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Policy Issues

Regulatory Improvement

WHY THIS MATTERS: A swollen government state, antiquated federal rules and non-transparent processes regularly stifle innovation and growth across economic sectors. 

AAR POLICY POSITION: Instilling good government principles, transparency, complete and sound science, and embracing performance-based regulations where possible.

Tremendous advances have happened in railroad design, preventative maintenance and safety technology since the rail industry was partially deregulated more than thirty years ago. Railroads continue to keep pace with an evolving digital world, but prescriptive safety regulations often lock the rail industry into outdated, redundant and costly practices that stifle innovation.

Proposed Principles

As policymakers look to improve regulatory processes, freight railroads propose the following principles for how the FRA should create smart regulations moving forward:

  • Base regulations on demonstrated need by relying on verifiable data and sound science.
  • Be transparent with decision-making and encourage meaningful discussions with industry, business and the public.
  • Use performance-based regulations to allow railroads to invest in cost-effective, innovative solutions that better enhance rail safety.
  • Ensure the benefit of a regulation outweighs its cost by relying on data, expert input and looking at the cumulative burden of the regulation.
  • Use guidance documents to clarify ambiguous regulations, not to establish new obligations and coerce compliance.  
  • Encourage waivers and pilot programs to help the industry demonstrate new, cutting-edge technologies and practices that could enhance safety. 


Here are just a few examples of current or proposed regulations that make it harder for the freight rail industry to invest in new safety technologies.  

Manual Intermediate Brake Inspections

RegulationRailroads must inspect brakes in specific ways at rigid timeframes based on FRA standards that were last updated in 1982. 


  • Reduced inspection effectiveness: The current required visual inspections only confirm brakes are applying, not how effective they are.
  • Decreased network efficiency: Brake tests are performed on stationary trains and are not as effective as a dynamic test.

     Increased employee risk: Manual testing requirements regularly expose employees to walking on uneven and rough terrain, and adverse weather conditions.
  • Better technology is available: Wayside Wheel Temperature Detectors (WTDs) offer a safer, more effective way to ensure brakes work properly by using infrared sensors that measure the surface temperature of each wheel as it passes over a detector. Instead of having to stop the entire train for intermediate brake inspections, trains are only taken out of service when there is an abnormal brake reading. The Transportation Technology Center, Inc. a world class railroad testing facility estimates that WTDs could reduce potential accidents due to ineffective brakes by 40%. 

The Solution: The FRA should modify the regulation to a performance-based standard that allows railroads to use technology that keeps trains in service, identifies problems based on science and improves employee safety. 

Retroreflective Sheeting

Regulation: FRA regulations require retroreflective sheeting (the yellow strips on the sides of trains that help motorists see them at night) be replaced every ten years, regardless of their condition.


  • No demonstrated need: AAR and Texas A&M Transportation Institute (TTI) tested retroreflective sheeting on 920 freight cars and 120 locomotives and found that the performance depends more on the condition and cleanliness of the material than the date it was applied. Data show that after more than nine years in service the material remains in good condition and doesn't need to be replaced if it continues to be properly maintained.

  • High cost, low benefit: The estimated cost to replace the retroreflectivity strips on 84,000 rail cars is $23.6 million, not including cost of staging and out-of-service time.

  • Better technology is available: Under a current waiver, railroads are developing a performance- based alternative to the regulation that would use a "retroreflectometer" to measure the condition of the material so that it can be replaced when needed, not arbitrarily. This is a well-established performance-based method the Federal Highway Administration currently uses.

The Solution: The FRA should modify the regulation to a performance-based standard to prevent needless costly replacements and allow the railroads to use technology to determine need instead of a rigid timeline.  


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

  • "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)