New interswitching rules scare pulse shippers

REGINA — Pulse Canada and the Canadian Special Crops Association are seeking member feedback about how Bill C-49 should be implemented.

“This legislation was really the end of a long process but in reality, it’s the beginning of another long process,” said Greg Northey, director of industry relations with Pulse Canada.

He said the Transportation Modernization Act that received royal assent May 23 was more successful for shippers than originally anticipated.

Northey attributed the success to the rail transportation disruptions of 2018 that spurred government action on the file and a “newly empowered” Senate that was amenable to amending the bill.

The biggest win for shippers is that contracts can now include financial penalties for railways that fail to live up to their service commitments.

“This is a significant change and one the pulse sector has been asking for,” Northey told delegates attending the 2018 Pulse & Special Crops Convention.

But there have also been setbacks, including replacing extended interswitching with a new long-haul interswitching provision.

“Maintaining that would have been probably the biggest win we could have got and we didn’t get it,” he said.

“That provided really true competition for shippers.”

Shippers didn’t have to apply for interswitching under the old system or wait 30 days to access it, and they had a clear understanding of what the rates would be.

A lot of the details of long-haul interswitching have yet to be worked out, but it is clear it will be more burdensome than the old system.

“It’s unclear how effective it will be, but we have it and it has a lot of potential,” said Northey.

Another concern for the pulse sector is that containerized shipments are no longer part of the maximum revenue entitlement (MRE) calculation.

“There is no limitation on the revenue that can be earned by the railways on the movement of containerized grain,” he said.

The government said that provision was made to incentivize innovation, but some shippers are concerned it will result in them paying more for container freight.

The other big change with the MRE is that soybean movement will now be included.

The Canadian Transportation Agency has a help line that is up and running to help shippers understand Bill C-49 and what it means to them.

The CTA is also offering a new informal dispute resolution service that is free and confidential, protecting shippers against potential retaliation from the railways.

The agency also has the power to launch investigations on its own without any service complaint. Northey hopes that can be used to prevent further transportation disasters like the one experienced in 2018.

Pulse Canada and the CSCA are forming a transportation advisory group this summer to help provide guidance on what members want to see on details including the long-haul interswitching provision.

The group will also provide guidelines to simplify some of the more complicated aspects of the new act.

Northey mentioned that government funding for the Ag Transport Coalition runs out this year and is expected to be renewed through 2021.

The coalition produces about 90 reports per month; some are publicly available while others are created for individual shippers.

The plan is to make much more raw data publicly available online and to create individual daily reports for shippers participating in the coalition.

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