This Week in Amtrak

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This Week at Amtrak; September 25, 2009



A weekly digest of events, opinions, and forecasts from



United Rail Passenger Alliance, Inc.

America’s foremost passenger rail policy institute



1526 University Boulevard, West, PMB 203 • Jacksonville, Florida 32217-2006 USA

Telephone 904-636-7739, Electronic Mail info@unitedrail.org • http://www.unitedrail.org





Volume 6, Number 41



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) Amtrak is three for three. The third report (and, there are more to come) about the start of new service is just like the two previous reports: Amtrak really doesn’t want to be in the passenger railroad business.



The third report is a feasibility report on proposed Amtrak service for the 3-C Corridor, which encompasses Cleveland, Columbus, and Cincinnati by way of Dayton, Ohio. The two prior reports concerned the restoration of service on the Sunset Limited route east of New Orleans, and restoration of the Pioneer route from Denver northwest to Seattle.



It’s important to note that of the three reports, this report has the best detail and lays out its arguments for implementation better than the other two reports.



Let’s start with some facts and numbers as outlined in the report.



Length of route – 255 miles



Number of freight host railroads – 3



Proposed scheduled running time, end to end – 6 hours, 30 minutes



Capital costs for infrastructure improvements – $236,200,000



Capital costs for track upgrading – $51,400,000



Capital costs for mechanical facilities – $55,000,000



Capital costs for equipment procurement – $175,000,000 or $4,380,000 per piece average



Estimated annual ridership — 478,000 passengers



Estimated annual revenue – $12,200,000



Estimated annual operating expense – $29,200,000



Estimated annual operating subsidy – $17,000,000



2) Let’s start with annual revenue. Extrapolating from Amtrak’s numbers, the average fare proposed is $25.52 per passenger, or about 11 to 12 cents per revenue passenger mile.



Why Amtrak has proposed such a low number (Even though, as said in this space many times before, conservative estimates for income and high estimate for expenses are best.) is another Amtrak mystery. Amtrak’s average revenue passenger mile income for its 26 corridor routes is 20.65 cents per mile; the figure Amtrak proposes mirrors what is earned on the Kansas City-St. Louis corridor, which has an annual load factor of only 37.4%.



A bump to 14 or 15 cents a revenue passenger mile, which still puts the corridor below other routes such as the Pere Marquette, Carolinian, Wolverine, or even the Illinois Zephyr, would generate a more realistic revenue figure of $15,000,000 or more.



Look at the consist; probably 300 seats per consist of five coaches and one food service car which also has business class seating. Using the number above, Amtrak is estimating just over 1,300 passengers per day total, breaking down to 163 passengers per each of eight departures a day. While that is a robust 54% load factor, that still falls 10% or more under most other Midwest route load factors.



Amtrak has estimated operating costs of $80,000 a day for the eight departures. Train mile costs to the host railroads will run an estimated $10,000 a day, which leave another $70,000 for maintenance, crew costs (less than $11,000 a day), reservations, station costs, and corporate overhead. At these rates, Ohio could probably do better with a non-Amtrak operator than the high costs of Amtrak operations.



As with the other two reports, Amtrak says it has no equipment available in its pool of stored and wrecked equipment to get these trains on the road, and – again – trots out the line all new equipment must be purchased with years-long lead time.



Not true. Amtrak says it needs five trainsets of five coaches, one food service/business class car, one locomotive, and one non-powered control unit for push-pull operations. All of this, says Amtrak, will cost an astounding $175,000,000, or an average of $4,380,000 per car/locomotive/unit.



In its current stored/wrecked inventory, Amtrak has 55 stored Amfleet I coaches and food service cars, and 24 wrecked cars which can be restored. That’s a total of 79 pieces of equipment, for an equipment pool need of 30 passenger cars. Amtrak also has 30 P40 locomotives in storage, and nine F40 locomotives stashed away, waiting for use. Certainly, somewhere in 39 pieces of equipment, five locomotives and five NPCUs can be found without having to buy new equipment. Even at upgrading/rehab prices of $1,000,000 per car or locomotive for 40 pieces of equipment, that’s miles and miles ahead of the $175,000,000 Amtrak says it needs for all new equipment, or, a savings of $135,000,000.



The capital costs for maintenance facilities is a little steep, too. The majority of the fleet maintenance will be done in Cleveland, with turn-maintenance being performed in Cincinnati and Columbus. Fifty-five million dollars for one enclosed shop facility and one wash facility, plus a few other goodies for the turn facilities in the two other cities is high; probably by at least 40%, unless the ground these facilities are being put on is tragically expensive.



And then, there is training, which seems to be Amtrak’s favorite category to overcharge anybody who will pay the price. Estimated road crew training for this route is an astounding $5,900,000. As with the Pioneer route similar figure, it’s impossible to imagine how training road crews for a 255 mile route could even approach even half of this figure. Amtrak is doing nothing but padding its pocket at the expense of Ohio.



3) Amtrak makes a good case for the chosen route, and it’s apparent the Ohio Rail Development Commission laid down some positive guidelines for this route study. The proposed route is one of three, and it is the shortest, most direct route from Cleveland to Cincinnati via Berea, Columbus, Dayton, and Middletown.



After departure from the existing Cleveland Amtrak Lakefront station, every inch of the route is over freight tracks which do not currently host passenger trains. Some track has speed restrictions of 15 to 25 miles per hour, and goes through a lot of congested city areas.



But, the route has a nearby population of roughly 6,900,000 residents, with a large collection of colleges and universities. The cost of improving the freight infrastructure is significant, and the cost of the coming Positive Train Control must be considered in any proposal. As with the Pioneer study, most likely the early infrastructure numbers in this report represent more of a “wish list” between Amtrak, the three host railroads, and the Ohio Rail Development Commission. As with all wish lists, when reality sets in, costs usually go down, not up.



The Cleveland Lakefront station is the only current station considered for use; it’s been so long since this Ohio route area has had passenger service, no suitable stations exist for recreating this route. When you are talking about stations, you are also talking about train platforms, parking, and waiting areas. Wisely, this report and Ohio assume if a local city wants a station stop, it will pay for the construction of a station stop, as well as on-going maintenance of the station.



One bothersome aspect of the report is the proposed station in Cincinnati. Currently, Amtrak’s Cardinal stops in Cincinnati in the dead of night for three roundtrips a week. The Cardinal uses a small part of Cincinnati’s magnificent and huge art deco station. For the 3-C service, a proposal has been made another station be created out of a riverside restaurant instead of the train going a longer distance into the Cincinnati terminal complex.



The assumption is made in the report that since the Cardinal is a nocturnal train for Cincinnati, little cross business will be created. The report seems to forget passenger train riders are an intrepid lot, and when a connection can be found – no matter how inconvenient – some riders will use it.



The argument about whether or not to use the existing station and create a second station will have to be settled by those in Ohio who will eventually be writing the check for this intrastate service. However, for all of the money which will be put into infrastructure for this route, exploring the costs of extending the route – if reasonable – into the existing Cincinnati station is a worthy goal. In the end, connectivity is everything, and optimists can hope that one day more than just a nocturnal Cardinal will be calling at Cincinnati.



An interesting note in the report, talking about the Cleveland station and proposed maintenance facilities there says, “Therefore, this study recommends the construction of a shop and repair facility in Cleveland to perform all maintenance, repairs, washing, fueling and sanding, as well as layover and turnaround servicing, for the entire fleet of 3-C cars and locomotives. This should include the capability in future years to perform heavy repairs as the equipment ages. It should be noted this facility is planned, not only for the maintenance needs of the initial 3-C Corridor, but also for the future Cleveland Hub System with passenger train service proposed to be initiated rom Cleveland to Pittsburgh, Buffalo, Detroit, and other points.”



4) This report is an expensive start for Ohio, but, costs aside, it provide a rational starting point. It will be up to the Ohio Rail Development Commission to sit down with Amtrak eye to eye and go over every costly step and find out the real costs and real revenues. It’s interesting one news report said this report represents $400,000,000 more in start-up costs than Ohio had anticipated. Ohio needs to follow the leads of California and North Carolina when negotiating with Amtrak, and figure out how much is bluff and how much is fact. California learned years ago that if it left route advertising up to Amtrak, the state’s annual share of operating costs for its corridors would sky rocket. But, if California relies on its own resources, it can influence the amount of ridership, and, conversely influence the amount of subsidy needed for some trains. Ohio needs to take note.



5) Every day’s e-mail to This Week at Amtrak is a never-ending parade of thoughts and ideas. Here’s the latest.



[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 that competition also applies to the long-distance trains as well, and that pressure needs to be kept on Amtrak. After reading some of the more recent TWA articles, it's obvious to me that 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 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 that “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 that all passenger routes can be returned to the host railroads. Instead, I propose that 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]



6) Coming in the next issue of TWA: William Lindley of Scottsdale, Arizona has more thoughts on the future of passenger rail.







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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