CANADA’S GRAIN HANDLING AND TRANSPORTATION SYSTEM: A GIS-BASED EVALUATION OF POLICY CHANGES

Abstract

Western Canada is in a post Canadian Wheat Board single-desk market, in which grain handlers face policy, allocation, and logistical changes to the transportation of grains. This research looks at the rails transportation problem for allocating wheat from Prairie to port position, offering a new allocation system that fits the evolving environment of Western Canada’s grain market. Optimization and analysis of the transport of wheat by railroads is performed using geographic information system software as well as spatial and historical data. The studied transportation problem searches to minimize the costs of time rather than look purely at locational costs or closest proximity to port. Through optimization three major bottlenecks are found to constrain the transportation problem; 1) an allocation preference towards Thunder Bay and Vancouver ports, 2) small capacity train inefficiency, and 3) a mismatched distribution of supply and demand between the Class 1 railway firms. Through analysis of counterfactual policies and a scaled sensitivity analysis of the transportation problem, the grains transport system of railroads is found to be dynamic and time efficient; specifically when utilizing larger train capacities, offering open access to rail, and under times of increased availability of supplies. Even under the current circumstances of reduced grain movement and inefficiencies, there are policies and logistics that can be implemented to offer grain handlers in Western Canada with the transportation needed to fulfill their export demands.