This Week at Amtrak; July 14, 2008

A weekly digest of events, opinions, and forecasts from
United Rail Passenger Alliance, Inc.
1526 University Boulevard, West, PMB 203
Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739, Electronic Mail info@unitedrail.org
http://www.unitedrail.org



Volume 5, Number 20



Founded over three decades ago in 1976, URPA is a nationally known policy institute that focuses on solutions and plans for passenger rail systems in North America. Headquartered in Jacksonville, Florida, URPA has professional associates in Minnesota, California, Arizona, New Mexico, the District of Columbia, Texas, and New York. For more detailed information, along with a variety of position papers and other documents, visit the URPA web site at http://www.unitedrail.org.


URPA is not a membership organization, and does not accept funding from any outside sources.


1) We need to have a very serious conversation – right now. Let’s plunge in.

Here at URPA World Headquarters, we monitor all types of newspapers, magazines, and broadcast media nationwide. Thanks to modern Internet search engines, we’re able to see almost every story and editorial which pops up regarding Amtrak, VIA Rail Canada, and the major freight railroads.

There has been a theme of late about a need for a resurgence of passenger rail travel, but most of the time the message in the stories and editorials about Amtrak has been wrong.

We in America have the blessing of a free press – which in the 21st Century – cares little about enterprise reporting. Reporters often begin their labors with a preconceived notion of how they want their story to turn out, and set out to seek quotes from interested parties which make their preconceived notion true, at least for the sake of the story.

If you’re one of the very good journalists from both the national and local press who regularly read this space – and, you know who you are – this isn’t about you. This is about the journalists who don’t take the time to dig into stories, or are more interested in keeping their assignment editors happy than going back and saying the facts of the story are just not panning out as anticipated.

More than once the telephone here at TWA has rung, and a reporter has spent sometimes more than an hour trying to elicit specific quotes – often asking questions in very specific words attempting to put words in the mouth of a source to fit a story. That’s not good research, and not good reporting. That’s just filling in the blanks for the sake of a made-up story, instead of soliciting the truth. Anybody close to the news business knows reporters don’t have the final say on what appears in print or on the air. Most reporters will tell you the only good editor is a retired editor. However, only so much burden can be put on editors, or the need to edit for space, after a story is assembled.

2) Depending on who is doing the reporting, some stories about Amtrak usually are accurate. The Bureau of National Affairs, a private publisher writing for lobbyists and government officials in Washington is usually close to 100% correct. The National Journal in the past has done some of the best writing about Amtrak. The New York Times recently ran a lengthy story about Amtrak and got most of it right. The Washington Post’s current transportation writers usually do a good job of reporting on Amtrak. The Richmond (Virginia) Times-Dispatch can usually be depended on to get an Amtrak story correct. The Hartford Courant is reliable. The small town newspapers and television stations in Illinois have a high propensity for good Amtrak reporting. On the Left Coast, most of the newspapers and television stations in California seem to have a pretty good grip on things. So many others, don’t.

3) A big part of the problem, of course, is Amtrak itself. We’re talking about Amtrak as a corporation, not Amtrak as is reflected in its corporate spokespersons, such as the always honorable and consistently excellent Cliff Black. We’re talking about corporate policy, as is generated in the bowels of Amtrak’s executive corps, rubber stamped by whatever board of directors may be in power at the moment, and spread as gospel by Amtrak and its various wholly owned lapdog organizations, who would never DARE dream of questioning the Holy Gospel of Amtrak.

Through the 37 wretched years of Amtrak’s existence, beyond URPA and some stalwart senior staffers on Capitol Hill, there have been very few voices questioning the veracity of Amtrak, what the company is saying, and what the company is doing. As a result, Amtrak has created for itself a fascinating niche in our domestic transportation network which is not only untenable, but perversely unassailable by reasonable thinkers because so much false group-think has been idiomatically concocted about Amtrak.

4) Since the advent of $4+ per gallon gasoline this spring and summer, many stories have appeared in the American media about Amtrak, and how many Americans are thinking of passenger rail in an entirely new light.

This is good. Americans have for decades wanted passenger rail, but because of the burp in transportation thinking caused by the introduction of the Boeing 707 jet airliner in the late 1950s, very few rational people have given much thought to passenger rail.

Plus, there is still a great deal of junk science to overcome when it comes to passenger trains.

First, there is the silly belief Americans don’t want to ride long distance passenger trains. On Sunday, July 13, a columnist in the Knoxville (Tennessee) News Sentinel opined, “who wants to spent three days on a train to travel to California?”. Well, actually, a lot of people already do, and many more would if there was any inkling Amtrak was available to all Americans, and there was enough equipment to handle all of the demand if the secret of Amtrak was every unleashed on the American public.

Second, there is Amtrak’s constant promotion of short, regional, and very expensive to operate corridors instead of a healthy focus on high-revenue producing long distance trains.

Let’s review the facts, again.

In Fiscal Year 2007, the Empire Builder, a single daily train in each direction, operating between Chicago and Portland/Seattle on a route of over 2,200 miles, generated total revenue of $53,177,800, and 390,824,000 revenue passenger miles carrying 505,000 passengers an average length of trip of 773.9 miles. The load factor for the Builder was 60.7%, with 13.61 cents of revenue per passenger mile. On average, the Builder carried 206.7 passengers for every mile it traveled.

During that same period of time, Amtrak short corridor Hiawatha service ran an interstate route of 86 miles between Chicago and Milwaukee, Wisconsin with seven daily trains in each direction (six on Sundays). The Hiawathas generated $10,230,000, and 47,619,000 revenue passenger miles carrying 593,300 passengers an average length of trip of 80 miles. The load factor for the Hiawathas was 37.7%, with 21.48 cents of revenue per passenger mile. On average, the Hiawathas carried 110.7 passengers for every mile one of the Hiawathas traveled.

Here’s the bottom line: The single daily train Empire Builder carried 88,300 fewer passengers than the combined seven daily Hiawathas, and generated $42,947,800 MORE in revenue, and generated 8,536,600 MORE revenue passenger miles than all of the combined Hiawathas.

This same story is true all over America, no matter what comparisons are used. The long distance trains, consisting of the Silver Star, Silver Meteor, Cardinal, Empire Builder, Capitol Limited, California Zephyr, Southwest Chief, City of New Orleans, Texas Eagle, Sunset Limited, Coast Starlight, Lake Shore Limited, Palmetto, Crescent, and Auto Train are the really money makers and passenger haulers of Amtrak.

When you add up the performance of the regional services outside of the Northeast Corridor, including the Ethan Allen, Vermonter, Albany/Niagara Falls/Toronto, Downeaster, New Haven/Springfield, Keystone, Empire Service, Chicago/St. Louis, Hiawatha, Wolverine, Illini, Illinois Zephyr, Heartland Flyer, Pacific Surfliner, Cascade, Capitol, San Joaquin, Adirondack, Blue Water, Washington/Newport News, Hoosier State, Kansas City/St. Louis, Pennsylvanian, Pere Marquette, Carolinian, Piedmont, and Amtrak Thruway busses, all of these services, many state sponsored, generate $312,192,500 in revenue, based on 1,550,341,000 revenue passenger miles, and ridership of 11,993,200 souls. There is an average load factor of 40.1%, and revenue per passenger mile of 20.14 cents per mile, with an average of 112.8 passengers carried for each mile all of the trains travel.

The long distance fleet generates $377,981,000 in revenue, based on 2,495,482,000 revenue passenger miles, and ridership of 3,818,900 souls. There is an average load factor of 56.8%, and revenue per passenger mile of 15.15 cents per mile, with an average of 170 passengers carried for each mile of all of the trains travel.

That means, the long distance fleet generates $6,578,850 MORE in revenue than the short distance/corridor trains, and generate 945,141,000 MORE revenue passenger miles, carrying 8,174,300 FEWER passengers than the short distance/corridor trains.

4) The discussion becomes the same here as it is in war: body counts.

The empirical evidence is the long distance fleet of few trains is much stronger in actual transportation output than the regional/short distance/corridor trains. In short, fewer trains, costing less to operate, and based on a lower income per passenger mile completely overcomes a much higher number of trains, costing more to operate, with a higher amount of income per passenger mile.

Why is this concept so difficult for Amtrak to grasp, and for the news media to ask Amtrak, “why is your business plan so flawed, that it prefers expensive corridor trains over financially stronger long distance trains?” when the necessity for passenger rail is so prominent?

Is it more important to carry more people over shorter distances, or carry fewer people over longer distances?

Here’s a better question: Should Amtrak do everything it can to become a stable, growing company, so it will be able to meet the many demands placed on its resources, or should it continue to be a crippled child of government, always waiting for the next financial handout from government?

Headlines in Illinois the last couple of weeks were rife with speculation the state government would not continue funding on some of Amtrak’s newest state routes, due to budget concerns. The usual hand-wringing stories were written, and this story was presented as high drama by the news media. In the end, a compromise was reached, and the trains will live to travel another budget year.

This is exactly the sort of problem that is inherent on being a child of government, such as Amtrak is today. The “success” of the company is always at the whim of some bureaucrat numbers crunchers, whose only allegiance is to keeping their government jobs.

5) There was a time, in the glory days of passenger railroading, when both concepts were achieved. How did this work? Passengers work just like freight. The long hauls are where the money is made, and the short hauls are done for customer convenience and as feeders, and paid for by the profits made by the long hauls.

For every San Diegan (the predecessors to today’s Pacific Surfliners) operated by the Santa Fe between Los Angeles and San Diego, there was also a Super Chief, San Francisco Chief, The Grand Canyon, El Capitan, Tulsan, Chicagoan, The Oil Flyer, and Kansas City Chief.

The same was true with the Southern Pacific. For every regional train in and out of San Francisco, there was a Sunset Limited, Golden State, Imperial, and Argonaut.

This held true all over America. For every milk run, local train, or mail train, there were streamliners like the Orange Blossom Special, Silver Meteor, Florida Special, City of Los Angeles, North Coast Limited, Twentieth Century Limited, Broadway Limited, and many, many more.

The Eisenhower Interstate System of highways and the sucker punch of the Boeing 707 jet airliner were too much for the railroads of their day in the 1950s and 1960s. The railroads were not glamorous, or fast enough for a society hooked on speed and the race for space and rockets to the moon.

But, now, the tables have turned, and passenger rail is once again viable. It’s just that America’s sole provider of passenger rail isn’t viable. It’s stuck with a corporate mindset and junk science business plan that dooms it to financial ruin and the inability to serve Americans who want passenger train service.

6) Amtrak’s business plan, if put together by rational human beings, should consist of three layers.

The first is a healthy and growing system of long distance trains IN PARTNERSHIP with the host freight railroads. Everyone acknowledges there is a rail capacity problem in this country as more and more freight is leaving expensive highways and jumping on freight trains.

If you believe the Association of American Railroads, of which (even though you would never know it) Amtrak is a full dues-paying member, there isn’t a single mile of railroad in this country which could accommodate additional passenger trains. The translation of that is Amtrak is such a low-paying customer that demands so much attention, it’s difficult for the host freight railroads to accommodate Amtrak trains (Even though by mutual agreement at the beginning of Amtrak the railroads agreed to a federal law being created which REQUIRES freight railroads to give full access to their rails to Amtrak.), so, therefore some type of better agreement needs to be reached between Amtrak and the host freight railroads.

The second layer is a robust system of corridor trains, much like today’s arrangements, but with a different set of criteria. No two state contracts are alike, and Amtrak is getting as much money as possible from each state, with no standardization of costs and contracts.

Short and regional corridor trains can be healthy feeders into a long distance system, and they can help share station, reservations, and infrastructure costs. However, the emphasis must be placed on connectivity and hubbing with long distance trains, and services must complement each other for maximum passenger flow and utilization.

The third layer is providing coordination of commuter services with various local and state operators and competitors. Today, Amtrak still operates some commuter services (such as the Virginia Railway Express) under contract, providing train and engine crews, equipment maintenance in some cases, and other services. Allegedly, these services are provided at a profit because they are purely services for sale to other entities, but one can’t help but wonder what the real return on investment is when providing these services. In other words, does capital Amtrak uses to prop up these services have as high of a rate of return as capital used elsewhere in the company?

7) Congress has the ultimate answer to Amtrak’s many problems, and that doesn’t include throwing more free federal money at Amtrak. The answer is for Congress to set standards for Amtrak, above and beyond what the Amtrak Board of Directors is willing to do.

Amtrak has pretty well become a bipartisan issue in Congress, and some of its strongest defenders for the national system have been prominent Republicans. Democrats can always be counted upon to support Amtrak as a labor issue.

Congress must gather its collective wisdom and demand of Amtrak it create a viable business plan which serves all of America, not just the Left and Right Coasts, and an area in and out of Chicago.

As air service continues to shrink (and, there is still a lot of shrinkage to come), and the cost of motor fuel continues to rise, suddenly, in the minds of many, Amtrak looks pretty good. Oops! Because of Amtrak’s longstanding policy of putting all of its efforts and fiscal capital and political capital into the Northeast Corridor and ignoring the rest of the country that’s west of Harrisburg, Pennsylvania, and south of Washington, D.C., there aren’t many Amtrak choices for most Americans.

Small Town America, where most of the country lives, has been left out of the Amtrak equation for decades. Congressional representatives and senators from these towns and states have dutifully kept Amtrak alive year after year, voting more and more free federal monies for Amtrak’s benefit. But, there has been only minuscule return on investment for those votes. In many instances, Members of Congress and others have time and again been burned by Amtrak, after working to restore a local train station, make improvements in some type of infrastructure, or help start a promising new route, Amtrak has unceremoniously yanked service and left communities and states high and dry, including all of the Gulf Coast east of New Orleans.

Amtrak will retort there isn’t enough money to go around. Really? URPA has completed and TWA has published study after study which shows Amtrak, if it follows a strong business plan, can be a robust and successful company. It can live up to its mandate to provide America with passenger rail service. Amtrak just chooses not to, because it is easier to follow a flawed business plan and junk science that incorrectly claims passenger rail service can’t be profitable, or break even.

In today’s news accounts, we’re beginning to see more and more stories airlines aren’t, and can’t be, profitable hauling passengers. Since when? Because most airlines weren’t as smart of Southwest and didn’t purchase oil futures contracts (Even Amtrak bought oil futures contract wisely.)?

If this bandwagon continues, are we (shudder) about to see Amsky? Will the Republic Not Stand and come to its knees unless government steps in and starts running the airline passenger system? What a revolting thought.

In France, Air France and private passenger train operator Veolia are talking about a combination plan where train and plane will work in harmony to haul passengers, depending on the length of trip. What a concept.

There are many clever answers to today’s passenger transportation challenges, but government operation is definitely not the obvious, nor complete, answer. The true answer relating to government is for Congress to mandate Amtrak to come up with a more viable business plan which serves Americans both fiscally and sanely by providing dependable surface transportation from nearly anywhere to nearly anywhere in American where existing railroad tracks are in operation.

Will this require more free federal monies? Probably, in the beginning to get things moving. More rolling stock will definitely be needed, but should be able to be financed through traditional equipment leasing channels instead of government purchase. Local stations and passenger terminals should pass from Amtrak ownership and maintenance responsibility to local ownership and responsibility, just as airports are publicly owned and operated. Many existing freight lines will need upgrades, but there are either federal programs already in place, or new ones being considered for that to happen. A public/private partnership for infrastructure improvement is a reasonable approach to rebuilding America’s passenger rail system.

8) All of this brings us back to where we began, talking about America’s news media. Beyond the claptrap handed out by Amtrak and its wholly owned lapdog organizations to the news media, the media on all levels need to dig into the Amtrak story and come up with useful stories and editorials which reflect what can be and should be, not the continuing woe-is-me stuff which dominates today’s news about Amtrak. Enterprise reporting is called for, to better help all Americans understand why Amtrak is not available to entire states of people, plus major cities like Phoenix or Tulsa, any only minimal service to cities like Houston and Cincinnati.

Some people who call themselves passenger rail advocates are really nostalgic rail fans hoping for the past to reappear. That’s not going to happen. Instead, such an opportunity has presented itself due to the current energy crisis where the true golden years of passenger railroading may be in the very near future. Providing the news media and the Congress get it right.

9) Respected businessman and private railcar owner Clark Johnson of Madison, Wisconsin sent this missive to TWA.

[Begin quote]

As a long-time reader [of TWA] and good friend of Andy Selden, I think the recent service disruptions [due to flooding] of rail service in the Midwest are a stark testimony to railroad mismanagement and lack of government concern. Had these floods occurred in the 1950s, and there were some then I remember well, there were numerous alternative routes that were not afflicted by high water. The sort of total service disruptions simply did not occur.

The massive downsizing, brought about by a management concerned only with the expense side of the ledger, caused removal of double track, secondary lines and connecting branches. Most railroad management (but not all) could not conceive of significant increases in business; a typical result of linear thinking of which the industry is especially proficient. Deregulation brought about a surprising increase in business, which was a surprise to most rail management who were still stuck in a downsizing mindset.

While this does not directly read on Amtrak, the current congestion does. There are few alternate routes. I live in Madison, Wisconsin and watched a 110 car CP freight creep through town over the Wisconsin and Southern to bypass the flooding on the CP main at Reeseville. That would be a rational re-route for the Empire Builder except that it is Class 1 track. On Amtrak Day the Milwaukee's Chicago-Madison service ceased and the track began deteriorating to its present rather deplorable condition.

So with no secondary lines, no connecting branches and rail management concerned with keeping their railroads glued together, what's poor Amtrak to do?

There is no way to rebuild the rail infrastructure without massive government support. So how about this deal: the Fed put up a significant portion of the infrastructure money and the quid pro quo is open access for passenger trains, and not limited to just Amtrak.

Keep up the good work.

Clark Johnson

[End quote]



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J. Bruce Richardson
President
United Rail Passenger Alliance, Inc.
1526 University Boulevard, West, PMB 203
Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739
brucerichardson@unitedrail.org
http://www.unitedrail.org