How long will the coffee crisis last?

Throughout the year, there are many reasons to celebrate. A birthday, a name day — mine, yours, grandma’s, passing an exam, the birth of a child or Christmas….

In the coffee industry, Christmas is celebrated early and several times a year. These celebrations cannot be planned, it depends on what mood the universe and the Coffee God are in. Understand how much it rained, what the air temperature was, what condition the coffee trees are in right now this year, how many workers came in to harvest the ripe beans at the time of the pandemic, and about a million other, basically unpredictable, factors.

Anyway, Christmas is always when the container of fresh beans finally arrives — and instead of Merry Christmas, we celebrate Merry Arrival.

The average user probably doesn’t bother with the question of how the coffee got here in the first place. After all, you’ll be able to indulge in your favorite flat white without knowing the answer. Right? We’re in for a lot of changes this year, and this might be one of them.

How did the coffee get here?

I don’t want to cry wolf, but it’s not looking good with our favorite flat white. Why? Normally, coffee is nicely picked, processed, bagged, and loaded in a container onto a ship and voila — it’s off to Europe. There it will be picked up and stored so that it can be enjoyed by the eager roaster and, ultimately, your taste buds for the foreseeable future. But this year will be different, and probably for the next three as well. We will all be confronted with the reality of the logistics crisis that is currently affecting not only the coffee industry but many other industries as well.

What’s changed?

The pandemic ensured that everything slowed down and gradually, at least for a time, came to a halt. It was no different on the coffee farms. The coffee trees were fruiting, the beans were ripening, but thanks to the pandemic measures, in many countries there were no people to pick, process, pack and transport them — problem number one. In March, the whole world, coffee drinker or non-coffee drinker, watched the bizarre case of a cargo ship trapped in the Suez Canal, blocking it for months. But the attention of coffee drinkers gradually shifted towards Peru, where in April and in the weeks that followed, they were recovering from extreme rains and their consequences— destroyed bridges and flooded roads.

So that would be issues two and three, let’s move on. Summer has brought a new wave of positivity, fortunately not the covid one, but the real one, when one believes that it will get better. But it didn’t take long and we had autumn, which brought us back to reality, brought its own positivity. Among other things, the shortage of vaccines and protective equipment made the consequences of the shortage of personnel felt in the ports, in the countries of origin of the coffee, in the USA, in Europe, in China, in Asia, simply everywhere. The staff who could still work felt the consequences of the constant deployment. The lack of manpower has resulted in additional delays, port congestion, and, inevitably, a shortage of empty containers and cargo ships. It’s a vicious circle, even though the shipping companies tried to prevent the disaster and gradually started ordering new containers and new ships. But guess what… yet there was no one to produce them and no way to bring them in, the irony of fate.

In addition, many of the container ships we have cheerfully used so far will have to be phased out. Inevitably, we will have to replace them with more modern ones, whose maintenance and environmental requirements will be in line with current regulations on reducing emissions.

What’s next?

Well, what does all this mean for us and our coffee drinking? So let’s look at it in numbers. Compared to 2019, when an average of 80 percent of container ships arrived at their destinations on time, today it’s less than 30 percent, and improvement isn’t expected so soon. Currently, more than 80 percent of the world’s cargo ports report extremely long waiting times.

Ports are simply overloaded, resulting in significant increases in the time it takes to complete all administrative and non-administrative tasks associated with unloading. The congestion of the cargo ports and their inability to handle the cargo ships waiting to unload has caused many of them to be diverted to other ports where the chances of processing their cargo appeared higher.

Is it going to get better?

But this was a double-edged weapon, and this solution resulted, among other things, in around 13 percent of global shipping capacity being unavailable in August 2021. This was as a result of more than three million TEUs, simplistically containers, being swallowed up somewhere in the wrong ports or on delayed ships. The production of new cargo ships will take at least another 2–3 years. Shipping prices are already at relatively astronomical levels. Freight rates have increased by 100 to 300 percent depending on where they come from. According to current forecasts, a general improvement in the logistics situation is not expected before the end of 2023. I highlighted the word improvement, not the solution.

What does this imply for us consumers? Our favorite life-saver will simply get more expensive, but don’t worry. Remain loyal to your favorite roasters and try to understand all of this in a broader context. In the context of what we’ve all been through in the last two years.

In 2023 we will celebrate not only Merry Christmas and Merry Arrivals but also Merry Understanding People drinking Coffee. I’m looking forward to it and seeing how we deal with all of it.