Rail defects are the most frequent cause of freight train derailments and a major hazard to the transportation of hazardous materials in the United States. Railroads periodically inspect their rails using ultrasonic technologies to prevent train derailments, thereby mitigating transportation risk. This research quantifies the relationship between ultrasonic rail defect inspection frequency and railroad hazardous materials transportation risk. A Pareto optimization model is developed to determine optimal annual inspection frequencies on different track segments with different risk levels. The model provides an evaluation of segment-specific hazardous materials transportation risk due to rail failures, as well as an assessment of risk-based prioritization of rail defect inspection. The model can be adapted to other types of hazardous materials or account for other accident causes in the future. (C) 2017 Elsevier Ltd. All rights reserved.