FEATURE Logistics
A shifting supply chain GLOBAL COFFEE REPORT EXPLORES HOW COVID-19 HAS CHANGED THE LOGISTICS OF TRANSPORTING COFFEE, AND HOW TRADERS, SHIPPING COMPANIES, AND ROASTERS ARE PIVOTING TO MEET CONSUMER DEMAND.
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ransporting green beans requires a plan as meticulous and thorough as a James Bond mission. It involves coordinating harvest seasons with local and international logistic companies, correct handling to prevent oxygen contamination and maintaining consistent humidity levels, and that was before COVID-19 turned the logistics world on its head. International food and agri-business supplier olam food ingredients (ofi) experienced the immediate impact firsthand, having transported green coffee from origin countries to roasters around the globe for more than 30 years. “There are so many variables in shipping that come as a surprise even with the best of planning. Throughout COVID, we’ve seen first-hand how a single bottleneck causes a ripple effect throughout the supply chain,” says Marc Lissauer, Director of Coffee Logistics at ofi. Lissauer points to Colombia, where government-enforced curfews during early COVID-19 outbreaks decreased shipping and production capabilities. Soon after, strikes and protests shut down the country’s main roads, drastically reducing exports again, despite demand for coffee remaining high. “Our extensive global team and presence in origins such as Colombia put us in a favourable position to navigate our way through these roadblocks – both literally and figuratively,” says Lissauer. “Having inventory available in each destination is one way we’ve been able to continue supplying green coffee to our roasting partners. Others, meanwhile, have been forced to buy spot coffee at increasing prices or swap to alternative origins that offer similar flavour profiles.” As a result of these roadblocks, Lissauer says there have been fewer vessels and containers able to meet surging global demand. “Ports and vessels become filled with full containers that reduce both the number of available vessels and empty containers on the water,” he says. “With this increased competition for space and containers, there has been an increase in shipping prices.” In 2020, integrated container logistics company A.P Moller-Maersk shipped more than 100,000 coffee containers via ocean carriers from Brazil. As a result of local container shortages, Luiz Gouveia, Sales Coordinator of Maersk Group brand Hamburg Sud, says the company became accustomed to expecting delays. “We found when we exported containers to ports across the globe, they would probably become stuck at terminals,” Gouveia says. This can be caused by any number of reasons, including irregular shipping schedules with an influx of boats arriving at the same time, understaffing of terminal workers due to COVID-19 outbreaks, lockdowns or capacity limits, and truck and equipment shortages. These factors can result in 20 or more boats waiting in a port at any one time. Gouveia cites the Rotterdam port, one of the largest seaports in Europe, and the Port of Los Angeles in America as some of the hardest hit. “In September, we saw up to 60 to 70 vessels waiting at one time in the Port of Los Angeles,” he says. Gouveia adds that Maersk, along with countless other shipping companies were faced with
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the challenge of either utilising more fuel to make up for lost time spent at the terminals or “blank sailing” – skipping ports. “There is, however, an environmental issue with burning more fuel and skipping ports adds to the backlog of items already waiting at ports,” he says. “Globally, there has been a vessel shortage, so it is not as simple as sending more vessels to collect the blanked ports.” With so many contending factors, Maersk worked to maintain the high standard conditions of its dry food grade containers to ensure coffee quality. According to Jean Nicolas Wintgens in his book Coffee - Growing, Processing, Sustainable Production , green coffee is susceptible to absorbing water from its surroundings, which dilutes its flavour and aroma. As such, when transporting coffee, its temperature and humidity must be carefully monitored and held in conditions of less that 60 per cent humidity. Exposure to warm temperatures, along with too much oxygen, also increases the bean’s metabolic activity, causing a loss of aroma. Transport by air, however, remains very expensive due to limited space says Gouveia, with degassing and oxygen exposure always a threat. According to the United States Census Bureau, in 2021 air transport of green beans cost an average of US$16 per kilogram, compared to ocean shipping of green beans which cost an average of US$3 per kilogram. For this reason, maritime shipping has remained the preferred method for transporting coffee internationally, which is why Gustavo Pereira, Senior Marketing Analyst at Maersk says it’s important to improve the problems seen today. “We are shifting to offer a complete end-to-
