The Western Grain Elevator Association is welcoming a new rail shipping pilot program expected to provide a more competitive market.
The federal legislation received royal assent in late June.
The interswitching 18-month pilot program will extend the distance from a grain elevator in which shippers can seek a competing rail provider service from 30 kilometres to 160 km.
WGEA executive director Wade Sobkowich said it will bring more competitiveness to grain shipments by rail, while providing a more disciplined service.
Sobkowich equated the new program to what an air traveller might experience when a direct flight is delayed or cancelled and travellers can get on a shorter flight to a different airport and catch a connecting flight to their original destination.
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Interswitching is similar, in that it allows grain shipments to be moved short distances by competing rail carriers and dropped off for other rail companies to take to port.
Sobkowich said the old 30-km limit might have worked in Eastern Canada, where a far denser rail system exists, but it didn’t work for the wide expanses in the West.
“Whether it’s used or not, the competitive tension brings the parties to the table to be reasonable,” he said.
WGEA and other western grain industry players have lobbied the government through the Flip the Switch initiative to extend the interswitching policy to 500 km and for the pilot program to continue for more than five years.
Regardless of how often interswitching is used over the next year-and-a-half, WGEA plans to push for the program to be made permanent.
“There may be only a handful of times an interchange takes place but what we do think, is it will create that competitive alternative that will motivate the primary carrier to be more willing to meet the needs of their shipper customers,” said Sobkowich.
