Comparing Grain Transportation in the United States and Argentina

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2015-08-12
Authors
Goldsby, Thomas
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Altmetrics
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Center for Agricultural and Rural Development
Abstract

Whether an individual or nation can compete in the global marketplace hinges on the ability not only to produce materials and goods demanded by customers but also to deliver those materials and goods in an efficient, timely, and safe manner. The transportation and logistics systems that serve a market are critical given that transportation costs typically represent more than one-half of a commodity’s total landed cost. The agricultural sector of the United States enjoys considerable advantages in grain movement and storage, helping to explain the overall trade advantage of the United States over Argentina in common export markets. It is estimated that higher freight rates and inadequate transportation capacity result in a 10 to 20 percent increase in the cost of South American exports relative to the United States. It appears, however, that cost and performance differences are narrowing between the United States and Argentina. Argentina’s rapid progress promises to diminish the advantage the United States has.

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