Grain Growers call for extension of interswitching pilot to boost rail competition

The Grain Growers of Canada (GGC) is raising concerns over the expiry of the extended interswitching pilot, which it says benefits Canadian shippers in several ways.

Extended interswitching allows shippers located on a single rail line to seek competing service from the next closest railway within a certain distance. The GGC says this balances negotiations, encouraging better service or pricing to benefit entire supply chains by offering increased competition, improved efficiency and better market access.

“The extended interswitching pilot is an important tool for Canada’s grain sector, providing access to competitive rail options that can improve access to rail service, reduce shipping costs and enable producers to meet market demands more effectively,” the GGC said in a statement. “By allowing shippers to access alternative rail carriers within a set distance, extended interswitching can help alleviate monopolistic practices in the rail sector and improve service predictability across the supply chain.”

The extended interswitching pilot is set to expire in March. The GGC believes this marks a step backward for the sector and says the government missed an opportunity to make the program permanent.

“As a no-cost measure, it would have continued an essential level of competition into Canada’s duopoly of Class 1 railways, delivering meaningful benefits to farmers, shippers and the broader agriculture sector,” said the GGC. “A government committed to supporting Canadian agriculture and bolstering the economy must take prompt and decisive action to address this oversight.”

The current pilot will complete its 18-month run in March, while a full program was available from 2014 to 2017.

“It’s time to ensure competitive forces exist at the heart of Canada’s rail supply chains so they deliver the best possible service outcomes for the agriculture sector,” said the GGC.