Inland grain logistics. Ways of widening the bottleneck

13.07.2017

Railroads? Trucks? River transport? What will solve the grain shipping problem?

● How can the degree of the export grain flow’s freedom be increased?

● Is it possible to avoid the risk of contract breach caused by a grain carrier shortage?

Over the last decade, Ukraine has increased grain exports more than fourfold: from 10 to 42 MMT. Growth of grain yields contributed to a rise in Ukraine’s grain export potential. In turn, this drove an expansion of port capacities. However, a weak link has appeared between the powerful production resource and the rapidly growing port sector: this is inland logistics.

The problem of grain movement between the grower and the export hub became particularly acute in the record 2016/17 season, when grain exports came close to 42 MMT. Back in the previous marketing year 2015/16, when 38 MMT was shipped, inland logistics somehow managed these shipments. The rise in exports by just 10% along with restrictions imposed on truck transportation was the straw that broke the camelback.

Logistics problems have entailed a series of negative consequences for the Ukrainian export market: contract execution delays, substantial growth of shipping costs, forced change of the commodity’s origin into NON-Ukrainian one, and many other issues.

To avoid further losses, major exporting companies are considering the possibility of investing in inland logistics. UkrAgroConsult’s study “Inland grain logistics. Ways of widening the bottleneck” shows optimum ways to invest in the grain infrastructure for reducing risks while executing export contracts.

 

1. Market of cereals and oilseeds

1.1. General description

1.2. Key trends

1.2.1. Production

1.2.2. Consumption and trade

1.3. Development prospects

2. Foreign trade

2.1. Exports

2.1.1. Key trends

2.1.2. Indicators, dynamics, geography etc.

2.1.3. Key exporters and foreign buyers

2.2. Imports. Key trends and indicators

3. Truck transportation

3.1. Place in the grain trade logistics chain

3.2. Description of grain shipping by trucks

3.2.1. Key advantages of truck transportation

3.2.2. Key geography and destinations

3.2.3. Truck fleet, availability of specialized vehicles

3.3. Approximate shipping cost and its dependence on the distance

3.4. Problems and prospects of the truck transportation development

4. Rail transportation

4.1. Place in the grain trade logistics chain

4.2. Description of grain shipping by rail

4.2.1. Key destinations and volumes of shipments

4.2.2. Export border points

4.2.3. Availability and condition of hopper fleet

4.3. Cost of rail transportation

4.3.1. Rail freight rates and their components, dynamics

4.3.2. Calculation of shipping costs for key routes

4.3.3. Impact of tariffs and costs on shipment volumes and grain trade profitability

4.4. Organization of shipments

4.5. Leasing and purchase of hoppers

4.5.1. Advantages/disadvantages

4.5.2. Non-state shippers and owners

4.6. Problems and prospects of the rail transportation development

5. River transportation

5.1. Place in the grain trade logistics chain

5.2. Reasons for the interest in the river transportation development

5.3. Description of grain shipping by river

5.3.1. Key trends, destinations and volumes of shipments

5.3.2. River waterways and main terminals, technical condition and capabilities

5.3.3. Compliance with regional grain production volumes and silo locations

5.3.4. Tug-boat and barge facilities

5.4. Estimated cost of shipping grain by river to ports and for export

5.4.1. Tariffs and total cost

5.4.2. Comparison with shipping by other modes of transport

5.5. Analysis of development prospects of river grain shipments for grain trading companies

5.6. Problems and prospects of constructing river terminals and developing river shipments

6. Sea ports

6.1. Place in the grain trade logistics chain

6.2. Description of the port sector from the viewpoint of grain trade

7. Development prospects of grain export logistics

 

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