Appraise Pricing and Competition in Rail Operations

Question :

Liquid containers on a train. While more and more intermodal containers are being moved by rail today, historically rail has tended to be used to move low-value bulk commodities. Due to the low-value nature of the cargo, rail competition and especially pricing has always been hotly debated.

Answer :

The article “Congestion and Distribution of Rents in Wheat Export Sector: A Canada-U.S. Cross Border Comparison” has been written by Devin Serfas, Richard Gray, and Peter Slade in order to analyze the distribution of rents in the wheat market. The purpose of the paper is to analyze how rents are divided or split between the three main players such as farmers, railways, as well as grain handling companies. 

The researchers have focused on three locations in Western Canada and three locations in the North-eastern United States. The researchers paid proper attention to the impact of congestion on the allocation of rents in the selected markets throughout the research. 

The researchers found that rates of rail in the US are relatively higher than the rates of rail in Canada. The reason for the relatively lower rail rates in Canada is that the railway is regulated by the maximum revenue entitlement (Brewin et al., 2017). The maximum revenue entitlement sets a limit on the average rate and the Canadian railway follows the rates set by the maximum revenue entitlement. Contrary to this, the margins of handling grain in Canada are higher than the margins in the United States.

The researchers have done a great deal of research. They have reviewed several scholarly articles and government websites to get the right information in order to compare the rates regulated in both countries (Serfas et al., 2018). The researchers have found several previous studies that have been conducted on the same topic so that they can get rich content to meet the objectives of the paper. 

A well descriptive analysis of the grain transportation policies in Canada as well as the United States of America has been done (Gray, 2019). The researchers have found that around 65% of the total grain production in Canada is moved by rail and only two companies such as Canadian National as well as Canadian Pacific are involved. Apart from this, all grains exported from Western Canada are transported by rail. In the United States as well, there are two railroad companies that serve maximum producers of grains such as Burlington Northern Santa Fe as well as Union Pacific (Brewin et al., 2017). 

The researchers have found that there is a significant difference in price as well as the distribution of rents on two sides of the border, and the most significant difference is grain freight rates. The paper very effectively presents all information needed to satisfy the objectives of the paper. 

However, the researchers have not presented the findings of the paper in a separate section that reduces the effectiveness of the paper (Bearman, 2019). All the facts and figures of this paper have been supported by the previous studies that enhance the strengths of the paper. The paper is based on secondary data, and the research has been done through reliable and valid scholarly papers to support the arguments (Keenan et al., 2017). Overall, the research paper effectively covers all areas which are required to meet the objectives of the paper.

References 

Bearman, M. (2019). Key concepts in qualitative research design. In Healthcare Simulation Research (pp. 73-78). Springer, Cham.

Brewin, D. G., Nolan, J. F., Gray, R. S., & Schmitz, T. G. (2017, September). JTRF Volume 56 No. 3, Fall 2017Bringing in the Sheaves: Changes in Canada’s Grain Supply Chain Through the Post Canadian Wheat Board Era. In Journal of the Transportation Research Forum (Vol. 56, No. 3).

Brewin, D., Nolan, J., Gray, R., Schmitz, T., & Schmitz, A. (2017). The Canadian Grain Handling Supply Chain in the Post Canadian Wheat Board Era (No. 17-00784).

Gray, D. E. (2019). Doing research in the business world. Sage Publications Limited.

Keenan, J., Poland, F., Wilson, P., Mathie, E., Boote, J., Varley, A., ... & Munday, D. (2017). 022 PP: RESEARCH DESIGN BOUNDARIES FOR QUALITATIVE RESEARCH, STAKEHOLDER AND PATIENT AND PUBLIC INVOLVEMENT, AND WHY THEY MATTER.

Serfas, D., Gray, R., & Slade, P. (2018). Congestion and distribution of rents in wheat export sector: A Canada-U.S. cross-border comparison. (Links to an external site.) Canadian Journal of Agriculture Economics, 66.