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The following discussion focuses on the transportation mitigation of the wheat chain from loading terminals to a destination market (as shown in Table 3-11). The content of this area of research involves logistical costs and risks associated with the wheat and grain marketing system. In addition, some studies evaluated the benefits and costs of mitigation risk systems.

Table 3-11. The literature of supply chain risk management of wheat transport

Year Researcher Findings on risks and mitigation of wheat transport

1983 1993 1997 1998 1999 2000 2001 2002 2004 2005 Binkley

Wilson & Preszler

Faruqee, Coleman, & Scott

Duval & Biere

Young

Vachal & Reichert

Park & Koo

Schlect

Janzen & Wilson

Transport SA

Schlecht, Wilson, & Dahl

RIRDC

Bushel & MacAulay

The concept of instability in the international grain trade and its impact mechanism to transport operation including shipping freight-rate

Identification method for uncertainty coefficient on import demand of wheat

Risk assessment technique based on dynamic domestic market price of wheat without incurring high government cost or distorting price signals

A framework of parameters for building wheat modelling toward grain producers‟ attitude on supply chain vulnerability.

The impact analysis of export costs of wheat trade in Canada due to uncertainty of Wheat Board policy and changes of transportation and shipment arrangements to international markets

The concept and ideas of changing pattern from bulk to containerised shipment of wheat transport

An empirical study on how „port-buying” strategy in removing maritime risks for wheat shipments of domestic points

A variety of distribution models of logistical risks transporting different grades of wheat to importing market. Two risk measures (wheat market-at-risk and wheat shipments-at-risk) of stages of a wheat-chain

Analyse the grain transport risk in South Australia in particular related to port and shipping facility and capability. Broadening the impact of risks on logistical costs in marketing and transporting different grade of wheat.

The structure of logistics cost as a proportion of grain export prices from Australian farm gate to port.

The impact analysis of inter-correlations of principal, agents and wheat marketing to the effectiveness of Australian wheat movement and competitiveness.

2006 Rosamond et al. A grain chain mitigation model based on three risk factors of bio-fuel, food security and the environment including

2007

2008

2009

Philips & Smyth

Rick & Van Horn

Leequddin et al.

recommendation of strategies on policy matters.

Risk analysis framework for the management of liabilities arising from global wheat-chain

Assessment technique to identify threats and opportunities of agri-flation in grain industry and global chain

Identifying institutional risk perception in the upstream supply chain entities in the packaged food industry

Source: Author

Binkley (1983) examines the instability concept of international grain trade and its impact, particularly on the costs and benefits of alternative supply chains under dynamic conditions of transportation operations including the shipping freight rate. Further, Wilson and Preszler (1993) identify a general method of calculating the uncertainty coefficient on the import demand of wheat. Their research also includes transportation and marketing expenses to various importing countries. The main goal of that research was to determine the uncertainty of demand level and potential costs.

Faruqee et al. (1997) suggest a logistical risks assessment technique in a dynamic grain marketing system. Past research shows that an increase in grades is a major limiting factor in the efficient movement of grain from the producer (farm) to the port. Logistical risks included in the model are uncertainty in vessel arrivals, inventory levels of grain at the port, misgrades that arrive at port, and the rail car unload rate. Other factors that can cause supply disruptions are uncertainty in demand, quality, and performance. The study focuses on demurrage costs without incurring high government costs or distorting price signals. To extending this study, Schlecht (2001) and Schlecht

et al. (2004) expand the supply chain risk assessment due to different grades of commodities to an importing market. This concept, is then broadly developed by Janzen and Rice (2001) who focus on two main joint risk measures namely wheat market and wheat shipments in a wheat chain.

Duval and Biere (1998) develop framework parameters of a wheat model in a vulnerable supply chain system and examine logistical risks associated with marketing homogenous corn between an inland and export terminal. Uncertainties included in the

study are yearly supplies of commodities, deliveries into the system, railcar and barge placements, vessel arrivals, and transportation transit times. Given that application, Philips and Smith (2007) expand a similar study with the establishment of a risk analysis framework for the management of liabilities of a wheat supply chain. On the basis of these particular models, Rosamond et al. (2007) propose a broad grain chain mitigation model examining three main risk factors such as bio-fuel, food security and the environment.

The wider literature of risk impact studies on wheat transport started with Young (1999) who initiated the impact analysis study on export related costs of Canadian wheat due to uncertainty of Wheat Board policy. The study provides a cost analysis and comparison of various changes of transportation and shipment arrangements for international markets. A similar research approach is continued by Bushel and MacAulay (2007) which enlarge the inter-correlation impact of principals and agents within Australian wheat marketing policy. A further study undertaken by Rick and Van Horn (2008) builds a comprehensive assessment technique to identify threats in the grain industry and the prediction of opportunities of agri-flation.

Another study by Reichert and Vachal (2003) provides a discussion of risk incurred when organising identity preservation shipments. The study developed a cost analysis including comparison of bulk versus container movements. Many benefits of containerised shipping are included, and a justification for their use is thoroughly analysed. A simple comparison concludes the study by comparing transportation expenses of shipping soybeans from Iowa to Japan across alternative modes, including container, truck, single rail car, and unit train shipments. Truck transportation is found to be the most expensive at $4.05 per bushel, and unit trains are the least expensive at $1.65 per bushel. The difference in unit train versus container shipment costs are reported to be 33 cents per bushel. Given that application, Transport SA (2002) establish a transport risk study in South Australia in particular related to shipping facility and capability.

Further, Park and Koo (2001) undertake an empirical study in order to assess whether or not „port buying‟ strategy has succeeded in removing maritime risks for wheat shipments of domestic points. The study found that active and flexible responses of port facilities and services are evident concerning the acceptable optimum costs and price of wheat under various maritime risks particularly on various sizes and capacity of available ships and the freight rate. In the particular case of Australia, Rural Industries Research and Development Corporation (2005) explored the structure of logistics costs and prices calculated from Australian farm gate to port.

The wider literature on recovery planning studies on the wheat chain can be traced to Clark and Miller (1967) who initiate an impact analysis study on export related costs of Canadian wheat due to the uncertainty of wheat shipment availability. That study provided a cost analysis and comparison of various changes in transportation and shipment arrangements to international markets (as shown in Figure 3-4). Similarly, Duval and Biere (1998) suggest recovering responses as framework parameters of a wheat model in a vulnerable supply chain system and examined logistical risks associated with an homogenous marketing system between an inland and export terminal. Uncertainties included in the study are yearly supplies of commodities, deliveries into the system, railcar and barge placements, vessel arrivals, and transportation transit times. This type of strategy is taken to anticipate various risks in the process of maritime transport in the wheat supply chain in the research of Garcia (2008). Further, in the study of Garcia (2008), a risk warning system is developed that assesses past risk events that generate an inter-correlation impact on port operators, agents of shipping companies, shippers, and agricultural consignees.