Issue link: http://read.dmtmag.com/i/641418
STiR tea & coffee industry international 27 "The core of this international trade is the flow of goods through supply chains that connect raw materials, production and delivery to consumers worldwide. Infrastructure, accessibility, mar- ket size and business environment are all integral factors to ensuring efficient supply chain flow," said Richard Barkham, CBRE's global chief economist. "Logistics hubs are the main driving force behind the industrial real estate markets and are at the center of large clusters of distribution facilities." Other factors Infrastructure investments - Physical improvements to regional transportation infrastructure can increase the viability of a location for substantial international trade. The report cited the re-emer- gence of the Silk Road in Asia, the oldest overland trade route stretching from China to Central Asia, and then to Europe's border. China launched a new strategic initiative in 2013 designed to revive the viability of the trade route The new Silk Road will have two parts - the Silk Road Economic Belt, a land-based route that will connect central China to the Middle East and Eastern Europe, and the Maritime Silk Road, a sea-based path that will link South China to Southeast Asia, East Africa, and Europe. "These two strategic routes may shift global supply chain dynamics and result in the creation of new and important logistics hubs along the routes," the report stated. Demographics - As living standards around the world continue to rise, new markets and cus- tomer segments are opening to global suppliers. Rapid population and economic growth around the world, especially in emerging Asia markets, has altered the shape of consumption and the distribution networks in place to serve these populations. Supply Chain Trends - Larger trends in the global supply chain can shape the emergence of global hubs. In Asia, low-end manufacturing—such as garment and textiles production and elec- tronics component assembly—has steadily been moving from Southern China to Western China and Southeast Asia. Southern China, encompassing the Pearl River Delta, has traditionally been the light industrial manufacturing center of the world. As wages continue to rise, however, and China attempts to move up the manufacturing value chain, there has been a shift to more sophisticated heavy industry manufacturing. Technological advancements - "E-commerce continues to be one of the main driving factors for modern logistics developments and networks across the region. With a trickle-down effect to inventory management, this leads to changes in the global supply chain network," said Dennis Yeo, regional head of Industrial & Logistics Services for CBRE Asia. "Speed-to-market is more important than ever. The service demands brought about by e- commerce—for example, shorter delivery times to consumers—has changed the entire retail sup- ply chain of getting goods to consumers, including regional distribution strategies," he said. "The technical ability of locations and buildings to support the ever-increasing demands for both scale and speed of output is an ever-more important determinant of market position." Source: CBRE exams but "we sometimes can't afford to wait as much as two weeks for customs exams." Weber sees the same problem at the Port of Oakland. "The increase in inspected coffee containers is creating some delays and additional cost," Weber said. "In the last couple of years, I've seen more contain- ers getting inspected but I can't say it's going to happen this year." Traffic stops in Portland While other West Coast ports bounced back from the labor slowdowns, the Port of Portland's cargo ships left with the outgoing tide. Hanjin Shipping Co., which represented nearly 80% of all con- tainer business in the Rose City, stopped deliveries Feb. 10. Two months later, German carrier Hapag-Lloyd stopped scheduling shipments as well. The two shipping lines' decisions left Portland high and dry. It seriously af- fected the state's strong specialty coffee market and Portland warehouse Costa Oro International. "Oregon has three times more ex- ports than imports so it's really hurting the shippers going outbound," said Ari- anna Hartstrom, Costa Oro founder and c.e.o. "They have to truck the product and it's adding transit time and costs." Despite the loss, Portland remains a viable market for green coffee storage, she said. Door-to-door costs have only increased marginally and Hartstrom re- mains bullish about the Oregon market. The nearest ports are 150 miles north at the Port of Tacoma or 30 miles farther at the Port of Seattle. All green coffee coming into Costa Oro must be trucked south. The effect on Hartstrom's busi- ness is still unknown. Costa Oro handles everything from micro lot to commodity grade shipments and serves as the go-between for produc- ers, importers and roasters. "We pretty much handle the entire range and deal with all the players that react with each other," she said. "We've become the neu- tral party for storage handling and trans- portation. There's a high level of confi- dentiality in the green coffee importing." That totaled about 600 containers a year – until now. "I anticipate a decrease (in shipments) but because it's only been a few months I can't gauge it yet," she said. "There will be a