Canadian National Railway Co said on Tuesday will phase out its fleet of 183 older DOT-111 tank rail cars over the next four years as part of a safety improvement plan. 

CN said it will spend $7 million by the end of the year to replace the 40 DOT-111 tank cars it uses to carry diesel fuel to its freight yards. It will phase out the remaining 143 leased DOT-111 cars over the next four years as their leases expire.

Older DOT-111 tankers, used to carry flammable liquids, are seen as a major safety issue by regulators and the railways. But CN's small fleet of owned and leased tankers is just a small fraction of what travels the rails.

A CN spokesman said the railway supports tougher rules for all cars and it is structuring its freight rates to encourage replacing older tanker cars. However, it cannot refuse to haul them.

"Older DOT-111 tank cars comply with current regulatory requirements, so CN, under its common carrier obligations, is obliged to transport them," the spokesman said in an email to CBC.

CN’s CEO Claude Mongeau called tank car design "one of the most important systemic issues arising from the Lac-Mégantic accident" that killed 47 people last summer in a small Quebec town.

A runaway train operated by MM&A carrying crude oil derailed in Lac-Mégantic, exploding and devastating the town.

CN said it will replace its DOT-111 tankers with cars meeting the newest regulatory standards, with thicker hulls less likely to be punctured in a derailment.

CN’s commitment covers tankers it owns or leases itself. Most of the cars used to carry crude oil and chemicals are owned or leased by rail users. An estimated 100,000 such cars travel North American rails each year. 

Some rail users, such as Irving Oil, have already committed to phasing out the older tank cars.

Transport Canada has proposed regulations to phase out the older tank cars, but the rules are not yet in force.

 CN said North America-wide regulations could soon be in place to phase out all DOT-111 cars.

“The question of tank car robustness is central, and that question is being addressed by the American Association of Railways, to which CN belongs, in recent recommendations calling for the retrofitting or phase-out of the old DOT-111 cars used to transport flammable liquids and a reinforced standard for new tank cars built in the future,” Mongeau said in his statement Tuesday.

CN said it began a thorough review of its safety policies after the accident in Lac-Mégantic, including reviewing train securement and buying additional monitoring equipment for early detection of defects.

The railway also is meeting municipal officials and emergency responders in cities and towns along its network to discuss the nature and volumes of dangerous commodities transported through Canadian communities.