The Impact of New Rail Industry Regulations on the Transport Industry

Recent incidents (including the devastating rail car explosion in Lac Mégantic, QC) have highlighted the importance of safety in each link of the fuel-transportation network. In the U.S., the result has been a greater focus—and new legislation—on train transport, and while it may seem that the new regulations apply only to trains, their impact extends much further.

Renewed Focus

First and foremost, the new rail legislation emphasizes how crucial it is for the entire transport industry to ensure that safety is paramount. It also underscores a need for ever-greater training and education for all HazMat handlers.

As one example, the investigation into the Lac Mégantic explosion found that the particular kind of crude oil from the Bakken region in North Dakota (where that load originated) is more volatile and flammable than crude from other sources. This discovery means that all industries involved in its transport will need to review and re-evaluate their testing and transport methods to ensure that they have the adequate tools and protocols to handle it safely.

Greater Demand for Land Transport

As a result of the new DOT legislation, it is expected that there will be greater demand for other transport agents to pick up some of the slack while tens of thousands of older trains are upgraded and retrofitted to meet the new safety standards. This means that trucks may have to be more involved (and in greater number) while the rail industry rushes to catch up with the proposed rules and regulations. It could also mean that rail transport prices increase for other types of goods.

Increase in Fuel Prices

In addition to the costs of upgrading and replacing older cargo train cars, the proposed legislation puts new limitations on train speeds, especially in populated areas. Since both of these consequences (reduced number of suitable cars and reduced transit speeds) will have an impact on the volume of fuel that can be transported over the rails each day, analysts are predicting an increase in the cost of fuel – an effect that all of us will feel in one way or another.

Greater Demand on Drivers

Given recent news about truck driver shortages, a greater need for trucks for fuel transport impacts all of us, especially current truck-transport customers. A greater need for drivers in one sector could mean that trained drivers in other divisions must be switched and re-assigned to fill the gaps. Transport companies should prepare themselves for the potential need to reorganize their operations, and transport customers should prepare themselves for the possibility of rate increases and/or longer-than-usual transit times as the industry works to keep up with greater demand for road transportation.

While much of the impact remains indeterminate, and only time will tell how exactly this new legislation will affect other industries (and consumers at-large), it’s always wise to be prepared and to anticipate potential changes on the horizon.

The need for greater safety and security remains at the top of everyone’s concerns. We must continually ask ourselves how we can make our operations safer for everyone involved. Though they may not affect us directly, the new DOT regulations should serve as a moment for reflection and re-examination for everyone in the transport industry. In that sense, at least, impact of those regulations will—and should—extend well beyond rail.

Bob Carr

Bob Carr

Bob Carr has a long history with the Wadhams family and Wadhams Enterprises. He currently works as Director of Sales for ARG Trucking Corp, as well as for the milk hauling division, ETW.