Abstract
In response to public concerns about the environment, regulatory requirements for cleaning up spills of certain chemicals have become more stringent and cleanup costs have increased dramatically. Hence, due consideration must be given to environmental sensitivity as an element of transportation risk. Among the environmentally sensitive chemicals of most concern to the railroad industry are 10 halogenated hydrocarbons that are shipped in general-purpose tank cars. The cost of cleaning up spills of these chemicals in 1980 through 1989 exceeded $50 million. This represented more than half of the major environmental cleanup costs resulting from railroad transportation incidents in this period, although shipments of these chemicals accounted for less than 1 percent of the total carload volume of hazardous materials. Investing in more secure tank cars would increase the capital and operating costs but would reduce the risk of these spills. Under current packaging practices, the average liability is estimated to be $788 per carload in 1990 dollars, and this liability will double in 1992 as a result of more stringent hazardous waste disposal regulations. Use of more secure 105A300W or 105A500W tank cars would reduce the 1990 liability to $375 or $129 per carload, respectively. The analytical approach developed in this paper quantifies the benefits and costs of transporting these chemicals in such tank cars. The results indicate that the reduced liability resulting from the use of type 105 tank cars more than offsets the increased capital and operating costs and therefore would be a cost-effective means of reducing the risk.