Tariffs hit home hard in the newspaper industry

By WYATT EMMERICH,

It’s one thing to talk theoretically about the impact of a trade war. It’s another thing to be caught in the crossfire.

But that’s where I am. Or more literally, that’s where 60 or so independent newspaper contractors found themselves this month when they lost their jobs.

Most Canadian wood products are harvested from government-owned lands. The U.S. has long considered this a subsidy. In January, the Trump administration imposed a 30 percent import tariff on Canadian wood products, including newsprint.

Prices have risen accordingly, costing my newspaper company $300,000 a year.

In the heyday of newspapers, perhaps we could have raised prices or found some fat. Those days are long gone. Intense competition in the media sector has driven margins to the bone. Google, Facebook and Amazon are sucking ad dollars straight to the west coast.

One of the state’s larger newspaper organizations, the Tupelo Journal and its many weeklies, cut editorial, laying off some excellent reporters. But what is a newspaper without original content? We were already lean and mean.

Fortunately for the survival of my company, we found an option. Thanks to a special postal regulation called Exceptional Dispatch, we will be able to use the U.S. Postal Service to get same day delivery of our three daily newspapers, saving a substantial amount of money and allowing us to leave our editorial staff intact.

We will have to change our printing schedules. Instead of printing at 11 a.m. for late afternoon delivery, we will print at night for early morning delivery. As it turns out, most of our daily subscribers will get the newspaper sooner rather than later.

This will not affect our weekly and twice-weekly publications, including The Scott County Times, which have always been delivered through the U.S. mail.

Switching from independent carriers to mail is a trend rapidly progressing in the newspaper industry. Even Amazon doesn’t have their own delivery force — yet.

Independent carriers are becoming an artifact of a bygone era when newspapers were chock full of free-standing inserts and slow mail service. As the main conveyor of timely news, it was imperative that newspapers got delivered as rapidly as possible.

But those days are over. Even in rural Mississippi 90 percent of people have a smartphone and can get breaking national news far more rapidly than delivery of a printed product.

In the meantime, the post office has automated and mechanized. It is now far more capable of reliable delivery than a part-time carrier force. Over the years, it has been increasingly difficult to hire newspaper carriers. Readers will actually find substantially improved service.

Scoff you may, but for months I have included the newspaper carriers in my morning prayers. I pray that they find better jobs. In this unique era of record unemployment that is not a pipe dream.

Meanwhile, the newspaper revenue will help bolster the finances of a challenged U.S. Postal Service. In Greenwood, Greenville and McComb, we will become the Post Office’s biggest customer. We look forward to a fruitful working relationship. I talked to over a dozen publishers around the country who had converted to mail. On average, they rated the experience a nine on a scale of one to 10.

I am writing about this not simply to whine. We all have our challenges in business and life. The newsworthy takeaway is that trade wars do not occur in a vacuum, but have huge real-world effects.

In today’s competitive world, businesses operate on thin margins. When huge new import taxes are levied overnight, the disruption is enough to disrupt entire industries. Millions of jobs will be lost.

At the very least, such new import tariffs should be applied gradually so companies have some time to respond. Trump’s swift action imparts an image of daring bravado, but this is not a TV show. It’s jobs of real people. Just ask our carriers.

Perhaps some mothballed American newsprint mills will crank back up and the market will respond. We will see. In the meantime, anyone owning pine trees is feeling the upside of our downside.

When I started in this business as a young man, newspapers were the hottest thing going, selling for up to 25 times cash flow. The financiers were buying up everything.

I remember wishing I were in some sleepy, niche industry where I could grow the company through skill and expertise, not financial prowess.

The lesson there: Be careful what you wish for!

 

Contact Wyatt Emmerich by email at wyatt@northsidesun.com