STiR coffee and tea magazine

Volume 5, Number 1

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Page 24 of 67

STiR tea & coffee industry international 25 The Northwest Seaport Alliance, representing Seattle-Tacoma, retained its rank as the 5th largest American port by volume. Continued expansion is ex- pected to elevate the regional port to a first-tier global hub, one of 20 identified by CBRE Research. The same cannot be said in Oregon for specialty coffee roasters. Last year's labor delays were exacerbated by local dock disputes, causing the Port of Port- land's largest shipping partner to with- draw direct call service. Hanjin Shipping Co. of South Korea officially ended ser- vice on March 9, 2015. Since then, all im- ported green coffee has been unloaded in Seattle or Tacoma. Disputes slowed containers At the center of the labor strife was a nine-month work slowdown at 29 West Coast ports, including Seattle and Ta- coma; Portland; and Oakland, Los Ange- les, Long Beach, and San Diego. The 29 ports handle about a quarter of all U.S. international trade, including imports and exports from Asia. Negotiations between the Interna- tional Longshore and Warehouse Union and the Pacific Maritime Association that began in May 2014 became contentious later that year when both sides engaged in a blame game. At issue was an arbitration system for resolving disagreements. The Pacific Maritime Association represents port terminal operators and shipping companies. The original con- tract expired in July 2014. The stalemate was broken in Febru- ary 2015 with a tentative agreement on a new five-year contract that both sides ratified three months later. The new con- tract established a more efficient arbitra- tion process. Resolution of the matter could not arrive fast enough for Frank Gavina, Jr., green coffee buyer for the fourth-genera- tion family-owned Gavina Gourmet Cof- fee roasters in Southern California. "The vast majority of our coffee is coming through the ports of Los Angeles and Long Beach," Gavina said, "and we have been an unfortunate victim of the West Coast port system." Gavina Gourmet Coffee receives 300,000 bags, or nearly 40 million pounds, of green coffee a year. About 40% of their roasted beans are for private label clients. McDonald's is the company's largest private brand, Frank Gavina said. Asia ports and those along the West Coast of the United States will expand their roles as global logistic hubs during the next decade, according to a recently released research report. The report, prepared by CBRE Group, Inc., highlights 20 markets that are poised to become global logistics hubs in the next decade. Among the 20 are China's Beijing, Hangzhou, Nanjing, Suzhou ports, as well as South Korea's port at Busan and Seattle, Wash.. Other emerging logistics hubs include Philadelphia and South Florida, USA; Santiago, Chile; Bajio, Mexico; Istanbul; Berlin, Munich and Ruhr, Germany; Madrid and Barcelona; Amsterdam and Tilburg/Eindhoven/Venlo, Netherlands; Leeds/Sheffield and Manchester/Liverpool, UK. The recently negotiated Trans-Pacific Partnership (PPT), if ratified, will enhance the Pacific Rim's value in the shipping of tea and coffee around the world. "As governments continue to draft new trade agreements and amend labor laws, new trade routes are becoming more accessible and more integrally connected with existing strategic routes," Dr. Henry Chin said in a CBRE statement. "The Trans-Pacific Partnership is a potential trade agreement that will have drastic effects on global trade routes and manufacturing demand in Asia." Dr. Chin is head of research for CBRE Asia Pacific. The comprehensive Trans-Pacific Partnership includes 12 countries in the Pacific Rim – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam – and seeks to lower trade tariffs, streamline cross-border regula- tions, and increase market access between the member countries for a wide range of products, including coffee and tea. "With increased market access and lower trade barriers, the amount of goods moving through this trading bloc is likely to increase," Dr. Chin said in the statement. "For example, as manufacturing demand shifts to Southeast Asia, local ports in Vietnam may experience in- creased port calls, and regional hubs in Malaysia may grow in prominence. Stronger demand for agricultural land and logistics facilities, with the projected increased output of agricultural products from Australia and New Zealand, is also expected." Defining a global logistics hub Emerging logistics hubs share characteristics, including significant investments in infrastructure, new trade policies and agreements, and more advanced supply chains and technologies, the report stated, citing a 600% growth in global trade during the past 35 years. This drives the development of more complex supply chains around the world. A viable logistics hub connects a variety of transportation modes. (continued pg. 27) China, South Korea emerge as global logistics hubs

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