Proposed Rule Aims to Close a Glaring Gap in Freight Rail Security

By Elizabeth Brotherton-Bunch
Feb 07 2024 |
Aerial view of a large rail yard located just outside of St. Louis, Missouri. Getty Images

The SAFE Trains Act, which passed as part of the infrastructure package in 2021, seeks to support Made in America freight rail — and limit influence of countries of concern, i.e. China.

The Federal Railroad Administration (FRA) officially has proposed new government guidelines that would prohibit railroad freight cars operating in the United States from having sensitive technology — including component parts of that technology — that come from “countries of concern” or state-owned enterprises.

The proposed rule also would aim to boost domestic manufacturing of railcars by limiting the amount of foreign content allowed in freight cars to less than 20% in the year after the new regulations have been issued, and 15% after three years.

The proposed rule comes from legislation included in the Infrastructure Investment and Jobs Act in 2021. Originally stand-alone legislation called the Stopping America’s Foreign Enemies Through Rail and Infrastructure National Security — or SAFE Trains Act for short — the new law aims to quell China’s influence over the U.S. freight rail system.

Of most concern is the China Railroad Rolling Stock Corporation (CRRC), which nabbed federally funded government contracts to build passenger rail systems in cities like Boston, Philadelphia, Los Angeles, and Chicago.

It wasn’t exactly a fair competition. Backed by massive government subsidies and other support, CRRC severely underbid rivals to secure those contracts, with one competitor in Philadelphia remarking, “I cannot grasp how they are able to do it at that cost.”

Quality has since been an issue on these projects; the one in Boston has gone so off the rails with delays and safety woes that at one point the Massachusetts Bay Transportation Authority accused CRRC of “significant lapses in overall quality management” and “chronic workmanship quality issues.”

But worries about CRRC go beyond those specific projects. According to the Department of Defense, CRRC has ties to China’s military, and Radarlock reported in 2019 that the state-owned company plays a direct role in China’s military-civil fusion strategy. CRRC also has been known to collect data abroad and deliver it back to state and military affiliates in China, according to Radarlock.

Lawmakers passed the Transit Infrastructure and Vehicle Security Act (TIVSA) in 2019 to effectively ban CRRC and other Chinese state-owned or supported companies from obtaining contracts to build federally funded railcars or buses. But that law did not cover freight rail, which was identified as huge gap. America’s freight rail system includes 140,000 miles of track, with freight trains regularly moving everything from military equipment to toxic and hazardous goods.

The bipartisan SAFE Trains Act was designed to close the gap. Introduced by Sen. Tammy Baldwin (D-Wis.) and Sen. John Cornyn (R-Texas), the legislation had the backing of groups like the United Steelworkers, Rail Security Alliance, American Iron and Steel Institute, Railway Supply Institute, Foundry Society, and the Brotherhood of Locomotive Engineers & Trainmen — Teamsters Rail Conference. The Alliance for American Manufacturing also supported the bill.

AAM on Tuesday officially submitted comments to the FRA on the proposed rule, commending FRA for moving ahead and urging “robust implementation of the country of concern (COC), state-owned enterprise (SOE), and sensitive technology limitations” included in the proposed rule.

“Beijing should not have operational control of or backdoor access to U.S. transportation systems, opening our critical infrastructure to potential attack or access to sensitive data and communications,” we wrote.

However, we did express concern that the proposed rule would allow for the “potential evasion” of the new guidelines for aftermarket applications, such as future repairs to railcars.

“FRA indicates that it will only apply these tools at the time of manufacture,” we noted. “This approach leaves the door open for aftermarket application in a manner that violates the spirit of the law and creates security risks to the U.S. railway system.”

But overall, the proposed rule is a step in the right direction.

“The constant movement on the U.S. freight rail interchange is vital to America’s security, which makes the freight railcar sector worth safeguarding,” said Erik Olson, executive director of the Rail Security Alliance. “The proposed rule that FRA has issued helps ensure that foreign adversaries like China cannot exploit our freight rail infrastructure or make inroads into this critical industry.”

Read AAM’s full comments here.