The truth about the ongoing toilet paper shortage is elusive, but actually makes a lot of sense. The panic triggered by an irresponsible media’s attempt to gain political advantage in the headlines caused some people to stockpile certain nonperishable items. One sinister person tried to hoard hand sanitizer for profit and was prosecuted by the authorities, but purchasing twice or three times more toilet paper than one normally uses is not a crime. A run on toilet paper and totally empty shelves caused additional stockpiling as soon as new stock arrived. The panic buying was always easy to understand, but why couldn’t supply eventually catch up with demand?
The paper industry is comprised of a several very large manufacturers. It is an integrated industry such that wood pulp and recycled fibers can be made into any number of paper products. The process and equipment used is this industry is maintained in a rather small number of mills located around the country. These plants are massive and filled with large expensive heavy mills, presses, and related equipment to manufacture and form the ultimate products from copy paper, boxboard containers to tissue paper products. To construct a new plant would be a massive and long undertaking, but more importantly unnecessary.
The secret to this phenomenon is in the supply chain. These products are not new, they have been made for a hundred years with little actual change. The quantity needed by the entire public is fairly consistent and has been reduced to a precise calculation many years ago. Therefore, the manufacturers know exactly how much to produce and deliver to each retail outlet. The gradual increase in population and related consumption is easily compensated for within the industry through product mix and normal efficiencies and improvements. There is no oversupply, undersupply or excess inventory because that is expensive and unnecessary. It’s just like tugboats, there are only a limited number of navigable waterways in America. Long ago the optimum number of tugboats were constructed and because they are designed to last for a hundred years or more, none have been or will be built, just rebuilt and overhauled.
Once all toilet paper supplies were consumed from the retail stores, the resupply could only continue at the predetermined rate. Since panic buying continued resupply was subject to ongoing hoarding. Eventually, when everyone has a closet full of toilet paper, the retail supply will reappear. However, the manufacturers know this and they do not want to have a shutdown in the future when everyone stops buying toilet paper. They have very little incentive or ability to address the current shortage in a quick manner. They know that what has been purchased will last until it is used and sales now will be offset by lower future sales. It takes a long time and huge area for a massive ship to turn around, even more so with the paper industry. The sand in the hourglass must trickle through to the bottom at a constant rate, it has been designed to do so for that purpose. The systems of supply and demand for commodities are fixed on a macro scale over time, it’s the most efficient way to get things done – it just makes sense.