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AAR Statement Concerning Indemnification

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Statement from Edward R. Hamberger President and CEO, Association of American Railroads Regarding Indemnification To assert that the indemnification system places an unfair burden on taxpayers and provides no incentive for the freight railroads to improve safety shows a complete lack of understanding of how our nation’s rail system operates. First and foremost, safety is the rail industry’s number one priority. Freight railroads have every incentive to keep their tracks safe, since they are the primary users of the track and are responsible for the safety of their employees and the goods they carry. The freight rail industry has a strong and impressive safety record. Since 1980, train accident rates have declined by 65 percent and the employee injury rate has declined by 76 percent. Amtrak, not the freight railroads, brings passenger liability to tracks owned, maintained and operated by the freight railroads. Under law, the nation’s privately owned freight railroads must let Amtrak use their tracks, must give Amtrak priority, yet can’t charge Amtrak the actual cost of using their tracks. Each year, Amtrak pays only about 19 percent of the cost of using the freight network, leaving the nation’s largest freight railroads to subsidize Amtrak to the tune of $243 million a year. It is unworkable from a business and practical standpoint to ask the freight railroads to bear the additional cost of liability that would not be there if not for Amtrak. Indemnification is used throughout the rail system. When freight railroads operate on Amtrak, Amtrak is indemnified! And, when one freight railroad operates on track owned by another railroad, the visiting railroad indemnifies the host railroad. The visiting railroad --- Amtrak and the freight railroads --- pays for any damages to its employees, property and customers, while the host railroad pays for damages to its employees, property, and customers.
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