Containerization of Grain: Emergence of a New Supply Chain Market

Abstract

The containerized shipment of freight continues to grow rapidly. This development can be traced to a transformation of bulk and break-bulk service to containerization. Demand has been driven by opportunities to broaden logistical options as well as advantageous freight rates. Logisticians and policy makers are unsure how much more bulk traffic can be converted to containerization, but the trends are evident. Of particular interest is grain. Bulk grain handlers have successfully resisted the conversion of grain shipping to containerization, except on the North American-Asian traffic lanes and the Australian-Asian traffic lanes where growth has been significant. This paper reviews the theoretical case for grain containerization from a logistics perspective, followed by an examination of the current trends in the United States and Canada. Subsequently, the analysis considers the restrictions and resistance to the conversion of grain from bulk shipping to containerization.

Maritime connectivity and agricultural trade

“…For instance, an increasing share of grain trade is being containerised, in the range of 10%–15% according to Rodrigue (2020). Prentice and Hemmes (2015) provide similar figures for containerisation for US and Canada seaborne grain exports. Korinek (2011) claimed that 25% of fruit and vegetables are shipped in containers.…”

Transport Networks and Impacts on Transport Nodes

“…Grain shippers have realized this opportunity. Approximately 15% of total grain exports from North America now move in containers to Asia outside the established bulk grain supply chain (Prentice and Hemmes, 2015). In the United States, grain is being loaded into containers at Chicago and Kansas City that favors shipment through Los Angeles/Long Beach, which have not been traditional export ports for grain.…”