Coated Paper Prices Have Crashed

Despite all the talk of "green shoots" in the economy at large, prices for coated paper have recently dropped even more than expected.

Less than two months ago, we polled readers about where they expected prices for 40# #5, then at $900/ton, to be in July. Most thought the RISI index for the grade would decrease, but only 29% voted for the index to be below $820 ($41/cwt.)

Most of the voters (including me) have already turned out to be wrong: Though it hasn't released its full report yet, RISI has revealed that its 40# index for May was $810. It is also projecting that the bottom of the market for all types of coated paper will be much lower than it previously predicted.

Demand may perk up a bit as inventories are burned off and we enter the busier half of the year. But the problem is supply: There are simply too many North American mills churning out coated paper.

Market leader NewPage has indicated it has no more high-cost machines to shut down, and the black-liquor credit has given many U.S. mills a huge subsidy to keep their pulp and paper machines running. It seems likely that paper prices will keep dropping until the least efficient machines or mills can't even cover their variable costs.

Playboy and Virgin Fail to Hook Up

Our condolences go out to all the headline writers who are mourning the news that Richard Branson is not interested in acquiring Playboy Enterprises.

Imagine the headlines if Branson's Virgin Atlantic indeed pursued Hugh Hefner's troubled offspring: "Virgin Ogles Hefner's Assets" or "Virgin Hot for Playboy". That might cause the target's stock to rise: "Virgin Gooses Playboy".

If Branson's company bought part of Playboy: "Virgin Gets a Piece of Playboy". Or got it to accept a low-ball offer: "Playboy Goes Down for Virgin".

If Branson decided to break up the House of Hef: "Virgin Deflowers Playboy". And then fired Hefner: "Hef Loses Virgin-ity".

The Mutant Hand of Marie Claire

Photoshop can easily become Phot-Oh-S**T!, as the editors at Marie Claire discovered recently.

Sharp-eyed Gordon Pritchard noticed this aberration (see photo) on the magazine's June cover.

His excellent Quality in Print blog normally deals with the finer points of prepress and printing, demonstrated with fabulous graphics. He even makes the concept of screen angles easy to understand.

But Gordo's not all business. Check out his hilarious summary of real-world magazine workflow in the context of the Marie Claire goof.

UPDATE: There's been a lot of debate on various sites about whether this is really a Photoshop mistake or just a huge cube ring on Beyonce's finger. See Gordo's new take on the image and on Photoshop disasters in general. And for more fun go right to the source, Photoshop Disasters.

Why USPS Must Consolidate Its Mail-Processing Network

Some have questioned my assertion yesterday that consolidation of the U.S. Postal Service’s mail-handling network is much needed.

But I’m backed up by no less an authority than the Government Accountability Office, which last week reiterated its long-standing advocacy of such downsizing. Its latest report on the subject is titled “Network Rightsizing Needed to Help Keep USPS Financially Viable”. Some highlights:

• “It is important for USPS to make significant progress in consolidating its networks and reducing excess capacity or it may face more drastic cost-cutting options and have less time to achieve necessary cost reductions.” With 160,000 employees eligible for retirement this year and another 130,000 in the next four years, the Postal Service can accomplish much of its downsizing via attrition rather than layoffs, the report indicates.

• “We reported in 2005 that USPS had substantial excess capacity in its mail processing network. Long-term trends have further increased excess capacity in the processing network such as continuing automation, declining volume of single-piece First-Class Mail (e.g., bill payments, personal correspondence), and destination entry of Standard Mail . . . that reduces the need for USPS mail processing and long-distance transportation of mail."

• “New automation equipment enables USPS to sort mail faster and more efficiently, a development that, with declining mail volumes, has resulted in more equipment downtime. In addition, new equipment, referred to as the Flats Sequencing System, will sort flat-sized mail (e.g., large envelopes, catalogs, and magazines) into delivery order, which is expected to reduce the need for space-intensive manual sorting at delivery units. Because delivery units are often co-located with post offices, branches, and stations, eliminating the excess space could involve relocating or consolidating retail activities.”

• “However, USPS has closed only 1 of its approximately 400 major mail processing facilities. USPS has often faced resistance from employees, affected communities, and Members of Congress when it has attempted to consolidate its operations and networks. In enacting PAEA [postal reform], Congress recognized USPS had more facilities than it needs and strongly encouraged streamlining its networks, noting this can pave the way for eliminating excess costs. Continued congressional support for necessary closures would be helpful to facilitate progress in this area."