United Rail Passenger Alliance

Amtrak’s big opportunity is now; is Amtrak ready?

It’s 2009, and Amtrak is raking in the cash. Not from the fare box, but from the federal government. Even though Amtrak accounts for less than one percent of America’s transportation market share, it often is the second highest subsidized mode of transportation.

The current administration is Washington is looking favorably on Amtrak, and ready to send lots of cash. Will Amtrak know how to properly spend this money for the greatest public good?

Does Amtrak have an equipment purchase plan for new passenger cars and new locomotives?

Does Amtrak have infrastructure plans for its many terminals and stations outside of the Northeast Corridor?

Does Amtrak have a viable business plan that includes the creation of adequate passenger service in all of the Lower 48 states?

Amtrak has an under-populated board of directors, an interim president and chief executive officer, and a cadre of executives which are accustomed to not being held accountable for their actions.

It’s going to be an interesting year in 2009.

You may depend on United Rail Passenger Alliance to be a leader in developing viable passenger rail policy for America.

Stay informed, because there is going to be a mad scramble between those who believe in the unacceptable status quo, and those who believe in growth concepts for passenger rail. There won’t be a dull moment.

Andrew Selden’s vision for the future of Amtrak and high speed rail in America

Where does/where should Amtrak figure into the development of high speed rail? The automatic answer is it should figure prominently. The realistic answer is, Amtrak, after being the monopoly passenger rail carrier in the United States since 1971, for nearly 40 years, still has not proven it is worthy of the tax dollars which are poured into it year after year.

This brings us to “the vision thing” as the first President George H.W. Bush used to say at the end of the 1980s.

As it stands today, Amtrak and its management lack vision. Amtrak may corporately lust after the pot of money which is being thrown at the development of high speed rail, but it really has not proven itself worthy of the privilege of directing the spending of that money.

Here is what Andrew Selden has to say as a vision for the immediate and long-term future of Amtrak.

A. Amtrak must become relevant.

Its contribution to national mobility today does not justify its cost. The national network is too small – it goes to too few places and interconnects too few city pairs (e.g., it doesn’t go to Las Vegas, Nevada or Columbus, Ohio, and one cannot get from Dallas to Denver or Dallas to Orlando). Even in what its own supporters characterize as its strongest market, the Northeast Corridor, its market share of intercity trips is less than 1%, at a public cost of about three-quarters of a billion dollars a year. Even in the NEC, a complete shut-down would be all but imperceptible as all of its customers (except in the New York-Philadelphia sub-market) could be easily absorbed into existing road and airway capacity.

B. Amtrak must grow.

No business, or social service, succeeds by stagnating. Amtrak’s share of the national intercity travel business has shrunk steadily for three decades. Its carrying capacity has shrunk steadily for two decades. The newest Superliner rail car is more than 10 years old and the average age of the intercity fleet is far older than the cars Amtrak inherited from the private railroads in 1971. At the same time, Boeing builds a new 737 airliner every day, and Airbus builds a new A320 every day. Southwest Airlines adds a dozen or more new aircraft to its fleet every year. Amtrak could not absorb real growth if it were to occur, except in regional corridor markets where even a doubling of transactions would not raise it to a 2% market share.

C. Amtrak must change its vision.

Amtrak views itself as a social service, like a transit agency or a sewer authority, and thus as a ward of government. It measures its performance by the metrics of a public agency, in simple transaction volume. The only function at which it truly excels is extracting money from public sector sponsors. This vision condemns Amtrak to always being irrelevant to the needs of the traveling public. Amtrak must adopt a vision of sustained growth, relevance and minimized dependence upon public agency financing in favor of dependency upon customer selection, of mode and route. Amtrak must position its services and its operational network such that it can become the mode of consumer preference for most intercity travel.

D. Amtrak needs a new business model.

Amtrak has pursued the same business model for its entire history, one based upon the supply-driven model of point-to-point short corridors between urban city-pairs, based on the High Speed Ground Transportation Act of 1966. That model has produced the current state of Amtrak:  irrelevancy to the traveling public and financial catastrophe. The model causes the results, the results do not occur despite the model. The new business model must be based on consumer demand, in applications that can be financially remunerative. The new model must focus on the metrics of output, not merely transaction volume, and growth, market share, and maximal return (in output and revenue) on invested capital. The model must create volume and efficiencies of scale on a national basis, by developing a true national network of regional and interregional routes that allow use of rail for most intercity travel demand, and inherently grow with demand and population growth. Capacity must be re-allocated to match consumer demand, and must grow to anticipate and accommodate growth in demand.

Here are some things we know to be true, and you won’t find this information anywhere else

• “No passenger rail system in the world operates without some type of subsidy, and it’s impossible for Amtrak to exist subsidy-free.” This is utterly false. Passenger rail systems in Japan, Germany, The Netherlands, and elsewhere all operate on a sound basis and report profits. Do your own research and discover how many passenger rail systems in the world actually do make money.
• According to the Bureau of Transportation Statistics’ latest report issued in 2009, Amtrak’s market share of intercity transportation is one tenth of one percent of the national transportation output. This includes all intercity travel, but does not include commuter travel. Amtrak is statistically irrelevant, but learned people know passenger rail travel is an important – and growing – part of our domestic transportation network, and has great potential with the right leadership and proper vision for the future.
• “Amtrak is chronically underfunded.” This also is utterly false. It’s not a matter of how much money Amtrak is given out of public treasuries, it’s a matter of how that money is spent, and what the results are of Amtrak’s business plan in operation. Amtrak’s current business plan revolves around the most expensive types of trains to operate – short distance corridor trains – with the lowest return on investment. Amtrak’s great cash cows are the full service long distance trains, all of which throw off excess cash from above the rail operations costs. Amtrak’s current business plan mostly ignores the transportation output potential of long distance trains and the good return on investment in these routes in favor of short distance corridor routes which constantly require public subsidy.
• “Amtrak receives an unfairly small amount of government subsidy; why can’t it receive equal amounts to what other modes of transportation receive year after year?” This is another false statement, mostly made by those with modal envy. In some years, according to the federal government, Amtrak’s annual federal subisdy is the second highest amount of subsidy paid by the government. The reason for this is other modes of transportation, such as roads and highway and the air traffic control system, are paid for by federal user taxes, such as gasoline taxes and fees charged to airlines which use the air traffic control system. The other modes of transportation do not have “a free lunch,” their subsidies are generated by users of each system, not just from general tax dollars.
• “Amtrak is doing the best that it can, given its circumstances.” We’ve heard this “the dog ate my homework” excuse for nearly four decades. No, Amtrak is not doing the best it can, because it is leaving so much money on the table, runs only an embarrassingly skeletal national system, and currently has no long range plan for new equipment. Too often, Amtrak has thrown up its corporate hands in surrender to any particular vexing situation because it is easier to constantly rely on a steady stream of federal and state funding than generating new revenues through increased passenger traffic.Amtrak’s real customers are not passengers, but federal and state bureaucrats and elected officials who hand out government subsidy dollars. In FY 2009, Amtrak will receive nearly twice in subsidy dollars more than it will take in from the sale of passenger tickets.
• “Amtrak is experiencing constantly growing ridership.” This is a true, but meaningless statement. All intercity common carriers measure success by load factor, not by the number of warm bodies hauled; an average load factor of 65% is considered a profitable operation. A combination of revenue passenger miles and load factor are true measures of success for passenger rail operators. In Fiscal Year 2008, Amtrak’s network of 15 long distance routes in the nati0nal system reported 2,609,387,000 revenue passenger miles, with an average length of trip of 625.7 miles per passenger, and a load factor of 59.7%. Every train traveling one train mile carried an average of 178.4 passengers per mile, and generated 15.95 cents of revenue per revenue passenger mile. The long distance trains generated $416,284,100 in revenue.Amtrak’s network of 26 short distance routes in the national system (including all corridor routes outside of the Northeast Corridor) reported 1,754,039,000 revenue passenger miles, with an average length of trip of 128.9 miles per passenger, and a load factor of 43.5%. Every train traveling one train mile carried an average of 125.9 passengers per mile, and generated 20.65 cents of revenue per revenue passenger mile. The short distance trains generated $362,294,100 in revenue.Amtrak’s Northeast corridor services, Acela and Northeast regional trains, operating between Newport News, Virginia and Boston, via Richmond, Washington, Baltimore, Wilmington, Philadelphia, New York, and New Haven reported 1,796,260,000 revenue passenger miles, with an average length of trip of 164.2 miles per passenger, and a load factor of 52.9%. Every train traveling one mile carried an average of 197.5 passengers peer mile, and generated 53.08 cents of revenue per revenue passenger mile. The NEC trains generated $953,429,500 in revenue.
• “The Northeast Corridor is the only part of Amtrak that actually makes money.” False, again. When you apply real world accounting to Amtrak’s books, and properly apply all of the costs of owning and operating the NEC infrastructure, the NEC trains (Acela and Northeast regionals) do not make money. Amtrak often assigns routine maintenance costs of the NEC incorrectly to capital expsense cost accounts, which skews the real financial burden of the NEC. Additionally, none of the commuter tenants of the NEC pay anything close to the real cost of their share of infrastructure maintenance costs. For decades, this has been a silent subsidy from the federal government to these various Northeast commuter agencies, allowing them to keep passenger fares unrealistically low because the commuter railroads pay far less than their proportionate share of infrastructure maintenance costs.

Amtrak often seems to ignore its original mission of being a national intercity passenger rail system, in favor of a concentration on the Northeast Corridor and other short distance corridors. Under a federalist system, taxpayers in Nebraska and Oklahoma have every right to expect passenger trains owned and operated by the federal government to be as statistically prevelant in their states as taxpayers do in the Northeast.

“Amtrak shall operate a national rail passenger transportation system which ties together existing and emergent regional rail passenger service and other intermodal passenger service.” — United States Code, Title 49, Subtitle V, Part C, Chapter 247, Section 24701.

While a number of states pay large annual subsidies for passenger rail service to Amtrak, New York State (Where Amtrak Interim President and CEO Joseph Boardman was head of the state Department of Transportation before moving to the federal government.), the beneficiary of dozens of daily trains on the Northeast Corridor, the operation of 20 long distance and short distance trains, and 22 Emprire Service daily short distance/commuter trains (with only a 35% load factor), only pays for one of those routes, the Adirondack between New York City and Montreal via Saratoga Springs. Pennsylvania, however, operates 28 daily Keystone Service trains between New York City and Philadelphia/Harrisburg and subsidizes each train. California operates dozens of corrdior and commuter trains through its Pacific Surfliner, San Joaquin, Capitol Corridor services, and pays to subsidize each train. Other states such as Illinois, Michigan, Wisconsin, Washington State, Oregon, North Carolina, and Virginia all pay for subsidized trains. Other states pay, too, while New York receieves mostly free service.

A primer for members of the news media on correct terms for passenger rail

The news media is writing more and more every day about passenger trains in all forms, and usually quickly displays its collective ignorance on proper terminology for all things regarding passenger trains.

Here is what the news media doesn’t know:

• There are four or more types of passenger trains, all with different uses and functions, even though to the untrained eye they look similar. Subways are trains which travel mostly underground, make frequent stops, and stay within metropolitan areas. Subways are populated by commuters, and are a part of transit systems. Light rail is another form of transit for commuters, with the same parameters as subways, but above ground. Commuter rail is usually above ground, and goes from suburbs to inner cities. Commuter trains often share train stations and terminals with Amtrak trains. The primary passengers on commuter trains are those going to and from work, or going from a bedroom community in a suburb to an inner city location. Rarely do commuter trains travel more than 75 or 100 miles in the most extreme cases. Short distance/regional passenger trains have longer routes than commuter trains, and are operated by Amtrak, which is the trade name for the NRPC, the National Railroad Passenger Corporation, a semi-public company which is controlled by the United States Department of Transportation and the Federal Railroad Administration. Short distance/regional/corridor passenger trains travel an average route of 300 miles or less, and usually operate only during daytime or evening hours before midnight. Long distance/intercity passenger trains travel long distances between cities and states, and are also operated by Amtrak. These trains usually have full service dining cars (restaurants), lounge cars (bars), coaches (cars with seating only), and sleeping cars which have private rooms with seats, beds, and private lavatories. Some short distance and most long distance trains also have baggage cars which carry excess baggage/luggage, and, in some cases, express shipments of small packages.
• Most commuter trains, short distance trains, and long distance trains all have locomotives and passenger cars. Some commuter trains have self-propelled passenger cars, with no separate locomotives. A locomotive, or engine, as it is commonly referred to, is not considered one of the cars of the train, because it is the motive power, not a trailing car being pulled by a locomotive.
• The people who operate trains all have separate and distinctive titles. The person who runs the locomotive, or “drives” the train is the locomotive engineer. An engineer is not called a “driver,” the same way you would not call an airline pilot a “driver” of an airplane. On trips of greater than four hours, a second person is in the cab of the locomotive along with the engineer, and this person is called the assistant engineer. The person who is in charge of the operation of the train, when it does or doesn’t move, and carries all legal authority, is the train’s conductor. There are also assistance conductors. The engineer takes instructions from the conductor. On freight trains, the conductor rides in the cab of the locomotive, but on a passenger train, the conductor rides in the passenger area of the train and communicates with the engineer via hand-held radio. There are also a number of onboard service employees working in various places on each train. Coaches have car or coach attendants, which assist passenger boarding or leaving the train (entraining or detraining), and in some instances provide at-seat service. Sleeping cars have sleeping car attendants which assist passengers in every way, from making beds to providing room service to handling luggage. In dining cars, there is a chef, and a dining car steward who is in charge of the diner. There are also dining car service attendants, which is another names for wait staff. Lounge cars have lounge service attendants (bartenders).
• Local passenger train stations are manned by station agents (the person in charge), ticket agents, and baggage handlers. In some Amtrak stations, there is no full-time staff, and part-time station caretakers open and lock the station facility before trains arrive and after trains depart. These people do not handle money or sell tickets.
• When a train hits a car or truck where a road or highway crosses a railroad track (the train, by federal law, ALWAYS exclusively has the right of way), that is called a grade crossing accident. These accidents, which can be fatal for automobile and truck drivers and passengers, usually do little damage to the locomotive or rest of the train, unless the train hits a large truck such as a dump truck or 18-wheel truck. In those instances, the impact of the train hitting such a solid object can cause the train to jump the track, which is called a derailment.
• The speed of each train is dictated by a combinati0n of factors as set by federal law. State and local jurisdictions have no control over the speed of any train at any time. A combination of the condition of the track a train is running on, to what standard that track is maintained, and surrounding environmental conditions dictate how fast a passenger or freight train may travel. As an example, a passenger train running through rural areas or closely protected track may operate as fast as 79 miles per hour (90 miles per hour with certain track safety systems installed), but that same train operating through an urban area or down the middle of a street in a small town may be restricted to 20 miles per hour or less.
• Currently in the United States, there are conventional speed passenger trains (up to 79 mph), and there are higher speed trains which operate on Amtrak’s Northeast Corridor between Washington, D.C., New York City, and Boston. On a small section of track between New York and Boston, Amtrak’s Acela trains operate at speeds up to 150 mph, but just briefly. Most of the time trains on Amtrak’s Northeast Corridor operate at speeds of less than 100 mph.
• The new high speed trains which the Obama Administration is hoping to put into place in coming years will operate at average speeds up to 150 mph, but many of these trains will first operate at speeds of 90 mph to 110 mph. The difference between the proposed high speed trains and advanced conventional passenger trains is current conventi0nal trains share tracks with slower and longer freight trains (which in the United States are not called “cargo” or “goods” trains, but freight trains). The proposed high speed trains will have dedicated tracks, and, in some instances dedicated rights of way (the entire track structure) for exclusive use. This is a safety issue, because all trains, whether short commuter trains or longer intercity trains, cannot “stop on a dime,” but take yards and yards of tracks to stop. Longer, heavier freight trains often take even longer to stop, sometimes measured in miles.
• The international standard for high speed passenger trains is 150 mph or faster, sometimes up to 250 mph. There are no trains in the United States or Canada which operate at these speeds.
• If you have any questions about proper phraseology when writing about passenger trains, please do not hesitate to contact URPA at the contact information on this web site. We will be delighted to assist you to write clearer, and more factual stories about passenger trains.

A review of 2007: Amtrak continues long slide into irrelevance and financial picture worsens under President and CEO Alex Kummant

By Andrew Selden

Amtrak under CEO Alex Kummant is continuing its long slide into irrelevance. Amtrak’s market share (including in the NEC) dropped again. Kummant led the Company to an increased annual loss in 2007. On $165 million increase in ticket revenues, and $110 million increase in total revenues, Kummant produced a $53 million increase in the net loss and a whopping $280 million increase in total loss on the year, of $1.338 billion on total revenue of $2.15 billion. $180 million in increased labor costs from forced labor settlements were a major factor in the results, but expenses surged in every major category except casualty claims. The Annual Report, published months late (by SEC standards), called this “… a good year.”

The Annual Report, almost devoid of critical and relevant metrics of segment performance such as load factor, return on investment, and output in passenger miles, is a depressing celebration of Amtrak’s squandering of hundreds of millions of dollars of free federal subsidies on its absolutely least productive and most grossly over-served markets. Amtrak’s total revenues were higher in 1998 than in 2007, although “passenger ticket” revenues did reach a new record last year. Its operating ratio, at 1.48, has not improved in ten years.

What has improved is federal support. Amtrak’s subsidies during the Bush administration have averaged about $1.2 billion a year, fully 50% more than during the Clinton years. (Discounted for inflation, the growth in subsidy has not been that great in “real” terms.) But judging from the financial results reported for 2007, that money has not been prudently or effectively invested. Management’s entire focus has been on its least productive services, the short distance regional corridors.

URPA’s 2005 white paper, Concepts of the Successful Long Distance Passenger Train of the Future has been updated

One of Amtrak’s bankers, Senator Dick Durbin, has introduced a bill in the United States Senate to provide Amtrak with $2.8 billion in bonds to refurbish existing rolling stock and build new passenger equipment.

If this bill becomes law, it is essential Amtrak use this opportunity to properly equip its fleet with the best selection of equipment which will meet passenger demand and generate the highest amount of revenue possible.

Here is the link for the full .pdf presentation.

concepts-of-the-successful-passenger-train-of-the-future-2008

URPA Background and information

Travel by passenger train in North America is an essential part of our domestic transportation network.

As every mode of transportation has its strengths, so, too, does passenger rail. Passenger trains work well for long, medium, and short distances of travel, both on a national and regional basis.

Regional passenger trains, transit systems, and national network passenger trains should not be in competition with each other for regional or federal funding or focus. Passenger rail travel should be guided by a national policy that meets the needs of all Americans in all parts of the country. Passenger rail travel in Arizona is equally important as passenger rail travel in Delaware, and it is a way to travel that serves customers from every economic and educational strata.

Because passenger rail travel has viable and unique benefits that cannot be found elsewhere in our domestic transportation network, there must be a resurgence in passenger train travel in our nation. This is a proven technology that is over a century and a half old, is economical, environmentally friendly, and has a firm infrastructure in place.

Passenger trains are just now entering a new Golden Age of Rail Travel. Not for over half of a century have so many opportunities for good, reliable passenger train service been available now, or within grasp in the near future.

The only requirement for a new Golden Age of Rail Travel to spring forth is a new pioneer with the vision, foresight, and strong leadership resources to pull together all of the necessary elements.

The United Rail Passenger Alliance is dedicated to the viability of a new Golden Age of Rail Travel. You are invited to investigate our plans and join us in the attainable quest for more trains to more places more often in a robust and viable national passenger rail network.

From Today to Tomorrow

There was a time, not too long ago, when railroads made money on passenger trains… both long-distance and short-distance.

How did this work? Passengers are fundamentally just like freight: The long hauls are where the money is made; the short hauls are done for customer convenience and as feeders, and paid for by the profits from the long hauls.

The Eisenhower Interstate Highway System and the sucker punch of the Boeing 707 jet airliner, coming in quick succession in the 1950s and 1960s, were too much for the railroads of their day. The railroads were insufficiently glamorous and not fast enough for a society suddenly hooked on speed, the race for Space, and rockets to the moon.

And while taxpayer-funded airports and highways began to cover the nation, government taxation and regulation of the railroads strangled every effort to revive passenger trains, and even freight trains. Entrenched railroad management and unions seemed more interested in fighting each other than doing much about their failing industry. The result was a massive wave of railroad bankruptcies and abandonments through the 1970s, with passenger trains being an early near-fatality.

It is perhaps a testament to the innate efficiencies of the steel wheel on steel rails that freight trains revived in the 1980s. The Staggers Rail Act of 1980, by initiating deregulation of the railroads, was a watershed that led to positive corporate attitudes. Today, the chief problem facing the large railroads is a lack of capacity to handle their existing and growing traffic. The seeds of a poor-to-nonexistent national transportation policy in the 1950s grew into the rail abandonments that have given flower to the problems of the railroads today.

And now, finally the tables have turned for passenger rail as well; it is once again viable. It’s just that America’s sole provider of passenger rail is not viable. It is stuck with a corporate mindset and junk-science business plan that dooms it, like the freight railroads of the 1960s, to financial ruin.

This is where we stand now. This website and our weekly newsletter explain how passenger rail can get unstuck.