This Week in Amtrak

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This Week at Amtrak; January 5, 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 1

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

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

1) Welcome to the sixth year of This Week at Amtrak. Thanks for being a TWA reader, and thanks to all who took the time and kindness last year to write with thoughts, suggestions, other opinions, and questions.

From the beginning, TWA has worked hard to be a different voice about the business of passenger rail in North America. For too long, true debate about passenger rail has been shouted down by those who have blindly followed the Amtrak path as gospel, and who haven’t bothered to think outside of the proverbial box to create a new and better world of passenger rail centered on success rather than the constant false propping up of failure. Detractors of TWA seem to be terrified someone in a position to do something act on the suggestions made here.

TWA is not for the faint of heart, and has never intended to be another cheerleader for the failures of Amtrak. TWA is a mix of news, facts, proposals and opinions not found elsewhere based on common sense, solid principles of self-reliance, a knowledge of railroading, and a belief entrepreneurs and capitalism are always a better alternative than government, and, when government intervention or financing may be necessary, the less the better.

Many, over these past six years have taken exception to those beliefs as espoused through TWA. That’s fine, because then honest debate can occur. During the past decade we have seen Amtrak and passenger rail move from a partisan-Democrat issue to a non-partisan issue where people of all political beliefs have come to better understand the many advantages of a truly diverse domestic transportation network which encompasses more than air and automobile travel.

We have also, through a series of events and the unfortunate dying off of The Greatest Generation, seen a renewed interest in passenger rail by those who never witnessed the last two decades of private passenger rail travel and the ignoble replacement of the passenger train by the Boeing 707 as the preferred choice of the long distance traveler.

We have also witnessed a long-standing debate about modal envy, with passenger rail fans constantly whining about the unfairness of massive government subsidies to airlines in the form of government-owned airports and the air traffic control system and government-built and maintained highways for busses and automobiles.

This silly argument has fed fuel to the fire that passenger rail MUST be government subsidized, and has swept honest debate away from how passenger rail – which once was subsidy free, but had large Post Office and REA Express contracts – can again be subsidy free, even without the Post Office and REA Express. Too many people have blindly accepted arguments without truly thinking about the big picture, and have been more than willing to happily spend someone else’s money in the form of government subsidies instead of doing real work and being as close to as possible – or completely – self-sustaining.

Just because something exists – especially if it is the only "something" existing – doesn’t mean it is right or should be supported at all costs, with no quarter given to other options.

The passenger rail business in North America was once the envy of the world; companies like Canadian Pacific boasted of the world’s greatest transportation system, consisting of CP’s excellent passenger rail system, CP ships, which had a grand tradition of bringing immigrants to Canada, and later serving as a top notch passenger line, and, CP airlines, one of Canada’s pioneer airlines, whose pilots played a pivotal role in World War II ferrying American-made bombers to Europe.

In the Lower 48, once mighty giants like the New York Central, Pennsylvania, Northern Pacific, Santa Fe, and other roads boasted of passenger trains that have lived on in history and are still a standard to be measured against for future passenger trains.

And, then, there is Amtrak. Created in financial crisis as a public solution to a private industry problem caused in large part by over regulation by the federal government, Amtrak has never fully found its way in the world. Constantly enabled by sycophants who cause more problems than they solve, Amtrak has been allowed to skate by decade after decade with little direction and little oversight of its constantly failing business plans. When an administration finally did stand up to Amtrak and demanded it do better, the sycophants instantly branded those simply asking questions and demanding sound business decisions as traitors and unworthies. How dare they demand success? How dare they turn over rocks exposing beds of worms and snakes? Why, no other passenger railroad in the world is profitable! Why should Amtrak be?

Why, indeed?

Simply, because it can.

If the rest of the world wants to be like lemmings and jump off of the cliff, why should Amtrak follow? Why shouldn’t Amtrak work as diligently as possible to be a subsidy-free as possible? New York State’s ONLY state subsidized train, the Adirondack, is currently the focus of yet another news media campaign, declaring it "endangered" because the New York Department of Transportation may not have enough money to subsidize it for another year in tight budget times.

How many times have we heard this sad story? How many thousands of potential passengers are discouraged from taking the train because they believe it is going away? How many New Yorkers will only hear "Amtrak" and not "The Adirondack," and think all Amtrak service is going away? If there were ways found to turn this route into a more self-sufficient route, these type of unhelpful media stories would simply disappear.

Some believe any publicity is good publicity, as long as they spell the name right. Speaking from a professional marketing standpoint: hogwash. For all of the negative publicity caused by these annual subsidy soap operas, it takes millions of dollars in savvy marketing to put a positive, call-to-action message in front of the public to overcome the negative media stories.

So, here we go starting another year of This Week at Amtrak. We hope to provide you with a lively account of important events and proposals for passenger rail in 2009. Let’s begin with two contributions from Andrew Selden, URPA’s vice president of law and policy.

2) [Begin quote]

Numbers

by Andrew C. Selden

As we enter a new year, Amtrak is already a third of the way through its 2009 fiscal year, which began October 1, 2008. It is useful to look forward to where Amtrak thinks its future lies, and back to reflect on where it has been.

Amtrak has another new CEO this year, Joseph Boardman, so a quick review of strategy seems especially appropriate. Mr. Boardman is a capable administrator (ex-chief of the New York state DOT, and lately of the Federal Railroad Administration), but his experience seems to have limited his vision to the usual, tired canard of "short corridors" being the wave of the future.

To show why "short corridors" (routes up to 500 miles, like the NEC, the Chicago-hub corridors, and the west coast corridors) are a dead-end spur, let's look at some hard data from Amtrak's FY '08, which ended last September 30, by comparing the key results of the nine short corridors based at Chicago with the seven long-distance routes that radiate out from Chicago.

9 Short Distance Trains 7 Long Distance Trains

Riders 2,604,100 2,012,500

Revenue $64,817,000 $198,770,000

Pass. Miles 410,498,000 1,388,906,000

These are interesting numbers. Look at the contrasts: in ridership, the only metric Amtrak ever talks about, the nine corridors carried about 29% more people. That means they also incurred greater costs for ticketing, marketing, stations, insurance, crew turns, equipment maintenance, etc., based just on handling that many more people.

But in the metrics that matter, which Amtrak always ignores, the seven long distance routes (diluted by the 3-day-a-week Cardinal), from 29% fewer passengers, and on two fewer routes, earned more than three times the revenue and produced nearly three and one-half times the transportation output as the short corridors.

But, you might say, what about all the people carried by those corridor trains? Aren't they helping relieve road congestion and save the environment? Well … not really. By a factor of 2-to-1, the highest ridership corridor into Chicago is the 86 mile Hiawatha line to Milwaukee, with 749,700 riders last year. To give you a perspective on that, local I-94 between Minneapolis and St. Paul (in the same metropolitan area) carries that many people every five days. So does I-94 between Milwaukee and Chicago. So, this big-deal corridor with just one lane-hour a day of ridership on its 96 trains a week really isn't doing very much in terms of mitigating congestion or air pollution.

The weakest of the daily Chicago long distance routes, the City of New Orleans, carried 197,400 riders (about ¼ of the Hiawathas), but earned more revenue ($14.9 million vs. $13.5) and produced 150% more output than all of the Hiawathas combined.

If you were a manager of a business and had money to invest, into which of these two operations would you put your banker's money? Would it help you decide to know that the City of New Orleans was statistically sold out (at a 64% load factor) while the Hiawathas were more than half empty (40% load factor)? Which route has more growth potential?

This is Mr. Boardman's challenge: put his banker's free money into routes that don't do anything? Or, ones that really produce?

[End quote]

3) [Begin quote]

Growth Prospects

by Andrew C. Selden

With the prospect of a trillion dollars in federal "stimulus" spending, every pig in Washington is lining up at the golden trough. Amtrak is no exception, but as always for the wrong projects. "Wrong" here meaning "least likely to accomplish anything productive." Amtrak's entire capital budget is focused as always on the NEC, and state-subsidized corridors elsewhere. At the same time, the Superliner fleet is both shrunken and wearing out. The oldest cars are nearing 30 years old.

And it's a shame because Superliners, especially Superliner sleepers, are the most profitable asset Amtrak owns.

The late Byron Nordberg and I figured out two things about Superliners back in the 1980s: First, what it would cost to lease them in trainset lots with a maintenance contract, and what a Superliner set can reasonably be expected to earn in typical western deployment (allowing for seasonality and downtime for maintenance and overhauls). It turns out that the former number is a fraction of the latter.

That means that if you can deploy the cars, you can pay for them easily from their own revenue. The remaining surplus eats away at system fixed costs.

And that means you don't need (or especially want) federal welfare to buy or lease them. All you need is vision and some initiative. All that is left is to show the lender you can reasonably expect to generate the revenue with which to pay the lease. Adrian Herzog's matrix equations solved that: at the same level of market penetration that Amtrak has today (i.e., you don't have to do anything differently or better than you already are doing, just do more of it in a way that is interconnected), by building a national scale interconnecting route matrix, new traffic literally falls off the tree into your trains at an exponentially-growing rate. Build a little matrix with maybe a 10% expansion of today's train-miles, and traffic and revenue doubles; build a bigger matrix, say double what exists today, and traffic and revenue grows so big so fast that you couldn't handle it if it showed up.

In my 1986 TRAINS Magazine article, we published the Southwest Transcontinental Corridor matrix and showed that twiddling with the Chief's route just a little (about 5% more train miles) multiplied the demand by 600%, on just one train.

When Dr. Herzog ran the matrix model on interconnecting the Southwest Transcontinental Corridor with the Central Transcontinental Corridor (accomplished by the simple matter of extending one Mule to Omaha, and adding a Cheyenne-Denver-Pueblo-La Junta shuttle) the numbers were so huge we didn't publish them for fear it would discredit the whole theory.

So it is not so much a matter of "Do we need 100, or 1,000, or 3,000 new Superliners?" as much as the idea that what we should do is start up a line to produce new Superliners at a modest rate, say six a month, and keep that line open indefinitely until the traffic growth starts to slow down, or we run out of track-time to run them.

[End quote]

4) We know by combing through various Amtrak information, it already has a very, very modest five year equipment plan, which is akin to having next to nothing. Here is what Amtrak has said it wants as of right now (hopefully, subject to rational thought and changes):

– Purchase 75 Viewliner class baggage and baggage dorm cars, plus 25 Viewliner class diners, and 15 Viewliner sleeping cars, for a total of 115 cars.

The baggage and bag/dorm cars are a wise investment; currently all baggage cars are from the Heritage fleet, and most are more than 50 years old. Even equipment built more solidly than a battleship eventually wears out, and this proud fleet of equipment deserves a decent retirement. The same is true for the single-level dining car fleet. One Viewliner class diner was put into service as a test vehicle in the 1990s, and with some modifications, can be brought back. However, a mere 25 diners only replaces what is on the road now, and does not allow for ANY expansion, a horrid mistake.

The idea of only buying 15 new Viewliner class sleeping cars is ludicrous. All this will accomplish is allow the current completely worn-out Viewliner sleeping car fleet to be cycled through heavy maintenance on a faster schedule, and, again, will allow for no expansion of sleeping car service. This seems to be a loud and clear signal Amtrak is not serious about new long distance service in the East.

– Purchase 40 new Acela cars, expanding 20 existing consists by two cars each.

The September issue of Railway Age had a hilarious item quoting now former Amtrak CEO Alex Kummant to the effect that "We're out of capacity" on Acela trains. The magazine reports that Acela is "so crowded, especially during peak travel periods" that cars will have to be added to the trainsets. Amtrak doesn't want to break up its two spare sets for the cars, and "there's no funds right now to pay" for more.

Inquiring minds want to know: Where exactly are these trains sold out, since their load factors hover around 50%? Is it just between Philadelphia and New York? What "peak travel periods" are we talking about, exactly? Evening rush hour? Thanksgiving? Maybe some demand-moderating pricing is a better solution.

If Acela is having crowding issues over its peak loading point, but with a 50% load factor overall, does that mean Amtrak maybe will address capacity issues on some other trains that have 30% higher load factors and capacity constraints over their entire routes? Like the Southwest Chief, Empire Builder and Silver Meteor?

– Purchase seven new high speed trainsets for the NEC.

To do what? Replace Acelas, when it wants to bolster that fleet first? To replace the old, reliable, recognized and respected Metroliner brand with a new level of service? To add more service to the NEC which today already is over-populated by Amtrak trains by at least 35%?

– Purchase 166 Superliner/California cars and three Talgo sets as state funds become available. This is a pay for hire idea, where the states pony up for the equipment, and presumably it doesn’t come out of Amtrak’s capital budget. Not a bad idea, if you can convince states to do the buying.

Recent Amtrak naughtiness uncovered late last year by the Sacramento Bee newspaper regarding Amtrak’s alleged misuse of state-paid-for maintenance facilities in California may slow this process down, however. This far-reaching potential scandal could have an enormous effect on how Amtrak does business with its client state governments, and should be followed closely by every state DOT which currently does business with Amtrak.

– Repair and restore 25 wreck-damaged long distance cars for revenue service, including three Amfleet II coaches, one Amfleet II lounge car, nine Superliner coaches, seven Superliner sleepers, and five Superliner transition dorm cars.

Hmmmm ... those Superliners would go a very long way towards restoring Sunset Limited service (or a replacement service) east of New Orleans to Orlando, Florida, and, (are you listening, Amtrak?) work towards increasing the frequency of the Sunset Limited to at least five days a week, if not daily. It takes one trainset a full week to travel from Los Angeles to Orlando and return. Today, Amtrak is using three trainsets to operate the Sunset between Los Angeles and New Orleans, so, only two new trainsets would provide transcontinental service for five times a week.

In FY 08, with the Sunset only operating a truncated route between Los Angeles and New Orleans three days a week, the load factor was 56.7%, which still put it above the daily Crescent, Palmetto, Texas Eagle, California Zephyr, and tri-weekly Cardinal. Imagine how powerful a performer this train would be if it ran more than three times a week.

The Sunset Limited generated revenue of $8,046,900 and 66,149,000 revenue passenger miles at 12.1 cents per revenue passenger mile. The Sunset carried 71,700 passengers an average length of trip of 922.6 miles, with 105.8 passengers traveling every average mile.

– Repair and restore 67 Amfleet coaches for service, including 25 for the NEC, and 42 for state corridor service expansion as state funding permits.

– Repair and restore one single level damaged cab car to service.

As you can see, Amtrak’s current equipment rehabilitation plan is squarely aimed at its least productive services, state supported routes and NEC service.

Amtrak seems to constantly forget its proper corporate name is the National Railroad Passenger Corporation. Please note the name "National" as the first word in the company name, not "Corridor."

5) Here’s a positive note from long-time professional railroader and URPA associate Rob Bohannan of Arizona.

[Begin quote]

Empire Builder Trip Report

by Rob Bohannan

Portland [Oregon] Union Station quickly reminded me I was someplace where people believe in trains. One could have eaten off the floor, or used the polished marble walls as a mirror. Outside, a landscaped rose garden sets off the building nicely, and rails for a future light rail or streetcar are already installed in the street. With the Builder, Starlight, and Cascades, Portland is a busy place and has the takes-itself-seriously ambiance of an airport. Every departure brought a "Southwest Airlines gate" style drill, with dozens of people lined up and eager to board. The clientele were more like one would see on a cruise ship, or perhaps at a theme park or National Park – senior couples, singles, young couples, families, and so forth. The agents were friendly and helpful.

I chose to ride the Empire Builder’s Portland section, train No. 28, specifically to enjoy the trip up the Columbia River gorge, and I was not disappointed. No. 28's conductor, a friendly fellow who clearly enjoys his job, provided a well-done narrative of the trip. The Superliner cars show their age – even the refurbished ones, but they seemed as clean as any airplane I have been on recently. The lower-level lounge car supper – a hot dog – was not particularly memorable. Number 28 has a nice "branch connection to the mainline" feel. At Spokane, Washington, No. 28 joins the main body of the Empire Builder which originated in Seattle, to become part of train No. 8.

I chose coach the first night – the Portland-Milwaukee price for a sleeper was breathtaking. The coach seats need to be re-upholstered – not because the fabric is worn, but because the padding beneath is so compacted from use as to be unbearably hard. I sat on my pillow!

At Essex, Montana, I stopped off and stayed at the Izaak Walton Inn – trackside, pleasant, and convenient to Glacier Park. The red "Jammer" bus picked me up right at the inn. The decor was "early foamer" with Great Northern Railroad, Empire Builder, etc. photos and memorabilia everywhere.

The next morning I reboarded the Empire Builder, No. 8, right on time. Almost immediately, I began a quest to upgrade to sleeper. Breakfast was okay; lunch – I had the open-faced roast beef sandwich special – was so good I had the same thing the next day traveling across Wisconsin. For dinner, I tried one of the "Havre chicken dinners" and I thought that was fine.

Throughout the day, the conductors made announcements that, again, were reminiscent of Southwest Airlines – "We have a full train today and you WILL have someone sitting next to you" in your coach seat, and so forth. Like the airline, the announcements were made pleasantly and often with a little humor. The upbeat morale of the crew was obvious throughout the journey.

After dinner, the conductor found me and announced I had a room, and to follow him up to the "832" car, where I was promptly installed in Roomette 3. The local upgrade price was reasonable – I think I was probably sold the room from Grand Forks even though we were just a little east of Minot at the time. What a treat – for a while I wasn't sure I would get to experience an overnight in a Pullman in the 21st Century! Of course, I learned in the process that Minnesota is the "land of 10,000 grade crossings." Railfan though I may be, I guess I am a little more open to "quiet zones" than before!

The next day was uneventful. The CP line across Wisconsin had reopened after the floods several days before and we were all treated to an up-close view of the floods. We were only 30 minutes late into Milwaukee.

I was sorry to leave No. 8 – I now understand why the Minnesota Association of Railroad Passengers is so proud of the Empire Builder!

[End quote]

The FY 08 load factor for the Empire Builder was 63.4%, one of the three top trains in Amtrak’s long distance fleet.

This single daily train generated revenue of $59,389,600 and 409,480,000 revenue passenger miles at 14.5 cents per revenue passenger mile. The Builder carried 554,300 passengers an average length of trip of 738.7 miles, with 216.9 passengers traveling every average mile.

The secret is out about the Empire Builder, suddenly everyone's darling. Even Amtrak has begun to acknowledge the Builder as its "most popular" and highest revenue western train. In November 2008 the Builder earned nearly $4 million, still more than any other single train, even Auto Train. All of the Pacific Surfliners combined only earned $4.1 million. The Builder was the focus of an episode of "Extreme Trains" on the History Channel in early December.

6) It’s amazing Amtrak didn’t receive a lump of coal in its corporate stocking for Christmas. While Amtrak has been busy these past few years leasing out what it deems to be surplus locomotives, in December it has been leasing locomotives on the West Coast from its host freight railroad partners so it can get its trains down the tracks.

There has been a reported shortage of Amtrak-owned F59PHI locomotives; some are out of service for overhaul and other damage reasons.

Amtrak has been shifting them around the West Coast as needed, but at the moment there aren’t enough to go around, and the only option seems to be to lease power from freight railroads.

As one observer puts it, "This situation would suggest the once-might P42 locomotive fleet is thinning out nationwide; as previously Amtrak would send extra ones West to make up for predicted shortages. Former Amtrak President and CEO David Gunn ditched the P40s, parking all of them; Amtrak is leasing out or selling as many as Connecticut and New Jersey and anyone else has wanted. The rest are unserviceable, and being robbed for parts."

It should also be noted someone needs to take a count of the idle locomotives sitting at Amtrak’s Beech Grove repair facility, in Chicago’s yards, and elsewhere, that have been pushed out of service for lack of Amtrak’s desire to keep them in serviceable condition, either through routine inspections or minor repairs. Amtrak seems to be continuing the highly questionable practice of setting aside any equipment which may inconvenience the company (such as requiring routine maintenance), and just running the wheels off of anything remaining.

Amtrak just never seems to understand the concept of "stewardship" of assets and capital funds.

6) Much more and very serious naughtiness occurred during the Christmas travel season in the Midwest. Brutal snow storms blanketed the Midwest, and, again, Amtrak seemed to be caught completely by surprise that winter always comes after the fall season.

Equipment inexplicably froze up and was out of service, crews were not properly placed to prevent long delays due to crew times expiring on the federal hours of service law, and many other mishaps.

Here’s what frosted the shorts of many: Amtrak seemed in too many instances to do its best/worst to provide the worst possible passenger service available, from lack of information to lack of sanitation provisions to stranding passengers on trains in rail yards less than 25 miles from their ultimate destination, and less than a mile up the line from its last station stop in civilization.

Far too many Amtrakers seem to forget they are in the PASSENGER railroad business, and PASSENGERS are their primary concern. There is an assumption made by many Amtrakers that passenger should sit down, shut up, and be grateful for whatever meager efforts Amtrak may make on behalf of paying passengers.

It almost rises to the level of a national disgrace.

Amtrak has so many opportunities, as a unique form of transportation to excel at passenger service. In light of how the airlines treat passengers these days, Amtrak could – with so little effort – simply vow to be the most customer/passenger friendly carrier in the country, and make passenger comfort at all times a priority. This includes basics like keeping passengers informed of new developments (or lack of new developments), going just half a step beyond normal to do the right thing and assist people who are stranded and at the complete mercy of Amtrak, and not have a "take it or leave it" attitude about every facet of Amtrak life.

Here’s a news flash: Amtrak trains should be scheduled and operated for the convenience of the traveling public, not Amtrak’s operating department. In this day and age of instant communications, there should never be a moment when a passenger or relative or friend of an in-transit passenger should not be able to know where a train is located, and when it will be arriving, barring extraordinary circumstances.

In places like Chicago, where huge amounts of money were poured in recent years into new facilities to keep passenger equipment from have frozen systems in the winter, then that problem should never occur, just because some errant mechanical employees didn’t follow instructions or procedures. As one commentator noted in December, the old Santa Fe Railroad, which based much of its passenger service in Chicago, never seemed to have a problem with frozen equipment on its trains, because it prided itself on good passenger service. If the Santa Fe, of which there hasn’t been a Sante Fe passenger train since April 30, 1971, could maintain equipment up to that standard in what today would be considered pre-historic times of mostly mechanical systems, when can’t Amtrak do the same now nearly a decade into the 21^st Century?

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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