Concerned about Freight Delays? Read This First

Posted on March 22nd, 2021

Reporting by Max Hurd, SVP of risk management and sourcing.

Over the past month, the lowly shipping container has been making a lot of news (NYT, The Guardian). The reason? What else is new: the ongoing Covid-19  pandemic and its by-products. There are lots of details involved with this particular topic because the global shipping system is an interconnected behemoth, but the TL;DR* version is this: The demand for containers is quite a bit greater than the supply for routes between Asia and the U.S. West Coast, and, to a lesser extent, for Asia-to-Europe container shipping lanes. This is causing a dramatic increase in container pricing and greater difficulty in securing bookings for these lanes—for example, ocean freight from Indonesia and Papua New Guinea to the U.S.A. has roughly doubled in cost over the past four months.

Want more details? Read on.

In the early days of the pandemic, everyone (e.g. retailers) stopped buying products from Asia, which led to many almost-empty container ships and cancelled sailings. However, it appears that the demand for all that stuff from Asia didn’t go away for good: It just shifted in time, and has now piled on top of normal demand. The pandemic has also happened to increase the demand for things that are, generally speaking, manufactured in Asia.

Additionally, many of the West Coast ports are still operating with a reduced workforce, as skilled dock workers are out due to Covid-19 illness or workplace adjustments. This has caused the West Coast ports to be overwhelmed. Delays for container ships arriving there—not just the ones from Asia—are currently 1 week or more. It’s not really clear how long this supply-demand mismatch will last, but the general consensus seems to be “plan for this to continue through the duration of 2021.”

As mentioned above, the global container-shipping system is an interconnected behemoth, and the intense focus on Asian exports (because there’s lots of money to made by shipping companies) is pulling resources away from other areas of the world. We’ve also seen it pushing some additional demand to East Coast ports as companies look for alternatives to the West Coast—in other words, this is a living and evolving scenario.

* TL;DR is Internet speak for “too long; didn’t read.”

U.S. Outlook

We are somewhat fortunate that the vast majority of our coffee moves through the Gulf and East Coast ports. With the exception of Papua New Guinea and Indonesia, we haven’t seen major price volatility or availability issues related to the Asia-demand surge. It remains to be seen if that will change.

We’ve been looking at alternatives for Papua New Guinea and Indonesia, including routing containers through the East Coast instead of the West Coast (being located in the Midwest does have its advantages). Of course, the weather on the Gulf and both coasts tends to be less predictable. We did see some rail delays this winter due to weather (our coffee takes a train from the coastal ports to Minneapolis), but we are hopeful that weather and rail backups won’t be an ongoing issue, and that the West Coast wackiness stays confined to the West Coast.

Naturally, we should caveat this statement with the acknowledgment that we can’t predict the future and there is significantly more volatility in global shipping than there was pre-pandemic. So, while you’ll get no promises from us about the circumstances, you will get some promises about the fact that we’ll always do our best to keep you informed about delays and hiccups along the way.

What Does This Mean for You?

Remember that your friends at Cafe Imports are always here for you, and we understand that it’s exceedingly important for you to receive your coffee on time and when you need it. While we can’t control global shipping movement, we can keep you informed about your estimated delivery dates, and make sure that you always have coffee in your warehouse, no matter what. This might mean getting a little creative, but we love a challenge—that’s part of why we’re in the coffee business!

It behooves our roaster customers to stay up-to-date with news regarding shipments and deliveries, as well as generally paying attention to articles and reports like we linked above: While they might not always specifically apply to our shipping lines and what we’re experiencing, it helps all of us when we’re all tuned in to what’s going on around the world.

As always, if you need any support with regards to planning your future buys, tracking coffees you have on contract or are expecting to contract, or have any questions at all about the state of global shipping affairs, don’t hesitate to reach out: We’re always here and happy to help.