Railway Safety Act of 2023 This bill addresses safety requirements for rail carriers and trains transporting hazardous materials. Specifically, the Department of Transportation (DOT) must issue safety regulations for trains carrying hazardous materials to require that rail carriers or shippers (1) provide state emergency response commissioners with advanced notice and information about the hazardous materials; (2) reduce blocked rail crossings; and (3) comply with certain requirements regarding train length and weight specifications, track standards, speed restrictions, and response plans. DOT must also establish requirements for wayside defect detectors. These are used by railway systems alongside the tracks to detect defects and failures (e.g., wheel bearing failures). Current federal regulations do not require their use, but federal guidance does address their placement and use. Under the bill, DOT must issue regulations establishing requirements for the installation, repair, testing, maintenance, and operation of wayside defect detectors for each rail carrier operating a train carrying hazardous materials. The bill also increases the maximum fines DOT may impose on rail carriers for violating safety regulations, requires DOT to update rail car inspection regulations and audit the federal inspection program, requires a minimum two-person crew for certain freight trains, phases out certain railroad tank cars by May 1, 2025 (four years sooner than required under current law), expands training for local first responders, imposes a new fee on certain rail carriers, and authorizes grants to improve railway safety.