Yahoo Finance How the Baltimore bridge collapse upended a D.C. coffee chain’s business
When he woke on March 26 to the news that Baltimore’s Key Bridge had collapsed, Michael Haft, co-founder of Compass Coffee, dialed his chief operating officer.
“You have to reroute all of our coffee immediately,” Haft recalled saying.
The collapse upended the supply chain for the D.C.-based roaster, which imports most of its beans through the Port of Baltimore. The crash is expected to cause delays and extra costs for many other businesses that rely on the port, which is responsible for about 52 million tons of imports and exports annually. The U.S. Small Business Administration has received more than 1,000 loan applications in response to the upheaval.
With the port closed to most vessel traffic, hundreds of products, including coffee, tofu and cars, now have to be rerouted to different parts of the country. Three temporary channels provide limited access to the Baltimore port.
To show how the supply chain has been disrupted, The Washington Post looked at the shipping process for some of the products that come from overseas to serve Compass customers.
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From around the world to your hands
Compass gets its coffee beans from Kenya, Ethiopia, Indonesia, Brazil, Guatemala and Colombia. Those beans get loaded into shipping containers - 42,000 pounds in each - and sent out to sea.
They arrive at the Port of Baltimore, which receives more than 8 percent of the nation’s coffee beans. Only the ports in Newark, New Orleans, Charleston, Oakland and Houston imported more beans annually before the bridge collapse.
In addition to the beans, Compass uses imported sugar to make simple syrups. Their 12-ounce coffee bean cans are made by a company that imports its steel through the port.
At any given time, Compass typically has six to eight containers of coffee and other products in transit.
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Unloading in Baltimore
Once Compass’s beans are unloaded at the Port of Baltimore, they get trucked to a warehouse about 12 miles northeast of the city. That facility also stores beans for other coffee companies, ranging from behemoths like Starbucks to small businesses like D.C.-based subscription service Cam’s Kettle. Inside, 150-pound bags of coffee are stacked on wood pallets.
Then, the beans wind their way to Compass’s 18 D.C.-area cafes. Others go to wholesale and grocery customers, and some are sold to customers to brew at home.
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New plan: Newark
The bridge collapse disrupted this process, and the coffee, sugar and tins - among other items - needed somewhere new to go.
Some vessels carrying beans were already at sea when the bridge collapsed, and shipping companies rerouted them to the Port of New York and New Jersey in the Newark area. That port typically handles about seven times as much cargo as Baltimore, a Port Authority spokeswoman said, and has been accepting many other shipments originally intended for Baltimore.
Then Compass had to decide where to route the beans that hadn’t yet shipped. The company considered things like the size of each port, its availability to accept cargo, the cost of transporting products from there to D.C. and the timing of it all, said Matt Brown, who works with Compass as an outside sales manager at the importer Cafe Imports.
Haft decided to send that coffee to Newark. That solved the immediate issue, but also caused a domino effect.
Now that the beans are entering the country through New Jersey, what used to be a 30-minute trip to truck them to the Maryland warehouse is now a five-day journey. Plus, Compass has to return the empty containers to Newark. Sugar will also be expensive to transport from New Jersey because of its density, said Chas Newman, Compass’s chief operating officer.
The roaster’s next order of raw materials for their bulk coffee bags is expected to take 12 weeks - twice the usual time - and other shipments are also running behind schedule. Empty bottles for simple syrup have been delayed by six weeks. One of Compass’s main packaging suppliers, based in Maryland, also expects delays.
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What this means in Washington, D.C.
For now, Compass has kept prices the same for its customers. But Haft hasn’t ruled out raising prices in the future, and he hopes Baltimore’s port will fully reopen before he has to make changes to his operation.
The diversion has been expensive. It used to cost Compass about $1,000 to transport a container from the port to its roastery in Northeast Washington.
Now the company expects to pay $3,500 per container for the trip from Newark to D.C., plus an extra $10,000 on sugar in the next three months. Haft might also purchase more beans at a time to compensate for how long it takes to get the coffee to the warehouse.
There are still other products that could be affected, from paper cups to compostable straws. “The ripple effects are also being felt up and down the supply chain,” Haft wrote in an email. “We are scrambling to find alternative products or alternative shipping routes.”
The U.S. Army Corps of Engineers has said it aims to finish removing the Key Bridge wreckage by the end of May, clearing the way for the Baltimore port to reopen.
“Hopefully that happens,” said Carl Bentzel, a commissioner at the Federal Maritime Commission, which regulates international ocean transportation. “But there’s a lot of steel to bring up from the bottom.”
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