Newest Supply Chain Issue Is...Title Paper?

• Supply chain issues and shortages have characterized automotive production and sales for nearly two years, but now the administrative part of the process is backed up, too.

• The specific kind of paper used to print car titles is now in short supply, thanks to paper industry consolidation and a lack of raw material, and certain states are feeling the effects.

• South Dakota, Michigan, and Oklahoma have delayed or ceased almost all title printing, with title delivery estimates ranging from a month to four months on a case-by-case basis.

Buying a car hasn't been easy for, well, the past two years. Raw material costs and semiconductor shortages have led to historically low levels of supply coinciding with soaring demand for cars, both new and used. Supply chain snags have exacerbated this issue, as the backlog of port deliveries grows, but at least everything goes smoothly once you've purchased the car, right?

Wrong. The newest twist in the automotive industry's nightmare is a lack of paper, specifically the kind of paper used for titles. States like Michigan, South Dakota, and Oklahoma have issued memos about conserving the special print by being more selective about the speed at which titles are issued. For example, if someone needs a replacement title to sell their vehicle, the request will be processed more quickly. Other conserving tactics include asking dealerships to only apply for a new car title once a purchase is finalized.

This issue isn't just affecting small-town DMVs or unlucky owners with long-lost titles. News reports and online forums are filled with stories of titles arriving as late as 18 weeks from the application date. In fact, Autoweek Editor Natalie Neff encountered this very problem last week, with the dealership estimating two to four months before she receives her new car's title.

The situation has become so dire that the South Dakota Department of Revenue's Motor Vehicle Division said it won't print any titles until February 2023, save for emergency cases where residents are moving out of state. The situation gets even more complicated in Oklahoma, where title status is denoted by color. Green means clean in the Panhandle state, and the state is focusing on fast-tracking the printing of clean titles, potentially leaving those with rebuilt, salvage, and even boat titles without proof of ownership. All around, the shortage has slowed down the bureaucratic process of buying, selling, and keeping legal vehicles on the road, making out-of-state used car transactions particularly frustrating.

How did the paper supply situation get so out of shape? The answer is more complicated than a lack of raw materials. As print publication fell out of favor and electronic information dissemination grew in popularity, the paper and cardboard industry experienced consolidation, limiting the number of available plants and people to create paper products.

Global demand for shipped goods also pushed the paper industry towards cardboard boxes, further diverting focus from specialty paper production. In the case of title paper, the process is highly specialized and closely regulated to nullify counterfeiters, meaning the process requires more intensive labor. Reporting from the Wall Street Journal cites the limited number of paper production companies as one of the main reasons behind the shortage.

Some states have decided to do away with paper titles altogether and go digital, a move that is making life easier for consumers and car flippers alike in those 12 states. For the remaining states, this issue is on the mend, as the ebb and flow of shortages have shown us over the last two years.

Oklahoma reported that it changed its title printing process and switched to digital lienholder reporting, while a spokesman for Michigan's Secretary of State said it has received additional paper and is also looking into switching the type of title paper it uses. Even so, the frustration felt by owners who haven't been able to use their newly purchased vehicles is justifiable, as the shortage continues.

Have you experienced long waits for vehicle titles to arrive? Share your experience in the comments below