Urban commuter congestion continues to increase. According to a recent study, more than 7 billion hours are wasted in traffic every year. A good percentage of this time is suburban and medium distance commuters stuck in traffic while driving into urban centers. To combat this problem, many cities have either developed or enhanced light rail systems. Additionally, Amtrak has routes that address the needs of longer-distance commuters on the East Coast and other relatively close metropolitan centers, such as Chicago and Milwaukee.
Passenger rail systems are often a complex combination of legal entities that are created to maximize the use of existing facilities, tracks, equipment and expertise. In many cases commuter railroads will use tracks owned and sometimes utilized by freight railroads. In other situations, a freight railroad may operate commuter rail lines that are under the auspices of a local transportation district or a tourist attraction in a scenic area. Freight railroads may also provide service facilities for rolling stock requiring repairs. These webs allow millions of people to get their destinations each day.
The complex relationships that exist between various stakeholders in passenger rail and the fact that every passenger is a potential claimant in an accident present considerably greater risk than the traditional model of freight-only railroads. There have been a number of recent incidents that resulted in lawsuits where multiple stakeholders have been named. Usually these incidents are the result of a crash, derailment or both. When a passenger train comes into contact with another vehicle or a pedestrian, the result is often catastrophic. Additionally, there have been a number of derailments where either the train was traveling too fast for conditions or there were issues with the tracks. In many cases, passengers suffer injuries as they are thrown around the rail cars or are jolted by the sudden stop. There were also a couple of cases during the winter of 2015 where passengers filed claims for having to stand out on train platforms in frigid conditions for trains that were very late or never came. Injuries can be serious and because of the high level of expertise associated with the railroad, any mishap is viewed by the public as an act of negligence. The level of risk is compounded by the high cost of even minor repairs to rolling stock and tracks.
Best practices to address risk include:
- People — The most critical part of any system is having responsible and well-trained operators aboard the trains and in the control rooms. They need to be able to identify unsafe situations and take appropriate action very quickly. There is no substitute for experience and ongoing training in this industry. Good hiring practices need to be in place and employees need to be monitored for changes in performance.
- Safety culture — Everyone in the organization needs to understand that safety comes before everything else. Top management down to the staff responsible for cleaning the rail cars need to understand their role in the safety process and how critical even a small failure can be. The culture needs to be obvious and regularly communicated through actions and words. Shortcuts and exceptions quickly undermine culture.
- Insurance coverages — Insurance policies need to address the various risks and provide coverage for the possibility of a catastrophic loss. Contracts between the various stakeholders need to address the risks and describe in detail which parties will be held responsible for different types of losses. The utilization of insurance brokers and carriers that have experience in passenger transportation is critical to reducing exposures and making stakeholders whole after a loss.
- Maintenance — A strong maintenance program is also critical for both the rolling stock and the tracks. Scheduled repairs to locomotives and cars ensure that breakdowns are kept to a minimum and the regular inspection and replacement of tracks and crossing greatly reduces the likelihood of a derailment. All maintenance subcontractors must be closely scrutinized to ensure that they are capable of completing the work and will do so in a safe manner.
- Crash/loss management — Critical loss plans that include engagement of emergency responders, public relations, use of outside vendors, alternative modes of transportation, and how investigate losses must be in place. The worst time to put together a plan for handling a large loss is while the situation is unfolding.
Because of the high level of risk and responsibility associated with passenger rail it is critical that the various operators involved take appropriate measures to minimize risk and utilize risk transfer instruments such as insurance to reduce their exposure.
Steve Bojan is the vice president of fleet risk services for Hub International.
