How to execute a world class solution to complex DOT tank cars rules

How to execute a world class solution to complex DOT tank cars rules.

Railway Age has a very important message about regulatory confusion. So many regulations. How do corporations cope?

http://www.railwayage.com/index.php/regulatory/survey- says-complex-hazmat-transport- regs-would-even-challenge-einstein.html

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Regulators tell you what to change or to do. They don’t tell you how to execute..

“They in fact seldom give advise about the myriad choices of how to comply”. They do not provide training either.

There is a company called STARS that can help you. Starting with training, like I received this past week.

From the RAILWAY AGE current issue :– here is added background discussion this week..

“Is complying with the multitude of regulations for the transport of hazardous materials—also known as dangerous goods (DG)—truly a challenge? According to 136 shipping executives surveyed online in April 2015 by Labelmaster , a provider of solutions for hazardous material transport compliance, even Albert Einstein would have had problems figuring out some of the rules.

More than half of the 136 executives polled—56%—said the brainy Einstein would have difficulties figuring out the 49 CFR, one of the government’s primary reference books that cover regulations, requirements and standards for U.S. hazmat transportation via highway, rail, air and water.

The survey also revealed a majority—59%—find it a challenge to keep with the ever- changing dangerous goods regulations.

As one example, 14% say that “the regulations are confusing—everyone has a different interpretation.” And the regulatory inspectors provide no or little help. Most DG professionals are looking for training and integrated solutions to simplify their role as to what to do now.

_BEYOND TRAINING__

There is a real quandary as to “should we retrofit” or “should we abandon what migh be a suitable sunk capital fleet and switch to all new tank cars”?

Washington safety agencies lack the skills to give you guidance. Who pays for the retro fits? Washington has no idea. Why?

Because the thousands of already operating cars are subjects of complex lease agreements. Regulators don’t live in that complex world.

As a business example, if you use DOT type CPC-1232 tank cars, and your lease expires before the mandatory April Fools date of 4/1/2020, how do you handle the financial accounting for any improvements/modifications made between the lessor and the lessee? And exactly what technical modifications should you consider given the liability issues of a failure?

Who do you turn to to for such critical advise? The car manufacturers? Or a source of independent due diligence? Remember that on average you might pay around $60,000 a car for a retro-fit on a tank car with more than 20 years remaining life. But on a new tank car the cost might be more than $135,000.

As an insurance question to your broker, how would the insurance risk be perceived between the retro fit and the new car option? Do they calculate that value difference for you?

The economics are so complex that a special survey is being conducted with the results to be published in an upcoming Railway Age issue. You can contact dnahass@railfin.com for more about this. Or contact http://www.starsconsulting.org/ for a second professional opinion.

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