Last year’s nightmarish toilet roll shortages could be on their way back because of a crisis in the shipping container world, a top industry figure fears.
Space on container ships has been scarce for months because of bottlenecks caused by the pandemic – with the Suez Canal blockage only making things worse.
Walter Schalka, whose firm Suzano SA produces the wood pulp that toilet roll is made from, told Bloomberg that shipping problems had already forced his company to delay some shipments from its South American terminals.
That in turn could lead loo roll manufacturers to run out of wood pulp, ultimately causing fresh shortages on supermarket shelves.
Will this come back? A Sainsbury’s customer with a trolley full of toilet roll looks at the emptying shelves at a store in Northwich shortly before the UK’s first lockdown last year
Blockage: The Taiwan-owned MV Ever Given remains lodged in the Suez Canal in Egypt, exacerbating what was already a crisis in the container shipping world
The global container shortage has been driven by a surge in online shopping and a Chinese export boom after the country suppressed the initial wave of the pandemic.
At times, China has been exporting three containers for each one imported as firms seized market share from rivals in hard-hit countries abroad.
But at the same time, supplies of containers became scarce after manufacturers who expected a slump in trade slowed their production of them, said Simon MacAdam, a senior global economist at Capital Economics.
All of this means it is harder than ever to charter a container from China as the pandemic continues to disrupt the global economy,
Container shipping costs have already leaped by 250 per cent between January 2020 and last week, MacAdam said, and are now set to rise further.
The pandemic has also caused delays in shipping returning to China, further disrupting global trade.
Suzano, the Brazil-based wood pulp firm, relies on shipping that transports the raw material in loose quantities or ‘break bulk’.
But as firms battle for space on container ships, break-bulk shipping of the sort needed by Suzano is falling by the wayside and docking at its terminals less often, according to Schalka.
A container ship is loaded at an Australian port last year – with demand for containers surging during the pandemic due to the growth of online shopping and Chinese exports
Suzano, which produces around a third of the world’s hardwood pulp, already faces exporting less of the raw material than planned in March.
‘All the South American players which export through break bulk have faced this risk,’ said Schalka, the firm’s CEO.
If the wood pulp trade faces significant disruptions, loo roll producers may find themselves unable to make toilet paper unless they have sufficient stocks.
That could ultimately lead to renewed shortages on supermarket shelves a year after a run on loo roll became one of the symbols of the early weeks of the pandemic.
Empty shelves were an early sign of the disaster unfolding in Italy last March, when it became the first country in Europe to go into lockdown to slow the pandemic.
It subsequently reached Britain where toilet roll shelves were emptied and supermarkets were forced to impose limits on how much loo roll could be sold.
Empty shelves in the toilet roll aisle at an Asda in East Dunbartonshire last year as panic-buying set in around the world
Further episodes of panic-buying have followed since then, including in Australia when Melbourne went back into lockdown in the Southern Hemisphere winter.
In the US, toilet paper sold out in California cities including Fresno and Los Angeles as the country entered its deadliest phase of the pandemic late last year.
Pulp producers last year warned that border closures in Europe were causing transport logjams that delayed shipments of the raw material.
Producers such as Finland’s Metsä Fibre and Sweden’s Södra Cell International said at the time that trucks of pulp were stuck in traffic jams for hours or even days.
Now, container shipping has been further snarled by the Suez Canal crisis that could take days or even weeks to resolve.
‘With supply chains already under pressure, a large container ship has now literally blocked one of world trade’s major routes,’ said ING economist Joanna Konings.
‘As the Suez Canal Authority works to free the canal, traffic is building up, and missing inputs will disrupt supply chains.’
Egypt’s Suez Canal Authority (SCA) said it was doing all it could to refloat the MV Ever Given, a 1,300ft vessel which ran aground in a sandstorm on Tuesday.
Tug boats, dredgers and heavy earth-moving equipment have been deployed but so far the ship has not budged.
Salvage experts warned the shut-down could last weeks, potentially forcing businesses to re-route cargo ships around the southern tip of Africa.
Leon Willems, a spokesman for Rotterdam’s port – Europe’s largest gateway – said logistics demand had already been outstripping capacity before the Suez incident.