New rules for railcars (WAB, GBX, TRN)

This is from SA article.

U.S. sets new rules for oil shipments by rail

U.S. regulators issue tough new rules for safer transportation of crude oil by trains, introducing a new tank car standard and mandating the use of new braking technology.
The rules require that the oldest, least safe tank cars be replaced within three years with new cars that have thicker shells, higher safety shields and better fire protection; a later generation of tank cars, built since 2011 with more safety features, will have to be retrofitted or replaced by 2020.Regulators are not asking railroads to notify communities of any oil train traffic but will require a “point of contact” for information related to the routing of hazardous materials.

Originally the govt proposed 2 years, and now it’s 3 years for really old cars and 5 years for latter generation. Timeline of revenue growth will be affected accordingly for the railroad companies. TRN and GBX also have leasing business and this means that the cost (COGS) will also increase in that business segment. I’m not too sure whether WAB has leasing business, but all three enjoyed good increase today.



Ooops. Was going to say raildcar companies instead of railroad companies. And please excuse no italics for the article part.