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The Frieght Situation

Reports on global port congestion remains at the forefront for many coffee suppliers and importers. The disruption throughout the global supply chain continues to produce reports of congestion at many of the popular international ports across Europe, North America, and beyond. This week we highlight information gathered from Hamburg Süd which covers conditions found across Northern Europe, with additional articles reviewing port congestion across the United States.



Northern Europe


On June 16th, Hamburg Süd reported conditions at four of their key ports across Northern Europe, including Bremerhaven, Rotterdam, Hamburg and Antwerp.

Bremerhaven has reached a critical level of congestion, creating elevated yard density levels and waiting times. Talks between trade union Verdi and the Central Association of German Seaport Companies (ZDS) have caused for a potential strike, with continuing dialog to take place this week. In Rotterdam, the situation remains congested with similar strategies as stated above to help alleviate port congestion. Hamburg faces potential strike actions as well. Antwerp faces a reduction of labor as well, but overall remains at fair levels.

Hamburg Süd recommends that customers contact their local service representative for information on in-transit or off-dock storage strategies in Bremerhaven. Further suggestions may come after assessing if redirection of shipments to Gdansk, Wilhelmshaven, or Zeebrugge would be beneficial to speed up service. To help alleviate the situation at these ports, they suggest picking up full container loads as quickly as possible as well as the swift return of empty containers.


United States


The situation in the United States reflects similar complications as seen within Europe, caused in part by delays in shipments of goods from China to Europe, which has slowed down the availability of containers for European goods to be shipped to the United States (The Drink Business, May 2022). With the East Coast experiencing a shortage of arrivals from Europe, this has alleviated some of the pressures on the West Coast, diverting some of the capacity of shipments to the East Coast to avoid severe port congestion in Oakland and Los Angeles, California.


As of May 27th, Oakland continues to experience six days for unloading and loading, while remaining at the port for approximately 11 days before being relocated to their final destination. Los Angeles ports have experienced the second-longest wait times with 12 days for containers to leave ports, with an additional 5-6 days for ships to be processed. The southern ports across the United States have seen less congestion, including Charleston, Savannah and Houston. The general cause of delays within the United States have been related to labor shortages and Covid-19 conditions.


A global heat map created by CNBC shown below, lists factors influencing global delays, including factory capacity, vessel availability, container availability, trucking capacity, port productivity, vessel transit time and rail capacity.



Global heat map created by CNBC


In addition to port congestion, the higher than average shipping costs have made the situation even more difficult to navigate for both coffee producers and consumers. According to a Bloomberg article from June of 2021, the rising costs of freight had challenged the exportation of anchovies from Peru for importation into Europe because with the additional freight costs, the products are no longer competitive with local markets. Bloomberg also mentioned at the time of the publishing the article, that European olive growers were no longer able to afford to export to the United States due to these additional costs.

(Bloomberg, 2021).


Peruvian coffee producers and exporters are facing similar realities where green coffee buyers and roasters are left with fewer options, mainly with a focus on substituting origins that may have better freight rates than what was previously purchased for blends, in addition to seeking coffee grade ranges with lower differentials.


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References

  • Hamburg Süd. North Europe: Latest Updates on Key Region Ports. Customer Advisory. June 16th, 2022.

  • The drink business. (2022, May 27). Heat map reveals ports causing the most disruption to global supply chain. Retrieved June 20, 2022, from https://www.thedrinksbusiness.com/2022/05/heat-map-reveals-ports-causing-the-most-disruption-to-global-supply-chain/

  • Loriann, Larocco. (2022, June 14). These ports are causing the most congestion in the global supply chain, new CNBC charts show. CNBC. Retrieved June 20, 2022, from https://www.cnbc.com/2022/05/24/these-ports-are-causing-the-most-congestion-in-supply-chain.html

  • Out-of-control shipping costs fire up prices from coffee to toys. (n.d.). Retrieved June 20, 2022, from https://www.bloomberg.com/news/articles/2021-06-12/out-of-control-shipping-costs-fire-up-prices-from-coffee-to-toys

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