Say what? You want to put my coffee EXDK after a final SASPSSNR? What the heck are you talking about?!?
The language of coffee exports and imports is confusing at best and totally nuts at worst. For roasters, you simply want to get that 40 bags of sweet Tenejapa Grade-2 from Chiapas to your roasting plant quickly, easily and as inexpensively as possible. Luckily that’s where you and your importer/exporter team are in perfect alignment. The only thing missing is a little communication, beginning with definition of terms.
The reason importers and exporters use such odd sounding terms is because fundamentally we all get tired of saying the whole long description every time. So we shorten it, condense it and turn it into an acronym. It saves time, breath and even space on the already crowded forms we use every day. But even when the terms are spelled out they can be a little confusing. So here are some of the most common ones that most roasters will encounter when talking to their importer about getting coffee. Each of these are highly important and can either save you a lot of money, headaches and time, or cost you a lot of all three.
This is but a short list of the key terms you should know:
- EX-WH/EXWH/EWH/EDK/EXDOCK (Exchange ownership at warehouse dock)
- Definition: This means that the coffee changes ownership at the warehouse or when it transfers to your account at a shared warehouse.
- Why You Care: When it leaves the importer’s or exporter’s warehouse dock you own it. You have to pay shipping from there to wherever else it is going, and if it gets lost or damaged in shipping it is your financial loss not the sellers’. This is a big deal so pay close attention to where coffee changes ownership.
- FOB – Free On Board
- Definition: Risk and ownership is transferred at the ship rail point
- Why you care: If the coffee is sold FOB that means that the buyer owns the coffee as soon as it leaves the ship and must pay all costs to transport and assumes all risk. Generally only done for full container loads direct from origin.
- FOT – Free On Truck
- Definition: Seller’s price includes warehouse in-loading and out-loading charges but not transport from the warehouse to you.
- Why you care: This means that other than shipping from the warehouse to your plant all the other costs of moving the coffee are included in the price. Risk and ownership are both transferred when coffee is loaded on the truck. The buyer pays freight from the warehouse to their plant.
- C&F/CFR/CIF – Cost and Freight; Cost, Freight and Insurance
- Definition: Means that freight is paid for by the seller to the point specified above but that risk is still transferred at that point. CIF means that the seller also paid for insurance and that is included in the price. All generally related to FOB purchases.
- Why you care: Mostly relates to FOB purchases, but being clear on these terms can save you a surprise increase in price later on.
Purchase and Sample-Related Terms on Contracts
- TYPE Sample
- Definition: A high level, rough idea of what the coffee should and could be like. These are almost always hand milled, early-harvest or very late-harvest coffees.
- Why you care: These coffees are NOT what you will actually be buying. They are just to give you an example.
- SAS – Sale on Approved Sample, or Subject to Approved Sample
- Definition: This means that you are placing an order for the specified coffee and both of you create a binding contract to purchase it, however it is based on your approval of the sample and it meeting what the seller told you it was.
- Why you care: When you agree to buy a coffee, that is a valid, legal, binding contract. SAS gives you the power to approve the coffee based on grading, roasting and cupping the coffee and making sure it matches what the seller promised you. If it does or is very close, it is the buyer’s responsibility to honor the contract and buy the coffee. If it does not match what the seller promised, the buyer can reject it depending on the other contract terms. This should be your standard default contract term, at a minimum, for coffee purchases.
- REPRESENTATIVE or OFFER Sample
- Definition: A technical definition that means that on average the seller took a random sample from about 10 percent of the bags, blended them and created one large sample.
- Why You care: This is much closer to what you would actually be buying. It is a cross section of the whole lot so it more closely should match the average of the entire lot. When combined with knowing whether or not it is a PSS or AS, you can know what that means for your options. It is almost always a milled sample with set parameters, so ask what those are.
- PSS – Pre Shipment Sample
- Definition: This is a technical definition that has a very specific meaning and purpose. It means that this is a representative sample taken from after milling is complete and the coffee is ready to ship. It is a randomly chosen sample from 10 percent of the bags, blended and then sent to you to grade, roast and cup and approve.
- Why you care: This is your only opportunity to accept, reject or change the milling specs of your coffee. Time is essential on these samples, as delays could literally cost you the coffee.
- AS – Arrival Sample
- Definition: Means that the coffee has arrived at its final warehouse location in the country of consumption. And the samples should be representative samples so you can grade, roast and cup and approve the lot for purchase.
- Why you care: With an arrival sample, what you see and taste is what you get. It shouldn’t change from when you sample it to when you buy it assuming that time is less than 30 days. However, you also do not have the ability to modify the milling.
- REPLACE/NO REPLACE
- Definition: When applied to SAS coffees, it specifies whether you are agreeing to replace the coffee with another equal value coffee or not.
- Why You care: if it is a REPLACE contract then you must buy another coffee of approximate equal value. It also means the seller must try to replace the coffee with an approximate value and quality coffee. It can cut both ways so beware, as neither is better, per se.
There are many, many more terms than this in the crazy, confounding world of coffee importing and exporting. But hopefully these helped a little to clear up the most important ones that as a coffee roaster you should be aware of. All of these are defined by the Green Coffee Association.