(Bloomberg) — Skyrocketing demand for boxes and packing materials during the pandemic has slashed paper production across North America, and it couldn’t have come at a worse time for retail companies.

“We’re starting to hear, ‘We’re out of paper,’” said Polly Wong, president of San Francisco-based direct-marketing firm Belardi Wong, noting that some of her clients already missed their fall advertising campaigns due to issues at the printers. Wong estimates that 100 million catalogs will not be printed or reach U.S. homes in time for the year’s biggest spending season as a result. “It kind of put our industry up in a panic.”

With some mills converting to cardboard to meet the spike in e-commerce deliveries and others shutting down altogether, more than 2.5 million metric tons of North American printing and writing paper capacity—or nearly one-fifth of 2019 levels—has come offline since the start of last year. That’s according to Kevin Mason, managing director for ERA Forest Products Research, a financial research company that specializes in paper and forest products. Normally, printers would look abroad for supply but soaring logistics costs and other markets’ own booming packaging demand have limited that option. U.S. imports by volume of paperboard and papers were down 9.7% last fiscal year. Now supplies of certain grades are so tight that some commercial printers can’t get the paper they want “at any price,” Mason said.

Retailers’ catalog problems are the latest disruption caused by pandemics. Toilet paper and paper towels—prized commodities at the start of the lockdowns—are again in short supply in some locations, with a handful of grocers reinstating purchase limits to crack down on hoarding. Publishers of books are having difficulty getting paper and transport to launch new titles. Demand for paper products was already running high with the retail industry expecting its biggest back-to-school shopping season in at least five years after a year of virtual learning. 

As well, supply chain issues are afflicting overseas markets. The U.K. has experienced periodic shortages of basic items like toilet paper in its supermarkets. This is in response to Brexit. London-based packaging maker DS Smith Plc, which operates nine paper mills in Europe and two in North America, cited “significant increases to the price of paper” during its earnings call earlier this month. “The paper market, as a market overall, is extremely tight. We’ve seen numerous price increases going through on paper. I wouldn’t be surprised if there were further increases because it is so tight,” Chief Executive Officer Miles Roberts said on the call, noting that the company has been able to get material due to its “deep long-term relationships.”

The North American paper crunch is more an issue of mill capacity and tight labor than rising raw-material costs. Lumber futures—which touched a record $1,733.50 per thousand board feet in May, helping drive up the cost of everything from toilet paper to wood flooring—have since fallen back near normal, closing at $638.80 on Thursday.

In terms of the strained capacity in the U.S., “we’ve never seen it before,” said Mark Groff, vice president of sales for the eastern region at Nahan, a Minnesota-based catalog printing company with clients that include Patagonia and Warby Parker. “It’s affecting all of the printers in our business, which is affecting our clients.” The average price of paper has gone up as much as 16% this summer, he said. Nahan predicts that the paper shortage will continue into 2023.

Breeo, an American firepit company that is based in Pennsylvania, has seen the shortage. In May it published its first printed catalog since the outbreak. This was after a year of sales growth. Following the success of the campaign, the marketing team began discussing printing a festive catalog. But the paper shortage helped quash that plan; it’s going to send postcards instead, said Alex Smoker, the company’s marketing director.

This is a significant shift in a market that has seen its sector shaken by the advent of the internet. Although mail-order catalogs used to be a mainstay of American shopping—consumers could once buy entire houses from the Sears catalog—demand for paper has been declining in an increasingly digitized world, spurring many paper mills to shift course. In fact, direct-mail marketing declined so much between 2008 and 2015 that the Direct Marketing Association changed its name to the Data & Marketing Association in 2017 before it was acquired by another trade group. However, print is slowly returning to prominence. Even Amazon.com Inc. (NASDAQ:) was able to make a comeback in 2018. added a physical toy catalog to grab business after the bankruptcy of Toys “R” Us.

This trend gained momentum during the outbreak of coronavirus. Retailers are finding a captive market as more people spend time at home and physical catalogues can be sent to them. At the same time, soaring online advertising costs combined with Apple Inc (NASDAQ:).’s new advertising tracking rules, which reduce companies’ ability to reach their targeted audience, have pushed more retailers back to print. While paper catalogues used to be considered clutter at one time, much of the marketing is now done via email, so a printed mailing seems almost an anomaly.

Screen fatigue drives down the success rate of online advertising, and in the past year, “we’ve all been overwhelmed with more digital stuff,” said Jonathan Zhang, associate professor of marketing at Colorado State University. “Part of the allure of having a magazine or print material is that it cuts through the clutter.”

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