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Secondary rail car markets for grain transportation and basis values

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  • William Wilson
  • Prithviraj Lakkakula

Abstract

Commodity marketing firms’ logistical strategies have escalated in importance in recent years and are a significant factor that affects interfirm competition. Railroads have formulated pricing and allocation mechanisms for rail‐cars, resulting in a relationship between basis values in commodity markets and logistical performance, including rail‐car velocity (trips per month). This study estimates the determinants of and relationship between the Pacific Northwest export basis for soybean and rail‐car values in the secondary market, as well as to evaluate the simultaneity between these variables. The results indicate that the export basis and rail‐car values in the secondary market are determined simultaneously, which has important implications for commodity trading firms and for analysts (both private and public) of the commodity marketing system.

Suggested Citation

  • William Wilson & Prithviraj Lakkakula, 2021. "Secondary rail car markets for grain transportation and basis values," Agribusiness, John Wiley & Sons, Ltd., vol. 37(3), pages 472-488, July.
    • Handle: RePEc:wly:agribz:v:37:y:2021:i:3:p:472-488
    DOI: 10.1002/agr.21677
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    References listed on IDEAS

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