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Continental Terminals: not just any warehouse.

Just about the time I started with this magazine in 1979, a warehouse was just a warehouse--It just stored coffee. Now, warehouses have become full-serviced facilities where coffee importers and/or manufacturers can have their coffee unloaded, weighed, sampled, checked through customs, reconditioned or rebagged, if necessary, and railed or trucked to almost any location.

Continental Terminals is such a facility and claims to be the largest in the U.S., and perhaps the world. Situated on the Gowanus Bay in Brooklyn, the facility allows for ships to pull up along the berth, have their cargo unloaded and placed into the proper processes until the coffee actually leaves for the manufacturer.

Continental Terminals is a family-owned business now in its 34th year. Started by Gerald Ponsiglione Sr., the firm only serviced/warehoused the cocoa trade in a 35,000 sq. ft. warehouse Now son-in-law, Douglas Martocci is president of the company with Gerry Ponsiglione Jr. serving as vice president. Ponsiglione's grandsons are also involved, being educated in the commodity handling business.

It was back in 1968 that Martocci pursued the coffee trade. The Port of New York had just lost the cocoa delivery point to the Port of Philadelphia and the cocoa trade practically dried up. Economically, coffee handling seemed to be a perfect match for the company. Since many cocoa firms also trade coffee, and vice versa, the company was able to benefit from its relationship with cocoa and establish a thriving coffee business. The Coffee, Sugar & Cocoa-licensed warehouse now occupies 1,500,000 sq. ft. and holds one million bags of coffee and a half million of cocoa.

Continental Terminals also pursued the coffee trade in the various entry ports. They now have established a facility in Laredo, Texas, and Norfolk, Virginia. Norfolk, Virginia, was considered when the Nestle Beverage Co. built a new plant there just two years ago. The Laredo, Texas facility was established to service the trade when many importers were unsure of other facility management in that area.

Continental provides warehousing services for a wide spectrum of clients. Importers, dealers and manufacturers establish their client base. The size of the manufacturers ranges from the largest roaster to the small gourmet roaster that comes in form New Jersey or Connecticut and loads his own truck. One specialty roaster told me that one of the reasons he located his business in Brooklyn was to be within walking distance from Continental to pick up his coffee bags. Walking through the warehouse, I couldn't help but notice a large number of Kona coffee bags. Within a matter of blocks, Coffee Holding, Harry J. Wolfe & Sons, Hena, Hillier, Gillies and a few others are located close by.

The small roaster is just as important to us as the big ones, says Nunzio Franzese, supervisor. Franzese has been in the coffee and cocoa trade for 18 years, 15 of which were spent on the importing side.

Coffee warehouses have become full service to become more economical for the importers. The transition from separate warehouses, samplers, weighers and reconditioners all took place within the last eight years, says Martocci. The cost effectiveness of keeping everything under one roof is a tremendous advantage to the trade.

One of these services offered by Continental is weighing. Almost all coffee contracts including Coffee, Sugar & Cocoa Exchange deliveries are bought and sold on a 100% weight basis. In the past, weighing was performed on an |A' frame scale, weighing from 4-6 bags individually. This method was labor intensive and costly. Now, coffee is weighed primarily on a platform scale, with pre-weighed pallets consisting of 20 bags, thus reducing labor and costs.

Another service and a most important one I'm told is sampling. Since the only thing a potential buyer sees is a five lb. representative sample which can represent 1,000 bags or more, a sampler's responsibility is to inspect the cargo as well. They will report any conditions in grade, packing and handling with regard to the shipment.

Reconditioning coffee is also one of the many functions of Continental. According to Franzese, most of the damage done to coffee is only water damage. Salt or fresh water damage on coffee gets the coffee mouldy. In containers, heat may rise in excess of 100 [degrees] inside a box, especially in summer. Condensation from warmer climates to colder climates cause the coffee to sweat, and you'll actually have a raining phenomena in the container. Getting rid of the mold is no big chemical fiasco. Mold is skimmed off the beans, washed, dried and later rebagged. No chemicals are needed to clean the coffee. The same holds true for grease stains that sometimes are on the bags. Foreign matters such as powders, are present if the container wasn't cleaned properly before the coffee was handled. Sometimes talc or paprika is found. If the bag is stained, Continental will bring it back to conformity.

Continental also provide drayage services which I found out is a term used for trucking. Traditional carriers are using more and more containers if they are not fully containerized. Continental services the container-carrying vessels in Red Hook and New Jersey, and then trucks them back to the Brooklyn facility.

Another unique service Continental offers is direct vessel discharge.

Chartered vessels carrying coffee either in its entirety or in part, have increased in the number entering the ports. Chartered vessels make their money by offering to the trade, a lower carrying costs than other established carriers.

At the Brooklyn facility, Continental has plenty of wharf/berth space for direct discharge for charter vessels. Martocci says that more and more importers are using charter vessels to bring in their coffees. Charters give a 30% differential rate compared to traditional carriers. The absence of ICO quotas are helping the independents and all carriers are becoming more competitive. Chartered vessels deploy coffee in slings.

Both Martocci and Franzese agreed that it's quicker to unload a charter ship with slings than it takes for a containerized vessel. For example, if 50,000 bags of coffee came in containerized, it would take labor over one week to unload. For a chartered vessel with slings it would take two days.

In light of the recent reduction of major coffee importing firms in the New York area, that hasn't diminished the amount of business for Continental. In fact, this year has been a busy one for them. In light of the ICA collapse, the Brazil/Colombia conference collapse and the increase of charter vessels, business was up this past year. When asked if the recent Hoboken, New Jersey closing of Maxwell House will have any effect on future volumes coming into Continental, Martocci knew the exact day the plant closed--March 28th, 1992. He hasn't felt the effects of that closing but emphasizes that it will definitely affect the Port. He expects there will be a decrease in volume but, with the advent of the new coffee, Sugar & Cocoa Exchange |B' contract, that may just fill the void. Martocci adds that the Hoboken closing will have a definite effect on coffees crossing the docks and will affect the port, but there may be an equal replacement offset with the |B' contract.

If a new ICA for 1993 comes about, we feel there will be no adverse effect on the Port until the ICA comes back into effect, he added.

Martocci knows the coffee industry. Continental has always dealt with the importers and manufacturers." Our business is coffee, we specialize in raw coffee; that's why we're in Laredo and Norfolk, we're innovators to a certain extent. We're not restricted to any one commodity. We were one of two groups in the New York Port willing to do bulk for GF-Hoboken; now its moot. We're not a dormant organization, we'll go elsewhere to do work, we're dynamic. Continental holds 200,000 sq. ft. of warehouse space in Norfolk and 80,000 sq. ft in Laredo. Both are equipped with truck and rail facilities."

It was a quiet day when I visited Continental. These men know their coffee, and I just can't help being impressed by the new roaster in the neighborhood who wanted to get his facility as close to Continental as possible. There must be a very good reason.
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Article Details
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Author:McCabe, Jane
Publication:Tea & Coffee Trade Journal
Article Type:Company Profile
Date:May 1, 1992
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