Logistics and supply chain strategies in grain exporting

The grain shipping industry is highly competitive and has become technically advanced during the past decade. These changes, along with the introduction of innovative shipping mechanisms, have made logistics management an important source of opportunity and risk for grain shippers. A stochastic simulation model was developed to evaluate tradeoffs and effects of key variables on logistical costs in the grain supply chain for an individual firm. Average demurrage for the supply chain was $2.14 million ($0.70|mt or 1.8 cent|bu) with the highest demurrage costs for vessels and lowest for railcars. Of the random variables modeled, unexpected changes in export demand had the greatest impact on costs. [EconLit citation: Q130.] © 2004 Wiley Periodicals, Inc. Agribusiness 20: 449-464, 2004.