This Week at Amtrak; July 25, 2009

This Week at Amtrak; July 25, 2009

A weekly digest of events, opinions, and forecasts from

United Rail Passenger Alliance, Inc.
America’s foremost passenger rail policy institute

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 6, Number 24

Founded over three decades ago in 1976, URPA is a nationally known policy institute which 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, New York, and other cities. 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) Response to the last This Week at Amtrak published Monday came fast and furious. The overwhelming sentiment was negative against Amtrak and the P.R.I.I.A. Section 226 Gulf Coast Service Plan Report as discussed in the last issue.

Here are some samples from the TWA mailbag. Every new paragraph represents a new quote by another individual writer.

[Begin quotes]

“Those crooks are so lost in extorting money they have absolutely forgotten their purpose is to operate a ‘national network of rail passenger services’.”

“I have in my possession a published SCL passenger timetable from December 1970. Could I just mail that to Mr. Boardman and say ‘here, can't you replicate this service?’.”

“I am totally incensed by Amtrak's total incompetence from Mr. Boardman down the line to middle management. 20 months to train onboard staff is absurd! What can the average person do to correct the culture of mediocrity?”

“Yeah, I read the report. In typical Am-logic, they establish a conclusion first, and then
‘manufacture’ facts and data to justify it! A new station at Sanford? Why? Good point. ... Yeah, you're right – [Congresswoman] Corrine Brown should request a refund and Boardman should resign. What a disgrace!”

“I was comforted that it wasn't only me that was . . . well . . . flabbergasted . . . at the audacity Amtrak had to issue such a publication. It's filled not only with numerous untruths, but it actually documents their ‘hidden’ agenda, which obviously is to impede and hinder hooking up east of New Orleans. Does this go unseen by those who SHOULD care? Now, if there are so many obstacles over the New Orleans to Florida issue, will Amtrak raise similar objections for restoring the Pioneer and/or the North Coast Limited? To my knowledge, I've not been made aware of Amtrak's viewpoint on this matter. The restoration of The Sunset Limited issues began previous to the Pioneer or NCL proposals; correct me if I'm mistaken.”

“Put two stakes in the ground with yellow tape between them and call it a station until one is built. Not running a train because of one station on the route is nonsense. And 20 months required to train the crews to do what? I worked at an airline and it took way less time to train our crews on the various aircraft they had to fly. Why is Amtrak dragging its feet on this route? It doesn't make sense. I hope they do extend the City of New Orleans ... then I can get on the train in Memphis and make the whole trip to Disney World! You think that Amtrak might try to market that? ... Nah.”

“I don't understand this nonsense about tri-weakly service either (misspelling intended). Then again, the Rio Grande Zephyr was a huge success, in spite of tri-weekly service. Yes, I know the Rockies aren't the Florida panhandle, plus the D&RGW folks ran a first class operation and had a huge amount of pride in their train. Always good to get your weekly newsletter and analysis.”

“Amtrak New Orleans-Orlando passenger service. Designed to fail. Amtrak's record of plans and implementation have been a failure, except for maintaining an inept bureaucracy. America's skeletal passenger train network is a carryover from decades ago, yet, Amtrak's board continues to perpetuate this as their primary purpose. The present Amtrak board has outlived their usefulness in today's world of American transportation. No disrespect to you and any of the advocates, but I cannot even suggest any choice when the inmates are running the asylum. I suggest you review the ‘be careful what you wish for’ quote, and listen to what your subconscious tells you.”

2) And, so the comments went. There was one comment from someone living on the Gulf Coast this space has a lot of respect for, and there were two other major comments, too.

“Amtrak is accomplishing precisely what they hoped to accomplish with their inaccurate, error-prone, agenda-driven, biased report – turn people against restoration of service. Anyone who doesn't understand the importance of the route to the national system, and also understand that Amtrak has intentionally put the worst possible spin on projected ridership will question whether return of Florida service is a wise decision. Amtrak should be ashamed and embarrassed, but they're not. Goal accomplished and business as usual inside Amtrak – protect the money machine, and not waste precious resources on anything as mundane as service to the passenger. Isn't it odd that spending money to run a train between New Orleans and Orlando simply scares them to death, but paying an Amtrak crew to lay around the pool at a New Orleans hotel for three days while the equipment sets idle [waiting for the return trip] seems likes a logical decision. Only at Amtrak would buffoonic moves such as these be made.”

[End quote]

3) For the major comments, first, United Rail Passenger Alliance Vice President of Law and Policy, and President of the Minnesota Association of Railroad Passengers, Andrew Selden of Minneapolis.

[Begin quote]

By Andrew Selden

TWA’s discussion of the intellectual failures of Amtrak's projections of usage of the various service alternatives across the New Orleans-Florida gap missed one of the most compelling bits of evidence: Amtrak's own experience with actual patterns of usage of this service when it existed.

One of the most striking passenger behaviors that evolved almost immediately upon extension of the Sunset Limited to Florida in 1993 was the spontaneous discovery by passengers and travel agents one could change trains in Jacksonville between the Sunset and trains to and from points NORTH of Jacksonville.

This is not a surprising result to anyone who understands networks in transportation systems. Matrix theory in mathematics predicts when a node (or a "hub") is created, traffic will flow through that hub in all possible directions, and the volume is approximately proportional to the square of the potential number of origin-destination pairs in the matrix.

So it didn't matter the one train – the Sunset – turned south at Jacksonville. Amtrak, of course, if they thought about it at all (no evidence exists that they did, before or after service was started), assumed customers would only go where the train went, to points south.

But passengers could read the timetable, and saw if they got off at Jacksonville, lo and behold, before too long a train would come through headed north into the Carolinas and Virginia, and even all the way to the Northeast. So people bought tickets and constructed their own connections, sometimes enduring unreasonably long waits for the connecting train. But through they went, generating "ridership" – and more importantly revenues – and much longer trips (output, measured in revenue passenger miles). United Rail Passenger Alliance founder Austin Coates documented this phenomenon by going into the Jacksonville station, and talking to passengers and ticket agents. They all understood what was happening, but Amtrak didn't: their systems only saw the local tickets to and from Jacksonville, not the fact it was the same folks passing through Jacksonville.

Amtrak's blindness to inter-route through traffic is further exacerbated by its bias – Amtrak sees itself mostly as operating a high-cost transit service in the Northeast Corridor and other short corridors. Many short trains, running discontiguous short routes, accommodating time-insensitive customers, who won't use the service (Amtrak assumes) if they have to change vehicles to reach their own destination.

It is an old shibboleth of urban transit planners that a connection for a journey will cut potential patronage ("ridership") by 50% or more as compared to operating a through train and/or bus or trolley. That notion is false, of course, but Amtrak's planners didn't get the memo. So to them, potential passengers are not likely to use a long distance service which requires a change of trains, and so only a few riders are to be expected to want to change trains at a place like Jacksonville. In Amtrak’s projection, little or no allowance is made for the potential usage or resulting revenue of someone who might choose to use rail to get from Houston to Raleigh, North Carolina or Mobile, Alabama to Boston via Jacksonville, even if that means a short layover at Jacksonville.

But, people are willing to do that. We know that not because of a theory or a forecast, but because of actual historical patterns of usage, of which Amtrak is either ignorant or which it is willing to try to hide, when it really doesn't want to do the work of running the train in the first place.

Our casual analysis suggested the comparatively few passengers who hubbed at Jacksonville between points west and points north of there were generating enough revenue (from their entire trip's fare, not just the fare for the segment taken on the Sunset) to pay all or most of the direct, above-the-rail, cost to operate the Sunset east of New Orleans. Everyone else was gravy. And, of course, all that occurred spontaneously, without benefit of any advertising or promotional support, fare promotions, or any other marketing.

And – at the time – the phenomenon was sharply limited by the lack of capacity on the Silver Star and Silver Meteor, especially in sleepers, to handle any serious growth in traffic. We believe if additional capacity had been available on the Silver trains, especially in first class, there would have been MUCH more connecting traffic at Jacksonville than there was. There is no way to estimate how much revenue Amtrak lost for lack of understanding. And, when the Sunset was discontinued east of New Orleans and the connection lost, ridership and revenue of the Silver trains to and from Florida was diminished accordingly.

Thus, Amtrak's craven failure this year to account properly for inter-route connecting revenue and ridership is really no surprise, either as a methodological failure, or a political scam. But, it is both disappointing and dishonest, and reflects a very serious lost opportunity to serve the public and to make money.

[End quote

Noted rail historian Daniel Carleton of Dunnellon, Florida had this to add, thinking along the lines of last weekend’s 40th anniversary of American man on the moon.

[Begin quote]

Mission Control … What is our mission?

By Daniel Carleton

As a nation we look back with pride to that day 40 years ago when humankind, humankind of American citizenry, set foot on Earth’s first and foremost satellite. It was the pinnacle of our civilization and became the benchmark for all technological leaps… or lack thereof; “We can land a man on the moon but we can’t …”

During these intervening four decades we have seen substantial changes in the size and scope of human enterprise. Due to the evident realities concerning what resources are actually available we have readjusted our views concerning our endeavors. Man has not been back to the moon since 1972. Commercial supersonic flight ended in 2002. And on the ground, intercity rail transportation became the ward of the National Rail Passenger Corporation, or Amtrak, in 1971. In Amtrak’s 38 years we have seen it expand and contract, rise and fall, lauded and condemned. With all the talk these days of “High Speed Rail” one may conclude the future mission of passenger rail is, in NASA parlance, “ago.”

So it was with great dismay that on July 16th of this year Amtrak released its “Gulf Coast Service Plan Report;” ironically on the same day of the states’ deadline for Pre-Applications for High-Speed Passenger Rail Funding. Although appearing comprehensive, the inaccuracy of detail leads one to believe it was conceived by one either not familiar with the area of proposed service or counting on those reading it would not be familiar.

The Report calls for “$10.7 million” for restoration of stations including “$3.2 million for the demolition and reconstruction of the Sanford, Florida station.” This should not be confused with the southern terminus of the Auto Train. The regular passenger station in Sanford is between the active stations in Winter Park and DeLand, and is passed daily by the current pair of New York to Miami trains. However, unlike other now vacant stations in Florida, Sanford was abandoned years ago due to very low passenger loadings. Why should the restoration of Gulf Coast service shoulder the cost of rebuilding a station with low boardings?

Also cited is “$600,000 for improvements at Amtrak’s Sanford maintenance facility where equipment would be maintained.” When the Sunset Limited was running prior to 2005 it was adequately maintained at the Auto-Train terminal in Sanford. Sanford is already in line for $2 million in maintenance area funds from the American Recovery and Reinvestment Act; this does not include the $10 million new Auto Train passenger station. Why should the restoration of Gulf Coast service shoulder the cost of unnecessary improvements?

The least expensive option for restoration of service is the reestablishment of the tri-weekly Sunset Limited. However, the “major issue associated with this option is the route length. The route length (2,763 miles) presented significant operational challenges for the pre-Hurricane Katrina Sunset Limited with respect to equipment servicing, operational performance, crew scheduling and other issues.” This is a curious statement as Amtrak is planning to operate a daily Texas Eagle from Chicago to Los Angeles (2728 miles) as noted in the August 2009 issue of Trains magazine. Does 35 miles make that much of a difference? Or does Amtrak intend to discontinue this train when it is deemed convenient?

As of this early date at least two “advocates” listed in the Report as having been contacted have denied any such correspondence.

This action, or more accurately inaction, on the part of Amtrak is an insult to the people of the State of Florida, the Gulf Coast, and adds insult to injury to those left in New Orleans. What is Amtrak’s mission? Are they or are they not our national passenger railroad? If not, so be it; let us find another medium for rail transportation. If so, then where is our train? At a time when we should be working toward a stable and responsible means of ground transportation we are handed a 78-page report which says, in essence, “no, we can’t.” Remember this point, if New Orleans and the Gulf Coast had been mercifully spared the wrath of Katrina in 2005, would not the Sunset Limited still be running today?

[End quote]

4) Reports like the Gulf Coast Report make it difficult to snuggle up close to Amtrak and make nice. The report showed everyone – politicians, railroaders, passengers, American taxpayers – the worst and most arrogant side of Amtrak. We’ve seen a company with no solid or permanent leadership, no vision for the future, no regard for its basic mission for existence.

Then, we come to the following two press releases. Read them carefully.

[Begin quote]

Veolia Transportation Names Former Amtrak CEO As Chairman of its Rail Division

CHICAGO – June 17, 2009 – Veolia Transportation Inc. announced that Tom Downs has joined the company as chairman of its rail division. Downs will work with Rail Executive Vice President Ron Hartman to continue Veolia Transportation’s growth as the largest private provider of contracted passenger rail services in the U.S.

As chairman, Downs will help guide the company’s strategic planning efforts as well as its expanding roster of public private partnerships, and catalyze the development of its high-speed rail business. He will further develop the company’s relationships and alliances with key organizations in the public and private sectors, including the Federal Railway Administration, Federal Transit Administration, U.S. Department of Transportation, as well as transit authorities and city governments. Downs also will provide assistance with operations, continuing to enhance performance in safety, maintenance, customer service, technology and maintenance of way.

In his distinguished career in transportation, Downs has held several executive roles. As CEO of AMTRAK, Downs was credited with leading the national passenger rail system from insolvency to a $2 billion capital investment fund in 1998. He also has served as commissioner of transportation in New Jersey and as president of the Triborough Bridge & Tunnel Authority. As city administrator of the District of Columbia in the 1980s, Downs oversaw the restoration of Union Station.

From 2003 to 2008, Downs was CEO of the Eno Transportation Foundation, a forum for the discussion of emerging issues and policies in all fields of transportation. Prior to that, he directed the National Center for Smart Growth Education and Research at the University of Maryland.

“Tom brings a powerful combination of strategic depth, integrity and a proven record of successful leadership in rail to Veolia Transportation,” said Mark Joseph, CEO of Veolia Transportation. “The experience he has gained in leading several of the most respected entities in the rail industry will be a tremendous asset to our rapidly growing rail business and to our clients.”

“I am very pleased to be joining Veolia Transportation as I believe they have the competence, capacity for innovation and values that will assure their continued leadership in the industry,” said Downs. “As the company continues to grow over the next 10 years, we will bring groundbreaking advances in commuter and high-speed rail service to cities and transit authorities in North America. Veolia Transportation is committed to setting the standard in safe and sustainable mobility solutions through genuine partnerships with clients and superb execution, and I share these commitments.”

About Veolia Transportation

Veolia Transportation is the largest private-sector operator of multiple modes of transit in North America, including bus, rail, paratransit, shuttle, sedan and taxi services. The company has over 17,000 employees and operates some 150 contracts in multiple modes of transit for cities in North America. The company operates several major commuter rail networks in the U.S., including Boston, San Diego, Austin, Los Angeles and Miami and is an integrated manager and operator, providing a range of rail services to clients.

Veolia Transportation is part of Veolia Transport, the world’s largest private operator of multiple modes of public transit, including bus, rail, paratransit, shuttle, ferry and taxi services. Veolia Transport operates contracts for 5,000 city transit authorities in 27 countries, and transports 2.5 billion passengers per year. The Company operates some of the most sophisticated rail systems in the world in Australia, Germany, The Netherlands, and the UK.

For more information, visit www.veoliatransportation.com

[End quote]

[Begin quote]

Veolia Transportation Names COO of Its Rail Division

CHICAGO – July 20, 2009 – Veolia Transportation announced today that Donald Saunders has been named chief operating officer of the company’s Rail Division. Saunders, who joins Veolia Transportation from Amtrak, will report to Executive Vice President – Rail Ron Hartman and work with the rail management team to advance Veolia Transportation as the largest provider of contracted rail services in the United States.

Saunders joins a management team committed to setting the standard for passenger rail operations in North America. As COO, he will focus on day-to-day operations and operational execution to ensure that Veolia Transportation is continually exceeding the expectations of passengers and clients. He will also participate in the company’s strategic planning efforts.

“Don has extensive experience in many parts of the passenger rail industry and an excellent track record,” said Hartman. While working at Amtrak in the Central Region, Don dramatically improved the operational performance of the trains he managed, including the operation of 60 daily intercity trains and dispatching of 300 Chicago commuter trains.

“Veolia Transportation has a global reputation for being an innovative company that cares about the safety and well-being of customers and employees,” said Saunders. “I look forward to helping them achieve their mission of being best in class through strong partnerships and commitments to clients and employees.”

Prior to joining Veolia Transportation, Saunders had a long career in various executive positions at Amtrak. Most recently, he was assistant vice president of the west region for policy and development. His key responsibilities in this role included business development, including developing and implementing plans for stimulus-related projects, and for new future service possibilities. He successfully negotiated contracts with the Departments of Transportation in three western states.

About Veolia Transportation

Veolia Transportation is the largest private sector operator of multiple modes of transit in North America, including bus, rail, paratransit, shuttle, sedan and taxi services. The company has a workforce of over 20,000 people and operates over 200 transportation contracts in 22 states and two Canadian Provinces. The company manages and operates transportation services in leading U.S. cities, including Las Vegas, San Diego, Phoenix, Denver, Baltimore, Atlanta, San Francisco and Los Angeles, as well as several major rail networks, including Boston, San Diego, Los Angeles, Miami and Austin. (www.veolia-transport.com/en)

Veolia Transportation is part of Veolia Transport, the world’s largest private operator of multiple modes of transit, including bus, rail, paratransit, shuttle, ferry and taxi services. Veolia Transport operates contracts for 5,000 city transit authorities in 28 countries, and completes 2.63 billion passenger trips per year. (www.veolia-transport.com/en/)

[End quote]

Ron Hartman, Veolia’s Executive Vice President here in North America has been putting together a blockbuster team of transit and passenger railroaders. Adding Tom Downs is a plum for Veolia (After all, transit is what Mr. Downs does best; not intercity passenger rail.) when dealing with various state governors and city mayors, plus an assortment of other politicians.

Good railroaders like Don Saunders add huge strength to the company.

Ron Hartman is a well-respected former Amtrak executive, with excellent private experience, too. He is earnest and hard working, and he is not someone to be taken lightly; he knows his business.

Now, go back and reread the last two paragraphs of both press releases. French company Veolia is a huge, powerful worldwide player in every field it enters, including transit and passenger rail. This is a company with a lot of clout, a boatload of money, huge political muscle, and an executive cadre not to be messed with. If you don’t believe everything you read in those last two paragraphs of the press releases, visit the company’s web site. You’ll be convinced these people are important – and highly relevant.

Look to the future. Here’s Veolia with all of this money, all of this talent, all of this experience. What if someone wanted to start a regional rail operation ... who better than Veolia to run it? As a private, for-profit company, Veolia is automatically much leaner and more focused than Amtrak, and has a work ethic far, far different from Amtrak, especially after what we have seen in last week’s Gulf Coast Report. What if Veolia had produced that report? Do you think the conclusions would have been the same? No, they would have been radically different, with a dozen different ways to make that service work, instead of three examples and all of the reasons why the service can’t work. (Ron Hartman alone would have made sure of that, even without the other new guys.)

Every city, town, and hamlet in America is clamoring for high speed rail. A puny $8 billion to be distributed this year goes against so far over $100 billion in requests by states. Everything is up for grabs. Even Amtrak? Well, possibly so.

What if Veolia gets in the operations door for high speed rail? There is no mandate for Amtrak to have those contracts automatically. (Indeed, the Gulf Coast Report makes a huge argument for Amtrak to be pushed as far away as possible from those contracts.)

So, think outside the box, because that’s what everyone but Amtrak is trying to do today. Let’s say Veolia (or one of its competitors other than Amtrak) gets one or two high speed routes to operate. Well, to make the contract complete, how about putting some of the existing connecting long distance or regional or short distance Amtrak routes into that contract, to make a nice, efficient, connected bundle? A couple of votes from Congress and that could happen. Amtrak may currently have a monopoly on passenger rail in this country, but it does not have a monopoly on political clout.

Imagine for a moment you’re a planning executive at one of the major freight railroads. We just saw earlier this month Norfolk Southern’s CEO is willing to talk about passenger rail. If one is talking about it, mostly likely others at competing railroads are, too. Suppose you see an opportunity in passenger rail, but your passenger department has been long gone for nearly four decades. Where do you go to find and populate a new passenger department?

Why go anywhere further than Veolia? Don’t hire individual passenger department employees, just sign a contract with Veolia to handle the whole thing for you. No muss, no fuss, and you’ve got instant professionals handling things to your specifications. If things don’t work out, well, don’t renew the contract, and don’t worry about having to get rid of a huge pool of employees. They all belong to Veolia, not you.

Ron Hartman’s Veolia has become the 800 pound gorilla in the room when it comes to transit and regional passenger rail. The desire is there, the financial muscle is there, the deep bench of talent is there, the vision (Amtrak, are you paying attention?) is there. Veolia through its normal lines of business wants to grow and expand, not contract or merely maintain, as Amtrak is, because it is always depending on someone else’s good graces or funding and does not have the will to accept normal growth.

If you were Amtrak and you had a lick of sense, would you be looking over your corporate shoulder?

5) Oh, and look at the date. Five months from today is Christmas Day!



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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