Transport snarl may spark bathroom paper, espresso shortages


Blocking the Suez Canal by a skyscraper-sized cargo ship could exacerbate months of growl in the global supply chain and lead to a shortage of products such as toilet paper, coffee and furniture in the US

About 10% of world trade is carried out through the channel, which corresponds to a daily volume of goods of almost 10 billion US dollars.

There are virtually no alternative routes for shipping goods from Asia to Europe. As a result, imports from Europe to the US could be delayed and the blockage could prevent empty shipping containers from being returned to Asia, exacerbating a global container shortage triggered by the pandemic and rising consumer demand.

Although U.S. imports from Asia generally cross the Pacific Ocean to California, delays in parts shipped from Asia to Europe could push back shipments of finished products from Europe to the U.S. A blockage that is cleared within a few days is unlikely to slow deliveries, but the impact would be more severe if the crisis dragged on for weeks.

Suzano, a Brazilian company that accounts for around a third of global shipments of hardwood pulp that is used to make toilet paper, told Bloomberg that the container crisis is already at risk of supply problems.

Most of the robusta coffee makers used in Nescafe ship the product through the channel. A coffee shortage would primarily affect Europe, but could have global effects, according to Bloomberg and Business Insider. Coffee roasters on the continent have already struggled to get supplies from Vietnam, and the coffee beans that Europe imports from East Africa and Asia flow through the Suez.

And booming furniture sales amid the work-from-home trend of the pandemic has pushed shipments back months, a traffic jam made worse by the congestion in California’s ports, according to Business Insider. The Suez growl could amplify the backups.

Oil deliveries can also be caught up in the crisis. According to Lloyd’s List, a shipping journal, about 1.9 million barrels of oil flow through the canal every day. That’s about 7% of all marine oil. The shutdown could affect the transportation of oil and natural gas from the Middle East to Europe and drive crude oil and gasoline prices higher. Pump prices have already risen because a winter storm shut down refineries in Texas and switched refineries to more expensive summer gasoline blends.

And the global shipping network is clogged, despite consumer demand rising along with a waning pandemic. Some factories in the US and overseas are still closed while many others are partially busy due to COVID-19 cases from employees or social distancing requirements. Ports, warehouses and haulage companies are also struggling with employee absences. And the deliveries of COVID vaccines are taking up the shipping capacity.

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Containers pile up in ports where workers cannot store and move them. And congested ports have increased the time truckers need to pick up or drop off containers.

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Contributor: Associated Press