Last year’s nightmarish toilet paper shortage could be on the way back due to a crisis in the shipping container world, a top industry figure fears.
Space on container ships has been scarce for months due to bottlenecks caused by the pandemic – with the blockage of the Suez Canal only making things worse.
Walter Schalka, whose company Suzano SA produces the wood pulp from which the toilet roll is made, said Bloomberg that shipping issues had already forced his company to delay some shipments from its South American terminals.
That, in turn, could lead to toilet roll producers running out of wood pulp, which could eventually lead to new shortages on supermarket shelves.
Is this coming back? A Sainsbury’s customer with a trolley full of toilet paper looks at the shelves in a Northwich shop shortly before the UK’s first lockdown last year
Blockage: Taiwan-owned MV Ever Given continues to be housed in Egypt’s Suez Canal, exacerbating what was already a crisis in the container shipping world
The global container shortage is driven by an increase in online shopping and a Chinese export boom after the country suppressed the first wave of the pandemic.
At times, China would export three containers for each imported, as companies captured market share from rivals in hard-hit countries abroad.
But at the same time, container supplies became scarce after manufacturers expecting a slump in trade slowed their production, said Simon MacAdam, a senior global economist at Capital Economics.
All of this means that it is more difficult than ever to charter a container from China as the pandemic continues to disrupt the global economy,
Container shipping rates have already increased 250 percent between January 2020 and last week, MacAdam said, and are now set to rise further.
The pandemic has also delayed returns to China, further disrupting world trade.
Suzano, the Brazil-based wood pulp company, relies on shipping that carries the raw material in bulk or ‘breakbulk’.
But while companies compete for space on container ships, the general cargo that Suzano needs falls by the wayside and moors less often at the terminals, says Schalka.
Last year a container ship was loaded in an Australian port – with increasing demand for containers during the pandemic due to the growth of online shopping and Chinese exports
Suzano, which produces about a third of the world’s hardwood pulp, is already facing exports of less raw material than planned in March.
“All South American players exporting via breakbulk have faced this risk,” said Schalka, the company’s CEO.
If the wood pulp trade faces significant disruptions, toilet roll producers may not be able to make toilet paper unless they have adequate supplies.
That could eventually lead to renewed shortages on supermarket shelves a year after a run on toilet roll became one of the symbols of the pandemic’s first weeks.
Empty shelves were an early sign of the disaster that unfolded in Italy in March, when it became the first country in Europe to go on lockdown to slow the pandemic.
It then reached Britain, where the toilet roll racks were emptied and supermarkets were forced to put limits on the amount of toilet paper that could be sold.
Empty shelves in the toilet roll aisle at an Asda in East Dunbartonshire last year as panic purchases took place around the world
Since then, more episodes of panic buying have followed, including in Australia, when Melbourne in the Southern Hemisphere closed again in winter.
In the US, toilet paper was out of print in California cities, including Fresno and Los Angeles, when the country entered its deadliest phase of the pandemic late last year.
Pulp producers warned last year that border closures in Europe were causing transport disruptions that delayed the shipment of the raw material.
Producers such as Metsä Fiber from Finland and Södra Cell International from Sweden said at the time that trucks with pulp were stuck in traffic for hours or even days.
Now container traffic is further under the spell of the Suez Canal crisis which can take days or even weeks to resolve.
“With supply chains already under pressure, a large container ship is now literally blocking one of the most important routes of world trade,” says ING economist Joanna Konings.
“As the Suez Canal Authority works to clear the canal, traffic builds up and missing inputs will disrupt supply chains.”
Egypt’s Suez Canal Authority (SCA) said it was doing everything it could to refloat MV Ever Given, a 1,300-foot ship that ran aground in a sandstorm on Tuesday.
Tugs, dredgers and heavy earthmoving equipment have been deployed, but the ship has not sunk so far.
Salvage experts warned the closure could take weeks, potentially forcing companies to divert cargo ships around the southernmost tip of Africa.
Leon Willems, a spokesperson for the port of Rotterdam – Europe’s largest gateway – said logistics demand was already greater than capacity before the Suez incident.