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September | October 2020


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FEATURE ARTICLE

STORAGE, SAMPLES AND SHIPPINGThe Crucial Role of the Green Coffee Warehouse

By Levi Rogers


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BETWEEN THE TIME THAT GREEN COFFEE is imported to when it is released to the roaster, there is a key player that is often overlooked when we discuss the coffee supply stream: the independent green coffee warehouse. The warehouse plays a crucial role in ensuring the quality and transparency of the coffee it holds.

Let’s take a closer look at coffee’s journey from the farm to the warehouse, examining the critical stopping points and key terms to know along the way.

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Warehouse at Continental Terminal. Photo by Ruth Ann Church


PRE-WAREHOUSE JOURNEY

Coffee is shipped in containers on vessels from the location where it is grown and processed. Before this step, someone must transport the product from farms, mills and co-ops to the port of export. Generally, this role belongs to an exporter, but it depends on the contract. Sometimes the broker will need to pay to arrange transport to get the coffee from a truck (or FOT), into a container and then onto a ship. Once the coffee is loaded into a container and then onto a vessel—or “on board”—it becomes known as FOB or free on board. FOB refers to the price paid to the seller of the coffee, usually the exporter. This price is different from the price the exporter paid for the coffee (which could be for coffee in parchment or cherry), but sometimes the exporter is also the farmer or estate—it just depends on the supply chain.

The responsibility, ownership and title of the container is then passed on to the importer by notice of a delivery order (DO); when the coffee has been imported and clears customs and required inspections, a logistics company or the warehouse will collect the container and deliver it to the warehouse. Port security requires that only registered authorized logistics companies are allowed on the docks to collect cargo.

These global destination warehouses are typically located along the coast at well-established seaports (such as the ports of New Jersey, Oakland or Tacoma for the United States; Vancouver or Toronto for Canada; and Grays or Liverpool for the United Kingdom).

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Green coffee warehouse in Colombia. Photo by Jiyoon Han


These global destination warehouses are typically located along the coast at well-established seaports (such as the ports of New Jersey, Oakland or Tacoma for the United States; Vancouver or Toronto for Canada; and Grays or Liverpool for the United Kingdom).

The necessary documentation at this point is the bill of lading (BOL). The BOL is a legal and negotiable document, and an original BOL is required to collect cargo from the port as it establishes ownership. The BOL holds all the important information about the coffee, such as the destination warehouse or roasting company, shipping weight, shipping line and International Coffee Organization (ICO) mark. Unique to each parcel of coffee, the ICO mark includes the country code, parcel number, and the code for the exporter or grower. It is extremely important for the owner of the coffee, be it an importer or roaster, to double check all the marks on DOs and invoices to ensure correct information.

A typical “full” coffee container holds 275 (69-kilo) bags of coffee from Central America or approximately 320 (60-kilo) bags of coffee from origins like Brazil and Africa. Interesting fact: Containers often hold more weight than coffee typically ships. Green coffee is usually half the available space. These are the standard lot sizes that the coffee industry considers a full container load because additional net weight over 45,000 pounds would require special equipment for over-the-road trucking and additional weight fees.

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Devanning at Continental Terminal. Photo by Ruth Ann Church


STEP 1. DEVANNING 

Once the coffee container has arrived in-country and passed through customs, the container is then unloaded for further inspections by an importing country’s quarantine agency (generally the primary concern in this step is checking for the presence of bugs or other “restricted” animals that may have hitched a ride in transit and pose a biosecurity threat if introduced to a specific country’s environment).

Arianna Hartstrom, owner and founder of Costa Oro International, which operates warehouses in both Portland, Oregon, and Seattle, says this container unloading process can take “anywhere from 50 minutes to two hours depending on how many micro or specialty lots are included in the load.” Bags of coffee are then floor loaded (when a shipping container is stacked with freight that has been loaded from the floor up without using a shipping pallet) and “lumpers” (laborers who handle freight) devan (unload) the cargo and stack it on pallets.

The warehouse team will then make sure all marks and bags and quantities are the same. The warehouse will also be the first to notice any damage, be it moisture damage or insect infestations. This process is fairly straightforward if the container consists of the same coffee and comes in undamaged, but if the container is made up of a handful of different micro-lots, the crew must re-sort every bag to verify that count and marks are correct—an occurrence that the team at The Annex warehouse in Oakland, California, refers to as “micro-lot madness.” It is crucial that importers work closely with the exporter and producers to ensure that the bags that arrive are what were agreed upon in the BOL, and there are no mix-ups.

After the coffee is unloaded, it is then weighed as the importer will often require a weight certificate to verify that it received the correct cargo and number of kilos/pounds. Any discrepancy will be disputed with the exporter.
After this, the inbound warehouse contact sends a “devanning” or “stripping” report to the importer, who then verifies the sample for quality control. Once approved for quality, the importer or owner of the coffee will send an arrival sample of the coffee to the roasters/clients who have contracted the coffee.


Reconditioning

Sometimes damage occurs in transit. Some bags may become wet or moldy. The warehouse will then coordinate with the owner of the coffee on whether to “recondition” the coffee, destroy the coffee or file an insurance claim. Reconditioning involves discarding any wet or damaged coffee and re-bagging the rest of the green into new bags and GrainPro (if applicable). Coffee is then re-sampled for approval from the reconditioned bag to ensure consistency and quality.

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Green coffee warehouse in Colombia. Photo by Jiyoon Han


STEP 2. STORAGE 

Conditions

Coffee is stored while waiting to be released. If the environment is too humid, dry, hot or cold, temperature control precautions should be in place. However, typical green coffee warehouses are ambient, and temperature controls for storage facilities are expensive. While coffee warehouses ideally are located in climates where there is not too much heat or humidity, or hot temperatures, sometimes conditions are less than ideal.
As home roasting purveyor and green importer Sweet Maria’s says on its website, “If it’s comfortable for you, then your coffee is happy too.” This temperature range falls somewhere between 60–70 degrees F with 40–60 percent relative humidity.

It is the responsibility of the importer or roaster to manage the time each coffee lot spends in storage before roasting—as storage time will affect coffee quality.

Storage fees

Roasters may see a line item on the invoice from their importer for “storage fees,” among some other potentially unanticipated costs such as weighing, strapping or reconditioning. Until the coffee is released to the roaster, the importer still has the responsibility for a coffee and must pay to store the coffee in the warehouse. The importing company has taken on the financial risk of importing the coffee, holding it in its inventory and paying to store it. Charges are calculated by cargo weight in U.S. cents per pound, but these few cents can add up over time if a roaster is storing a large amount of coffee for a long duration of time. However, many brokers may include “carry” costs—the cost of storage and financing—into their price per pound to a roaster, if they have agreed on that price. In that case, those costs are absorbed and won’t be a line item.

On the other hand, the benefit for roasters is that while storing the coffee, a roasting business is not required to pay all at once for the product that is being held in a warehouse. Roasters pay only for each coffee they do release from the warehouse. Thus, the roaster could pay a few extra cents per pound to avoid having to release all the coffee at once, which is especially beneficial for roasters who may be roasting only a few bags per month. Larger companies that roast 50 bags per month or more and can release all 50 bags at once will certainly benefit from saving on storage fees.


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Sampling at a green coffee warehouse. Photo courtesy of Costa Oro


STEP 3. SAMPLING 

Once a sample has arrived or “landed” at the green coffee warehouse, the broker will verify the quality of the sample via its internal quality control system. There is also a warehouse charge for each sample drawn, another cost for brokers to consider. If quality is approved, a copy sample is then shipped to a roaster or other clients for their approval. This green sampling service done at the warehouse is performed by an in-house or third-party sampling service. Sometimes importers will order a larger sample from which to ship smaller samples out of their office. Both clients must verify this landed sample against the “pre-shipment” sample for quality assurance.

How does one take a sample?

Typically, a 350- to 500-gram sample is pulled from multiple, representative bags that account for 15-20 percent of the overall lot from different sections—top, middle, bottom, front and back. A minimum sample of 350 grams is needed for green grading.

“For conventional jute bags, beans are extracted with a coffee trier, which is a tool that allows removal of beans with little to no damage to the jute,” says Hartstrom. “For GrainPro, each bag must be staged and carefully opened to remove the requested amount of beans from a particular quantity of bags that would represent an allowed sample size for quality verification.” This is often done by a third-party sampling service.

It is important that all warehouse services act as third parties so that roasters can feel confident the product they are getting has not been altered in any way by the importer or broker (i.e., the warehouse is not beholden to the importer or forced to give preference to one customer over another).

Slack Bags

A slack bag is any bag of coffee with less than the expected net weight. This can be caused by reconditioning bags or damage from the warehouse. Occasionally, if an importer has a spot coffee sitting in the warehouse for a long time that has had multiple samples pulled, this bag will lose a few pounds. If a roaster ever receives a bag that is slack—and this was not mentioned on the DO—be sure to weigh it and contact the importer or warehouse if there is a discrepancy.

Re-sampling

An additional measure of quality is re-sampling. This could occur if a quality control team finds a defect, such as potato, phenol or ferment, after the landed samples are sent out. The owner of the coffee will then contact the warehouse to re-sample the coffee for a more “representative amount,” such as an order for 3 kilos instead of 350 grams, or might even sample 100 percent of the lot, pulling representative samples from every bag.

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Moving bags at a green coffee warehouse. Photo courtesy of Costa Oro


STEP 4. RELEASES 

Once coffee is approved by the roaster, the importer or roaster will request a “release” or DO from the warehouse.

Sheila Muchmore, account representative at The Annex warehouse, believes that attention to detail is the most important concern for roasters and importers who are releasing coffee. “As a warehouse working with hundreds of imports, we can only work from the information (paperwork) we are provided,” she says. “If any part of that paperwork is inaccurate or missing, we aren’t going to know. We are not part of the sales/purchase process and we don’t have a lot of conversations with buyers/exporters directly, so it really behooves all parties to review anything written for them and have changes made right away so things go as they prefer. Lack of detail literally can stop the whole show. For example, we might get a release but no shipping/carrier information, so we can’t do anything with the release—then a truck will show up to pick up a coffee and we won’t know they were assigned or authorized.”

All releases have a cutoff time, usually by noon on the day prior to the desired shipping or pick-up date. This is to give proper time for the warehouse to pull the coffee and get everything lined up.


STEP 5. FREIGHT

There are many different options to ship the coffee from the warehouse to roastery. Depending upon the contract, the importer can arrange shipping for the roaster and bill for the service, or the roaster can handle the process, using another shipping company. The roaster can also use a shipping or forwarding company to schedule the move. In any case, for whomever is in charge of this service, a BOL will be needed to ship the coffee, a DO will be needed to release the coffee, and a pick-up time will need to be scheduled at the warehouse.

Most warehouses have specific windows of time for freight to be picked up, so it’s always smart to check. Appointments are required. Another thing the roaster will need to determine is whether they will need a “liftgate” for unloading the pallet (usually for residential or small roasteries) and if they are willing to unload the pallet themselves or arrange to have a forklift on hand. The pickup and delivery truck must have suitable equipment for loading docks at the warehouse and to deliver safely to the roaster. Use the “special instructions” part of your BOL to indicate correct hours, special entrances, phone number and more.

Many green coffee traders will do their best to make green coffee accessible, whether through one bag will-call pick-ups for micro roasters or delivery in the local area. This is helpful for smaller roasters, as the base rate for shipping one bag weighing 69-kilos (150 pounds) by freight via a pallet can be more than $150!

One additional note to remember about freight is that a truck with a pallet of coffee could arrive at any time. Sometimes these public carrier LTL freight companies will even charge a $50 re-delivery fee or other fees if no one is at the facility to receive the coffee (even if your hours are 8 a.m. to 5 p.m., but they show up at 7:45 a.m. or 5:15 p.m.). There is no real-time “tracking” as with freight carriers like FedEx, the United States Postal Service or UPS (unless perhaps the roaster is using UPS or FedEx Freight). Find a local trucking service or public LTL carrier that you trust.

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Samples at a green coffee warehouse. Photo courtesy of Costa Oro



THE FUTURE

Coffee warehouses are much more than a simple “U-Store” warehouse for importers and roasters. They also play a critical role in the traceability of coffee to verify both certifications and USDA safety requirements. They also help ensure that the supply stream is even-handed for everyone involved.

“Often, the green coffee warehouse is an anonymous participant in the supply chain,” says Hartstrom of Costa Oro. “We want all of our partners in the specialty coffee industry to feel comfortable contacting the green warehouse in their region when they have a need.”

The green coffee warehouse also plays an essential role in keeping the supply stream flowing, especially in a time of crisis like covid-19, where a global pandemic can cause delays all along the supply stream. Warehouses can act as third-party mediators between roasters, producers and importers—and the same is true for green coffee warehouses at origin. It is important to recognize this and understand how to use these facilities and services effectively.


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LEVI ROGERS is a writer and coffee roaster based in Portland, Oregon. He is the co-founder of La Barba Coffee in Salt Lake City, Utah, and currently works in quality control at Sustainable Harvest Coffee Importers.


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