19 Apr 2024

The Logistics of Global Grain Transportation

by | posted in: Shipping, Supply Chain | 0

Global grain transportation makes up a large chunk of the international supply chain business, and it’s responsible for a considerable percentage of its annual earnings and growth. What are the logistics behind global grain transportation and how are things changing for the future of better supply chain management? Here’s more about the logistics of global grain transportation, and what’s changing to improve the future.

The Logistics of Global Grain Transportation

Global Grain Transportation

First, grains go from farms to factories, where they’re processed and readied for the final consumer. Next, these grains find their way into other factories that buy directly from each supplier. From there, companies might process them into other products. The world would be different without interruptions or global grain supply problems. This supply chain is very important globally, just as crucial as medical supplies.

Almost all countries rely on some form of global grain transportation, whether they import or export the essential product. Changes in this supply chain are felt internationally and could affect multiple industries that rely on it. According to the financial firm S&P Global, the world trade outlook for grain trade is positive. There’s a higher demand for grain during 2023, and the trend has continued to hike grain demands in 2024. Grains are used and processed for many different reasons.

Here are just a few of the industries that wouldn’t be able to function the same without the grain supply chain:

  • Breakfast cereals and cereal bars
  • Skincare
  • Animal feed
  • Flours
  • Ready-made products

With higher demand for grain exports, the industry must adapt. Transport must be faster and more effective than in the past.

An Increasing Demand

An increased demand for grain internationally means that supply chain transport has to be faster and more effective. Grain can lie in storage for weeks to months, but a higher demand for the product has made this less likely. A larger volume of grain is hitting the road from one supplier to the next. Companies that aren’t keeping up are more likely to experience losses during times of higher demand. Companies dedicating time to better grain transportation will be more likely to benefit from it.

Better Grain Storage

Grain can be stored for months at a time if it is done safely. However, there’s a good reason why companies choose to avoid long-term grain storage. Storing grain too long can lead to potential spoilage. Spoilage can be expensive, potentially costing thousands. This can be avoided if a company chooses the easier alternative of moving the grain sooner in a higher-demand supply chain. Why wait when there’s a global demand for grain and companies can reduce their risk by transporting large quantities of grains faster?

Transportation: Improvements In Supply

Supply chains are improving, partially due to higher demand and better systems put in place. United States agricultural producers rely on efficient, safe, and reliable transportation. The Department of Agriculture marketing service releases a weekly Grain Transportation report that relays anything that can affect the shipping of products, such as freight rates and crude oil prices. It also reports the volume and price data for River Systems and Barge Freight, railroads, shuttle trains, grain cars or hoppers, trucks and ocean freight. Railroads are responsible for over a third of US grain exports.

The Surface Transportation Board monitors the economic regulations of various modes of transportation, primarily freight rail. Rail service is expanding, and cargo providers are doing more to strengthen their roles in a larger supply chain. These lead to indirect supply improvements for the global supply chain industry, which uses these systems to move grain forward. Supply chain improvements are sometimes aided by additional government funding, who join forces with private investors to ensure better global grain supply.

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