Grains, Trains and Chains: An Agent-Based Model of the Western Canadian Grain Handling and Transportation Supply Chain
An open access policy will be explored to determine if it can restrain incumbent railway behavior and help ensure the continued timely delivery of Saskatchewan wheat to export markets. An agent-based simulation is developed to evaluate the feasibility of implementing competitive access applicable to grain movement. The simulation contains: all grain and oilseed farmers in Saskatchewan, in addition to all primary elevators and inland terminals in the province; both Class I railways; and the port of Vancouver. The model uses agent-based simulation to incorporate spatial and temporal effects into a dynamic supply chain, observing delivery penalty events. A competitive opportunity may be present for a potential rail entrant if the volume and frequency of delivery penalties are high enough and if the locations are sufficiently close enough to make entry feasible. I found in the simulation that there are approximately one million tonnes of wheat that do not move in a timely manner on an annual basis within the province of Saskatchewan. Delivery penalty event volumes averaged approximately 85,000 tonnes per month or approximately 30 shipments across Saskatchewan per month. This delayed grain is not randomly distributed across the elevators in the province, but occurs in dense pockets. I find in the simulation that a potential rail entrant does not earn a profit. The return on investment for an entrant that transported all delivery penalty events to export position is -5.5%. If an entrant attempted “hit-and-run” entry and only transported the largest shipments, their return on investment would increase to -1.7%.
DegreeMaster of Science (M.Sc.)
DepartmentBioresource Policy, Business and Economics
SupervisorNolan, James F.
CommitteeSchoney, Richard A.; Rosaasen, Ken; Peterson, Steven
Copyright DateAugust 2011
open access, rail, elevator, terminal, farmer, grain, agent based modeling, simulation, GIS, transportation, supply chain, wheat, grain handling