The freight railcar market is more secure thanks to a new rule issued by the Federal Railroad Administration (FRA), a provision in the 2021 bipartisan Infrastructure and Investment Jobs Act (IIJA). This FRA final rule means future incursions by predatory state-owned enterprises (SOEs) into the U.S. freight railcar market have been dealt a serious blow.
Late last month, the FRA, in consultation with the Office of Management and Budget, took the necessary step to implement this bipartisan statute, known as the “SAFE TRAINS Act,” by publishing a final rule amending the Freight Car Safety Standards in 49 CFR Part 215 to restrict freight rail rolling stock from being “manufactured, assembled and substantially transformed” by SOEs or entities from “countries of concern” (as defined in the law). The law (and FRA’s implementing regulations) also ensures that no sensitive technologies or their active components placed on freight railcars originate from foreign countries on multiple U.S. watchlists, and it sets up content limitations for specific freight railcar component parts that originate from countries of concern. At this time, the only country that meets the definition of a “country of concern” is China.
The final FRA rule, which goes into effect Jan. 21, 2025, only applies to railcars wholly manufactured on or after Dec. 19, 2025, one year after the date the FRA issued the final rule. This means that qualified railcar manufacturers are required to certify compliance with the Act to the FRA beginning Dec. 19, 2025, for railcars wholly manufactured on Dec. 19, 2025 or later.
The basis of the rule is to prohibit Chinese freight railcars and Chinese-sourced sensitive technology (including any active components) on freight railcars from being placed on the U.S. interchange rail system. The rule only applies to newly built freight railcars that are wholly manufactured after Dec. 19, 2025, and prohibits any freight railcar not in compliance from operating on the U.S. freight rail interchange. To be even more precise, the law specifically restricts the Chinese state-owned railcar equipment manufacturer CRRC.
This new rule requires only freight railcar manufacturers to certify compliance with the FRA, and there is no obligation of compliance by any railroad, railcar owner, lessor, offeror, supplier, or railroad operator.
When the FRA issued and published the final rule, the agency underscored a qualified railcar manufacturer’s obligations under the SAFE TRAINS Act at the time of initial manufacture.
The amended freight railcar standards apply to newly built freight railcars only that will enter service in the U.S. on or after Dec. 19, 2025. The rule requires only freight railcar manufacturers to electronically certify compliance with the FRA just once before any newly built freight railcars are placed into service on the U.S. interchange. The rule does not impact any after-market commercial or maintenance activities.
From there, the only other requirement is for freight railcar manufacturers to keep the records that support the original certification, making them available for FRA review upon request.
The North American freight rail interchange and the freight railcars that operate on it have been called the “engine of our economy,” ensuring the constant movement of critical goods that keep everything from our grocery stores and small businesses to hospitals and healthcare systems to our government and military operational and well-supplied.
These critical transportation operations are too important to be put into the hands of China. After all, why risk allowing our freight rail system to be vulnerable to potential attack from China as has happened in too many other core manufacturing sectors and industries?
The SAFE TRAINS Act prevents that, and it strengthens the entire North American freight rail industry.
On a purely economic level, as a more than $35 billion Chinese military-affiliated company, CRRC is seeking inroads in Europe, Africa and our own backyard, starting with Canada and Mexico.
Governmental bodies, including the European Commission, have recently flagged CRRC’s heavy use of Chinese Communist Party subsidies, calling for an investigation into ultra-low passenger railcar bids that thwart competition from the domestic European market. Congressional bipartisan leadership here in the U.S. has thankfully kept the issue of rail security—and the China threat—at the forefront.
Laws like FIRRMA Foreign Investment Risk Review Modernization Act of 2018), as well as Buy America requirements and the FY2020 National Defense Authorization Act, took critical steps that help safeguard the domestic freight car manufacturing and supply sector. FRA’s final rule on SAFE TRAINS ensures the security of the freight rail sector closing additional avenues that bad actors like state-controlled CRRC could exploit.
In response to FRA’s proposed SAFE TRAINS rule, published in early 2024, groups including the Steel Manufacturers Association, American Iron and Steel Institute, Foundry Society, Alliance for American Manufacturing, Railway Supply Institute, United Steelworkers, Brotherhood of Locomotive Engineers & Trainmen and the Canadian Association of Railcar Suppliers voiced support. Their voices represent tens of thousands of North American manufacturers and suppliers with a stake in this important issue.
Now that the final rule is in place, the SAFE TRAINS Act can do what it’s intended to do: Stop America’s foreign enemies, protect our critical freight rail interchange system, and ensure the safe and secure transport of goods and supplies our country relies on every day.
Erik Olson is Executive Director of the Rail Security Alliance.
