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  • QA 168
    Question:
    How to export very small lots, say 50 bags or less?
    Background:
    We read about the Cup of Excellence auctions which are very interesting. But our question is: how are those small lots physically exported? They are much too small for a container load so I guess they are combined with other coffee?
    Asked by:
    Miller/processor - India
    Answer:

    Exporters and buyers of very small parcels not only face logistical and cost constraints, but must also face the fact that many buyers will not consider anything less than a full container load *. This effectively bars many small producers of specialty and organic coffee from direct participation in the overseas market…

    The background to this is the constant evolution of modern shipping. Today about all international coffee shipments are carried in containers, both in bags and in bulk (loose). Modern container vessels have largely displaced what were previously known as 'break-bulk' vessels: ships capable carrying all kinds of loose cargo in their holds, including small coffee parcels in bags. Container vessels however carry containers only…

    Furthermore, larger and larger vessels are being constructed: already vessels capable of carrying around 11,000 containers are at sea! Such vessels do not call at smaller ports, concentrating instead on what are today called 'hub ports'. Just as in the airline industry such 'hubs' receive cargo from smaller regional ports, through feeder lines. This means more transhipment - some shipments may be transhipped more than once even: for example from a small port to a regional or national port to a hub port.

    To answer your specific question the following:

    • Cup of Excellence parcels are often combined with other coffee that successful bidders buy directly in the country in question, thus arriving at a full container load;
    • Alternatively a number of buyers jointly nominate one exporter to ship their purchases together in one container - either with some other coffee added or they accept to pay for any unused or 'dead' space;
    • In some cases buyers requiring very quick delivery, for example ahead of the Christmas season, have used airfreight - of course an expensive solution.

    In other words, the logistical arrangements for Cup of Excellence coffees are mostly tailor-made. But for individual exporters of conventional small parcels the options are basically two-fold only:

    • Consolidate (combine) with other coffee to fill a container: this depends on the buyer's willingness to accept this and the availability of suitable additional cargo. Can be very difficult for organic coffee.
    • Ask the buyer to accept to pay for any unused or dead space in the container. This is not unusual where the quantity is say 150 bags or so, particularly in the case of organic coffee that may not be mixed with other goods.

    Therefore, what this really means for smaller producers is that only those with exceptional coffees should anticipate bypassing the traditional export/import chain. This is because, as is often said: if the middleman (read exporter/importer) is eliminated, who then shall fulfil that function?


    * Full Container Load or FCL: around 300 bags of 60 kg, depending on the type of coffee. In shipping LCL means Less than Container Load.

    Posted 18 October 2007

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