Millcraft State of the Graphic Printing Paper Industry Q3 2025
Join more than 300 industry professionals in this Millcraft State of the Graphic Paper Industry Q3 2025 webinar where attendees describe the market in their own words and share real-time feedback regarding tariffs, uncertainty, and customer hesitation as drivers of deferred decisions and stalled projects.
Millcraft President Greg Lovensheimer also includes loss of demand, rising costs, supply closures, and instability around USPS rates in the Q3 landscape. However, he frames the moment as “potential energy” poised to release. “Everything points to growth, just not yet,” Greg says. “The question to ask is, ‘What’s the catalyst for release?’.”
Watch the State of the Graphic Paper Industry Q3 2025: Making Sense of External Threats as Greg balances promising indicators with global complexity, unpacks tariffs, freight, labor, inventory, and market dynamics—and outlines how printers and partners can respond with agility and strategy.
Q3 2025: State of the Industry
Economy & Interest Rates: GDP turned slightly negative in Q1 2025 due to tariff uncertainties, and consumers remain hesitant. The Federal Reserve has reduced interest rates to 4.5%, down from the 5.5% terminal rate. “When you start to see interest rates come down, that’s a catalyst,” Greg says. “You will see major reinvestment as the American consumer comes off the sidelines, and that’s always a great indicator for print whether it’s marketing pieces, packaging printing, and the likes.”
Unemployment is at 4% and the U.S. economy continues to add jobs. The labor market has stabilized, with the U.S. maintaining 1.10 jobs for every unemployed person, and the quit rate has returned to pre-pandemic levels, currently within the 2% range.
Manufacturing & Imports: Manufacturing is in a holding pattern. After a promising start in January of 2025, the ISM Manufacturing PMI dropped to 49% signaling contraction for the fourth straight month. Though production is growing, low customer inventories point to latent demand. Import activity surged ahead of the anticipated East Coast port strike and looming tariff deadlines, contributing to uncertainty in availability and pricing.
Freight Trends & LTL: Domestic freight remains stable, with truckload rates averaging $2.09/mile. Greg makes note, however, that LTL rate increases of 5–8% are expected as NMFC classification changes take effect, impacting approximately 49% of LTL shipments. Changes are being driven by the need to modernize and simplify the current outdated and complex NMFC structure, and density will drive the cost moving forward.
“This is one of those big, macro forces out there that people may not even be aware of. If you’re not aware of these changes, get in touch with your transportation department and people who are booking your freight,” Greg says, “and absolutely reach out to Millcraft.” Greg openly recommends contacting Millcraft for help with better understanding how to consolidate your loads, ClassIT systems, and upgrading descriptions and NMFC codes.
Ocean freight is back to “normal/historical” levels at $2,812 per 40-foot container. However, volatility looms as suppliers try to predict policy changes. “Everyone’s just sitting tight, waiting to see what Trump decides to do with tariffs,” a cargo consultant said.
Tariff Watch: Tariffs remain the most disruptive external threat in Q3 2025. Canadian imports remain exempt under USMCA: Printing & Packaging Papers originating and sourced from Canada fall under the existing Fentanyl/migration IEEPA order. As such they will be exempt of any tariff as long as they comply with the USMCA. In the event the existing fentanyl/migration IEPPA orders are terminated, USMCA compliant goods would continue to receive preferential treatment. Therefore, as long as USMCA is in effect, there are no tariffs on Canadian produced printing and packaging papers.
Greg says tariffs are undoubtedly worth paying attention to, with materials from countries like Indonesia (32%), South Korea (from 10% to 25% within one week), and the EU (20%) facing significant adjustments. As the U.S. continues to rely on imports to meet demand, these ongoing shifts will influence pricing, inventory, and production planning for months to come.
“On the good side,” Greg says, “in one month alone, the U.S. brought in $22 billion dollars worth of fees as part of the tariff structure. It has the potential to do a lot of the things the administration wants to do. But what are the negative side effects? Some suppliers are eating all or a portion of those tariffs. How long can this last?”
USPS: Since 2021, postal rates have increased seven times, with the latest hike hitting July 13, 2025 to 8.7%. Postage now outpaces inflation and represents up to 70% of mailed advertising costs. Direct mail remains crucial—$6.5 billion of the graphic paper industry still flows through USPS—but affordability is affecting volume. Greg asks businesses to get involved. “Consider how you can take an active position with the USPS and their promotions. Massive discounts are available in 2025 and 2026.”
Inventory & Operating Rates: “There’s still a level of unrest with lack of tariff rate clarity,” Greg says, “and mill closures and conversions are back.” Just in the last two years, over 1.4MM tons of capacity has been removed. Coated freesheet impact is 22% of its overall North American supply is now gone, and uncoated freesheet impact is 20% is now gone.
- UFS - Domtar Ashdown #62; 185,000 tons shuttered to allow mill to produce more market & fluff pulp
- UFS - McKinley Paper in Combined Locks, WI; 45,000 tons converted to packaging grades offsetting Port Angeles closure
- CFS - West Linn shuttered; 185,000 tons
- CFS - Sappi Somerset PM#2 conversion; 235,000 tons
- UFS - International Paper shutters Georgetown, SC mill; 300,000 tons
- UFS - Pixelle Chillicothe Mill; 380,000 tons
With demand stagnant, mill inventories have remained stable/low. As of Q3, CFS inventories were at 36 days, and UFS at just 21 days. Operating rates show UFS at 85% and CFS at 69%, with market-related downtime continuing as mills aim to balance supply with real-time demand.
Greg warns, “If and when demand comes back, those volumes won’t be enough, that supply won’t be there. You’ve got to pay attention to where inventory levels are. We’ve talked about this term of uncertainty, and about ‘potential energy’ and, ‘What’s going to be the catalyst and release?’ If these volumes all of sudden do break through, if all these quotes that are out there do break through, there’s not enough inventory in the pipeline. That’s why it’s so important to be aligned, making sure that you’re sharing forecasts, making sure that you’ve got a partnership, and that you’re working with your supply chain partners.”
Prescription for Success: Balance of 2025
With strong January and March figures that were offset by soft February, April, May, and June, 2025 has proven difficult to predict. The second half of 2025 hinges on tariff policy, election-year uncertainty, and whether the Federal Reserve resumes cuts. Greg emphasized that there won’t be a single way tariffs get passed through—some will use price increases, others surcharges. The industry will need to remain flexible and transparent in how it responds.
“It feels like we’ve been in this really long time period, waiting for recovery. Again, that’s why I use the term ‘potential energy’ because the potential is there. You can see the elements of recovery are evident. It’s just, what is the catalyst? The impetus? What will be that one event that’s going to trigger going over the tip?”
Greg furthers, “Advocacy is no longer optional. These tariff rates, because they vary greatly by country, it’s important to pay attention—to know where your products come from and to work with your supply chain partners. Make sure that you understand, ‘Do I have other options? Is there another country of origin that we could work with that potentially doesn’t give me the risk exposure?’ Partnership, transparency, and information sharing is absolutely the best course of action. Being able to share everything that you’re working on, ensuring that someone is working to procure your supply chain, is going to be paramount to your success.”
With more than 100 years of experience, Millcraft provides a world-class supply chain strategy for our customers. We continue to invest in technology, AI, and supply chain resilience—offering deep inventory, solutions to carbonless shortages, and our $100 In-Stock Performance Guarantee.
Discover more in the Millcraft State of the Graphic Printing Paper Industry Q3 2025 webinar, and see how to stay competitive in the current climate with Millcraft’s Prescription for Success, including seven actionable steps, beginning at 49:11.
If you have questions or want to discuss optimizing your print and paper strategy for best price, service, and availability, Millcraft can help. Just ask.