Sappi’s Swingler keeps it clean in transport of ‘dissolving pulp’

As John Swingler oversees the forest products supply chain, he may not be looking at breakbulk moves of logs and lumber as much as he is focused on containerized shipping and “super-clean” transport of a tree-based commodity used to make clothing.

Swingler is president of West Harrison, N.Y.-based U.S. Paper Corp., serving as the in-house export service provider to Sappi North America, a unit of Johannesburg, South Africa-based Sappi Ltd., a leading forest products firm and producer of specialized cellulose utilized in production of viscose rayon, the equivalent of manmade cotton. Swingler has, over the course of more than a quarter of a century with Sappi and nearly a decade as a director of International Forest Products Transport Association, seen firsthand the shift from breakbulk to containerized shipping in an industry with thin profit margins and an increasing emphasis on sustainability. In an interview with the American Journal of Transportation, Swingler shares his views on the changing face of forest products and their supply chain, as well as his desire for additional change in the United States – to the metric system he grew up with in his native South Africa. How do you leverage your 27 years of experience with Sappi to ensure efficient logistics for a variety of products through a full spectrum of transport modes, from airfreight to less-than-containerload to full containers and even to breakbulk? The various products, by their nature, move in various modes. But all of the modes that we use are important enough for us to have quality service providers who can commit to us longer term. As a result of that, you build up decent supply chain models based on your products and the modes and the markets. That means you’re not constantly shopping and changing from one provider and one mode to another provider and another mode. It’s very consistent and so are our customer bases. Based on that, you can build up a reliable, sustainable supply chain model. How surprised are some people to learn that your company makes a dissolving wood pulp product that is used to make clothing and textiles, and are there particular challenges associated with this commodity’s transport? Many folks are surprised and don’t understand what the raw material is to make viscose. The raw material for viscose production is cellulose, and one of the most abundant sources of cellulose in the world comes from trees. They’re also surprised to learn that, when you make cellulose in large quantities from trees, you’re supporting a renewable, sustainable alternative to cotton. There are three main fibers in the world that account for about 97 percent of all fabrics. The first is synthetics such as polyester and nylon, a 900-pound gorilla that is about 61 percent of everything we wear, and its raw material comes from oil-derived hydrocarbons that are sucked out of the ground. The second most common fiber of the world is cotton, which accounts for about 32 percent of the world’s fiber. Cotton is naturally grown around the world, particularly here in the United States, and exported mainly to China and elsewhere. China is the biggest producer, followed by [the United States of] America, which is the biggest exporter. Also, countries like India and Pakistan are producers of cotton. The smallest but fastest-growing fiber sector, amounting to about 4 percent, is cellulose derivatives, of which rayon or viscose is the biggest player. It is also sometimes referred to as manmade cotton due to its similar properties. Our customers are basically reformatting the cellulose molecule found in trees into a thin strandlike fiber. Both oil-derived hydrocarbons and cellulose – which is a carbohydrate – have a similar molecular tendency in that they like to form themselves in long polymer chains. That means that both of them are naturally well-engineered to make thin fibrous materials that go into making thread that in turn goes into weaving cloth which is cut and stitched to making clothing and other consumer items. The cellulose option, however, is a renewable resource whereas other hydrocarbons are derived from fossil fuels. And are there challenges associated with transport of dissolving pulp? Absolutely. The specialized cellulose that we produce is a primary raw material input to our downstream customer process. So, by its nature, it has to be extremely, extremely well transported, and the whole supply chain has to have a focus on cleanliness and contamination avoidance or ingress of anything noncellulose that can affect the purity of the pulp, and that is because the pulp gets added, or dissolved, into a chemical process. Obviously, you want to avoid adding anything else into this process that you don’t want. That particular aspect is very challenging, because the supply chain for pulp is set up mainly for paper-grade pulp, where there are many ways to take out any dirt that gets entered into the process during supply chain activities. But with specialized cellulose, or dissolving pulp, you can’t do that, so you have to make sure that things are very, very clean. That’s traditionally been a very big challenge for everyone involved in the transport of dissolving pulp. To meet the challenge, you’ve got to lift the game with your partners who are in the supply chain. For example, the warehouses have to be super clean. The railcars have to be cleaned. The containers have to be cleaned. Everybody through the supply chain has to make sure there’s no ingress of dust or foreign particles that can pollute or contaminate the pulp. Where are you primarily transporting this commodity? The North American-produced pulp comes from our mill in Cloquet, Minn., [where until 2013 Sappi’s former plant turned out kraft pulp for paper production] and goes to the big producers of viscose, or rayon, that are scattered throughout the world. So it’s a 100 percent export product, just about. The market for this grade of pulp in the United States is quite small. We ship most of our product to Europe, India and Indonesia. We don’t go to China because China introduced antidumping duties two years ago against the Canadians and the United States, as well as Brazil, so we’ve added other destinations besides China. Speaking from your position as a longtime active member and, since 2007, board of directors member of the International Forest Products Transport Association, how do you see the industry adapting to global demand shifts? I think the industry is very flexible and can adapt very fast. That’s really because the profit margins of pulp and paper are very thin. If there’s a way to save a dollar or two, people will do it. As a result, people are very flexible and nimble to make changes over small dollars, which is not necessarily seen in other industries. We’ve seen the advent of new ways of shipping coming into play, and many companies are adopting that, which is changing the traditional way of doing things. I’m really referring to the advent of containerization coming into the forest products industry in a bigger way. These days, even large volumes – I’m talking about significant volumes that in the past would scare somebody into breakbulk because there was no other practical way you could handle these volumes – these volumes are now moving in containers. We have customers in various parts of the world that will accept many hundreds of thousands of tons of product in containers alone. So you can imagine what their supply chain looks like, when you’re tracking literally tens of thousands of containers every single day. As sustainability becomes an increasing priority throughout the world, how has this impacted logistics for Sappi and the industry as a whole? Sappi takes a very holistic view of sustainability – starting with raw material acquisition, through our own production impacts and to the ultimate end of life of our materials. Our primary raw material is a renewable resource, that is trees. We use extremely high levels of renewable energy and most of our products can be easily recycled or are designed for reuse. While we are serving a global supply chain, efficient logistics is extremely important, and we have developed a carbon calculator that can show us the emissions associated with various routes and modes of transportation. Our industry has come a long way, and we continue to make improvements across the supply chain. Although I believe you and your family first moved from your native South Africa to the United States more than two decades ago, are there still aspects of U.S. culture that you find vexing? Yes. The first one is the lack of the metric system. The lack of the metric system really makes life very complicated in the United States and takes time to learn the imperial way of doing things. It often adds cost and complexity into doing business. For example, computer systems that are used within the forest products world are often designed in Europe, and those European systems all are metric. If you buy such a system, the first thing you’ve got to do when you install it in the United States is convert it to the imperial system. Then, if you have an export customer in say Brazil, which is on the metric system, who wants his paper to be sold to him on a metric basis, you need to do that. So you’ve got a metric system that converts to an imperial system that you convert back to a metric system. You end up with systems that are converting from one to the other with domestic customers that will want to see their product and delivery notes in imperial but export customers that might want to see all the same information in the metric system. And it applies to suppliers who export into the United States in a similar way. Besides work, what activities do you most enjoy? I prefer family time. I like going out with my family and friends when I can, and the two ways of doing that for me are skiing in the winter and boating in the summer. I’ve got three kids, two who were born in South Africa and went through the American schooling system and who are currently becoming very successful. My son, the youngest of the three, was born here in America, and he’s still in high school. For my wife and I, not to mention the kids, it’s been a very good experience.