U.S./CANADA GRAIN HANDLING AND TRANSPORTATION SYSTEMS

Abstract

The United States and Canada have developed very different grain handling and transportation systems (GHTSs) over the last several decades to compete for global and domestic markets in Canada and the United States under CUSTA. Because the grain industries in both countries face long distance hauls, GHTSs are critically important to their operations and to producer returns. There has been considerable pressure for change in Canada's grain handling and transportation sector. Some industry trends, such as the rationalization of elevators in the Prairies and investments in new high through-put facilities, are being driven by market and competitive forces. Changes in grain handling, reciprocal access to marketing functions, and elimination of rate caps may have a significant impact on cross-border grain flows. Canadian Transport announced reforms to improve the efficiency of its GHTS. Possible multi-level effects, created by the reform package, would affect the grain flow from Canada to the United States. The most significant reforms include 'port buying' by the Canadian Wheat Board, which would remove the Board's control over internal logistics and shipping, and replacement of the current maximum railway rate scale with a cap on annual railway revenues for grain shipments.