Understanding Green Coffee Logistics.

After successful negotiations between the buyer and the seller, green coffee logistic is another crucial part of coffee trading as the green coffee beans has to reach the buyer’s warehouse. This is a complex undertaking that can be costly and time-consuming, but with the right framework and structures in place, it can be a smooth endeavor.

Roasters who buy their coffee from within their countries of operation have a less complex logistic process but are limited to the coffee offerings they can acquire. Therefore, most roasters look abroad to suppliers who may be direct producers, cooperatives, or coffee exporters/traders. The amount and variety of coffees available in the origins are far greater and of higher quality generally. Logistics involve any and all processes between the supplier and the buyer including bagging, inspections, warehousing, loading and unloading, costs and terms of freight (incoterms), transport, and shipping. A great logistics partner will be a great asset to the roaster because they will advise on all the available modes of transport, shipping, and warehousing that would be the most efficient and cost-effective.

Green coffee handling and safety.

In the warehouse, the coffee has to be inspected for any anomalies such as the MRL (minimum residue limit) that stipulates the amount of chemical residue that the green coffee should have before it is fit for human use.

The logistics partner will advise the roaster or the buyer on the progress of the inspection and suggest any required measures or steps to ensure a smooth flow of events. Fumigation is a necessary step for health considerations and this has to be factored in by the logistics partner and the client (buyer/roaster).

An important consideration for the roaster is the kind of green coffee packaging they wish to have their green coffee bean in. There are a few options the roaster can go for, such as normal jute bags, hermetically sealed jute bags, plain containers through coffee blowing, or vacuum sealing.

The normal jute bags are the cheapest mode of packaging and involve filling 60-kilo bags with the green coffee unless one bag does not fill up in what is then referred to as a pocket. Hermetically sealed jute bags have plastic bag lining on the inside which preserves and retains moisture and protects against external odors or water. They can keep the green coffee fresh for a little longer. They are a bit more expensive than the normal jute bags.

A roaster may opt to have his coffee blown into a container without being bagged. In this case, a well-lined container is filled with green coffee which is blown by a machine until the required amount is achieved. This is optimal for large consignments of coffee.

Vacuum-sealed green coffee is more expensive and guarantees maximum life shelf, protects against any and all external pollutants that may compromise the green coffee quality including fire, frost, water, and odors. This method is available on demand.

The coffee warrant that gives the bearer ownership of the coffee also contains information about the coffee location, for instance, the warehouse, seller information, buyer information, coffee details, quantity, and all relevant dates. This is accompanied by invoices and bank details to support the warrant.

A phyto-sanitary certificate has to be obtained by the exporter before any shipping can be done. The phyto-sanitary certificate is issued by the plant health inspectorates of the origin countries stating that the commodities being exported adhere to all the health and sanitary requirements and that they are safe for human use.

Green coffee transport and safety measures.

Any roaster purchasing green coffee expects to have it in very good condition and in the same quality. Therefore, they should ensure that their coffee is transported safely and securely to the shipping port. The most common method of inland coffee shipping is by truck and in some cases by rail. Some roasters who have direct relationships with producers buy their coffee directly from the farms after processing. This means that the coffee needs to be transported to the exporting port.
The truck transporting the green coffee should be free of any odors such as gas or diesel fumes close to the coffee as green coffee can absorb the odors and compromise the coffee quality. In transit, the coffee should never come into contact with water or droplets of any liquids as this will immediately affect the quality and lead to black beans and water-damaged beans.
In some cases and countries, the logistics partner can hire services of an armed escort as green coffee is a favorite target of bandits on the highway. In some origins, it is mandatory to have an armed escort for green coffee in transit.

Most Common Green Coffee INCOTERMS

Free On Board applies only to inland waterways and seaways only and does not take into consideration the main carriage which may be air, truck, or rail. Port of Shipment is a Named Place Requirement. The exporter delivers goods to the exporting port and loads them onto a vessel for shipping. From then onwards, the buyer assumes all risks including costs of transport, loss, damage, or delay.

CIF – Cost, Insurance, and Freight applies to inland waterways and seaways only and has Port of Destination as a Named Place Requirement. The exporter delivers the goods to the exporting port, loads them onto the vessel, pays for the transport, and buys a minimum insurance cover for the goods. 

CFR – Cost and Freight apply only to inland waterways and seaways only where the port of destination is a Named Place Requirement. Under CFR, the exporter will deliver the goods to the exporting port, place them in a vessel, pay the shipping costs up to the destination port and clear the goods at the departing port.

Roasters have a choice to make on the best containers to use for the journey through the sea. The most common types of containers are the 20-foot ones. A full container load contains 320 bags each with 60 kilos of coffee. This means a full container load has a load of approximately 19,200 kilos of green coffee.

In some cases, the shipment does not amount to 320 bags. This is referred to as LCL – Less Than Container Load. In this case, the coffee is transported in a shared container, alongside other goods that will fill up the container.

Charges and Documentation.

The roasters should be aware of the tariffs levied and all charges incurred. Unless the origin country has an FTA (Free Trade Agreement), there will be import tariffs to be paid. A certificate of origin should be requested by the roaster or importer to help in customs clearance before the shipment arrives.

Commercial Invoices, Packing Lists, Shipper’s letters of Instruction, Forwarding instructions, and a Bill of Lading are all documents that are a must before a shipment can be successfully completed. 

The commercial invoice for export purposes will contain all the relevant information for the roaster like goods shipped, cost of goods, and the logistics partner who will be shipping the coffee. A packing list is a detailed document that states all of the product and packaging details of each shipment. A shipper’s list of instructions is a document that gives the freight forwarder all specific instructions relating to the export of goods.

Constant monitoring of the shipment by the roaster or buyers in real-time is very important in order to be in a position to make any necessary arrangements and be able to plan for the arrival of the consignment. It is, therefore, crucial to understand each of the origins the roaster sources his coffee from and the modes available for transport, shipping, and warehousing.