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Policy Issues

Regulatory Improvement

WHY THIS MATTERS: An improved regulatory system allows the freight rail industry to better serve customers and the U.S. economy by innovating, deploying new technologies and operating more nimbly.

AAR POLICY POSITION: Freight railroads support instilling good government principles, transparency, complete and sound science, and embracing performance based regulations where possible.

Privately owned U.S. freight railroads believe federal lawmakers and agencies should enact policies to streamline government processes, collaborate more earnestly with industry where appropriate, and issue rules and regulations that achieve desired outcomes and better serve the public. 

Antiquated rules and regulatory processes often lock the freight rail industry into outdated practices and technologies, which discourages investment in new and better approaches. It also elevates the judgment of the government regulator over the combined experience and expertise of an entire industry.  

The private freight rail industry shares the same goal of the Federal Railroad Administration (FRA) — safety — because operating a safe railroad is good business. 

Proposed Principles

As policymakers improve regulatory processes, freight railroads propose the following principles for consideration:

  1. Regulations should be based on a demonstrated need, as reflected in current and complete data and sound science.
  2. All components of an agency's decision-making should be transparent to the public and subject to meaningful comment before the rule is finalized.
  3. Non-prescriptive regulatory tools, like performance based regulations, should be deployed wherever possible to align the interests of the regulator and the industry, foster innovation and achieve well-defined policy goals. An ideal approach to performance based regulations includes:
    • Measurable, calculable, objective parameters to monitor performance;
    • Objective criteria to assess performance; and
    • Flexibility to meet established performance criteria in ways that encourage and reward improved outcomes.
  4. Regulations should provide benefits outweighing their costs, and the cumulative impact with other regulations should be considered in every rulemaking.
  5. Use of "guidance" should be limited to appropriate situations and time periods. 
  6. Waivers and pilot programs should be a viable path for the freight rail industry to innovate without being tied down by archaic and outdated rules.


  • “Automating freight transportation can increase productivity and safety. Regulators should encourage technological advances by providing clearer standards.” (Information Technology & Innovation Foundation)

  • "I think there are outdated regulations that need to be changed. There is red tape that needs to be cut." (Former President Barack Obama)

  • "The American regulatory system has no working, systematic process for reviewing regulations for obsolescence or poor performance, facilitating the accumulation of a vast stock of regulations." (Mercatus Center)

  • "The natural accumulation of federal regulations over time imposes an unintended but significant cost to businesses and economic growth." (Progressive Policy Institute)

  • "One of [Washington's] most urgent priorities is to reduce the stock of existing regulations, and slow the flow of new ones as well." (Cass Sunstein, former Administrator of OIRA)

  • "With a $2 trillion price tag in compliance costs and an increasing number of huge and complex rules, it's clear the regulatory system isn't working." (U.S. Chamber of Commerce)