There have already been many immediate and obvious ways that the COVID-19 situation has affected the specialty-coffee industry, but we’re also keeping our eyes on a developing obstacle that may have further-reaching impact on the season of shipments we’re expecting over the coming weeks: a global container shortage and port backups that have been snowballing since late January.
An integral part of the supply chain includes the transportation for coffee from its country of origin to its port of entry into a consuming country. Since the 1950s, coffee has been shipped in reusable intermodal containers (“intermodal” meaning they can easily transfer from truck to boat to rail) that are typically made of corrugated steel and clock in at about 8.5 feet tall, 8 feet wide, and 20 feet long, large enough to hold between 275–325 standard-size coffee bags (59–70 kg).
These containers (or “boxes” for shorthand) travel the globe on enormous ships, picking up and dropping off goods along a set route that typically includes several stops between origin and final destination. (For a really cool visualization of what shipping routes look like, visit https://bit.ly/2xuM3VP.)
Under normal conditions, the boxes get “flipped” relatively regularly: After a good or product is imported and unloaded, the container is reused to ship out exportables, thereby entering back into the rotation of use. However, the past few weeks have seen a pileup of interruptions to this flow of traffic, in large part due to COVID-19.
For starters, China effectively shuts down its import/export business for Chinese New Year, which just happened to also be the period in 2020 when the country began to realize the scale of the crisis there. The shutdown on trade was extended beyond the holiday, which meant that suddenly container ports elsewhere became backed up with boxes that would have headed to China. Once Chinese ports were open again to receive shipments, not only was there a backlog to catch up on, but the port of Fuzhou initiated a 14-day mandatory quarantine on ships arriving from countries affected by the virus—which is almost all of them—causing more delays.
Elsewhere there are slowdowns to container movement as well, as ports experiences staff shortages due to shift changes and safety protocol, fear over getting sick, and transportation restrictions or curfews in many countries that makes it difficult to commute to work. These deficits mean longer unloading times, which also means there are fewer boxes actively circulating as they wait in a queue to be flipped.
According to a Bloomberg report from late March, “The availability of cargo containers at Hamburg, Rotterdam and Antwerp in Europe and Long Beach and Los Angeles in the U.S. are at the lowest levels recorded. Imports to the port of Los Angeles and Long Beach, which have a 35% share of containers coming into the U.S., fell as much as 3% in the first two months of the first quarter.”
Cafe Imports supply-chain specialist Dave Froiland says, “The basic thing of it is that it became a massive trade imbalance.” What he means is that countries that import more than they export will always have a surplus of containers—which isn’t the case with China, the world’s largest exporter of goods. “Believe it or not, the U.S. ships empty containers to China every week,” Dave says. (The U.S. is the second-largest exporter of goods.) Coffee-producing countries, meanwhile, don’t tend to import as many goods as they export, which means that they’re destined to be a bit short on boxes generally—and this situation doesn’t help.
Additionally, coffee is still a labor-intensive product even after it’s been dried and bagged. When Dave issues a final approval on a coffee and shipping instructions to an export partner, that coffee still needs to be milled and put into exportable bags, and then the bags wait for an available container to book across the ocean. The whole process takes a minimum of several days and, depending on the queue of orders at the mill and the number of open containers, up to a couple weeks.
“If I send an approval today, generally I wouldn’t expect it to leave [the port of origin] for two or two-and-a-half weeks,” he says. “It would probably get processed later this week or next week, and then loaded the following week” if there is a container ready, and a ship scheduled to move—and that’s an ideal situation, on a full staff with ample transportation available. These days, however?
Well, to be honest, we’re not totally sure what the timelines will look like in a few weeks, but right now Dave is optimistic and feeling confident about our partners’ ability to keep as close to “on schedule” as possible: “[Our coffees] are still running pretty good. I haven’t seen any big delays anywhere.”
So far we’re more or less on track—but as with everything else in this weird, wild time we’re experiencing together, we’ll keep you updated if there are any major changes. (Dave also adds, “It’s hard to say all is clear when something can go wrong quickly,” such as a full container ship being held back at the port, which is happening in increasing numbers. Hey, even optimists need to remain realistic!)
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