WINNIPEG – Shipping grain in bulk or in containers each has advantages
and disadvantages.
Here are some of the pros and cons, as described during last week’s
grain industry conference on containerized shipping.
BULK SHIPMENTS
Pros
- Labour costs are lower because the grain is handled less, using
generally lower technology.
- Ships and rail cars act as the “packaging,” while containers often
can produce plastic, wood and steel waste. This makes bulk shipping
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- Bulk shipping reduces problems associated with regional variations in
production. Grain from widely dispersed areas can be blended to produce
uniform, consistent grades.
Cons
- Bulk shipments put large inventories into the supply pipeline, which
can slow down the ability to respond to market demand.
- Because the bulk system is designed to handle maximum volumes and
minimum grade separations, it doesn’t do a good job dealing with small
volumes and a high number of segregations.
- Bulk shipments require a massive and expensive infrastructure of
primary elevators and export terminals, which carry costs even when no
product is moved.
- The large volumes shipped in bulk can cause cash flow problems for
niche customers who might want to buy smaller lots.
CONTAINERS
Pros
- Because it’s a relatively new industry, especially in grain, costs
are declining and there are opportunities to develop more efficient
ways of doing business.
- Can quickly move small quantities of specific products from farm to
customer, with good quality control.
- A variety of products can be moved to different customers on the same
boat.
- Have good backhaul potential without the danger of contamination
that’s present with grain hopper cars.
- Smaller volumes mean better cash flow for customers.
Cons
- Less efficient for the railways because shipping grain in smaller
containers reduces the revenue-bearing cargo weight of a train.
- As a rule, container supply builds up in areas of high demand and
large populations, while they’re often hard to find in areas of low
demand, such as the Prairies.
- Shipping bulk grain in containers, as opposed to shipping bagged
grain, can require retrofitting the container.
- Some import facilities can’t handle containers or face additional
costs in doing so.
- There is often a lack of consistent quality between containers
because they are loaded from small geographical areas.
