On May 10, the U.S. Senate Commerce Committee passed a sweeping bipartisan rail safety bill prompted by the derailment of a Norfolk Southern train carrying toxic chemicals in East Palestine, Ohio, along with other recent derailments . The bill is poised to get a full Senate vote.

While the act includes important provisions likely to advance safety, including the requirement of advanced notification regarding hazardous materials shipments to state and tribal agencies and facilitating training for first responders, it also includes several prescriptive requirements likely to cause more harm than good.

Many provisions of this bill specify the methods that railroads must use to achieve safety rather than setting the level of safety that must be achieved. Examples include requirements for two-person crews (with some exceptions), the time and frequency of rail car inspections, and train length and weight. These regulatory design standards may prevent innovative methods of achieving railroad safety from being deployed, forcing railroads to focus on compliance rather than achieving better safety.

The history of U.S. railroad industry regulation provides essential lessons on how excessive regulation can reduce safety — indirectly through negative impacts on profit, or directly through design and operational standards that prevent better technologies from being deployed.

Prior to regulatory reforms in 1980, requirements to offer service on routes that were unprofitable along with constraints on pricing prevented or postponed the introduction of new innovations . This resulted in deteriorating financial conditions, leading to deferred investment on many rail lines . Since the deregulation of railroads, $780 billion has been invested in tracks, bridges, locomotives, cars, and other infrastructure/equipment, significantly reducing accident rates and improving safety.

It is natural to think that imposing “state of the art” requirements and safety standards is the appropriate solution. However, railroads are already incentivized to promote safety because of a concern for their property, liabilities for damage to products they transport, injury to employees, and others harmed by railroad accidents. A study that disentangles the effects of economic regulation from safety regulation on accident rates found that reduced regulation since 1980 has significantly improved safety , while regulations aimed at improving safety over the same period have not. It also showed that safety regulation effectively increased safety only when economic regulations were so burdensome that they reduced the market incentives for safety.

Some of the prescriptive provisions in this bill that have the potential to be most damaging are the requirements for two-person crews and a policy that would allow the secretary of transportation to set limits on train length and weight. In estimating the cost savings realized by large freight railroads from eliminating the caboose and related crew members (a requirement that was maintained by labor law well after it was technologically necessary), my previous research finds that the overall industry realized savings of between $2 billion and $3.3 billion . In another study, my co-authors and I found that railroads continue to realize significant cost savings from handling more traffic, at least partially the result of operating longer trains. Cost savings enable railroads to realize rates of return that allow them to invest in track, equipment, and technologies that enhance railroad safety. This enables railroads to provide better and lower-cost service to their customers.

In addition to the dubious effects of these prescriptive regulations on improvements to safety, their potential to make railroads less competitive with other modes of transportation is likely to have unintended adverse effects. For example, trucking companies are moving toward implementing autonomous trucks , even though the number of hazardous materials incidents, damage, and resulting deaths are much higher for trucks than for rail .

We should applaud the bipartisan efforts to improve rail safety. However, we must define safety standards rather than mandating the methods railroads should employ to meet them. By doing so, companies can explore innovative ways to meet those standards instead of checking regulatory boxes for compliance that may or may not improve overall safety.

John Bitzan is a professor of management and the Menard Family Director at the Challey Institute for Global Innovation and Growth at North Dakota State University.