It's a household essential that's become as rare as finding the hottest toy at Christmas. Toilet paper flies off store shelves as quickly as it's stocked, but Union Pacific is working with its customers to move pulp, the raw material tissue mills need for production. It's one of many paper products that's seeing an uptick in demand as communities hunker down.
Subscribe to Inside Track
"The increased demand is a short-term bump in response to the COVID-19 outbreak," said John Ivester, director-Industrial Products, Marketing and Sales. "We're working with our customers on both ends of the supply chain, shipping pulp in boxcars and finished tissue paper via intermodal."
The toilet paper market is essentially split between commercial and consumer use, and the two products aren’t made the same way. As people shift to staying home full-time, Georgia-Pacific, the maker of Angel Soft and Quilted Northern, says the average U.S. household (2.6 people) will increase daily consumption by approximately 40%. The change is impacting how the supply chain works.
In addition to toilet paper, approximately 39 million tons of paper goes into manufacturing boxes every year.
"You don't really think about it, because the focus is on the product on the shelf," Ivester said.
Ivester says Union Pacific is seeing a "short-term bump" in paper for boxes as online sales and the demand for essential items to restock store shelves rises. The railroad typically hauls the paper in boxcars from mills in the South, Southeast and Pacific Northwest to major cities where box plants are located. Finished boxes are then trucked to online retailers, big box chains, produce packers and others, within about a 100 mile radius, to be loaded and shipped to the end user.
"What's really great is about 93% of the boxes are recycled," Ivester said. "Often, Union Pacific will move the recycled boxes by boxcar from the recycler to the mill for production of the paper used to make boxes."
While Union Pacific continues playing a critical role in keeping supply chains moving, one of its top paper customers predicts the current rush for every day paper products could be beneficial for consumers. International Paper CEO Mark Sutton recently told CNBC, "We're building efficiencies in and making sure products are available, and I believe you'll see a better stock over time for some products."
Consumers nationwide hope that better stock includes supplies for the toilet paper aisle.