Thursday, August 5, 2010

TIH Shipping Liability

Earlier this week the Surface Transportation Board (STB) announced their intent to establish the Toxic by Inhalation Hazard Common Carrier Transportation Advisory Committee (TIHCCTAC) to provide the Board “with independent advice and policy suggestions related to the common-carrier obligation of railroads to transport Toxic by Inhalation Hazard (TIH) materials”. In recent years the Board has been asked to look a number of controversies surrounding the common carrier obligation of railroads to carry TIH materials and establishing shipping rates that adequately address the liability issues attendant to the carriage of those materials. The Board hopes that this advisory committee will “facilitate dialogue among TIH shippers, railroads, insurers or underwriters and tank-car owners, lessors or manufacturers with a goal of resolving economic concerns surrounding the transportation of TIH cargo”. Allocation of Liability Costs In their official decision document (Docket EP 698) notes that one of the major causes of the disputes between carriers and shippers in the shipment of TIH materials is the issue of the amount of potential liability that railroads face when they transport the material. Railroads have long maintained that their liability in the event of an accident with a catastrophic release of a TIH material could result in bankruptcy or even dissolution of the affected carrier. The railroads have asked the Board to allow them to transfer at least a portion of the liability to the shipper as a pre-condition to accepting shipments of TIH materials. Shippers have maintained that all recent fatal accidents involving TIH materials have been caused by actions of the railroads or their employees and thus shippers should not share in any liability from incidents caused by the carrier and its employees. The Board explains that the primary focus of the TIHCCTAC will be to come up with a consensus resolution to the liability issue. While the STB will retain responsibility for making any such policy the Decision notes that::

“The TIHCCTAC will be tasked with producing a report and recommendations on how the Board should balance the common carrier obligation to transport this commodity with the risk of catastrophic liability in setting appropriate rail transportation liability terms for TIH cargo. The TIHCCTAC’s focus and its solution to the question presented above should revolve around the amount of economic responsibility for liability that railroads can reasonably ask TIH shippers to assume before the carrier will transport TIH cargo.”

Public comments The STB requests public comments on the establishment of the Committee. Specifically the Board requests comments on four specific questions (pg 1):

“(1) What should be the appropriate scope of such a committee’s mandate? “(2) How would the scope of the committee’s mandate affect its utility? “(3) What would be the optimum size of such a committee? and “(4) How should the committee’s membership be allocated among various stakeholder groups to achieve a fairly balanced “cross section of those directly affected, interested, and qualified,” as required under FACA [Federal Advisory Committee Act], 41 C.F.R. § 102-3.60(b)(3).”

The Board requests that public comments be submitted by September 24th via their e-filing system at Nominations for appointment to the board should be submitted by October 25th. Nominations may also be submitted via the e-filing system or they can be mailed (10 copies required) to: Surface Transportation Board Attn: STB Ex Parte No. 698 395 E Street, S.W. Washington, DC 20423-0001

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