The Canadian Oilseed Processors Association (COPA) is pleased that the House of Commons Standing Committee on Transport, Infrastructure and Communities is recommending making extended interswitching limits permanent in its recently tabled study into making rail transportation more competitive.
“Having competitive options made available through extended interswitching limits has introduced a level of competition into the system that we have never seen before, allowing COPA members to negotiate better rates and service from rail carriers,” said COPA Executive Director Chris Vervaet in a release.
Canada’s oilseed processors serve the entire value chain and notably farmer customers by creating consistent and reliable demand year-round for their canola and soybeans. Canadian oilseed processors ship to locations in Canada, all 48 continental U.S. states and around the world, the release said.
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“The oilseed processors’ need for reliable rail service is essential as plants operate on a continuous 24-7 schedule and like most manufacturers require just-in-time delivery on in-bound seed and shipment of out-bound vegetable oils and protein meals,” Vervaet said. “Extended interswitching is an uncomplicated and transparent mechanism that is well understood and has allowed competitive forces to function in a natural way without the government having to intervene in a more prescriptive manner.”
Extending interswitching limits permanently, enables Canada’s value-added shippers to continue to solidify existing sales relationships through consistent and cost-effective delivery of their products, he said. Furthermore, this provision provides new opportunities to ship to North American customers that previously have not been accessible given logistical constraints.
COPA also noted that there are many other important issues of interest discussed in the Committee’s report including financial penalties to be covered in Service Level Agreements to address service failures.
The report also contains a recommendation to redefine the overall service obligations of the railways to meet the needs of the marketplace via shippers under the definition of adequate and suitable.
COPA is promising to continue working with the government as Minister Marc Garneau prepares to introduce legislation in the spring of 2017.
