KEY FACTS
- Performance-based rules foster innovation and improve safety in the modern regulatory framework for freight rail.
- Prescriptive regulations enforce outdated methods in the freight rail industry.
- DOT and FRA should ensure fair, tech-friendly oversight across all transportation modes, including freight rail.
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Railroads develop, test, and incorporate new and emerging technologies to help improve safety, efficiency, and customer service. Meanwhile, a modern regulatory framework for freight rail could address regulatory impediments. These impediments regularly get in the way of adopting technology-based improvements.
One major problem is that the current regulatory oversight of the development, testing, and incorporation of emerging technologies — including automated systems — is becoming increasingly divergent across the various modes of transportation.
Some modal agencies seek to encourage advancements. Others seem intent on locking in the status quo. The Department of Transportation should strive for modal parity, including in regulations, to allow for fair and balanced competition. It should not further distort the freight transportation market.
Railroads need an equitable regulatory framework.
The freight rail industry seeks a modern, effective regulatory framework at the U.S. Department of Transportation and the Federal Railroad Administration (FRA). This framework should embrace new technology and operational improvements to drive safety and efficiency.
One approach to achieve this is through performance-based regulations. Performance-based regulations define specific outcomes or standards that must be met. They give railroads flexibility in how to achieve compliance instead of mandating rigid methods or processes.
For railroads, this regulatory approach sets specific operational goals for the industry. Scientific metrics and data can measure and confirm these goals. Moreover, it allows railroads to develop and harness new technologies and approaches to improve their operations and reach those goals.
A modern regulatory framework for freight rail using performance-based regulations would help railroads build upon the safety of their operations more effectively than is possible today. This is in contrast to utilizing prescriptive regulations, which dictate the precise characteristics of workplace facilities, equipment, or processes for compliance with that regulation.
Prescriptive regulations freeze innovation.
Prescriptive regulations often cannot keep pace with the development of new technologies. They may, at times, impede safety improvements by requiring the use of certain outdated processes or equipment.
For example, the FRA’s prescriptive regulatory approach for when railroads seek to incorporate new safety technologies often only permits the rail industry to use these technologies as a supplement to — not a replacement for — decades-old regulatory requirements. This results in a powerful disincentive to invest in the research and technology necessary to keep railroads competitive in the marketplace for time-sensitive freight.
Performance-based regulations are forward-looking and meet the needs of a world where technologies are constantly changing and improving. Policymakers should strive to create a modern regulatory framework for freight rail that encourages innovation and the development of new technologies that would make railroads safer. They should also ensure sufficient governmental oversight.
A performance-based regulatory framework can ensure that freight rail companies are able to continuously improve the safety of our operations. They will better meet our nation’s growing freight transportation demand and benefit U.S. manufacturers and consumers. To incorporate a modern, effective regulatory framework, policymakers should:
- Emphasize modal equity in the development, testing, and incorporation of new and emerging technologies.
- Implement performance-based regulations to allow the industry to invest in cost-effective, innovative solutions that better enhance safety and efficiency.
- Base regulations on verifiable data, sound science, and demonstrated need.
- Encourage innovation and avoid “locking in” existing technologies and processes.
- Be transparent with decision-making and encourage meaningful discussions with industry and the public.
- Ensure the benefit of a regulation outweighs its cost by relying on data and expert input and examining the cumulative burden of regulations.
- Guidance documents should clarify ambiguous regulations, not establish new obligations or coerce compliance.
- Encourage waivers and pilot programs to help the industry demonstrate new, cutting-edge technologies and practices that could enhance safety.
Read the AAR Audio Narration
Why Freight Railroads Need Modern Regulations
This is AAR Audio, and you’re listening to Why Freight Railroads Need Modern Regulations.
Technology is changing the capabilities of skilled freight rail employees.
Artificial intelligence helps them inspect railcars.
Drones help them inspect bridges.
Sensors help alert them to emerging problems.
The question is…
Can regulations keep up?
Since the start of American freight railroads in 1827, technology has made freight rail safer, more efficient, and more reliable decade after decade.
But in many cases, regulations may as well be written for the trains of the 19th century.
That’s because they’re so prescriptive.
They don’t just say what outcome should be achieved.
They specify exactly how it has to be done.
Sometimes that works.
But when technology changes, those rules can become outdated and a major challenge.
Imagine if a regulation required everyone to use a paper road map.
Then GPS was invented.
The GPS is clearly better.
It’s more accurate.
More efficient.
And constantly updated.
But instead of replacing the paper map, you’re required to carry both.
That’s essentially the challenge railroads face in some areas today.
New technology can often be added.
But it can’t replace older regulatory requirements.
So, employees end up doing both.
Railroads support a different approach known as performance-based regulation.
Instead of telling railroads exactly how to do something, performance-based rules define the safety outcome that must be achieved.
Then railroads can use the best available technology to meet that standard.
As technology improves, the methods can improve too.
Without rewriting the regulation every few years.
That approach already exists in many industries.
Engineers don’t improve safety by freezing technology in time.
They improve safety by measuring results.
Testing new ideas.
Collecting data.
And adopting better solutions when they prove themselves.
Railroad regulations should work the same way.
Now, none of this means less oversight.
It means smarter oversight.
New technologies should still be tested.
Validated.
And shown to have the equivalent or higher level of safety before they’re widely adopted.
But once they do, regulations should allow them to replace older methods instead of simply adding more requirements on top.
Transportation should also be regulated consistently across all modes.
Today, some parts of the transportation industry have more flexibility to test and deploy new technologies than others.
That creates an uneven playing field.
Railroads support what’s known as modal parity.
The idea that similar technologies should have similar opportunities to be tested and adopted, whether they’re used by railroads, trucking companies, airlines, or other transportation providers.
Modern regulations also encourage innovation.
When companies know new technologies can eventually replace older methods, they’re more willing to invest in research and development.
That leads to better inspections.
Better maintenance.
Better operations.
And ultimately, a safer transportation system.
When regulations require both the old way and the new way at the same time, innovation slows.
Investment becomes harder to justify.
And everyone loses the opportunity to benefit from better technology.
Technology will continue to evolve.
Regulations have to evolve with it.
Railroads support a regulatory framework that’s built on data.
Sound science.
And measurable safety outcomes.
One that encourages innovation without compromising oversight.
Because the goal of regulation shouldn’t be preserving yesterday’s technology.
It should be creating the safest and most efficient transportation system possible.
THE BOTTOM LINE
A modern regulatory framework that emphasizes performance-based, data-driven rules—instead of rigid, outdated mandates—will help freight railroads innovate faster, improve safety, and meet growing demand. Smart, technology-friendly policies ensure regulation supports progress rather than holding it back.