A Sea Change in Print Buying

In the last year or two, the topic of offshore printing—particularly in China—has gone from being industry background noise to a headline-making concern for many U.S printers, observes Dr. Joe Webb, president of Strategies for Management. By mid 2004, the need for a comprehensive research initiative to report the facts and dispel the myths became clear, Webb says.

"A Critical Look at Offshore Printing"—a 138-page report published by the noted industry researcher with the help of Vince Naselli, Deborah Papineau and Joe LiPetri—is the result.

For the purposes of this study, "offshore" printing is defined as domestic print demand sent outside the U.S. and Canada for production. Competition with Canada and Mexico is classified as "nearshore."

According to the report, the printing trade surplus historically enjoyed by the United States has eroded over the past two years, and the decline picked up momentum in 2004. "For the first eight months of 2004, the total surplus in printed-materials trade for all countries with whom the United States trades declined by 82 percent compared to 2003. Imports and exports each currently comprise roughly 3 percent of total U.S. print shipments. This may not seem like much, but domestic printers will increasingly be subject to offshore competition in the future for products that were formerly impractical to produce overseas. This small percentage is expected to grow." …

Advances in technology deemed to be key enablers of this market trend are desktop publishing, digital proofing, Adobe's PDF file format, high-speed telecommunications, color management and computer-to-plate (CTP) systems.

Cost savings, of course, are the overriding economic factor driving production offshore. Overall cost savings, even with shipping charges factored in, are said to typically be in the 30 percent to 40 percent range.

"The offshore printers we spoke to said virtually all of the savings are achieved through the far lower cost of labor in overseas countries. … On top of that, these businesses do not have other significant costs related to environmental and worker-safety regulations and other compliance requirements," the report reveals. It also notes cost savings of up to 50 percent from using printing stocks manufactured in Asia rather than purchased in the United States.