This Week at Amtrak; October 30, 2009

This Week at Amtrak; October 30, 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 45

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) Here is the latest press release from Crown corporation VIA Rail Canada, Amtrak’s cold weather cousin in the Great Northland. Read, absorb, and learn.

[Begin quote]

VIA Rail Canada to boost famed transcontinental train's accessibility and appeal

MONTREAL, Oct. 30 /PRNewswire/ - VIA Rail Canada today announced a $19.5 million program for the reconfiguration of 12 of the stylish stainless steel passenger cars used on its western transcontinental train, the Canadian, to increase its accessibility and market appeal. The work is being funded from the $407 million allocated for passenger rail improvements under the Government of Canada's Economic Action Plan.

"It gives me great pleasure to announce the complete redesign and rebuilding of these cars," said VIA President and Chief Executive Officer, Paul Cote. The contract for the rebuilding of VIA's eight Chateau sleeping cars and four Park sleeper-dome-lounge cars has been awarded to Avalon Rail, Inc., of Milwaukee, Wisconsin. Avalon Rail specializes in remanufacturing passenger rolling stock of all types. The company will use various Canadian engineering, design and supply firms for a portion of the project. The cars will be delivered in 2011.

Mr. Cote added, "Avalon Rail was selected for this demanding work through a competitive bidding process based on numerous factors. These included price, craftsmanship, a detailed knowledge of the equipment to be rebuilt and on-time completion of previous projects."

"We are honoured to undertake this work for VIA," said June Garland, president of Avalon Rail. "The Canadian is a living legend, offering thousands of travellers from around the world the ultimate in safe, stylish and sustainable rail travel every year for more than a half-century. I can think of no better showcase for the skills of Avalon's dedicated craftspeople."

The work involved in the modernization and major upgrading of this classic rolling stock is extensive. The eight Chateau sleeping cars will be reconfigured with an all-new arrangement of six upscale cabins designed to accommodate up to three passengers each.

Each sleeping cabin will be completely self-contained and will include an en-suite washroom plus a separate shower. The new cabins will also feature wood paneling, sofa seating, a widescreen television and controls to enable passengers to raise or lower the beds whenever they desire. This elegant new design has been selected to enable VIA's Canadian to attract the growing clientele for more upscale travel experiences.

This program will also substantially increase the train's accessibility for travellers with special needs. The four existing Park car bedrooms will be replaced by two large upscale cabins. One will be identical to those in the rebuilt Chateau sleeping cars. The other will be an extra-large, fully-accessible cabin. It will provide separate, fully-accessible washroom and shower facilities. Each Park car will also feature an onboard wheelchair lift.

About Avalon Rail, Inc.

Based in Milwaukee, Wisconsin, Avalon Rail is renowned for the excellence of its highly-specialized remanufacturing of vintage and contemporary passenger rail rolling stock. The firm's skilled craftspeople have extensive experience in renewing the sturdy and durable equipment produced from the 1930s to the 1980s by the Budd Company, the originator of stainless steel passenger rail cars.

About VIA Rail Canada

As Canada's national rail passenger service, VIA Rail Canada's mandate is to provide efficient, environmentally sustainable and cost-effective passenger transportation, both in Canada's business corridor and in remote and rural regions of the country. Every week, VIA operates 503 intercity, transcontinental and regional trains linking 450 communities across its 12,500-kilometre route network. The demand for VIA services is growing as travellers increasingly turn to train travel as a safe, hassle-free and environmentally responsible alternative to congested roads and airports.

VIA's Stainless Steel Fleet Backgrounder

The 174 cars in VIA's stainless steel fleet were primarily built for Canadian Pacific (CP) in 1954-1955 by the Budd Company of Philadelphia, the world's leading manufacturer of stainless steel rolling stock. These elegant and robust cars were used to create CP's Canadian, the last all-new train of the Art Moderne-influenced Streamlined Era. VIA bought this distinctive and durable rolling stock when it took over the operation of the former CP services in 1978.

Between 1990 and 1993, VIA completely rebuilt the CP cars, as well as some additional Budd equipment acquired from the U.S. [Editor’s note: This equipment came from Amtrak equipment which was deemed surplus.] The cars were stripped to their shells and fully remanufactured for greater efficiency and passenger comfort at a fraction of the cost of new and unproven equipment. New interiors and a head end power (HEP) system were installed to eliminate the obsolete steam and battery-generator systems that previously provided lighting, heating and air conditioning.

This $200 million project not only renewed the cars for another 15-20 years of productive service on the Canadian and other long-haul and remote trains, but reduced operating costs by more than $20 million annually. A subsequent HEP 2 program applied the same modernization techniques and systems to 33 Budd stainless steel cars for use in the Quebec-Windsor Corridor.

As far back as the 1950s, Budd proudly proclaimed that not one piece of its rolling stock had ever been retired because it had worn out. More than half-a-century later, VIA's HEP 1 and 2 fleets reinforce that accurate. SOURCE VIA RAIL CANADA INC.

[End quote]

2) Sadly, VIA Rail Canada has time and again in these modern times been labeled “Canada’s worst run company.” Even sadder, this smaller and feistier company than Amtrak, which operates far fewer trains, with a much smaller equipment pool, and hundreds of millions of dollars less of free Canadian federal monies, constantly out bests Amtrak when it comes to the professionalism of onboard personnel, clever and widespread marketing, the overall maintenance of equipment, and the desire to succeed.

3) VIA is taking Chateau sleeping cars and brilliantly refurbishing them to provide drawing rooms for three passengers. This delightful throwback to the 1960s and before provides two lower berths in one room, without having to purchase two separate bedrooms and opening them en suite. A third bed, as an upper bunk, is provided, as well. One private toilet and one sink (along with a new shower) fill out the room’s amenities. Note the wood paneling being added, too. It’s notable Amtrak has no drawing rooms in its inventory, even though full bedrooms in all trains always sell out before roomettes.

The remake of the rear end observation dome Park cars to accommodate passengers in wheelchairs and with other challenges speaks volumes for VIA; they understand the upscale and senior citizen market, and are strategically placing themselves to take full advantage of the piles of cash accumulated for long trains such as The Canadian heavily laden with sleeping cars and appropriate accompanying amenities, with less emphasis placed on lower revenue producing coaches.

Amtrak needs to pay attention to this move by VIA Rail Canada, as it will once again be trailblazing a new standard in sleeping car travel.

4) While we’re in the neighborhood, let’s take a look at some of the many opportunities the bureaucrats who populate Amtrak’s executive cadre through the years have flushed down the drain.

These same Budd Company cars VIA is bragging have never gone out of style were once a part of Amtrak’s Heritage fleet, too. When the late Henry Christie made the famous “A” and “B” cars lists of which equipment Amtrak would keep and upgrade from the myriad of fleets it inherited from the private railroads, almost 100% of the equipment retained was Budd-built. The excellent equipment built in the same generations by Pullman Standard was – alas – built using carbon steel instead of the longer-lasting aluminum and stainless steel used by Budd, and, as a result, many of those excellent and exciting cars merely rusted away internally, becoming non-roadworthy and non-useful to Amtrak.

The Budd fleet, which numbered in the hundreds of cars, included crew dorms, sleeping cars of various configurations (including all-bedroom cars on the Auto Train which had drawing rooms), diners, lounges, and coaches.

Through the years, Amtrak’s disdain for this equipment – as opposed to the correct attitude of VIA Rail Canada – grew, and the equipment was sidelined as quickly as possible, with excuses such as no new replacement parts were available and had to be individually machined, and the cars were “too worn out” to have a useful future. (Tell that to the Canadians, and they will look at you like you’re too much in love with winter weather.)

So, even though the Heritage Budd fleet had millions of reliable miles on each car, and all of the fleet had been expensively upgraded to head end power systems for hotel power and air conditioning and heat, the cars were stripped away from Amtrak’s fleet roster, unloved and unwanted.

Many of those cars today and in the hands of railroad equipment brokers, waiting to be loved and used, again.

In addition to the hundreds of single level Heritage Budd fleet cars, also cast away by Amtrak were over 60 of the original Santa Fe Hi-Level cars, which were the basis for the successful development of today’s Superliner fleet. Less than 10 of these cars remain in Amtrak’s fleet, most notably as the Pacific Parlour cars on the Coast Starlight, and some coaches used on the Heartland Flyer stub end train.

The original Pennsylvania Railroad Metroliner cars from the 1960s, numbering in the dozens, sat for years in yards, and, while a few were placed in service for other purposes, almost all of the equipment was scrapped where it sat, gorily cut up and sent to scrap metal dealers.

The Rohr Turboliner sets of equipment (entire trainsets, such as today’s Acela and Talgo trainsets) are another example of equipment summarily discarded by Amtrak, even after the State of New York paid to have three trainsets rehabilitated for use between Albany and New York City, and a then-chief executive officer of the New York DOT by the name of Joseph Boardman (Today’s Amtrak Interim President and Chief Executive Officer) raised cane because Amtrak appeared to be hiding the unused trainsets outside of New York State and refusing to use them for the purpose New York State paid huge money for rehabilitation of the equipment.

5) The question must be asked: Why is Amtrak so quick to discard solid, reliable equipment which other railroads cherish and brag about, resulting in shorter consists, less revenue passenger miles, and overall less income? Why is VIA happy to brag this equipment constitutes a vital core of its company, and cheerfully says rehabilitating this equipment is saving the company tens of millions of dollars, while Amtrak only sees inconvenience and headaches?

Perhaps the answer is VIA has truly been on the brink before, and has a much more precarious political situation under a parliamentary system of government than our system here in the Unites States. It only takes five members of Parliament (The Prime Minister’s version of our presidential cabinet.) to make a decision to do anything to VIA Rail Canada it pleases, including putting it up for sale, as is currently being discussed in Canada.

Amtrak has much more political protection in Congress than VIA has in Parliament, and, perhaps, Amtrak feels since it always has a steady stream of free federal monies coming its way each year, it doesn’t have to be as clever as VIA Rail Canada and constantly prove its chops.

What a pity. The folks running VIA Rail Canada can certainly teach the folks running Amtrak a few things about the best use of resources and making a silk purse out of what Amtrak considers a sow’s ear. Necessity is the mother of invention. Amtrak needs more necessity, not more coddling.

6) As always, the This Week at Amtrak electronic mailbox has something interesting lurking about. Here is a missive about the last issue of TWA featuring the untangling of Amtrak math by Andrew Selden.

[Begin quote]

Another excellent issue. It goes into great detail pointing out exactly what is wrong with the numbers that Amtrak distributes to support its internal policies. In a sane environment, the data would determine policy, rather than the opposite. Unfortunately Amtrak is not really accountable to any agency that can force it to meet the goal of an effective national passenger rail system (and probably there is little consensus of rail advocates on what such a goal really means, much less public agreement on that even being a legitimate goal).

Looking back over the history of passenger rail service in the U.S., it is very unfortunate that the kinds of analyses you present were not available when many railroads filed data with state and federal regulatory agencies to justify their “train off” petitions. I see a great deal of similarity between Amtrak’s actions today and many railroad’s activities 50 years ago. Just as Amtrak selects and creates data to justify its desires, those railroads that wanted all their passenger trains to be eliminated did the same, no matter whether they were profitable, made a positive addition to their cash flow, or not. Some didn’t find out until it was too late that they were better off when they still operated passenger trains. The “fact” that passenger service was an anathema to the operation of a profitable corporation became the accepted paradigm of the day to many railroad executives, who in turn were very headstrong and surrounded themselves only with “yes men.” Too few opponents of that policy, both in regulatory agencies or as members of the general public, had the time and resources to interpret the data presented by the railroads or to question its accuracy in order to counter the misleading conclusions that the railroads created. There were some exceptions, but the individuals who fought for retention of profitable or break-even rail service in the public interest were eventually worn down, driven from their jobs, or left them for better opportunity.

If only URPA were around then.

[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

This Week at Amtrak; October 22, 2009

This Week at Amtrak; October 22, 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 44

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) Well. A lot has been happening in the two weeks since the last This Week at Amtrak was published. Before we get into some specifics, we first need to hear what Minnesota Association of Rail Passengers and United Rail Passenger Alliance Vice President of Law and Policy Andrew Selden has to say on the current state of Amtrak.

[Begin quote]

By Andrew C. Selden

Amtrak blinds itself, in its endless posturing to fool its bankers in Congress, by measuring its performance by numbers that do not really matter, while ignoring or burying numbers that do matter. As a result, it makes decisions, including strategically important allocations of precious investment capital, on the basis of fundamentally misleading data.

The most glaring example is Amtrak's endless blathering about "ridership." Ridership is only a measure of a sale transaction. It does not differentiate among the size of the sales. One "rider" from New Haven to Boston is, by this yardstick, exactly equal to one rider from Washington, D.C. to Boston, or even Los Angeles to Boston. Amtrak makes this worse by blurring useful sales data (ticket prices) into averages by which they measure (actually, it's just arithmetic, not really "measuring" anything) "yield," which is the average revenue per passenger mile on a train or route. This tends to reinforce the false belief any one passenger is pretty much the same as any other.

In an urban transit system where every passenger pays the same fare, that might be okay.

But on Amtrak, where a typical "corridor" customer might pay $10 to $30, but a family in a sleeper to the west coast could be paying $1,000 or more, these "riders" are decidedly unequal. Fifty of the former are less than two of the latter. But Amtrak is obsessively focused on "ridership."

A yardstick Amtrak tries to hide, and apparently never uses to make important resource allocation decisions, is load factor. Load factor is the percentage of your inventory you are able to sell. Airlines live and breathe load factor.

Load factor is available seat miles (total inventory) divided by revenue passenger miles (seat-miles sold to paying passengers).

Load factor ("LF") matters greatly. Among other things it is a perfect measure of capital efficiency, and where a business is over-invested vs. under-invested. It is an indirect measure of opportunity cost. A trend analysis of LF is a tell-tale for a growing or a dying business.

It indicates whether an operation has achieved an efficiency of scale, or needs to ramp up, or down, its application of capital assets to achieve an efficiency of scale. The NEC's low load factors show Amtrak is already over-invested there: it offers much more inventory than it can sell for $30, or even give away. Long distance trains, with high load factors, show where Amtrak is under-invested, turning away potential $1,000 customers by the hundreds.

Simple "ridership," without consideration of load factor, is classic "Amtrak accounting" that disregards the cost and utilization of capital. If you have a rich uncle who doesn't care, or a politically-oriented appropriations committee that has other objectives, or a gullible state agency that doesn't seem to get it (a la Oklahoma and the Heartland Flyer), then one can disregard capital costs, load factor, and utilization. Ready access to "free" capital (but always with a heavy political and opportunity cost) obscures that.

Suppose a train or route has a LF of 40% (NEC average is about 40%). Suppose the LF is static, or even growing slowly. Is that a good thing? Or does that suggest the capital – represented here by the rolling stock, the overheads and even the relationship and rent costs with the host railroad – might be better applied elsewhere?

In other words: Can those trainsets produce, or earn, even more someplace else?

Real world, actual example: take a standard KFC restaurant with 72 seats grossing a million a year, and is often "full" (i.e., has a very high LF). It is a cash cow. The owner is happy. His banker is happy. But an investment banker focused on returns on capital (i.e., making money by maximizing output) will say, "Bulldoze this obsolete, underperforming asset. Get rid of it. It is a parasite. It is an obstacle to growth and profit. In its place, build a new, larger KFC with 150 seats and a bigger kitchen and a drive-through, that is physically capable of growing into a TWO or even three million a year store." And if the KFC instead were a lightly-used 40-seater that was doing $500,000 a year and showing no real growth, even if it were steadily profitable at that level, any rational analysis would conclude the store should be closed outright, and maybe re-located across town by the Wal-Mart, or out by the interstate. LF as well as cash flow, market share, and earnings are all part of the constant analysis that should be done of any commercial activity.

Amtrak NEVER does that. Amtrak instead fools itself and fools its bankers in Congress and its client state governments with phony-baloney data about transaction volumes ("ridership") and other irrelevancies.

ITEM: Amtrak's net loss last year was UP from the year before, for the umpteenth year in a row, even after all the subsidy and the deferred maintenance and the shrunken fleet and all the other voodoo accounting. That is why Amtrak is still a sinking ship, and why Interim President and CEO Joe Boardman, just like his several predecessors, is no different from Captain Edward Smith of the White Star Line. And trains like the Harrisburg – Philadelphia locals, or Acela, or the Heartland Flyer, with their low load factor, whatever the ridership, are just like that tiny scrape in the hull that eventually worked its disproportionate magic on the fortunes of the RMS Titanic.

[End quote]

2) Amtrak issued another route renewal report, and issued a final report on a second route.

The Pioneer route report, which was commented on previously in this space, was issued in a final form with no real changes in how Amtrak perceives to put this train between Denver and Seattle back into service at extremely high costs and a too long lead time, despite questioning from two United States Senators along the route, Senator Crapo of Idaho, and Senator Wyden of Oregon.

The new report issued was for restoration of the North Coast Hiawatha (Originally, the North Coast Limited, pre-Amtrak.) over the original Northern Pacific Railroad tracks. This route will parallel the Empire Builder route, but make a more southerly trip. Pre-Amtrak, the Empire Builder and the North Coast Limited were strong rivals between Chicago and Seattle, and both routes have breath-taking mountain scenery. The North Coast Hiawatha was one of the trains massacred by the route cuts of the Carter Administration.

Amtrak wants – yes, we’re not kidding – over one billion dollars to restore this route, with the bulk of the money going to track upgrades. After the Burlington, Northern Pacific, and Great Northern railroads were all folded into one company (which eventually became BNSF when the Santa Fe was added to the mix), the Northern Pacific route was considered redundant to the Great Northern (Empire Builder) route, and was downgraded. Part of the route in Montana was sold to a short line operator, too.

All of that aside, Amtrak has come out with ridiculously high figures for route restoration, including an amazing $330,000,000 just for six trainset of new equipment, including locomotives. This works out to an astounding $4,500,000 per piece of equipment, which is not only impossible to justify, but incredible anyone could present this figure with a straight face. Additionally, Amtrak demands millions and millions of dollars for crew training, as it has done in previous reports.

This analysis of the North Coast Hiawatha landed in the This Week at Amtrak mailbox.

[Begin quote]

Amtrak North Coast Hiawatha Report Reflects Apathy and Atrophy; Fails to Answer Many Questions

By Joseph D. Henchman

October 17, 2009

Introduction

On October 16, 2009, Amtrak published the North Coast Hiawatha Passenger Rail Study as required by the Passenger Rail Investment and Improvement Act of 2008 (PRIIA). That law required Amtrak to produce a report within one year of October 16, 2008 examining the feasibility of restoring passenger rail service between Chicago and Seattle via the former Northern Pacific mainline in Southern Montana.

Confronted with a political environment favorable to the expansion of its services, the report suggests an institution whose marketing and innovative instincts have atrophied. The report’s tone reflects a determination to drag out the timeline and extract as many subsidies as possible rather than seriously consider how a successful passenger rail service in the study area can be implemented.

Below are specific areas the report is insufficient or raises serious concerns.

Amtrak penalizes the study train for diverted passengers from other trains, but does not credit it for passengers fed to other trains.

Amtrak’s report penalizes the ticket revenue of the North Coast Hiawatha by $8 million because Amtrak estimates the train will divert passengers from the Empire Builder, a heavily-patronized Amtrak train (693 passengers each train in FY 2009 through July) that also operates daily between Seattle and Chicago. Amtrak goes so far as to say that the diverted revenue will “increase Amtrak’s direct operating loss.”

This analysis is incomplete for two reasons. First, the Empire Builder is often sold out for being over capacity, so an additional train may have the net impact of freeing up space on that train to be sold to others, wiping out any revenue loss. Second, and more importantly, Amtrak does not estimate additional revenue for other trains from the addition of the North Coast Hiawatha (or if they do, they don’t report it). Few Amtrak long-distance passengers ride end-to-end, with many taking shorter trips often involving transfers to other trains. On the west end is the Seattle-Portland Cascade train as well as the long-distance Coast Starlight to California. On the east end are services to St. Louis, New Orleans, Washington, Boston, New York, and Michigan. Added service into and out of Seattle and Chicago will result in additional revenues for all of these trains. If Amtrak “penalizes” the North Coast Hiawatha for “diverting” passenger revenue from trains, it should also “credit” the North Coast Hiawatha for “feeding” passenger revenue to other trains.

One approach Amtrak did not take would be to estimate system-wide revenues and expenses from the addition of the North Coast Hiawatha. This would give a true picture of the actual incremental cost of service expansion. Amtrak is also studying the expansion of services in several other routes, and is producing piecemeal reports on financial impacts, one-by-one. As Amtrak adds trains and frequencies, the additional options stimulate demand beyond that of one-train-on-one-corridor. A comprehensive approach of these proposals would be necessary for informed decision-making.

Amtrak Inexplicably Buries Its Conclusion that the Train Will Cost Its Operating Costs

There are two types of costs associated with running trains. One are relatively fixed costs that do not vary with the number of trains (system reservations and website, management costs, station costs), and the other are costs that vary with the number of trains (crew costs, fuel, payments to host railroads, and to some extent equipment maintenance). Amtrak’s estimate of North Coast Hiawatha operations, put in these terms, is as follows:

Passenger Related Revenue (not including $8 million revenue penalty for diversions from Empire Builder) – $51,000,000

Variable Expense: Fuel – $7,400,000

Variable Expense: Train Crew Labor – $13,000,000

Variable Expense: On-Board Services Labor – $14,700,000

Variable Expense: Mechanical – $11,900,000

Total Variable Expenses – $47,000,000

Net, Variable Expenses – +$3,000,000

Non-Variable: Station & System Expenses – $27,100,000

Total, All Expenses – $74,100,000

Total Net, All Expenses – ($24,100,000)

Farebox Recovery, Variable Expenses Only – 108.5%

Farebox Recovery, All Expenses (Amtrak reduces the farebox recovery by 10 percentage points by excluding the diverted revenue to the Empire Builder) – 68.8%

Amtrak’s long-distance service requires subsidies to cover its operating shortfalls [Based on Amtrak accounting methods]. Few if any recover 68.8% of their costs for all expenses, or actually break even on variable expenses, as Amtrak estimates here. Why Amtrak buries this information is inexplicable. One possibility would be that acknowledging Amtrak will run a train with a rather positive financial performance undermines its argument that massive subsidies are required to operate it.

Note: Amtrak does not clarify whether its estimate of system and route costs are the amounts that will be assigned to the North Coast Hiawatha or whether they are incremental costs of adding the train. For example, assume (using made-up numbers) Amtrak spends $100,000 a year operating the existing station at Fargo, North Dakota (which the North Coast Hiawatha would stop at), and $5 million a year running its existing national reservation system. Assume also Amtrak’s cost estimates in the report include line-items of $50,000 for the Fargo station and $200,000 for system reservations (they don’t; those items are not broken out). Does that mean Amtrak is spending an additional $250,000 when the North Coast Hiawatha is launched, or rather the North Coast Hiawatha will be assigned $250,000 of existing costs?

If the latter, it is relevant information, but its inclusion warps the decision-making process. Among Amtrak’s costs of operating the North Coast Hiawatha would be costs Amtrak is already incurring, and will incur whether the route is launched or not. To use economics terms, a decision-maker would be erroneously looking at average cost instead of marginal cost.

If it is the former, Amtrak needs to justify the $27 million in route and system expenses beyond merely saying they are “other direct expenses.” The amount reflects a third of the expenses associated with running the train, and while not suspect on its face, it does raise questions. Why does Amtrak’s report not include a technical appendix itemizing the costs it has estimated?

Amtrak Provides Just One Option: A Single, Slow, Short Train over the Entire Route

Unlike here, Amtrak’s past studies have often included a series of operating options. The recent Pioneer Service Study looked at several different alignments, the Sunset Limited Service Study looked at different service options, and the Ohio Service Study looked at different frequency options. Here, however, Amtrak provides no option other than one single, slow, short train. Given Amtrak’s own ridership and cost estimates, this is indefensible. It also allows Amtrak to demand higher subsidies than would be required to operate the North Coast Hiawatha.

The report recommends the establishment of one round trip a day along the 2,300 mile route on a 49 hour schedule, for an average speed of 47 M.P.H. (The North Coast Limited in 1956 managed 46.5 hours, so Amtrak proposes a train slower than one run 50 years ago.). The train would consist of locomotives, a baggage car, a crew car, two sleeping cars, three coaches, a dining car, and a lounge. Since each sleeping car has a maximum capacity of 49 and each coach has a maximum capacity of 74, that would mean a total train capacity of 320.

On page 28, Amtrak estimates even this slow, single train will result in 359,800 passengers a year, or 492 per train. On the face of it, this suggests the train will fill 153% of its capacity. Of course, few passengers will ride end-to-end, resulting in turnover en route. It would be useful to know Amtrak’s estimate of passenger-miles or load factor, but the report does not provide those numbers. Even if each seat turns over once per trip, the load factor would still be 76% (which would make airlines envious).

Amtrak’s report handicaps itself by limiting the train’s capacity. Many of a train’s expenses are fixed (engineer and conductor costs, for instance) or grow only minimally (fuel and service attendant costs, for instance) with additional cars. In the past, American passenger trains have operated with 16 to 22 cars (Today, in Canada, the Canadian transcontinental often operates with 22 cars in high season). The only serious limiting factor on train lengths are station platform lengths and locomotive power (itself limited based on the route’s curves and grades) and the ability to transmit hotel power from the locomotive to the rest of the train; usually 18 cars in the United States is the maximum train length because of this. Amtrak provides no information on why it limits the North Coast Hiawatha to nine cars (with only five being revenue cars) other than it lacks the imagination to try for more.

Since Amtrak’s proposed train already has locomotives, a baggage car, a crew car, dining car, and lounge, any additional cars would be revenue cars generating sleeping or coach ticket revenue. A 14-car train, for instance, would double the North Coast Hiawatha’s capacity, potentially doubling its revenue and most certainly not doubling its costs. Given Amtrak’s ridership estimates, such a capacity expansion would be justifiable. Amtrak does not investigate this option.

Amtrak also does not investigate the option of greater frequencies or runs over segments of the route (aside from noting that Washington State would not object to running trains to Minneapolis instead of all the way to Chicago). As Amtrak has discovered with service in California and Illinois, additional trains each day can reduce subsidies because (1) added frequencies can mean equipment spends less time idle at each end and (2) added frequencies can increase revenue from additional riders taking advantage of more options. A second frequency 12-hours off of the proposed schedule would be a natural consideration, as would additional day-train frequencies between segments of the route. It is unfortunate Amtrak looks at additional frequencies not as expanding passengers options and thus revenue, but rather as something to be penalized for “cannibalizing” passengers and revenue from existing trains.

Most transportation providers offer travelers options. One of Amtrak’s largest weaknesses is many of its trains run only once per day, resulting in equipment sitting idle for 6-18 hours at each end and passengers giving up if they cannot work with Amtrak’s one timetable option. Twice the trains can in many cases result in more than twice as many passengers. Fixed route costs, such as station operating costs (here estimated to be $27.1 million), can also be spread over more trains. As noted above, Amtrak estimates that the train’s operation itself, exclusive of system and route costs, will break even.

Amtrak Does Not Investigate Marketing Options

Amtrak’s report also provides no discussion of service options or marketing opportunities. The report mentions the North Coast Hiawatha’s Livingstone station is not far from Yellowstone National Park, but does not enlighten the reader as to whether Amtrak will capitalize on that beyond leaving passengers at Livingstone. (In the past, the Northern Pacific Railroad ran shuttle trains and later shuttle buses to the park.) The private Grand Canyon Railway in Arizona offers four different accommodation options, including a basic coach seat option. The higher-priced options include snacks, entertainment, and Grand Canyon National Park admission. In Europe, the CityNightLine overnight train service offers several different accommodation options, with higher-priced options including welcome wine or beer, an array of magazines, and breakfast on arrival. Other Amtrak trains have included parlor lounges, observation cars, children’s playrooms, quiet cars, wine tastings, and enroute tour guides. Other ideas could include on-board treadmills or weight equipment, video arcades, taverns or bars, or gift shops. Amtrak’s report shows no creative thinking with regard to providing services to passengers, an important aspect of its operation.

This is particularly indefensible in that Amtrak requires the purchase of brand-new railcars to launch the service, and estimates it will take 4-5 years to begin operations after funding becomes available. If Amtrak needs five years and new trainsets to provide exactly what it has provided for years on other routes, it is not thinking sufficiently creatively.

Amtrak’s report also provides no discussion of joint marketing opportunities for other popular attractions along the route, including the Mall of America in Minneapolis; historic tourist attractions in Butte, Montana (a larger town which Amtrak inexplicably writes off without bothering to estimate the costs of serving it despite rails existing and being on the train’s route, even though it reports that public and Montana Department of Transportation comments strongly favored studying operating service via Butte) and Bozeman, Montana; airports; and small-town communities currently without rail service in Washington State.

Conclusion

Throughout the report and its actions in recent history, Amtrak views its role as merely common-carrier transportation handling passengers when they show up. Instead, Amtrak should push itself to figure out how it can develop a market, providing a travel experience. Doing so will improve the bottom line for the company and for taxpayers, but requires shaking Amtrak out of its apathy and atrophy.

Questions Unanswered by Amtrak In Its Report

1. What is Amtrak’s estimate of the load factor for the North Coast Hiawatha, and how many passenger-miles will it generate?

2. What are the system-wide and marginal revenues and costs associated with launching the North Coast Hiawatha, including additional revenues to other trains from its operation?

3. How many of the cost items within Amtrak’s estimated $74.1 million in estimated North Coast Hiawatha operating expenses will be incurred whether or not the train route is launched?

4. What are the revenue and costs associated with other operating options, such as a longer train of 14-22 cars, or additional frequencies?

5. What additional level of capital investment would be required to raise average operating speed to 55 M.P.H. (42 hour schedule), 65 M.P.H. (36 hour schedule), or 75 M.P.H. (31 hour schedule)?

6. Given that Amtrak will be purchasing new equipment for these trains, what innovative ideas will Amtrak explore for the equipment?

7. What marketing opportunities will Amtrak explore for the operation of the trains, to maximize passenger travel experience and develop the market?

8. What are the costs associated with operating via Butte, Montana?

9. How would a system-wide expansion of train lengths and frequencies for long-distance trains change the operating performance of this route?

10. Why does Amtrak estimate so many people will ride the North Coast Hiawatha, relative to other long-distance trains?

About the Author

Joseph Henchman lives in Arlington, Virginia, and is interested in transportation economics and rail planning. He works as an attorney and policy analyst with a non-profit think tank in Washington, D.C., but this report is not associated with that organization. His email address is jdhenchman [at] yahoo.com.

[End quote]

3) Amtrak has now issued four reports since the end of the summer. First, the Sunset Limited – East of New Orleans/Gulf Coast report (Amtrak doesn’t want to run the service); the Ohio 3-C report for restored service between Cleveland, Columbus, and Cincinnati (Amtrak doesn’t want to run the service), the Pioneer report for restored service between Denver and Seattle (Amtrak doesn’t want to run the service), and, finally, the North Coast Hiawatha restored service report (Amtrak doesn’t want to run that service, either).

When you add up Amtrak’s estimates to restart these four routes, it’s over $2,000,000,000 (that’s two billion dollars, if you don’t want to count zeros).

In reality, if Amtrak really wanted to do any of these projects, the estimates are probably high by at least 40%, if not a full 50%. But, when you’re a planner for a quasi-governmental agency and you’re accustomed to spending someone else’s money (That would be money which belongs to you, the taxpayer.), costs don’t really matter. What matters is convenience and lots of bells and whistles (No pun intended.). Amtrak’s dream world dictates all new equipment, extravagant stations where smaller ones will do, crew training costs which are incomprehensible to any railroad professional, and a gold-plating of railroad infrastructure “just in case” the railroads want their entire right-of-way wish lists fulfilled at someone else’s expense.

All of this leads to the inescapable, sad conclusion that until Amtrak has a new management team which has any inkling of a vision for the future which includes new passenger car orders, a business plan based on reality instead of only raiding government treasuries, or without fantasies of ignoring the conventional passenger rail business because of the glamour of an incorrect assumption Amtrak will be the exclusive high speed rail operator (there’s a thought to give you nightmares for a week), restored long routes such as the North Coast Hiawatha may not be the best plan.

As presented, Amtrak’s four route restoration plans are a prescription for disaster.

The Gulf Coast report laments Amtrak went to all of the trouble of studying multiple scenarios, and settled on four, all of which Amtrak has priced too high. The reality of the Gulf Coast report is if Amtrak simply extends the City of New Orleans from New Orleans to Orlando, Amtrak will instantly reestablish a Chicago-Florida train, restore service on the Gulf Coast, and have a powerhouse operation for the cost of one extra trainset for the City of New Orleans (due to current too long equipment layovers in New Orleans) and the cost of Positive Train Control installation on the CSX line between New Orleans and Jacksonville.

The Pioneer report wants to set up a separate operation for the Pioneer between Denver and Seattle, with through-cars on the back of the California Zephyr between Chicago and Denver. Amtrak never considered the huge benefit of running a second frequency in the form of the Pioneer between Chicago and Denver, apparently because it would be too much trouble, no matter how much of a financial gain would be found.

The Ohio report wants to set up a pretty good service, but with a lousy end point in Cincinnati so the service will not connect withe the Cardinal; Amtrak continues its reckless policy of not often enough offering connecting trains just in case some passengers may want to travel on more than one route to reach a final destination.

None of the reports take into account the matrix effect of connectivity, more travel choices, or more stations served. Amtrak can only see costs, instead of benefits.

Little of Amtrak’s work reflects it was created by anyone with real concepts of passenger service, what’s overall best for passengers, or what posture best serves Amtrak – and, our country – financially.

For right now, until some of this changes, Amtrak may best serve itself and all of us by making some logical, small steps which will strengthen the company financially. Things like Kansas City-Omaha, Oklahoma City-Kansas City, Peoria-St. Louis, Savannah-Jacksonville, or Barstow-Bakersfield (/San Jose). Maybe think about Harrisburg-Newark via the Lehigh Valley.

Even easier would be to add truly new Superliner capacity to the existing long distance trains, to start to capture many of those $1,000 tickets Amtrak is losing now because the sleepers are full at various peak load points.

For those hoping for restoration of routes which never should have went away, this fall is truly a season of discontent. Amtrak seems to have gone out of its way to make things as difficult as possible for any returning trains, yet its chairman of the board and some senior executives are making presentations around the country about how Amtrak is the perfect organization to be the exclusive high speed rail operator for new services in America.

Until Amtrak gets its house in order and demonstrates it has some – any! – vision, no one (even government bureaucrats) are going to be foolish enough to anoint Amtrak as the high speed rail operator.

4) Last Saturday, October 17, 2009, a determined band of people met together here in Jacksonville, Florida. The group named itself the Sunset Marketing and Revitalization Team, and has been meeting for over a year now at various locations along the former transcontinental route of the Sunset, prior to its unceremonious loss of the east end of the route beyond New Orleans due to Hurricane Katrina in 2005.

John Sita, Jr. of New Orleans is chairman of the SMART group, and Jerry Sullivan of Jacksonville was the gracious host of the meeting.

The meeting lasted three hours, and the SMART members represented a number of states along the route, both east and west of New Orleans. One SMART member from Louisiana made an all-rail trip from his home to the meeting. To cover the roughly 600 miles from New Orleans to Jacksonville without the Sunset, he rode first to Washington via Birmingham, Atlanta, and Charlotte on the Crescent for a full day and a night, and then took the Silver Star from Washington for the afternoon and overnight trip to Jacksonville. Whew! Talk about dedication ...

Without getting into the various discussions and deliberations the group had, what is notable is the very need for the existence of this group. This group has no formal sponsorship, and is completely self-funded. These people banded together because they feel their quasi-governmental national passenger rail carrier has failed in its duty and obligations to restart the Sunset Limited east of New Orleans, and has constantly failed during the entire existence of Amtrak to make the Sunset Limited a daily train between Los Angeles and New Orleans (And Orlando when the train ran its full route.).

In the real, non-Amtrak world, this group should never have been necessary. If Amtrak had the compunction to live up to its mandate as a national rail carrier, there would be no discussion about the gaping hole in Amtrak’s route map between New Orleans and Jacksonville. An entire region of the country is disenfranchised for passenger rail service because Amtrak isn’t clever enough to figure out how to make the Sunset a success.

So, a group whose membership is more than 50 souls is working together to take the place of a taxpayer funded organization’s planning department to figure out how to make the Sunset Limited viable. Amtrak should be terribly embarrassed.

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This Week at Amtrak; October 9, 2009

This Week at Amtrak; October 9, 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 43

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) If you are an airline, which pays landing and takeoff fees, plus user fees at every airport, plus user fees for the federal and international air traffic control systems, you make the most money operating long haul flights, preferably international long haul flights. As an airline, you stuff as many passengers as will fit in a tiny, tiny space known as “coach” class, and you make sure everyone knows you’re giving them peanuts, allegedly because so many people are allergic to peanuts and they don’t know it. You sell these people their “meals” and drinks, and hope many passengers purchase alcoholic beverages because you make a fortune from them, but – at the same time – don’t want any particular passenger to purchase too much and become drunk and disorderly.

Up front in the aircraft, you have first class and business class passengers, who willingly pay huge extra dollars for larger seats, better food (which is included in the price of the ticket), and a higher level of service. On the long, profitable, overnight international flights, if you are a foreign flag carrier, you now provide something of a cocoon for seating, which has all sorts of technological gadgets and a slightly heightened sense of privacy as the space converts to what allegedly passes for sleeping space.

You operate some short haul flights to feed your profitable long distance flights, but, in as many cases as possible, you take advantage of smaller, more efficient commuter airlines to feed your long haul flights. Sometimes these feeder airlines operate under your name using your reservations system, and sometimes they operate under their own names. Either way, the more expensive, short flights feed your true money-making long haul flights.

If you are a cruise line, which pays docking fees every time your ships are connected to land in any way, plus government inspection fees, plus all sorts of other interesting, yet, arcane taxes no one knows about, you have several classes of passengers on your huge ships, most of which host over 2,000 passengers per sailing.

Way down below the water line, next to the engine room, you have “economy” class interior “staterooms” (really, large closets with bath facilities and no windows) which provide cruise passengers with a place to sleep, bathe, and change clothes. You do provide these passengers with at least four major meals a day (including the always popular midnight buffet), and several small meals a day, all included in the price of your ticket. These same passengers are highly encouraged throughout the days at sea to purchase expensive alcoholic beverages, gamble in the onboard casino, shop in the gift shops, and pay lots of money for shore excursions.

The higher you go on the ship, the more expensive the accommodations, the more money the cruise line makes, and the more affluent passengers through very high fares for cabins with balconies, subsidize the passengers traveling in interior cabins next to the engine room way down in the bowels of the ship.

And, then, there is Amtrak, which is determined to never understand any of the economics of passenger travel, and do things as expensively as possible, with the lowest possible return on investment, and the least ability to create an enterprise which can support itself. Just like the airlines and the cruise lines, Amtrak pays a user fee to its host railroads for use of tracks and dispatching; in fact, this fee is so small and so below market, it’s almost a crime the host railroads don’t make a better return on their investment for their privately owned infrastructure, which Amtrak uses for next to nothing.

Amtrak runs 15 long distance routes throughout the country, and feeds those routes with 26 short distance routes. The 15 long distance route generate 2,609,387,000 revenue passenger miles, and the 25 short distance routes in comparison generate only 1,754,039,000 revenue passenger miles.

Here is what Amtrak brags about, but really doesn’t matter. The long distance routes carried 4,170,300 separate passengers, and the short distance routes carried 13,605,800 passengers. Wow! Amtrak will tell you; look at how wonderful we are because we carried all of those people.

Who cares? The average length of trip of a long distance passenger was 625.7 miles, and for short distance passengers it was only 128.9 miles. Which passenger would you rather have? The long distance passengers coughed up total revenues of $416,284,100, while the many more short distance passengers spent $362,294,100. Whoopee.

Amtrak’s short distance trains would be fine if there was enough capacity and enough long distance routes to carry more passengers. But, as we have seen in the recent reports issued by Amtrak for restoration of long distance service east of New Orleans and for the Pioneer route, Amtrak has little – if any at all – enthusiasm for long distance trains.

To back this up, one only has to look at Amtrak’s business plan. Whoops! We can’t do that, because Amtrak doesn’t have a business plan; it only has an indication it is more interested in taking money from states for short distance trains than for expanding the long distance network.

Amtrak’s short distance trains – little more than a series of Greyhound busses on steel wheels hooked together – are expensive to operate, and, as we see above, don’t generate nearly the transportation output of the long distance trains. But, Amtrak loves body counts, so it likes to brag how many individuals step onto an Amtrak train. This, of course, doesn’t matter, because 1,000 passengers only traveling 10 miles doesn’t mean nearly as much as 100 passengers traveling 150 miles each. Any rational manager will always take the 100 passengers traveling 150 miles because you get a much better return on investment and actually accomplish more good. Moving 1,000 passengers 10 miles is a job for transit or commuter services, not intercity rail passenger trains. It was all of the freight railroads’ big city and regional commuter services – such as those of the Pennsylvania Railroad, New Haven Railroad, Chicago Northwestern, and many others – which ultimately led to the downfall of private passenger service, because by federal regulation the railroads had to run those trains (at huge losses) and the dwindling long distance trains trying to compete with the new glamour of jet aircraft and new, four lane Interstate highways with Holiday Inns could not cross-subsidize the commuter services.

If Amtrak had not been created, and at the same time the Staggers Act had deregulated the railroads as it did a decade after the creation of Amtrak, and the railroads could have found a way to shed their expensive branch line passenger milk runs and various commuter services, there is more than half a chance private passenger rail would not only have survived, but eventually flourished as it has the opportunity to do so today.

Had Amtrak not been created and the railroads deregulated, there probably would still be a healthy rail passenger car building business in this country, a much stronger national network of long distance trunk line trains, and CSX would be running stainless steel silver trains in and out of Florida and Union Pacific would be running armor yellow trains with red striping in and out of California. Had deregulation happened in the Nixon Administration instead of the Carter Administration, it’s quite possible the railroad corporate map would be very different today, because many of the mergers which took place merely for corporate survival may have been put off, or never have occurred if deregulation had happened and the free market place had acted a decade or more earlier.

But, well, today we do have Amtrak, a company which doesn’t seem to want to bestir itself for much more other than its annual begfest for funding on Capitol Hill for more and more free federal monies.

Everybody but Amtrak seems to realize the Obama Administration has handed Amtrak the biggest challenge of its corporate life by saying, “okay, you whined about money for decades, so, here it is. What are you going to do with it?” Amtrak’s answer so far is, “not much.”

Perhaps Amtrak’s apathy is because it seems to be a company at war with itself. It has an interim president and chief executive officer who refuses to speak with the news media. It has a general counsel who seems to think Amtrak – and, herself – are pretty much above the law. It has an interim inspector general who is totally unqualified to hold the position. It has a chief operating officer who is obviously loyal to the guy who hired him – two Amtrak presidents ago (three if you count one other short term interim who was forced out, too).

We know there are a number of good people at Amtrak; we’ve named many of them in this space before. These are senior managers who show up for work everyday, and try to throw off the various shackles which are hung around them on a routine basis and create something worth bragging about. But, these same good people run into incredible roadblocks and bureaucracies which close ranks together and block any type of meaningful change. If you want to fire any of these particular bureaucrats putting up the roadblocks, you’re blocked from that, too, because of what can only be mildly referred to as the “good old boy network.”

What to do?

A new board of directors is forming. The White House announced two appointments to the board this week, and there are still two vacancies to fill. We have a new FRA administrator who serves on the board, too, and whenever a permanent Amtrak president is named, he/she will also be a board member.

It’s time to clean house. Give some of these good people at the top of Amtrak who want to do better the ability to do that. Get rid of the deadwood, and all of the folks with the old allegiances, and replace them with a new, dedicated team that wants to succeed, not merely survive until retirement. Give somebody – and Amtrak – a fighting chance.

If Amtrak keeps going much long the way it is going today, the bankruptcy of New York City back in the Ford Administration is going to look like a romp in the park. Amtrak is also headed down the nearly identical path of the inglorious Penn Central Railroad, which, at the time, created the Enron financial disaster of its day in the last half of the 20^th Century. The only way Penn Central eventually was saved and turned into a profitable Conrail was to get rid of so many of its internal antagonists and start with a fresh group of people. Amtrak needs to do that right now, before it becomes as helpless as Penn Central did so many years ago.

2) As promised, and promised, here’s William Lindley of Scottsdale, Arizona.

[Begin quote]

By William Lindley

Let's look at one scenario for creating the full matrix of passenger trains in the United States.

Please understand, the continuation of much of the existing "long distance" train network is helpful, but not required, for this scenario. A single daily train handing a handful of passengers at each station is very close to an irrelevancy compared to the volumes the eventual network will create.

We begin with perhaps a half-dozen local turnkey train operators. Each of these would be, at the beginning, in a fairly sizable region of the country and attached to a single Class I railroad, acting as a single point of contact between the railroad and the governmental agencies for all services.

The local trains act as the catalyst to bring cities and towns, large and small, on board with modern passenger rail. Providing local service gives direct benefit to monies spent rebuilding local stations, upgrading rights of way, eliminating grade crossings, and generally providing the "terminal services" that the later express and limited trains will require. The goal with the first phase is to begin laying groundwork so that, as in Europe, when a train leaves the station it can accelerate directly to full speed without creaking through miles of ancient switchwork.

Once these local trains have built political support through an expanding ridership base, express services will be added on longer routes, between the major cities... gradually connecting the matrix of local trains. Then the limited trains, on much longer routes, will be upgraded and dramatically expanded from whatever "long distance" trains still exist.

Looking at the beginning phase – Each turnkey local train operator would follow steps like these:

First, line up an equipment manufacturer – Bombardier, Talgo, or US Railcar which is planning to start building on the former Colorado Railcar's DMU production plans.

Second, bring aboard an insurance company which is willing to work with the railroads. Then, select one of the Class I railroads – and only one – to start with. It is this single railroad with whom you will be a single point of contact. Indeed, it might be beneficial to have a five-year exclusive agreement that "all commuter and short-distance passenger services" on their lines be provided through such a single point of contact.

Finally, and only after these are all at least tentatively aligned, go to the states, counties, and municipalities all along the one carrier's lines. Each region will have different needs – from sidings and double-track, to restoration of missing segments, to grade crossing and station issues; but every city will be getting a uniform and well-understood arrangement. In short, this sort of turnkey operation benefits both the railroads and the cities.

The basic plan for the turnkey local operator in each region is to start with two trainsets, offering three or four daily round-trips. Service will provided not just into destination downtowns, but, to the suburbs on either side, and to most every town of any size along the route. These are true basic transportation, local trains. And they will act as feeders – the base matrix – to the express and limited train networks which will follow.

Generally these first trains will run on routes of between 150 and 200 miles, either centered on one large city or between two cities, with one-way times of about three to four hours, and about a dozen stations. Each trainset will operate about sixteen to eighteen hours a day, maximizing return on investment while permitting sufficient time for servicing.

Let's look at two examples.

In the Tampa, Florida, metro area, two trainsets could provide four daily round-trips. The first train from St. Petersburg could leave at 6:30 A.M., arriving Tampa at 8:05 and Sarasota at 9:45; the first train from Sarasota leaving at 6:30, arriving Tampa at 7:55 and St. Pete at 9:45. The first three trains would leave each terminus every four hours on a "memory schedule" with the exception that the 2:30 P.M. trains, which both would arrive Tampa at about 4 P.M., would wait there an hour until a little after 5 P.M. for the evening rush; then the last trains would depart each terminus at 7:30 P.M. Each train would stop at Pinellas Park, Largo, Clearwater, Oldsmar, Carrollwood, and Sulphur Springs west of Tampa, and Gibsonton, Apollo Beach, Ruskin, Palmetto, and Bradenton on the way to Sarasota. Total population of these is over 950,000. Today's Silver Star calls at Tampa at 12:34 P.M. southbound and 2:17 P.M. northbound, and these local trains would provide excellent connections in all directions.

In Georgia, Atlanta and Macon are less than a hundred miles apart, so four or five daily round-trips should easily be made with two trainsets. Indeed the initial local route should at least connect Warner-Robins, south of Macon, with some of the suburbs beyond Atlanta. Atlanta is an excellent connection point, if a train station at the Five Points MARTA subway stop can be constructed – MARTA acting as the local feeder. These local trains would then serve commuters as well as all-day regional travel. Later, express service to Chattanooga to Savannah would overlay these local trains, followed by a further overlay of limited-stop service from Chicago via Indianapolis and Louisville to Florida.

Similar opportunities exist all across the country. Duluth to Minneapolis. Green Bay to Milwaukee. Anywhere there are cities under 150 miles apart is a prime candidate for comprehensive local train service.

Again, first we bring the states, counties, and cities on board with three or five daily trains that serve not just commuters, but, tourists and residents all day long. Much needs doing to upgrade the existing tracks, signals, and bridges to accommodate relatively fast passenger trains along with today's freight trains; much needs doing to restore stations, station tracks, and re-integrate the passenger train facilities with today's bus, streetcar and subway networks.

The improvements made possible by the local trains is what makes the later express and limited trains work smoothly. By building ridership and political support, all is possible.

[End quote]

3) Found on the internal United Rail Passenger Alliance Intranet:

[Begin quote]

When your doctor works for the folks who created Amtrak:

– Office hours are from 2:10 A.M. to 2:25 A.M., Sundays, Wednesdays, and Fridays.

– He knows the more patients he sees, the more money he loses.

– You'll have to ride an hour on a bus to the middle of nowhere, because the downtown location was closed "to save money."

– Everything takes longer than it did in 1951, and the furniture looks it.

[End quote]

4) And, this missive from a TWA reader.

[Begin quote]

Hello, once again, URPA,

I'm glad that others share my view on letting other companies operate long-distance routes in this country. Even though a lot of people in the rail community are (deservedly) excited about the aspect of high speed rail coming to their states, they should also remember competition also applies to the long-distance trains as well, and pressure needs to be kept on Amtrak. After reading some of the more recent TWA articles, it's obvious to me certain people in Amtrak's management need a wake-up call (Whether it's by losing out on the majority of the HSR corridors, or by watching some of its long-distance routes return to the freight railroads, something big needs to happen to shake them up.). After all, the poorly handled Sunset Limited report, a failure to drastically upgrade the overnight fleet, and demanding states to pay for long-distance routes have all happened on their watch.

Division B, Title II, Section 214 of the Passenger Rail Investment and Improvement Act of 2008 says:

(a) In General – Within 1 year after the date of enactment of the Passenger Rail Investment and Improvement Act of 2008, the Federal Railroad Administration shall complete a rulemaking proceeding to develop a pilot program that –

`(1) permits a rail carrier or rail carriers that own infrastructure over which Amtrak operates a passenger rail service route described in subparagraph (B), (C), or (D) of section 24102(5) or in section 24702 to petition the Administration to be considered as a passenger rail service provider over that route in lieu of Amtrak for a period not to exceed 5 years after the date of enactment of the Passenger Rail Investment and Improvement Act of 2008

Now, with all the talk about whether Amtrak is really disinterested in operating long-distance trains in the long-term, why don't some of the friendlier host railroads contemplate bidding for some of the overnight routes? Pullman may be gone, but the hosts could talk to a manufacturer like the revived Colorado Rail Car company about acquiring some real dining cars and sleepers.

At last year's Railway Age conference, railroad author Frank Wilner advocated returning intercity passenger trains to the freight companies because he thought “a sound business model” would win over anti-Amtrak politicians in Congress (Source: January 2009 Railfan & Railroads). While it sounds tempting, I’m not sure all passenger routes can be returned to the host railroads. Instead, I propose the hosts talk to the likes of Herzog, First Group America, and some of the foreign bidders for HSR and get them to run the trains. I would definitely like to see routes like the Crescent and Silver Star be supplemented with daytime counterparts so I don't have to go from the Carolinas to Atlanta or Florida in the middle of the night.

The hosts would work out a three or four-way partnership with each other and the new entity operating the route (for example, a daily Sunset Limited could have an agreement with BNSF, CSX, Union Pacific, and First Group America) as a way of avoiding the problem of changing trains. Meanwhile, BNSF could run the Southwest Chief by itself and add routes and branches like a spur to Phoenix (a similar situation would apply to Norfolk Southern with the Crescent).

One more thing, the Auto Train concept could be added to other markets by the host railroads (after all, those empty auto racks currently seen on freight trains could be very useful). It may not have been feasible to have a Midwest-Florida Auto Train route 26 years ago, but if gas ever returns to September 2008 levels, it would be more than practical for the Auto Train concept to be extended to other parts of the country.

– Anonymous

P.S. Based on the discussion in the URPA Intranet group during the Labor Day weekend, states like Florida should contact Veolia or any of the companies which fail to get HSR bids to operate conventional speed routes as a precursor to high speed service.

[End quote]

5) More reader mail.

[Begin quote]

Mr. Richardson,

This latest Pioneer (a splendid route serving "rich pickings" territory, lots of greens, etc) issue reminds us that Amtrak sees itself not in the passenger service business at all, but, as a candid porter once told me, as a "jobs program." Sad to say, that's the kind of people you have "managing" it, though "managing" is probably the wrong word. "Showing up at the office to get the benefits and the pension" is more like it.

Pity a private operator can't pick this one off.

Always value reading your (depressing) reports.

[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