Issue link: http://read.dmtmag.com/i/763665
STiR coffee and tea 35 The Royal Coffee warehouse in Oakland, Calif. Photo courtesy "Royal Coffee, Inc." at the gate operations significantly impacting our draymen with increased turn times which, will come with a price." Evergreen Marine Corp. and Yang Ming Ma- rine Transport Corp., two Taiwanese operators and major international players, are heavily in- vested in buying mega-ships. Evergreen has or- dered 11 container ships at a cost of $140 million each, according to reports. Each fuel-efficient ship can deliver up to 18,000 containers. Yang Ming is awaiting five Panamax ships of its own. There are now 1 million TEUs of capacity on the water or on order for the newest ultra large container vessels. US ports remain open One year ago, ports along the US west coast were recovering from a prolonged labor dispute that de- layed some containers from reaching coffee ware- houses and also played a role in Hanjin's decision to pull out of Oregon's Port of Portland entirely. This time around, labor peace seems to be at hand. The current collective bargaining agreement between the Pacific Maritime Association and the International Longshore and Warehouse Union is in place until July 2019 and talks are underway to extend that agreement. The two sides issued iden- tical statements on Nov. 1 saying discussions had begun. On the east coast, the United States Maritime Alliance Ltd. (USMX) and the International Long- shoremen's Association started their own talks this summer to possibly extend a contract that expires in September 2018. Neither side is commenting on the progress. A Trump trade effect? As the world watched, the US in November elect- ed real estate mogul Donald J. Trump as its new president. Throughout the lengthy election cam- paign, Trump was critical of the country's current trade imbalance. He opposed a tentative Trans- Pacific Partnership pact and also called for rene- gotiations or complete withdrawal from the long- standing North American Free Trade Agreement (NAFTA). Coffee importers contacted for this report do not see any imminent impacts from Trump's pro- posed moves, however. "Coffee continues to be one of the largest in- ternationally traded commodities so any changes in existing trade agreements could have an im- pact," Pisano said, citing NAFTA, the Central America Free Trade Agreement (CAFTA), and the Colombia Free Trade Agreement. "Consid- ering the fact that green coffee is a non-dutiable import commodity, a cancellation of current trade agreements may mean that imports from certain origins covered in those agreements may become A Hanjin ship docks at the Port of Oakland before the company filed for bankruptcy Photo courtesy "Royal Coffee, Inc." subject to merchandise processing fees. Beyond that, it's difficult to predict (any effects)." Unlike world stock exchanges that reacted to the election outcome, von Mecklenburg-Blumen- thal said he saw no initial effect on freight rates immediately after the election "and I don't think anything will happen on the freight rates at least for the next two quarters." International turmoil such as wars or high seas piracy have no effect on ocean freight rates in the short term, he said. "If international trade in and out of the Unit- ed States were to decline with fewer trade agree- ments, this would affect demand and then supply will need to react," he said. "Right now, it's just words."