Chemical Industry Transportation in the United States

Rail Reform’s Impact on the Chemical Industry

According to the American Chemical Council (ACC), approximately 1-billion tons of chemical products are transported per year within the United States. Logistics for this volume of chemical products requires an efficient, reliable and cost-effective transportation system. To accomplish this, the chemical industry relies on an intermodal network of transportation methods. Rail cars, tank trailers, tank chassis, truckers, ports, and pipelines cooperate to deliver chemicals throughout the USA quickly and safely all day every day.

Consider that in 2023, over 2.3 million freight rail cars of plastics, fertilizers, and other dry and liquid bulk chemical products were moved across 140,000 miles of track. A total that is expected to grow over the next decade. Trends including the onshoring of manufacturing facilities, a renewed emphasis on chemical and rail safety, and the need to remain competitive globally, have applied pressure to the supply chain and the United States’ government to implement smart rail reform measures. Maintenance and modernization to improve the speed, capacity, and safety of transportation routes are overdue.

Why is Rail Reform Needed for Chemical Transportation?

77% of chemical manufacturers say that rail shipping is worse than before the pandemic. Many are optimistic that proposed and recently approved rail reform measures will address the top concerns reported by a recent American Chemistry Council (ACC) survey which included:

  1. Longer transit times
  2. Missed switches
  3. Reduction in service days
  4. Rate increases
  5. Demurrage charge increases

Rail Industry Reform Measures in the United States

Recent high-profile derailments, such as in East Palestine, OH in 2023, provided additional momentum for reform measures. So much so that an unprecedented amount of funding to improve American railroad safety and infrastructure was approved through the FTA’s Bipartisan Infrastructure Law. Included in this legislation are the following programs:

Most recently, in April 2024, the Final Rule on Train Crew Size Safety Requirements was issued by the FRA to establish minimum crew sizes for trains to promote safer rail transportation.

Chemical Industry Benefits of Rail Industry Reform

Unprecedented investments are being made to modernize and improve tracks, routes, bridges, and other infrastructure. These reforms are also supporting the development of improved safety and accountability within the rail system. Railroads will now be held to a higher level of accountability through inspections and safety assessments. Industry safety standards are also being revised for both equipment and workers within the railway system.

Stakeholders, such as the Association of American Railroaders (AAR), the Alliance of Chemical Distributors (ACD) and the Surface Transportation Board (STB), are in on-going discussions as to how these reform measures will impact the chemical industry and rail freight transportation, and what measures are still needed.

In 2019 in his call for timely reform, Eric Byer, ACD (formerly NACD) stated that, “Competition and fairness in our nation’s freight rail system will provide more timely and efficient deliveries and reduce costs and wastefulness across the system.”.

Striving to achieve efficient transportation, especially chemicals transported by rail, are expected to provide benefits to the industry such as:

  • Higher levels of investment in new infrastructure and maintenance
  • Economic growth and increased access to new markets
  • More efficient global connectivity
  • Streamlined regulatory compliance and improved safety standards
  • Standardized information reporting

Rail reforms that benefit from a more efficient, integrated domestic transportation system are critical and will also benefit other industries that use rail and intermodal transportation systems.

The Road Ahead for The Chemical Industry

Rail reform policies and regulations have laid the tracks for a safer and more efficient future. At Matlack Leasing, we are committed to supporting the chemical industry. For your chemical transportation equipment solutions, contact the experts at Matlack Leasing find out more about how we keep your products on the move well beyond the end of the rails with chemical trailer leasing.