The current congestion at ports resulted in the supply-chain bottlenecks among the ports in the world. The coffee industry is facing a shortage of transportation reverting to the situation decades ago – the use of general cargo ships to ship coffee beans. According to Bloomberg News, Singapore trading company Olam International has leased a general cargo ship “Eagle” to transport coffee beans.
To meet the in-demand market, the ship is loaded with bags of Robusta coffee. It departs from Lampung, Sumatra, Indonesia, crosses the Atlantic via the Mediterranean Sea, and sails to New Orleans, Louisiana, USA.
The cargo ship carries coffee beans.
In the coffee industry, coffee bean producers, roasters, and traders are all facing the same situation, an unprecedented supply chain crisis. In order to solve the serious cargo backlog and delays, this big food industry is trying to find new ways to break out of the global shortage of containers. One of the potential solutions is to switch to general cargo ships.
Shortage of container ships! For the first time in nearly 30 years
Manish Dhawan, senior vice president in charge of the coffee business at Olam International, said: “We saw that the scheduled container ship schedule was delayed and it was difficult for customers to obtain the coffee they needed in time, so we began to consider using bulk carriers for transportation. If you ask some senior Traders, they will tell you that in the late 1980s or early 1990s, coffee was shipped in general cargo ships. For us, this is indeed a new method.”
Cooxupe, Brazil’s largest coffee cooperative, has also begun to use general cargo ships to export coffee beans. In early December, Cooxupe shipped 108,000 bags of coffee beans to Europe via a general cargo ship leased by a customer. The company also plans to ship two more shipments of coffee beans in bags without containers in January 2022.
Lucio Dias, Commercial Director of Cooxupe, said: “Some customers have decided to try this approach to solve the logistics bottleneck, but this is a complicated operation.” The process is more difficult to handle because only some ports have enough equipment to lift bags of coffee beans from the cabin. Under normal circumstances, coffee beans are either poured into a special container in large quantities or stacked in bags in a container, which is convenient for rail and sea transportation.
Issues arise while approaching a new method of transportation
Cooxupe originally expected it to take two days to load the bagged coffee beans onto the general cargo ship. However, due to the interruption of the rain, it took five days to complete the loading. The actual cost was also higher than the initial estimate, which caused the company to re-coordinate with the customer. Increase the freight rate.
Lucio Dias predicts that as different countries adopt new quarantine measures to combat Omi Keron mutants, the global logistics bottleneck will continue in the first half of 2022.
At present, Vietnam, the world’s largest producer of Robusta coffee beans, currently has piles of coffee beans that cannot be exported smoothly. Manish Dhawan of Olam International revealed that several general cargo ships are already preparing to load, and Olam International is also considering this option.