Container shortage re-igniting the trend of break-bulk shipping

The persistent container shortage has forced the industry to resort to the old ways of shipping commodities.

A first of its kind in over 20 years, a break-bulk vessel named Eagle has wound its way from Lampung in Sumatra, through the Mediterranean, and is now headed for New Orleans, transporting robusta coffee bags stacked in its hold to the U.S., garnering a lot of attention.

The ship-part of a burgeoning experiment is a hope for the industry where producers, roasters, and traders are looking to leapfrog a global container shortage that’s causing an unprecedented backlog of shipments.

“At the point when we were seeing shipments getting delayed, customers struggling to get their supplies in time and getting access to coffee, that’s when we started to look at it,” Manish Dhawan, senior vice president for coffee at trading company Olam Food Ingredients, which chartered Eagle, said during an interview.

He added, “If you speak to some of the older traders, it was the late 80s, or perhaps the early 90s, when they last did it, so this is a new frontier kind of thing for us as well.”

There has been an all-out fight for freight ever since the recommencement of the staggering economy amid the pandemic and a boom in online buying.

Obtaining shipping containers for moving coffee has been heavy on the pockets in the best scenario while in the worst, containers have been unobtainable, only adding fuel to the prices.

It is believed that in the future, roasters are more likely to start utilizing old-school shipping without containers.

To solve the long plaguing shipping bottlenecks, many shippers are adjusting to this new shipping modality, despite the complexity.

Handling of bags instead of containers is much harder, from the inland transportation in the origin to the reception at the destination, as only a handful of the ports are equipped to lift the bags from a vessel’s hold.

On a usual day, coffee is either poured in bulk into special containers, or bags are stacked inside containers for easier sea and rail transportation.

While this may not work for every business, market players are considering break-bulk as a way of dealing with shipping bottlenecks, as the industry expects the logistic bottlenecks to continue in the first half of 2022 with new isolation measures being adopted by different nations to fight the spread of Covid’s omicron variant.

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