Toilet paper might soon be in sharp shortage worldwide and at higher prices, the world's largest producer of wood pulp said, warning that a global shortage of shipping containers could cause supply disruptions.
Suzano SA ships the majority of its pulp in break bulk cargo vessels, and with demand for ships carrying ribbed steel containers increasing, CEO Walter Schalka told Bloomberg that the pressure is beginning to spill over to break bulk and threatens to slow the company's shipments.
Schalka said he was already worried about the possibility of exporting less than planned this month and having to roll over some shipments into April; with cargo vessel competition rising, he said break bulk ships are berthing at Suzano's terminals less frequently than expected.
The container crisis has been raging for months, fueled primarily by Chinese demand.
According to industry watchers, desperate companies wait weeks for containers and pay higher prices to obtain them, forcing shipping costs to skyrocket. This affects everyone who needs to ship products from China, but particularly e-commerce companies and customers, who may be hit with higher costs.
Spot freight prices for the Asia to North Europe route were 264% higher in December relative to a year ago. For the route from Asia to the West Coast of the U.S. rates are up 145% year over year.
The scarcity is compounded further by insufficient air freight capacity, as certain high-value goods that would usually be shipped by air, such as iPhones, must now be delivered via sea containers.
International flight volumes have plummeted owing to the virus and travel limitations.
At the onset of the pandemic, shoppers turned to panic buying and stockpiling, resulting in a shortage of toilet paper.
Brazil is the world's leading producer of pulp, with Suzano accounting for about one-third of global supplies of hardwood pulp, the type used to produce toilet paper.
