On tank-car design, they're on edge (by Pat Foran)

— by Pat Foran, Editor

Rail-related legislative and regulatory issues won't rule in Washington D.C., this year (when do they?), but they'll definitely rate. Funding legislation and safety-related regs and/or laws already are beginning to take center stage, as Associate Editor Julie Sneider notes in this month's cover story.

On the safety front, tank-car design-related regulation or legislation in the post-Lac-Mégantic world certainly is the issue this year for those who toil in or serve the rail finance and leasing sector, a crowd we survey annually for our Finance & Leasing Guide. Nearly all who responded last month to a "What is the key issue you'll face this year?" question ranked the uncertain tank-car design landscape at No. 1.

"It is unclear what regulations will be enacted and consequently, investment in new and existing cars and infrastructure is under review by all interested parties — shippers, receivers, railroads and financial institutions," as one exec put it. Added another executive: "Industry players are concerned about lack of real information, and way too much speculation has them jittery." (Check out the rest of their responses.)

Actually, they're on edge for a number of reasons — including the lack of a consensus view on how the industry is responding to the call for tank-car design changes (see "There's a lot at stake in tank-car discusssions" by rail-car market observer Toby Kolstad). The retrofit task at hand regarding DOT-111 cars ("Probably the biggest concern is shop capacity," Chicago Freight Car Leasing Co. Vice President of Portfolio Management and Marketing Todd Kahn told me during a December 2013 interview), liability and risk also are top of mind. "Perhaps a more fair apportionment of risk will come out of the tank-car discussions," notes industry analyst Tony Hatch.

However tense the dialogue gets, and whatever the rhetorical weather, a thoughtful, rational approach to ensuring safer haz-mat transport remains the right one. I'm not sure such an approach is possible at this point, but I'll bring a windsock and try to gauge it at Railroad Day on Capitol Hill. To be held March 13, the event enables railroaders to make their voices heard on a range of issues. For more information on Railroad Day, click on the "Meetings & Seminars" tab on the American Short Line and Regional Railroad Association's website.