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.
