May 2013 C&CI • Shipping & Warehousing • 15 EWF highlights
growing challenges Speaking at the recent World Cocoa Conference in Abidjan, Stefan Poppe from the European Warehouse Keepers Federation (EWF) provided an interesting update on some of the challenges facing warehouse keepers in the cocoa supply chain. The EWF was founded in 2005 as a result of an initiative between Belgian, German and Dutch warehouse keepers and currently has 37 members in six countries. Members of the federation are regional associations of warehouse keepers in the main European centres for coffee and cocoa. As Mr Poppe explained, the EWF’s Standards Committee plays a key role at the federation, providing a tool for quality control for warehouse keepers, in order to achieve and maintain reliable, sustainable and economically viable warehouse keepers’ services. One of the key roles of the EWF, he explained, was to unify and improve the quality of warehousing services throughout Europe and create what he called “a level playing field” in legislation concerning the warehousing sector. The EWF also plays an important role developing recommendations and/or standards for the quality of services for participating associations, and stimulates the exchange of experience and best practice between members of participating associations. It also acts as a ‘spokesman’ for the sector in European and other international matters, relevant for the soft commodity warehousing. Mr Poppe said that one of the biggest challenges for warehouse keepers was that, in the last decade, the relationship between warehouse keepers and the producing industry had changed significantly. Nowadays there is more outsourcing of non- core activities and greater involvement of the quality control departments in the warehouse/supply chain. The warehouse keeper is also expected to deliver new services and “add value,” such as through the use of the Vendor Managed Inventory (VMI) concept, which involves ‘collaborative,’ inventory supply by a contractor on behalf of a customer, faster in and outbound handling of cocoa beans, financing of stocks, and compliance with higher quality standards. “Nowadays, the warehouse keeper has a wider responsibility and is integrated partner with the cocoa of the industry,” Mr Poppe explained. As he also highlighted, over the last 10 years traceability and sustainability have become ‘key’ words. “Originally, the warehouse keeper played a role at the beginning of the supply chain, from farmer to exporter; and at the end of the chain, from factory to final consumer,” he explained, “but the warehouse keeper has become an integrated part of traceability and sustainability programmes and plays an important role ensuring that the requirements of certification bodies are met. As Mr Poppe noted, different certification bodies have different
requirements
for storing cocoa; this means that dedicated space is required in the warehouse for each, and more space is needed overall. A warehouse keeper will also need to develop a control system, enabling him to demonstrate full traceability throughout the logistics chain.
As Mr Poppe also noted, demand is growing for sustainable cocoa, and
The EWF says the role of the warehouse keeper is evolving rapidly and is no longer simply one of storing commodities
there is increased consumer awareness of sustainability, and of certification and traceability. However, supply is not growing at the same pace, the market is a volatile one, and the challenge for the warehouse keeper is to adapt his business model to be more flexible, and enable him to cope with peak storage levels and volatile inbound and outbound volumes, whilst maintaining a sustainable business model.
Since the economic crisis beginning in 2008 it has also been more difficult to secure access to finance for soft commodities. Working capital is of central importance to all of the players in the cocoa supply chain, and this has resulted in reduced buffer stocks, and more ‘just in time’ deliveries. This too is a challenge for the warehouse keeper, who may have to provide finance and adapt his business model as stocks fall in size but the rate at which stock needs to be delivered speeds up. Last, but not least, Mr Poppe said that, over the years, EWF members had noticed a clear deterioration in the quality and the strength of the jute bags used for cocoa beans. Federation of Cocoa Commerce (FCC) rules state that the bags should be of sufficient strength to withstand the transportation and storage of cocoa, but as he explained, poor quality bags are resulting in additional spillage and respond badly to sampling holes. “As this is a matter of significant importance to the quality of cocoa and the work of warehouse keepers, the FCC and EWF have joined forces to analyse cocoa bags from the major origins,” Mr Poppe concluded, noting that a report with the findings will be published in the course of 2013.
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