In light of the CSX derailment at Oneida, NY, I believe it is high time to hold the top executives, not only of CSX, but of the major railroads in general, accountable for the safety or lack of it on the tracks. That 5 tank cars jumped the tracks and blew up is inexcusable. If it were up to me, all of CSX’s top executives would be under indictment for reckless endangerment, negligent homicide in the case of fatal RCE accidents and the like. In addition, I believe it is time for shareholders likemyself to wake up to the fact that the goods entrusted to the railroads in which we hold stockare supposed be getting delivered safely and on time, something CSX, which I am a shareholder in, seems to be having an increasingly difficult time of doing. This is the fourth derailment in New York State since the beginning of the year and this , to pardon the pun, track record is inexcusible and indefensible. As a concerned shareholder in CSX, and most of the other major railroads, I believe it is time to hold management accountable for the accidents happening on their watch. Railroadinig is supposed to be delivering other peoples goods as well as passengers to their destination safely and on time, AND NOT SEEING HOW MUCH EQUIPMENT THEY CAN WRECK BEFORE THEY KILL SOMEBODY.
As has been said on other threads, let’s determine the cause of this wreck before we point fingers or hold people accountable.
Shall we indict governrs for the carnage on the highways, too?
Exactly. Don’t forget that spoons make people fat and guns kill people![B)]
I use to have increasingly infrequent conversations at the railroads I worked at with the safety people and a couple of CEOs about whether we wanted to handle this stuff. I got hauled in on the conversation because it was my job to get more chemical traffic. We would always decide that the business was just too profitable to forego. At two of these railroads chemical traffic was considered a “crown jewel”. The only option you are left with is to have a zero failure operation. We would get very very close to that situation but its like a general nuculear exchange-very very close is very very bad. In addition if railroads stoped moving propane, vcm, anhyrous ammonia, cholrine, etc. the economy would stop. It is a risk we all bear to have the standard of living we enjoy due to synthetic materials. Does anyone out there want to give up their computer using plastics derived from propane?
On the financial side, one of my bright ideas would get customers very agitated on the really bad commodities. I would propose giving them a lower rate if in return they would accept liability. The knew how to work this process since they shipped a lot of product by barge. Water carriers accept much less liability than a railroad or truck line so shipper go to a place like Lyold to buy insurance. I never got a taker so we moved on to other areas where we could offer something that met or customer needs.
Now, that sounds like a personal attack!
But, all joking aside, did you honestly expect anyone to take full liability for someone else’s actions? I am curious as to the reactions you received from knowledgeable railroaders on such a proposal, let alone even an unsophisticated shipper.
Congress and the courts change the laws, and I for one think some kind of reform is necessary. As a shareholder, and partial owner of CSX, you’re fully entitled to raise hell at the annual Stockholders’ meeting, if it isn’t too late to be scheduled. You can’t urge CSX officials to change the law, but you could point out the PR nightmare and human cost that results from deferred maintenance and sloppy procedures. That is something people won’t learn of from the big pretty Annual Report! - a.s.
PS: [soapbox] Also, it really galls me that CSX (maybe NS too, I don’t know) is neglecting its track, especially considering all the money and effort that went into it during the Conrail years.
Whoa, there! Your implication of what I may or may not know about sales aside, this isn’t a cost-of-materials, contract question. This doesn’t involve either the seller or the buyer of the product trying to write in a contract provision against cost changes during production that protects a margin. Railroads do this all the time with a fuel surcharge.
Rather, this is a tort question regarding the independent acts or negligence of a service provider, and that has absolutely nothing to do with the shipper’s actions, nor is it within the shipper’s control. It’s involvement in the transaction regarding liabilty to third parties has nothing to do with the contract cost of production; it is a tort question – completely unrelated.
Costs involved in the seller’s mark-up involve questions of foreseeability – between the parties, not liability for unforeseeable damages to unknown third parties – say, blowing up Houston in a derailment – resulting from the buyer or seller’s own negligence. If you have a specific example to the contrary, I would very much like to see it.
"The President of our company is not in favor of maintaining our tracks very well, and so we may very well take
You are correct in that it helps bring out the value of what the railroad offers the customer. These customers could easily put a dollar value on the proposal by calling their marine insurance provider who would take on the risk in return for a premium. As I mentioned all of the shippers water shipments were covered by liability insurance from through Lyolds, etc. These same firms sell railroads liability insurance.
So let’s look at the alternatives…
Barges: don’t reach all the markets or buyers, and can’t handle the current volume…
Trucks: Bet you really want all this stuff on the highway next to your wife and kids.
And pulling it off the rails and into trucks will overwhelm the interstate; in the wildest dreams of the interstate designers did they ever anticipate that much truck traffic.
One rail tank car equals, on average, 3 to 4 truck tanks.
Increase the chemical truck traffic driving through your neighborhood by 3 to 4 times?
Sure you would…
Pipelines: Safe, but very expensive, and have their inherent problems also.
Air: Flying bombs? (Planes have been known to fall out of the air, and I for one, would prefer this stuff to only have to fall 14 feet, instead of 14000 feet before it hits the ground.)
If you look at the sheer volume of the stuff, how many millions of miles we move chemicals like this ever year, and compare our safety record to all other forms of chemical transportation, the only one “safer” is pipeline.
As for holding the CEO of any company “accountable”…how?
Fines?
Jail?
Clean up duty?
Accidents are a part of railroading.
If you work in T&E service, and make a career out of it, you will be involved is a derailment.
Now, it might be a small one, getting a set of wheels on the ground in a yard, or you might be involved in something as dangerous as this, but you will have one.
Even with that, rail is still the safest, most economical way to move this stuff in volume.
According to the FRA, major derailments for 2006 were down a lot.
Nothing is failsafe, even though we try to make as close to that concept as we can.
And keep in mind the majority of railroad tracks run through unpopulated areas, or lightly populated sections of the country.
The areas where we do run though som
Years ago I noticed that Cargill registered their barges as independent companies, now I think each one is its own LLC. Each barge has its own insurance coverage, for the activities of that barge. Shippers will often purchase a loss coverage as well, because the barge is often not worth the value of the shipment. Loss coverage is not the same as liability coverage.
So, yup, that barge is insured, all right – right up to the net value of that barge [ship, etc]! Any claims in excess of that goes right where all such claims against LLC’s go – the dumpster. Of course Lloyds will write policies. They are cheap policies to write because the underlying purpose – to protect the company – is comparatively minor because the company consists of one barge. To compare that with a railroad company is, well, misunderstanding how they both work based on a misconception of ownership. An independent entity, such as a barge or ship can all too easily be defined, is just not the same as a railroad company, which cannot create such discrete liability units.
An insurance carrier will not insure the actions of unknown third parties against other unkn
[quote user=“edblysard”]
So let’s look at the alternatives…
Barges: don’t reach all the markets or buyers, and can’t handle the current volume…
Trucks: Bet you really want all this stuff on the highway next to your wife and kids.
And pulling it off the rails and into trucks will overwhelm the interstate; in the wildest dreams of the interstate designers did they ever anticipate that much truck traffic.
One rail tank car equals, on average, 3 to 4 truck tanks.
Increase the chemical truck traffic driving through your neighborhood by 3 to 4 times?
Sure you would…
Pipelines: Safe, but very expensive, and have their inherent problems also.
Air: Flying bombs? (Planes have been known to fall out of the air, and I for one, would prefer this stuff to only have to fall 14 feet, instead of 14000 feet before it hits the ground.)
If you look at the sheer volume of the stuff, how many millions of miles we move chemicals like this ever year, and compare our safety record to all other forms of chemical transportation, the only one “safer” is pipeline.
As for holding the CEO of any company “accountable”…how?
Fines?
Jail?
Clean up duty?
Accidents are a part of railroading.
If you work in T&E service, and make a career out of it, you will be involved is a derailment.
Now, it might be a small one, getting a set of wheels on the ground in a yard, or you might be involved in something as dangerous as this, but you will have one.
Even with that, rail is still the safest, most economical way to move this stuff in volume.
According to the FRA, major derailments for 2006 were down a lot.
Nothing is failsafe, even though we try to make as close to that concept as we can.
And keep in mind the majority of railroad tracks run through unpopulated areas, or lightly populated sections of the country.
The areas w
There is no real public realtions arm of railroads as an industry…major error#1…check out the column on the left…
Assessing the Severity of a Smoldering Crisis
The following crisis classifications have been established to ensure consistency in assessment of any smoldering crisis situation so that the proper response can be developed to minimize the potential of the crisis going “public” or to reduce the damage to our business if public disclosure cannot be avoided.
|
Smoldering Level 1 An internal business problem or disruption that can be dealt with and resolved by management responsible for responding to this kind of situation. |
Example: A disgruntled employee who has not been given a raise threatens to disclose internal policies that he feels are illegal or unethical to “the proper authorities” unless his grievances are resolved and he receives a pay increase. |
|
Smoldering Level 2 An internal problem that can be managed by those who are responsible for this area of business, with support from other management or employees who may have to be brought in to assess the situation and help resolve it. |
The disgruntled employee files a complaint with the local government employment agency, which contacts the company for a response to the allegations. He calls his manager to say that he has documents the company certainly would not want other government agencies or the news media to see. |
|
Smoldering Level 3 An internal problem that has the potential of going “public” via the news media and generating negative reactions from government officials, plaintiff’s attorneys, comp |
Ed –
Thanks for a cogent and articulate answer from a terrific perspective – that of a veteran railroader – although I think some people intentionally choose to ignore the reality of railroading in order to further some sort of agenda.
BTW, didn’t we already have a half-cocked, emotional finger-pointing thread about this wreck?
Sheesh… I guess one barrage of irresponsible and unfounded accusations is too many for me, let alone two.
PZ
I can honestly say that I’m not, nor will I ever be an expert on tort law. You, I presume are, and I can respect your opinion on that.
What you are failing to comprehend, is the sales side of things. I can see from Bob’s post directly above, that he understands what I’m saying. When a customer says he isn’t willing to pay the value of your service, it’s up to you to convince him of that value, or lose the business. I do that daily with my customers. You do it daily with your customers. It’s called salesmanship. The offer Bob is describing may be the extreme, but it gets the point across, as far as the value of responsibility and liability the railroad has to provide to the customer to get the business. That no shipper was willing to cover the liability premium through a third party, in exchange for a lower rate, means Bob got the point across.
Edited to note that the post from Bob that I mention as being directly above, is actually 5 or 6 posts above, because you all type so much faster than me.[:I]
I disagree with this because Bob is proposing that liability for creating disasters due to negligence is part of a value added scheme. There is nothing value added about killing a million people.
It is not a cost of doing business – it is a cost of failing to do business, and asking the customer to pay for it.
I just don’t see the advertising value. Bob’s proposal is stillborn from the standpoint of impossibility – the shipper can’t agree that he should be responsible, the insurance carrier can’t write it, the courts won’t enforce it. The shipper can only contract for himself. A shipper cannot contract away a third party’s rights. I think this is where you misconstrue cost protections written into ordinary production contracts.
And I’ve written a few of those in my time. And everytime there’s been a dispute, it’s been because the salesman tried to promise something different, or misunderstood the contract.
No salesman, not even BW, would be granted even the authority to discuss issues of negligence or third party liability in a shipper negotiation. That is an area of such sensitivity, and such potential ramifications, it should never, ever happen at that level.
I am sure you could see why.
And I mean that very seriously. In sophisticated organizat
While a shipper may not cover the cost of liability insurance directly, the shipper will understand the necessity for the transporter to have that insurance. The shipper will also realize that if the shipment is quite hazardous, that the transporter will have to pay large sums for liability insurance for that shipment. As a result, the shipper will pay more for his shipment than say a comparable shipment of grain.
I agree fully. I hope you see the distinction made above; it wasn’t about the higher rate, it was about the process of offering the lower rate and why it was “unsuccessful.”
Flash forward in time to a potential merger…rates and enviromental liabilities are part of the calculus…
From UP\SP Merger …
Environmental Matters
The Railroad was named as a defendant in a civil action brought by the
California Department of Fish and Game, Office of Spill Prevention and Response
on April 10, 1998. The complaint alleged violations of California Fish and Game
Code Section 5650, California Business and Professions Code Section 17200, Civil
Code Sections 3479 and 3480, and damage to the waters of California for which
the Department of Fish and Game allege trusteeship. The complaint resulted from
derailments and alleged releases of diesel fuel oil during 1995 in the Feather
River Canyon in Butte County, California. The Complaint sought penalties,
exemplary damages, natural resource damages and unspecified injunctive relief.
In 1999, a settlement was reached in this case between the Railroad and the
governmental entities in which the Railroad agreed to various measures to assess
and mitigate rockslide hazards and to pay stipulated civil penalties for future
releases.
The Railroad was named as a defendant in a criminal misdemeanor action
brought by the State of California in the Municipal Court of Placer County,
California on February 24, 1998. The complaint alleged a violation of California
Fish and Game Code Section 5650 as a result of a diesel fuel spill in Norden,
California in February 1997. In addition, the California Department of Fish and
Game sought penalties, monitoring costs and natural resource damages under state
water statutes, and the EPA sought penalties for violation of the Clean Water
Act in connection with the same incident. In 1999, a settlement was reached in
this case between the Railroad and the governmental entities in which the
Railroad agreed to remediate the spill and pay total penalties of approximately
$305,000
Lower transportation rates in exchange for limited liability have been a part of transportation for quite some time.
It will be interesting to see what the cause of the derailment was.
ed
[quote user=“MichaelSol”]
I disagree with this because Bob is proposing that liability for creating disasters due to negligence is part of a value added scheme. There is nothing value added about killing a million people.
I just don’t see the advertising value. Bob’s proposal is stillborn from the standpoint of impossibility – the shipper can’t agree that he should be responsible, the insurance carrier can’t write it, the courts won’t enforce it. The shipper can only contract for himself. A shipper cannot contract away a third party’s rights. I think this is where you misconstrue cost protections written into ordinary production contracts.
And I’ve written a few of those in my time. And everytime there’s been a dispute, it’s been because the salesman tried to promise something different, or misunderstood the contract.
No salesman, not even BW, would be granted even the authority to discuss issues of negligence or third party liability in a shipper negotiation. That is an area of such sensitivity, and such potential ramifications, it should never, ever happen at that level.
I am sure you could see why.
And I mean that very seriously. In sophisticated organizations, sales are strictly prohibited from discussing issues of corporate negligence and liability