Bulk and Containerized Commodity Chains

Bulk and Containerized Commodity Chains

The “First Mile” of bulk commodity chains is assumed by dedicated consolidation centers; one center per type of commodity (grain, coal, potash, etc.). These centers have specialized storage facilities for the commodity as well as the terminal equipment for transfer. Additionally, this requires the usage of specialized transport equipment for hinterland movements (e.g. hopper cars) as well as dedicated port terminal facilities where the commodity must be accumulated/stored until the shipment is big enough to justify a shipload. Then, specialized bulk carriers traveling full in one direction and empty in the other with a point-to-point service, are required. Specialized terminal facilities at the destination market often act as a warehouse where the commodity is directly shipped to the final consumer using dedicated equipment; the “Last Mile” of the bulk commodity chain. Economies of scale have been massively applied to bulk commodity chains, but this commonly requires large storage stacks.

The “First Mile” for containerized commodity chains would essentially be the same as for bulk commodity chains. It could require a regional facility, next to an intermodal terminal, that would containerize the commodities. Alternatively, the containerization process can occur at the export port facility, particularly in the context where an inland distribution system collecting commodities has already been established and is operating efficiently. At this point, the commodity chain becomes integrated into the existing containerized freight transport system, which is commonly articulated by corridors for inland distribution. This system is flexible and subject to port competition, meaning there are options to select services from a cost and time perspective. Container ports are commonly serviced by pendulum services conferring frequency and a number of port calls along with maritime ranges. At gateways, containers are transferred to corridors until they reach the closest inland terminal to the customer. In between, there can be facilities that will decompose the commodities into loads manageable by the customers, such as bags and pallets.