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Maritime coffee logistics is a complex operation that depends on multiple factors beyond the control of a single organization. At Sancoffee, our dedicated logistics team is doing their best to ensure smooth operations. However, there are global challenges to consider when planning your coffee shipment. With that in mind, we wanted to discuss some challenges we can expect to face in the second half of 2024 and what can be done to help mitigate them.
Top 4 factors currently causing major disruptions to shipping:
1. Geopolitical tension in the Red Sea - The results of the Houthis attacks to ships in the Suez Canal
Implications:
- Operating at just 34% of its capacity.
- Longer transit time, around 2 to 3 extra weeks, via the alternative route at the Cape of Good Hope.
- Generating delays in the ability of ships to unload and load cargo for the next trip, with unpredictable schedules, creating a scenario of shortage of empty containers and decrease in ship capacity.
2. Panama Canal Drought:
Implications:
- Limiting the number of vessels that pass through the canal daily, resulting in long ship delays.
3. Port Congestion in Asian Ports
Implications:
- 90% of containerships are arriving off schedule, leading to clustering of vessels.
- Asian ports, including those in China and Singapore, have been facing challenges due to increased backlogs caused by containerships diverting from their usual routes through the Red Sea. This congestion is now expanding to affect other nearby ports, causing them to operate at maximum capacity.
4. A strong demand for consumer goods in the USA
Implications:
- Driven by the economic recovery and high shopping season such as Black Friday and Christmas, leading to companies to stock up in advance, contributing to the increase in demand and generating a large effect on global chains.
How to navigate turbulent times and mitigate its impacts:
- Advanced planning and flexibility - Anticipating shipments and the beginning of the shipping procedures will help prepare for potential delays and reduce the impacts of increased freight and logistics costs.
- Choosing a reliable shipping company - Analyze which shipping companies are the most reliable at the moment, with the best routes, less transit time and good transshipments options, avoiding congested ports.
- Investing in data and analytics - Leveraging technology and data analyticscan help businesses better predict and respond to disruptions.
- A proactive approach is essential in managing potential issues that may arise such as limitations in space, capacity, equipment availability, in order to effectively identify, assess, and mitigate these potential risks.
What Sancoffee did to mitigate risks: prevention as a course of action
Even though many of the factors above are outside our control, there are still some precautions we introduced to prevent potential disruptions:
- Identifying and assessing the constant changes and the potential sources, types, and levels of risks that may affect our transport operations.
- Increasing our range of internal suppliers, such as freight agents and inland transport companies.
- Analyzing the most reliable shipping companies, with the best routes and transshipment ports.
- Anticipating shipping procedures to reduce disruptions in case of possible delays.
Do you have questions? Send an email to logistics@sancoffee.com and we will be happy to provide you with the latest information.