The Canadian Transportation Agency is entering the home stretch of a two-and-a-half year review of the rules governing railway interswitching.The agency issued an initial decision April 21, but has given stakeholders until May 21 to make final submissions.”What is being proposed is pretty significant change to the interswitching rates,” said CTA spokesperson Marc Comeau. “We want to provide another opportunity for feedback and comment.”Interswitching refers to the practice of rail cars from one railway being moved over track owned by a competing railway.The idea is to provide a means of promoting regulated railway competition within certain areas where there is no physical infrastructure to allow for direct competition.The CTA is required to review interswitching rates at least every five years. The current rates have been in place for six years. The review began in December 2007.In its April 21 letter to stakeholders, the CTA said it plans to implement a number of technical changes to its formula for calculating interswitching rates.As a result of those changes, rates for the movement of blocks of fewer than 60 cars would increase by 4.2 percent, to $248 per car from $238. That will provide the railways with a revenue increase of $1.57 million.For blocks of 60 or more cars, rates will decline by 16.7 percent, to $71 per car from $85. That will reduce railway revenue by $1.63 million.Grain shippers, including the Canadian Wheat Board, and farm groups generally support interswitching as a means of simulating competition between the two national railways and want to see continued regulation of rates and expansion of the areas eligible for interswitching.The railways say interswitching doesn’t need to be regulated, noting that switching is carried out in the United States on a commercial basis.Ian Wishart, president of Keystone Agricultural Producers, said that while interswitching is not a huge issue for farmers, it can provide some efficiencies and savings for producers.”We see some potential benefits,” he said. “It would make sense on some occasions to take loads from both railways as one unit, something they don’t do now.”He said the last thing he’d want to see would be interswitching rates set through commercial negotiation.”The railways keep asking for fully commercial rates yet they operate quite profitably with a cost-plus formula and have a virtual monopoly. I just can’t quite equate the two.”
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
