A DERAILMENT OCCURRED YESTERDAY IN MCKEES ROCKS, PA OUTSIDE PITTSBURGH ON THE OHIO CENTRAL INDUSTRIAL LINE, APPEARS TO BE THREE TANK CARS. THEY WERE CARRYING ETHANOL BUT UNKNOWN IF LOADED OR NOT. R.J. CORMAN CREW HAS BEEN CALLED IN TO CLEANUP THE MESS.
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I would like to know who pays for the cleanup? Do RR insurance co's payout that quick? does the RR premiums go up if the track is found to be substandard?
Definitely a question only a railroad risk manager could answer with certainty.
I'd guess that railroads are like most large companies and carry sizeable deductibles on their insurance. Since reopening a line and restoring service is paramount, you would fix it first and then, if the actual costs exceeded the deductible, settle up with the insurance company.
Curt
DERAILMENT SCENE WAS CLEANED UP IN A MATTER OF SEVERAL HOURS THIS MORNING.
THE DAMAGED CARS ARE STILL PARKED ON THE SIDING WITH NEW TRUCKS.
GOOD QUESTION ABOUT CLEANUP BUT WHO EVEN PAYS FOR THE NEW TRUCKS ??
MAYBE THE CARS DON'T MOVE EITHER UNTIL THE TRUCKS AND THE CLEANUP IS PAID FOR BY THE CAR OWNER TO OHIO CENTRAL.
Ford Motor Company is self insured. They pay for accidents themselves. I assume that the big RR's are also self insured. Smaller ones, Who knows?
GOOD QUESTION ABOUT CLEANUP BUT WHO EVEN PAYS FOR THE NEW TRUCKS ??
MAYBE THE CARS DON'T MOVE EITHER UNTIL THE TRUCKS AND THE CLEANUP IS PAID FOR BY THE CAR OWNER TO OHIO CENTRAL.
Ultimately who pays would depend on the result of the investigation. I can tell you that in all of the derailments in which our private cars have been involved, the railroad paid for everything, including transfer of product from railcars to trucks and, if necessary, reprocessing of the product. The damage to the car, any necessary repairs, including new trucks would be handled between the railroad and the car owner (ours are all leased). If the damage is bad enough that the repairs exceed the value of the car, the railroad and the car owner will reach a negotiated settlement.
Curt
Most railroads are self insured. They usually do carry a very high deductible policy for major derailments.
One of the first things that will happen at a derailment/wreck is that a mechanical department employee will estimate the damage to each car. (We had a handy little book that the AAR cost for each item and it had the depreciated value for our system cars.) With foreign cars, the AAR billing department would contact the car owner to determine the depreciated value of the car. The AAR sets the cost for all freight car components. (This is done so that gouging does not occur. (An AAR inspector will visit rip tracks, wheel shops, bearing shops, air brake repair shops to insure that all work is being done to AAR standards. If not a penalty will be applied, have seen places lose all AAR billing for 6 months or a year. Or a facility may lose the ability to repair specific items.)
With specialized cars, tank cars for instance, if damage was significant, they would be loaded on a flat an shipped to the owners repair facility. (Everything from that car would be shipped.) If you have ever been around a good sized derailment, you will see car department people trying to locate the wheels and trucks for each specific car.
It is also important to determine the exact cause of the derailment/wreck. Once a railroad accepts a car in interchange all problems are belong to the carrier. However, if it can be proven that there was a defective wheel bearing for example, the legal beagles will get involved.
It is also important for internal purposes to determine the cause, track, mechanical or train handling. Because cost will be assigned to someones budget
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