Ottawa's 18-month extended interswitching trial for the railways begins today.
Interswitching involves a shipper negotiating the transfer of a product between two rail companies, with one railway taking it part of the way, and then transferring it to a competing railway to take it the rest of the way.
CPKC's assistant vice president of marketing and sales for bulk is Elizabeth Hucker
"It's our belief that a return to extended interswitching will harm Canadian shippers by diverting Canadian jobs and investment dollars to us rail carriers and undermining the efficiency and capacity of Canada's rail networks. And we all know inefficiency harms Canadian customers and consumers by driving up costs for all users of the rail network. This will fuel inflation because so many goods and commodities are moved by rail."
The trial involves changing the interswitching distance from 30 kilometres to 160 kilometres for the three prairie provinces.
When the federal government announced the changes a number of farm groups came out in support of the interswitching trial.
At the time, Ian Boxall, President of the Agricultural Producers Association of Saskatchewan told us with 99 per cent of elevators in Western Canada serviced by just one railroad, allowing railway interswitching would ensure supply chain efficiency.
"If your elevators on CN's line and they can't bring you cars, this would give the opportunity for them to get a hold of Canadian Pacific Railway and request car service to their facility. Which would just increase competitiveness within our freight system, but also give the shippers opportunity so that our products that are so wanted around the world, get there when they're required to get there."
He notes in 2016 with the rail crisis we saw at the time and the backlog it worked really well.
"Our numbers indicate that there was roughly a $5 million savings to producers because of inner switching."
Boxall says the interswitching trial that was put in at the time gave grain companies the opportunity to get better rail service and get products shipped quicker which then resulted in the producer getting paid quicker.
APAS wrote a letter to the Federal Transport Minister in May suggesting that the 18-month interswitching trial timeframe be expanded and that the proposed distance of 160 kilometres be extended to a minimum of 250 kilometres.