I was wondering who pays for the damaged SD40-2's that were bound for Guinea in west africa> Does the CSX's insurance, since they were transporting them or does the Guinea railroad that ownes them?
Under whose control were they when damaged?
In the example of that well-known video where a crane dropped the locomotive, it would be on the crane operator (company, although that one may have been on the ship) or the shipping company.
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I would expect that the shipper has a transportation insurance for the export locomotives.
CSX most likely has a liability insurance that might or might not cover this accident.
If CSX is liable their insurance likely will cover the damage, otherwise the transportation insurance needs to step in.
That is derived from how it works here (Germany). The USA might be different.Regards, Volker
VOLKER LANDWEHRI would expect that the shipper has a transportation insurance for the export locomotives. CSX most likely has a liability insurance that might or might not cover this accident. If CSX is liable their insurance likely will cover the damage, otherwise the transportation insurance needs to step in. That is derived from how it works here (Germany). The USA might be different.Regards, Volker
US Class 1 Railroads are nominally self insured. They do get Catastrophic insurance policies to cover big derailments and acts of nature. My understanding - and I could be very wrong - is that the deductible before these policies kick in is on the order of $5M to $10M.
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So, since this is "an act of nature accident" (Hurricane Florence causing a washout, CSX pays the deductable and then the catastrophic insuracne kicks in. Is that correct?
caldreamerSo, since this is "an act of nature accident" (Hurricane Florence causing a washout, CSX pays the deductable and then the catastrophic insuracne kicks in. Is that correct?
That is why railroads have lawyers.
The answer spoken many times ultimately is insurance (who will fight to minimize the payout). But CSX will need to make it right by the intended party, so whatever term they come to really and CSX files a claim with their insurer for the value of goods damaged (in this case some freshly rebuilt locos)
Well, it's been a while. But when I was working for a railroad we were responsible for delivering any freight in the same condition as which we received it. If it was damaged we paid for it. Of course, customers played games. Cigarettes were a bear to haul. All the receiver had to do was splash some water on the cartons and claim damage. Then everyone on the dock got free smokes.
Freight claims people, working for the railroad, got wise and fought claims. All of them, legitimate or otherwise. This cost us business as we did damage some shipments. But the freight claims people were dug in. We had a trailer get lost out of the intermodal system and go over a hump. When its car banged in to the other cars on the track the load kept going right out the rear door. Our freight claims idiot called the shipper and yelled at him for not "Properly" securing the load. Well, the load wasn't supposed to go through a hump yard. Just try to get that business back.
Anyway, railroads are self insured up to an amount. Anything below that amount just comes out of the railroad's cash. (I'd say $10 million today.) Almost every insurance policy has a "Deductible" amount. Because of the "Deductible" I'm guessing CSX is covering the damage.
If the locomotives were moving on a contract rate the damage responsibility could have been modified by the contract.
As to insurance, I wound up retiring from Allstate. Insurance companies don't really pay for anything. Their policy holders do the paying. The companies just manage a pool. Everyone in the pool just puts in some money and any member of the pool who has incurred a covered loss gets paid out according to the loss. The last thing anyone needs or wants is an insurance carrier that doesn't pinch dimes. Because you're going to pay for that in your premiums.
On May 2 of this year a storm did significant damage to my house. I just paid off the contractor who repaired the damage. I'm very satisfied with his work and the amount paid by insurance. But, of course, there was that "Deductible". My insurance carrier was not Allstate. It was USAA.
On a bill of lading that is presented to a carrier when a cargo is booked is a box titied "Declared Value". This is for the carrier to determine if the cargo is subject to a "Valuation Charge". This is what a carrier charges for covering the carrier's liability in case of loss.
There are many cargoes that the value of the cargo actually makes the haul considerably more profitable then just the weight/mileage charge(for LTL and air). In truck load cargoes this can double or triple the revenue of a load. The flip side is you absolutely check your cargo to prevent damage or theft.
Why Boeing has been shipping both the fuselage of the 737 and cockpits of the 747 lines from Wichita to Everett Washington for decades. There's a saying in logistics if it ain't broke don't try and reinvent how they originally setup the supply chains. Over 6000 planes have ridden the rails to Washington from Kansas. I doubt Boeing is going to redo it now.
Taking the transporter out of the equation for a moment, doesn't the FOB location still apply? (Freight-on-board) FOB seller's location or FOB buyer's location? If it's FOB seller's, then it's on Guinea to obtain restitution. If it's FOB buyer's, it's on the seller to obtain it. Or have things changed?
BNSF dropped three 737s in the river back in 2014. Six total airframes were scrapped on site.
The answer in the USA is very simple. By Federal law, the carrier is liable for all damage (there are a few exceptions, inhearent vice comes to mind) UNLESS shipment is moving under a released value rate or a contract that incorporates a released value provision. Damage claims are an operating expense paid out of freight revenue.
Steamship carriers do not accept liability, so shipper/or consignee will generally purchase insurance for high value loads shipped by ocean carriers.
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