WINNIPEG —Canada’s Federal Court has upheld a ruling that allows Parrish & Heimbecker to gain competitive access to BNSF Railway on its grain shipments to the United States, according to a news release from The Western Canadian Wheat Growers Association.
The decision is being applauded by western Canadian grain groups because it helps improve competitiveness in the grain transportation industry.
“The Wheat Growers are very pleased to see the Federal Court uphold the (Canadian Transportation) Agency decision,” said WCWGA president Levi Wood.
“The interswitching provision introduces a modest but important element of competition in the rail sector.”
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The initial ruling by the CTA, issued May 1, 2013, ordered Canadian Pacific Railway to interchange traffic with the BNSF Railway at the interswitching rate prescribed by regulation under the Canada Transportation Act.
The act allows shippers to apply for goods to be shipped at an interswitching rate whenever their shipping point is located within a specified distance of an interchange with another railway. The distance was set at 30 kilometres at the time of the CTA ruling but has since increased to 160 km for grain and other shippers in Western Canada, following passage last year of the Fair Rail for Grain Farmers Act.
The CTA decision and Federal Court ruling applies to shipments from the P & H elevator at Milk River, Alta., which is about 20 km from the CP interchange with BNSF at the border crossing at Coutts, Alta. Other shippers within 160 km of the interchange will also be able to take advantage of an interswitching rate, which varies depending on the distance to the interchange, the news release said.
The CTA ruling gave P & H the ability to ship grain on the CP track to the Coutts interchange at the prescribed interswitching rate of $315 per car, which is approximately $3.50 per tonne. It is far below the commercial rate that CP wished to charge of $1,373 per car, or$15.25 per tonne.
“The difference in rates of almost $12 per tonne improves the return on shipments to the U.S. market and gives P & H the ability to offer better prices to Canadian farmers,” Wood said.
“Other shippers within the 160 km interswitching distance will also benefit from this ruling. Having the interswitching provision improves our industry’s competitiveness, while providing adequate compensation to the Canadian railway for its portion of the haul.”
