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  • Writer's pictureEd Gaines

The Blockage of the Suez Canal Causing Shortages

Another product shortage is looming. Major problems with international shipping are likely to make toilet paper and some other items scarce, and could bring a return of hoarding.

Products are having difficulty getting to their destinations around the world because for 6 days, Egypt's Suez Canal was blocked by a giant cargo vessel that got stuck and held up hundreds of other ships on a route that handles about 12% of world trade.

The Ever Given, about as long as the Empire State Building is tall, was finally freed Monday, but analysts say it could take more than a week to clear the backup.

Meanwhile, a shortage of shipping containers also is causing problems in the cargo transport industry. Many of the factories that build the giant metal boxes are in China, and a number of them shut down in the early days of the COVID crisis, cutting supplies short.

Given the situation in the Suez Canal and the container crunch, several types of products could become harder to find before long.

1. Toilet paper

One of the companies impacted by the container crisis is Suzano SA. The Brazilian company is the world’s largest producer of wood pulp, used to make toilet paper, and it's warning that the lack of containers could slow shipments to its production partners.

2. Furniture

Deliveries of furniture are being affected by the shipping industry issues. La-Z-Boy recently said on an earnings call that customers can expect to wait for their new sofas and chairs anywhere from 5 to 9 months after placing their orders.

The Suez shutdown held up shipments of furniture from Ikea, which is based in Sweden.

3. Cheese

Costco recently blamed a shortage of imported cheese on the shipping container shortfall. The retailer cited issues at ports along the West Coast, from Seattle down through California.

4. Coffee

The Suez Canal blockage has stalled some shipments of coffee, specifically the type used to make instant coffee like Nescafe.

The Suez is a major shipping route from Vietnam, the world’s largest producer of robusta coffee, used in instant coffee, so a scarcity of beans could soon be felt at coffee shops and in supermarkets.

However, do not panic. The Suez Canal should be back to normal soon, and the production of shipping containers will ramp up.

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