Tank Car Facility Definition Relaxed For Tank Car Component Manufacturers

October 23, 2019

Dear Salco Products Valued Customers;

Over the last three years the entire tank car industry has experienced uncertainty and confusion related to the expansion of the scope of term “tank car facility”, and the applicability of federal and Association of American Railroads (AAR) tank car requirements to facilities in the tank car component supply chain. On October 24, 2018, and in response to United States Department of Transportation’s (DOT) guidance articulating an overly broad interpretation of the term “tank car facility,” AAR finalized revisions to the technical certification requirements identified in the AAR Manual of Standards and Recommended Practices, (MSRP), M-1002, Section C, Part III, Appendix B. In addition, AAR revised key definitions in Chapter 1 of the AAR MSRP to support the revisions to the Appendix B activity codes.

During the AAR Tank Car Committee (TCC) Appendix B Task Force (TF) meetings, several controversial issues emerged including: (1) subcontracting provisions for closures that would require suppliers of items that are bolted to the car and have no moving parts, to obtain AAR facility certification, thus requiring that the entire closure manufacturing process be performed by an AAR-certified facility; and, (2) requirements that shipper facilities carrying out pre-trip maintenance would also need to become AAR-certified facilities to continue performing minor pre-trip repairs, required by 49 CFR 173.31(d).

Several members of the Appendix B TF, including Salco Products, submitted a minority report (Appendix B Dissenting Report, T91.2.4, TF proposal, dated 3.28.18), disagreeing with the TF’s direction on these items and other issues. Despite comments filed in opposition to this expansion of Appendix B, the proposed revisions were approved by the TCC, where the Class I railroads hold the voting majority. AAR’s revisions to Appendix B (which will go into effect on January 1, 2020) expand AAR facility certification (i.e., M-1002 and M-1003 certification) to manufacturers of all tank car components, including closures and fittings, and impose arbitrary constraints and limits around subcontracting.

Over the past two years, Salco Products has pushed back against this unwarranted expansion of the term “tank car facility” and worked closely with the Railway Supply Institute (RSI), shippers, and tank car manufactures to restore the scope of this term to its original meaning, consistent with existing federal regulations. Salco, together with its industry partners, has emphasized the absence of any data demonstrating a safety or quality issue that would justify DOT’s expansive interpretation and application of the tank car facility requirements (including AAR facility certification) to manufacturers of closures and fittings.

On October 8, 2019, DOT issued new guidance that clearly limits the scope of entities defined as “tank car facilities” and supersedes the prior guidance that had improperly expanded this term. This letter from the Pipeline and Hazardous Materials Safety Administration (PHMSA) makes clear that (1) tank car component manufacturers do not meet the definition of a “tank car facility” and therefore are not required to have an AAR-approved quality assurance plan; and (2) facilities that conduct pre-trip inspections are not “tank car facilities” and therefore do not need to maintain an AAR-approved QAP.

The letter can be viewed here.

This letter is a victory for the entire industry, and Salco Products is proud to lead the effort to prevent needless expansion of the “tank car facility” requirements and AAR-facility certification process. Salco will continue to work with RSI, and other industry stakeholders, to pursue revisions to Appendix B in advance of the January 1, 2020 implementation date that will ensure AAR’s requirements are consistent with DOT’s clarified guidance. We are committed to product quality for our customers, and will continue to advocate for fair and logical rules that promote safety without imposing unwarranted costs.

Regards,

Tom DeLafosse
VP, Technical Consulting Services
Salco Products, Inc.