might be a blessing in disguise for the Postal Service: That could give it leverage to force Northrop Grumman to make desired changes to the design. Or even grounds to cancel the contract and go back to square one.

To anyone who has heard postal officials talk enthusiastically about FSS, the idea of USPS abandoning the program seems extreme.

But consider this fact: Much of the work on and learning about FSS has been done at Dulles, VA, where three machines are running and a fourth is being altered. Five days ago, the Postal Service announced that it has begun a feasibility study "to determine if efficiency could be increased by consolidating mail processing operations" from Dulles to the nearby Northern Virginia facility in Merrifield.

Monday, September 14, 2009

The Great Forest Certification War

Now that the forest-certification movement is running out of steam, two groups involved in promoting sustainable forestry have responded by declaring war on each other.

ForestEthics fired the first shots a few days ago, filing complaints of both tax fraud and greenwashing against the Sustainable Forestry Initiative. It sent letters last week asking the IRS to revoke SFI's tax-exempt status and requesting that the Federal Trade Commission investigate SFI's "unfair and deceptive" marketing practices. ForestEthics claims that SFI's forestry-certification program is inferior to Forest Stewardship Council certification.

SFI responded today by calling the ForestEthics complaints "an affront to the tremendous efforts by foresters, businesses, governments, consumers, SFI and other standards groups to preserve and protect our forests for future generations."

“We should all be focusing our resources and efforts on supporting responsible forest management and fighting deforestation and illegal logging, not wasting energy on bickering among ourselves," SFI added. A United Nations report recently concluded that the once-rapid growth of forest-certification efforts has stagnated during the past three years, Dead Tree Edition reported last month.

I'm skeptical whether FSC, which has had its own credibility issues in places like Indonesia, is significantly superior to SFI, but I welcome comment on the subject. I think the most useful service Dead Tree Edition can offer at this point is extensive excerpts from the complaints and SFI's response. Note: The rest of this article consists entirely of statements from ForestEthics and SFI that do not necessarily represent the views of Dead Tree Edition:

ForestEthics' letter to the IRS (excerpt)

"Although it is approved as a 501(c)(3) tax-exempt organization, SFI is organized, governed, and operated more like an industry trade association that promotes its private “certification” label than a separate charitable organization dedicated to setting high standards for forest products. First, SFI’s purposes — certification of private forests for a limited number of large industrial timber and paper companies — do not lessen the burden of government because the government is not in the business of providing “certification” of forestry practices.

Second, SFI substantially serves the private interest of non-exempt SFI-certified timber and paper companies. SFI became exempt under IRC 501(c)(3), but SFI was incorporated by individuals affiliated with timber and paper companies and SFI’s by-laws assign timber and paper companies one-third of its director positions. SFI is, by its own admission, virtually completely funded by the timber and paper companies whose lands and operations SFI certifies. SFI’s environmental standards are substantially developed by persons with close ties to the forest companies subject to SFI’s certification standards. During the past several years SFI has continued to maintain close administrative ties to the American Forest and Paper Association, a 501(c)(6) trade association which created SFI in 1994. SFI also serves private interests because its forestry “standards” are vague, ambiguous, and grant wide discretion to the companies whose products are certified by SFI. These standards thus appear to provide too much latitude for forest landowners to serve their private interest in profitable forestry, rather than in the charitable endeavor of protecting the environment. In practice, SFI certification standards provide in many geographic areas of the U.S. little or no more added environmental protection than state and federal laws governing for-profit forestry.

Finally, we have a good faith basis to believe that SFI, a 509(a)(2) organization, may run afoul of the IRC requirement that a 509(a)(1) public charity must receive at least one-third of its financial support from “public sources” and that this one-third cannot be donated by “disqualified persons.” By its own admission, virtually all of SFI’s financial support (which was approximately $5 million in 2007) comes from the companies whose forests or products are certified by SFI. SFI refused to provide us with a breakdown of its contributors so we are unable to make a “disqualified person” analysis but it appears that SFI may be violating the IRC’s “disqualified” person rules as a result of its prosperous fundraising and relatively small universe of corporate donors.

SFI’s 501(c)(3) and 509(a)(2) status permits it to claim the mantle and tax benefits of a nonprofit public charity, thereby seeking to gain environmental and social credibility, and allowing its supporters to deduct their contributions. SFI’s 501(c)(3) status not only impacts taxpayers but works to the disadvantage of forest certification organizations that serve a public charitable purpose but must compete with SFI.

We request the IRS to investigate and, if appropriate, determine that SFI is not properly organized and operated as a tax-exempt charitable organization under Code sections 501(c)(3) and 509(a)(2).

ForestEthics' letter to the FTC (excerpt)

"The Washington Forest Law Center represents ForestEthics, a non-profit conservation organization based in Bellingham, WA, and San Francisco, CA, dedicated in part to promoting credible forest certification programs through consumer awareness and the marketplace. This complaint reports the “Sustainable Forestry Initiative, Inc.” (SFI),1 a forest “certification” system which we believe engages in several unfair and deceptive acts and practices on which corporate and individual lumber and paper consumers are relying. Hundreds of millions of dollars in “green” spending may be at issue. We ask the FTC to investigate this complaint and to seek appropriate declaratory and injunctive relief in the courts to require SFI to comply with federal trade law.

Alarmed by global warming and worldwide deforestation, wood and paper consumers today are increasingly demanding more environmentally-friendly forest products. Consequently, the marketplace for “green” forest products, which could soon reach $80 billion in four years, is cluttered with claims and labels that a forest product has been “certified” or was “sustainably” grown and harvested in an environmentally and socially sound manner. But if these claims are going to compete fairly in the marketplace, and if they are going to produce real on-the-ground improvement in forestry, it is essential that the FTC investigate and respond when claims of “sustainable” and “environmental” forest management rely on deception, confusion, vagueness, or ambiguity.

The SFI forest certification program was started in 1994 by the American Forest and Paper Association (AFPA), a Washington D.C.-based timber and paper trade association. Since 2007, SFI has represented itself as an “independent not-for-profit public charity.” SFI’s budget was over $5 million in 2007. The companies it certifies own 90% of private forestland in the U.S. and produce about 50% and 85% of wood and panel products, respectively, in the U.S. We believe the SFI forest product certification system competes unfairly and deceptively for several reasons.

Deceptive Label: SFI maintains at least one label on its products that is deceptive and misleading. SFI’s “Certified Fiber Sourcing” label implies that wood or paper bearing the label comes from SFI-certified forests. Yet, in fact, the SFI “Certified Fiber Sourcing” label provides no guarantee that any of the material was harvested from an SFI-certified forest.

Independent, Non-Profit Public Charity: In aggressive and well-funded national advertising, SFI and SFI-certified companies represent to lumber and paper purchasers and the general public that SFI is an “independent, not-for-profit public charity” directed and operated by a diverse and “independent” board of directors. These attributes are key to SFI’s campaign for environmental credibility and marketing. This claim is deceptive because SFI is funded almost entirely by the large timber and paper companies whose forests are certified by SFI and SFI receives virtually no general public financial support. Moreover, true to its origin as a program of the AFPA, SFI’s governance, administration, and standards-setting process is dominated by SFI-certified companies and individuals. While SFI has nonindustry board members, many of these individuals are affiliated with organizations that receive substantial financial support from SFI-certified companies. In the final analysis, SFI is not a standards-setting entity in which industry members participate; it is a heavily marketed industry-developed and funded “green” label that represents itself as an independent charitable organization.

Deceptive and Unverifiable Environmental Standards: SFI’s forest certification standards are deceptive and misleading. SFI’s standards deploylofty ecological terms but, in fact, they are vague, ambiguous, filled with qualifiers and loopholes.” On balance, they give forest managers discretion to manage their forest lands in ways that are inconsistent with SFI’s lofty environmental standards. To make matters worse, SFI certification lacks transparency: a member of the public or a competitor cannot find out what a landowner is doing (or not doing) in its forests and has access only to uselessly general audit summaries. Furthermore, SFI’s standards are enforced only by auditors which are landowner-paid consulting entities.

The Sustainable Forestry Initiative's statement

Washington, D.C. – From governments to conservation groups to foresters, the Sustainable Forestry Initiative has been globally recognized as a credible and effective forest management certification program. “The rapid growth of our program shows that more customers and consumers recognize the value of third-party forest certification, and it means we are making a difference on the ground,” said SFI President and CEO Kathy Abusow. “We are dedicated to finding ways to work together with all credible forest certification standards toward our common goal of expanding certification. That is especially important when you consider that 90 percent of the world’s forests are not certified at all.”

In light of that common goal, ForestEthics’ recent statements and activities “are an affront to the tremendous efforts by foresters, businesses, governments, consumers, SFI and other standards groups,to preserve and protect our forests for future generations,” said Abusow. “We should all be focusing our resources and efforts on supporting responsible forest management and fighting deforestation and illegal logging, not wasting energy on bickering among ourselves.”

Abusow pointed out that SFI “has been a fully independent non-profit organization since 2007 and our forest certification standard is developed through a transparent public process.” She added that SFI’s “labels and claims conform to government, consumer and audit requirements in the United States and globally.”

Here are some other facts about SFI:

  • The group’s three-chamber Board of Directors represents environmental, social and economic interests equally. Board members include representatives of environmental, conservation, professional and academic groups, independent professional loggers, small family forest owners, public officials, labor and the forest products industry. No one sector can control SFI – Board actions must be approved by a minimum of 80% of those present.
  • Last year, the Canadian Council of Forest Ministers issued a statement that read in part: “Canada is proud to have more certified forests than any other country. Governments in Canada continue to provide technical and policy support to the ongoing development of certification in Canada. The forest management standards of the CSA, FSC, and SFI all meet the above criteria. Customers can be assured that these forest certification standards are complementary to and demonstrate each Government’s sustainable forest management regime.”
  • SFI-certified products are recognized by many leading green building rating programs in Canada, the U.S. and overseas. In North America, this includes the Green Globes™ building assessment and rating system, the American National Standards Institute’s National Green Building Standard (administered by the National Association of Home Builders) and the Built Green Society of Canada. SFI-certified products are also recognized under government procurement policies in Japan and the UK.
  • The US Government Services Agency (GSA) recognizes SFI as well as FSC in their Solicitation for Offers requirement SFO Section 7.4 Wood Products (revised August, 2008). It states: “For all new installations of wood products, the Lessor is encouraged to use independently certified forest products. For information on certification and certified wood products, refer to the Forest Certification Resource Center, the Forest Stewardship Council United States, or the Sustainable Forestry Initiative.”
  • The Conservation Fund, Conservation International and the American Bird Conservancy are just a few of the more than 1000 organizations involved in the SFI program.
  • Several U.S. states, including Washington and Maine have weighed in with support of inclusive green building standards.
  • TerraChoice Environmental Marketing recently recognized the SFI label as a credible eco-label in its Greenwashing Report 2009, saying that our program meets three key criteria – third party certified, publicly available standard and transparent standard development process. SFI (along with FSC) are among 14 labels that the group recognizes as “legitimate.”
  • Tom Hinton, president and CEO of the 82,000-member American Consumer Council said last year, “We support the good work of SFI and applaud the positive and progressive things SFI is doing.., When it comes to environmentally friendly claims, consumers want to see the proof and not just the sizzle.”

The UN Economic Commission for Europe (UNECE), which represents 56 member states and involves more than 70 international professional organizations and other non-governmental organizations and The UNECE Timber Committee and Food and Agriculture Organization (FAO) European Forestry Commission released a report titled Forest Products Annual Market Review which found that:

  • “In terms of numbers, the most significant [forest certification program] is the SFI Program in North America.”
  • The rate of increase in global certified forest area slowed dramatically since 2006 (growing by only 1.3% to reach 325.2 million hectares in 2009). By May 2009, about eight percent of the world’s forests were certified (54% in Europe and 38% in North America.
  • Green building initiatives are a mixed blessing for forest certification. “Green building initiatives standards giving exclusive recognition to particular forest-certification brands may help drive demand for these brands at the expense of wider appreciation of the environmental merits of wood.”

“SFI has seen tremendous growth and acceptance in the marketplace,” said Abusow. “I am proud that we have over 240 program participants and work closely with not just conservation groups, but also organizations like Habitat for Humanity. We have carefully expended our resources on educating businesses and consumers about the importance of sustainable forest management and producing and purchasing products sourced responsibly. ”

Friday, September 11, 2009

Transcontinental and World Color Gear Up for Consolidation While Donnelley Inhales Helium

With Transcontinental borrowing money for possible acquisitions and World Color Press making it clear who is in charge, The Big Printer Consolidation Dance had some interesting moves this week.

Meanwhile, industry leader R.R. Donnelley, which tried to be the Great Consolidator a few months ago, has wandered off for a dose of Helium.

Transcontinental announced Thursday that it will try to raise up to $500 million via debt and preferred-shares offerings “for general corporate purposes, which may include the repayment of indebtedness and the financing of acquisitions and investments provided market conditions are favourable.” That is apparently enough cash to gain a controlling stake in the other big printer based in Canada, World Color Press. Or is it still Quebecor World? Or maybe Novink.

World Color Press hasn't completely worked out the name thing since emerging from bankruptcy in July with its new but old name. Its Web site is still, and many of its legal entities include "Novink", which was chosen and then abandoned as the name of the revived company.

But WCP did clear something else up: Mark A. Angelson, the person most responsible for consolidation of the North American printing industry, is definitely running the show. The company announced this week that the former Donnelley chief is now the CEO as well as chairman of World Color Press. Those who know him say he's there to do deals, not to make incremental changes.

What kind of deals Transcontinental has in mind is not clear. Besides the traditional commercial-printing business, it's involved in outsourced newspaper printing, newspaper publishing, and new media.

There was some speculation that Transcontinental's prospects were strained by its deal to print the San Francisco Chronicle because it might be stuck with an idle $230 million printing plant if the money-losing Chronicle's abandoned ink on paper. Hearst threatened to close down the Chronicle earlier this year if it didn't get union concessions.

But the prospectus for Transcontinental's debt offering says the Chronicle contract "provides for indemnification from Hearst Corporation should the San Francisco Chronicle cease publication or be sold." It also says the "contract size is for more than US $1billion (excluding paper) in revenues over 15 years."

And what of industry leader R.R. Donnelley, which made three unsuccessful attempts a few months ago to buy what was then known as Quebecor World? So far this month, it announced it is getting into the printer business in the form of a joint venture with HP to make digital inkjet presses.

It also spent $4.4 million on a minority stake in Helium, a "social publishing platform" that links freelance writers with publishers. It's not clear why Donnelley's interest has turned from buying other printers to Helium.

Maybe some RRD executives still grieving over the Quebecor debacle thought they could console themselves by taking a few big puffs and talking like Donald Duck.

Wednesday, September 9, 2009

Harper's Bizarre: Attacked by Pterodactyls?

Has Hearst's magazine division entered a parallel universe where paper has only one side and pterodactyls steal page files?

No, it’s just some media writers having trouble grasping what goes on with ink-on-paper publications. reported a few days ago that the September issue of Harper’s Bazaar was missing 39 pages. That reminded me of the advertising sales rep who wanted to know why we were going to charge a client for a two-page insert when it only wanted one page. “Because we have to print two pages” was the answer, to which the sales rep instinctively replied, “But our main competitor can produce one-page inserts!”

Alas, Hearst has not changed the venerable women's magazine into Harper's Bizarre or somehow obtained the magazine version of Zen. (If Zen Buddhists meditate on the sound of one hand clapping, do Zen production directors meditate on the look of one-sided paper?)

Jezebel miscounted. The issue has a page 256, two unpaginated pages, and then page 295 – a gap of 36 pages.

There's also no truth to the rumor that voracious flying beasts were attacking Hearst's PDF files, despite an article in the latest issue of Folio: magazine. The article quotes Hearst's Sean Keefe as saying that a switch to the PDF-X4 format has prevented "raptorization" of its files.

In defense of Folio:, it quickly corrected the error in the Web version of the otherwise excellent article after being alerted by a certain anonymous blogger (presumably after the dead-tree edition of Folio: had gone to press). And a badly formatted file can definitely end up looking like something that got chomped on by a hungry predator. Only people who have been trapped in a room with prepress geeks eagerly discussing preflighting and file formats (". . . when you have unsharp masking and convert from RGB to CMYK blah blah blah") would know that Keefe meant "rasterization".

What Folio: lacks is Jezebel's commenters, who have proposed novel ideas about what's in the missing 36 pages -- including Jimmy Hoffa, George W. Bush's drug-test results from the Texas Air National Guard, Amelia Earhart's plane, and a transcript of the missing Nixon tapes.

Because pages 257 through 294 do not appear in the table of contents, I'm guessing they don't exist. Harper's Bazaar may have planned to produce 257-294 when it went to press with back-of-book sections, then dropped those pages when some last-minute ads didn't come in.

Or maybe the pterodactyls took them.

Thursday, September 3, 2009

How USPS Could Bypass Congress on Saturday Delivery

The Postal Service should consider not accepting money from Congress so that it would be free to eliminate Saturday delivery and close rural post offices, a new report says.

Postal officials are laying the groundwork for five-day-a-week delivery but have had trouble winning permission from Congress. They can move forward on that and other controversial measures without Congressional approval, according to a report issued this week by USPS’s Office of Inspector General.

Congress appropriates about $100 million annually to the Postal Service to support free mail for the blind and overseas voters, according to the Inspector General’s report. Otherwise, USPS is expected to be self supporting.

“The small postal appropriation each year routinely shifts costs to the Postal Service and subjects it to riders that prevent closing small post offices or experimenting with 5-day-a-week delivery,” the report says. The rider requiring delivery six days a week has been in place since 1983, Postmaster General Jack Potter noted in January when he "reluctantly" asked Congress to remove the rider.

The Postal Service should consider opting out of the appropriations process “and its attendant restrictions” because the $100 million may be “more of a bother than it is worth,” the report says. Saying no to the money “would be a small price to pay for cementing the financial independence of the Postal Service,” it adds. USPS’s projected savings from dropping a day of delivery exceed $2 billion annually.

But the Postal Service has a practical reason for not giving Congress a “middle-finger salute” with unilateral elimination of Saturday delivery: It is also asking Congress to change the law requiring USPS to over-fund its account for retiree health benefits.

The OIG characterizes the overpayment, which it estimates as $5.4 billion this year, as using “Postal Service funds to make the president’s budget seem smaller.”

“The Postal Service is an attractive source of money to prop up the federal budget,” agrees Leo Raymond, vice president of the Mailing & Fulfillment Service Association, in a recent article for Mailing Systems Technology. He despairs of Congress ever granting USPS the freedom to make the tough choices it needs to make.

“What the Postal Service does (or doesn’t do) generates a steady stream of chances for politicians to superimpose their political preferences on what should be left as business decisions,” he writes. “Whether a labor issue, facility closure, or service decision, every action by postal management tees up a chance for someone in Congress to meddle – and get a photo op, issue a press release, or ingratiate himself to a source of campaign contributions at the same time.”

The Postal Service could be on track to run out of money in a matter of months. The two changes that would be large enough and feasible enough to stave that off are scaling back the retiree-benefits overpayments and eliminating a day of delivery.

So maybe it’s time for postal officials to send Congress a veiled ultimatum: If you don’t end the silly retiree-benefits shell game, USPS will go “off budget” and eliminate Saturday delivery. The threat of having a truly independent Postal Service that could make unpopular changes in their districts would definitely get the politicians’ attention.

Tuesday, September 1, 2009

Coated Paper Prices: The Dead Cat Bounces

Verso Paper announced a price increase for its coated-freesheet papers yesterday, the first sign of life in the U.S. coated market after 10 dismal months.

(Update: A day after Verso's announcement, NewPage started spreading word of a similar attempt to raise prices on coated freesheet along with a $1 hike on Escanaba, its high-end coated-groundwood product.)

In a letter to customers, Verso said it was increasing prices on its Influence and Velocity grades by $2/cwt. ($40 per ton) "effective with orders entered September 15, 2009 and all orders shipping on or after October 1, 2009." The letter does not mention Verso's coated-groundwood or supercalendered products, which presumably indicates the company didn't think announcing price hikes for those products would be credible.

Not that getting higher prices for coated freesheet will be easy. Even if the economy is getting up off the mat, there's still too much overcapacity in coated paper. And the black-liquor credits, not scheduled to expire until the end of this year, give U.S. mills an added incentive to keep their CFS machines running by chasing low-priced sales rather than to be disciplined and take down time.

In Verso's favor are a weak U.S. dollar that is discouraging imports and a strengthening pulp market that provides an outlet for some of the pulp that subsidized U.S. mills are cranking out.

I will repeat what I wrote in March, when I noted (correctly) that prices for coated paper had further to fall: "Prices may indeed stabilize – even increase -- in a few months when the current inventory overhang is burned off and we enter the busier fall season, especially if the economy improves or energy costs rise. But that’s likely to be what Wall Street calls a “dead cat bounce” – a brief increase on the way to further declines."