WINNIPEG, Manitoba, April 17, 2023 (GLOBE NEWSWIRE) -- Canada’s grain shippers applaud the Government of Canada’s announcement in Budget 2023 to bring back Extended Interswitching. This measure gives shippers who are physically located on a single rail line the ability to automatically seek competing service from the next closest railway within a certain distance at a guaranteed rate.
The Western Grain Elevator Association (WGEA) has long advocated to make Extended Interswitching a permanent measure in Canada’s regulatory framework.
“Extended Interswitching is one of the only policy tools that has historically created competitive options for shipper business,” said the WGEA’s Executive Director Wade Sobkowich. He added, “it offers an alternative service provider for single-served shippers which balances negotiations in a way that encourages better service or pricing for the benefit of entire supply chains.”
Canada had Extended Interswitching in place from 2014 to 2017. During that time Extended Interswitching did not cause major operational challenges and economic hardship on carriers. Instead, shippers experienced options for shipping product to its final destination which benefitted the western Canadian grain industry including grain farmers.
The intent of Extended Interswitching has always been to give all shippers the opportunity to have at least one other competitive shipping option. For that to happen in the grain sector, the Extended Interswitching distance will need to be 500km to allow for the Peace River and Carrot River growing regions to participate.
“Extended Interswitching, provided it’s at the right distance and automatically available, is a very important start to the government’s response to the Supply Chain Task Force’s report,” noted Sobkowich. “We look forward to providing the grain sector’s input to the full response, especially those further measures that address the imbalance in the business relationship with shippers, such as automatic demurrage penalties associated with railcar supply and service level performance.”
The WGEA is an association of grain businesses operating in Canada which collectively handle in excess of 95% of western Canada’s bulk grain exports. Its members account for approximately one fifth of bulk railway revenue in Canada and pay annual total freight of over one billion dollars.
Contact: Wade Sobkowich, Executive Director, WGEA (204) 942-6835 or wgea@mts.net
