Editor’s Note: This article first appeared in the July/August 2022 edition of Roast Magazine under the Column “Technically Speaking” and is reprinted here with permission
Transportation is an essential but frequently overlooked part of the coffee industry. For roasters of all sizes, overland freight is a key factor when considering location, pricing, and risk tolerance. Unless a coffee business is lucky enough (or savvy enough) to be located immediately adjacent to coffee production, transportation must be factored into the equation. LTL freight in specific is defined as the transportation of freight taking up anything less than a full trailer or container—literally “less than truckload.” This is in comparison to FTL (full truck load), meaning that the full trailer is occupied by one consignee or receiver of the freight. In many cases, your supplier will be able to offer you the best LTL rates since they ship on a regular basis. They may build the cost of freight into the price of your coffee, or they may be able to deliver directly to you if they’re nearby. But for many coffee businesses, having some knowledge of logistics remains essential for keeping the business running, and for maintaining peace of mind when you must handle things yourself.
Choosing the best LTL carrier for your business
If you’re arranging your own freight, finding the right carrier for your business is dependent on a few factors. Whether you are a single-bag or full-container roaster, you’ll need to find a carrier that has consistent and rapid service. If you are centrally located, it is more likely that you’ll find many carriers with direct service. This means carriers won’t need to pass your freight to what is called a cartage carrier, interline service, or beyond carrier for the final leg of delivery. Direct service is faster, but keep in mind that all LTL transit times are estimated, not guaranteed. The closer you are to a major city, local terminal, or interstate corridor, the more likely you will be reachable by direct service. Cartage carriers are used for remote points, and one or more days of transit time may be added to your shipment if your location is considered a remote point. These carriers should always honor the rate given to you by your initial LTL carrier, though it may be a good idea to choose prepaid service if you are at a remote point in order to avoid any issues. In many cases, cartage carriers will deliver to remote points only a few days each week. Get to know your cartage carrier’s delivery days, and make sure to be on-site for your delivery window. In some rare cases, a remote point might have a local service that performs regular runs to major distribution hubs. If you’re in a city far from a major interstate corridor, you might want to look for a local trucking company that will work with you to bring shipments from the nearest large city. Starting a relationship with a local carrier can be mutually beneficial.
Working with your importer and their warehouse
It may go without saying, but the best way to ensure your coffee gets to you quickly is to make sure everyone involved knows who you are and how to get in contact with you. Beyond contact information, any changes to your carrier, location, open hours, or accessibility (congratulations on your new forklift) need to be communicated to all parties. If this information is missing, you may experience missed pickups, missed deliveries, or other problems, along with accompanying fees. Your coffee supplier will relay this information to the carrier through their bill of lading (also denoted as “BOL”) if they’re arranging your freight, but it never hurts to communicate directly with your chosen carrier to make sure their notes match your needs.
Remember that palletizing coffee takes a good amount of labor. Many warehouses will prepare your order for shipment by the next day, but busier warehouses may need more than one day to prepare your order. Also, breaking down a pallet and repalletizing coffee takes time, which may lead to delays in shipping, so make sure you know what coffee should be on your shipment before you hit send on that email.
If your supplier is contracting through another warehouse, which is frequently the case, you’ll need to set up an account with that warehouse and provide them with your contact information as well. These outside warehouses should keep you informed about the status of your order, and they will generally let you know when your order has been picked up. Once your supplier has provided a delivery order, the outside warehouse becomes your best point of contact.
Understanding cost breakdowns for LTL freight
You may notice that prices for freight fluctuate from shipment to shipment. This is due to variable costs of fuel surcharges, demand on freight services, and many other factors. One factor you can control is negotiating freight rates, and doing so could be to your advantage, especially if you’re a larger company. However, chances are that your supplier does much more shipping than you do and can offer better rates, so check with them before going through the trouble of negotiation.
One method of pricing freight is called pallet rate. This means that you’ll pay per pallet, with the possible addition of accessorial charges (liftgate, scheduled delivery appointment, etc.). This is generally a consistent rate, but you’ll sacrifice the option of negotiating for better rates by volume. Furthermore, only smaller carriers and local LTL services offer pallet rate service. Pallet rates can be great for those starting out, but once you’re working with national carriers, or start shipping more than four pallets at a time, you’ll want to consider getting volume quotes.
A volume quote allows you to get pricing per pound and by density (also known as freight class). Frequently, green coffee gets listed as class 60 or 65, which is close to the densest and least expensive side of the scale. Requesting a volume quote is a good way to go for shipping five pallets or more. Another consideration, however, is that volume freight can tend to take longer to pick up, and claims coverage on volume freight may be lower than for smaller shipments, meaning some of the risks are offloaded to you in return for more affordable service.
As for accessorial charges, make sure to note every service you require on delivery, and check your bill of lading to make sure it matches your needs. Your dock must be level with back of the truck, or liftgate services will be added. Any use of a pallet jack outside of the truck can be considered inside delivery; and know that many carriers will not enter a house or business, something that could carry an extra liability, even if the term does include the word “inside.” Last of all, commercial and residential locations are designated by the carrier; even if you believe your farmhouse shouldn’t be considered residential or remote because you have a tractor and a paved driveway, your carrier may disagree.
Chain of custody
For coffee roasters using LTL, there are a couple of key documents that formalize the transfer in the chain of custody for a shipment. A bill of lading is a document signifying the official transfer of custody to the customer. This document is your lifeline and the best means of proof in showing you are liable only for the services you requested. Make sure all your needs are listed on the bill of lading. If you require a service that is not listed (liftgate, residential service, etc.), you will certainly be charged extra by the carrier upon delivery. When you’ve received a bill of lading, the coffee is officially your responsibility. That doesn’t mean that your supplier won’t still help you along the way, but legally, they are not obligated to. Still, it will always be the supplier’s hope that you receive your shipment without trial and tribulation.
While the coffee is your responsibility once it leaves the warehouse on the carrier, the carrier is also responsible for delivering the freight to you without damage. They are not responsible, however, for delivering on a schedule unless you’ve paid for guaranteed service. The carrier’s responsibility is concluded when you sign the delivery receipt. If you do not note damage or missing items before signing the delivery receipt, you may lose the right to a claim.
Delays and delivery windows
If your coffee doesn’t arrive on time, the best way forward is to check all along the chain of custody while keeping everyone involved informed. If it’s only a delay, your local terminal should be able to provide you with an estimate of when it may arrive. From there, you can request a delivery window from your local terminal so you can plan to be on-site when your freight arrives. Missing your delivery window may result in a redelivery fee, which can be quite costly.
Working your way back along the chain of custody, your carrier may be experiencing other problems. In 2021, for example, there was a large windstorm that disrupted freight all across Colorado, leading to delays systemwide. For situations no one can control, just having up-to-date knowledge can be helpful for planning your business.
Finally, check with your supplier to make sure your order has shipped—especially if you haven’t received confirmation of shipment. Mistakes can happen, like pickups not being notified correctly, or shipments being loaded onto the wrong truck. The best remedy is thorough communication.
Other issues such as lost freight (usually marked as “all short”), damaged freight, or missed delivery are more complex and involve claims.
Claims and other freight mishaps
As previously noted, once you have received the bill of lading, the coffee is officially in your custody. So, what happens if your coffee is lost or damaged in transit? If you have experienced only partial loss or damage on delivery, don’t sign that delivery receipt until you’ve noted the loss. Failing to note any problems on delivery forfeits your right to a claim in many cases.
Legally, you are responsible for contacting the carrier and filing a claim. You can ask the carrier to perform an investigation by calling your local terminal and requesting to speak with OS&D (over, short and damage). If there are issues of loss, it would be wise to get your supplier involved as well since they certainly have experience handling claims. They can also provide you with the cost of lost goods for your claim form, and give weight to any negotiations you may have to undertake.
Finally, be prepared to wait for your claim to be resolved. Many claims offices receive hundreds of claims per day, so a wait of up to 60 business days is not unheard of in the industry. This can cut into a roaster’s bottom line, so make sure to take your supplier’s advice on reliable carriers. Spending an extra $50 for a reliable carrier is a good investment.
Limitations of LTL freight
LTL freight is a convenient and relatively affordable way to ship large quantities of coffee. It does, however, have its limitations. A frequently repeated statement in the industry is that “LTL freight is not a white-glove service.” These are business-to-business carriers that make multiple stops every day, so any accommodations made to the consignee will be taken into account. Any changes to a delivery mid-shipment will disrupt service and can delay not only your delivery but all those alongside it in the designated trailer.
As with any aspect of the coffee industry, thorough communication is the key to moving coffee easily and keeping all parties happy and prosperous. Let’s build those relationships and keep that coffee moving! If you have any questions, contact us us at info@royalcoffee.com
