Streetcar Basics

The interior of a Portland Streetcar. (Photo credit: Wikipedia)

English: A car of the Portland Streetcar system at the eastbound Portland State University stop, on Market Street at the South Park Blocks. (Photo credit: Wikipedia)

A few years ago the thought of streetcars returning to our streets was a fantasy. Today several cites have either installed new streetcar lines, constructing lines, or in the advance planning stages. I support streetcars as I feel that they are a great step between basic bus service and full light rail service (notice I did not include BRT - Badly Repackaged Transit). 

The question is, what should be the priorities of new streetcar lines. The most famous new streetcar line is off course the Portland Streetcar. To be honest, I rode it on Monday but overall I rarely do. Now that I spend more time downtown at Portland State I most likely will be riding more especially to head to Powell's Books. 

People opposed to the streetcar line say is nothing but a subsidy to developers. It is easy to call it that, after all it goes through a part of town that was about to rapidly development. On the other hand the same people who make those kind of comments turn a blind eye to all the subsidies suburban sprawl developments get every day of the week. We could quarrel all day about the that, but instead lets see what the streetcar does do. 

1. The streetcar provides service along a corridor that has never had service. While the two ends of the network (in the northwest side of town and south of PSU), the bus service was not in direct competition with 

Tri-Met buses. In fact the one line that follows the streetcar in the northwest will be rerouted in September in a budget cut move that actually eliminates duplicate service. 

2. The streetcar provides an alternative form of transportation that makes that part of the Portland much more livable. While I don't go to Powell Book's everyday, maybe once a month at the most, it is much more convenient to take the streetcar than trying to drive and find a parking spot. 

The question is, what should the priorities be for a streetcar line? The problem with making a blanket statement is that every city has different priorities so what is important for Portland, is different for Salt Lake City, Cincinnati, Atlanta or any of the other cities that have projects in progress. 

While Portland is a great example here is some things that could improve the current Portland system and any future extensions: 

1. One problem was that the system was designed only to have single cars. From my understanding this was a compromise to ensure support along the line. However, one of the benefits of rail transit is when you add additional cars to a train to make it more efficient and carry more people. Any future lines should have the capability to run multiple car trains. 

2. There is no private right of way. The streetcar gets stuck in traffic. While in an ideal world the streetcar would have its entire right of way reserved, we know in the real world this is just not possible. However, I see no reason why on 10th/11th Streets the streetcar cannot have its own reserved right of way in stretches and other areas to. 

3. The streetcar should have signal priority plus priority at the four way stops like Couch and 11th were the streetcar gets stuck for extended periods of time. 

In September Portland will open its new East side streetcar line. Until the loop is completed with the opening of the Milwaukee MAX line in 20515 I am not overly enthusiastic about how well this line will do but we shall see. 

That brings up a good question, for a city looking to extend a streetcar line or put a new one in, what should the priorities be? As I said early every city has its own most important priorities but this is some general guidelines. 

1. The first priority of a streetcar line should be to provide an essential transportation function. If the city already has a light rail or rapid transit system, the streetcar should function as a feeder between the major rail line and important business and residential sectors. Salt Lake City is a perfect example of this. The streetcar will provide service from all three light rail lines to the Sugar House district which is currently a major retail center and will have high density housing going in. 

In a way the east side streetcar in Portland will provide this function also as it will connect from the Lloyd District light rail stations to the Pearl District offering customers an alternative to the current ways to get to the Pearl. 

Once the Milwaukee MAX line is completed, the Portland streetcar will provide an excellent feeder from that line to the northwest part of town that is not currently available because of the alignment of bus service (31.32,33 and 99) and the streetcar line. 

Another good route in  Utah would be from the Ogden Transit Center to Weber State University which is being studied at this time. This would create a feeder from the Front Runner Commuter trains to busy 612 bus line on Washington Blvd and onto the University replacing route 603. 

2. Another important priority would be to supplement a overburdened bus route along a busy corridor. In its transit plan Portland is looking to supplement bus service with streetcars in such corridors as Sandy Blvd. I mentioned this at one time where it will allow the 12 route to become limited stop along this section of route speeding up Trimets longest route (which is being split up in September and won't be so long anymore). 

Another good example would be the Barbur Blvd/Capitol Highway corridor. Currently there are in the study phase on this project for Badly Repackaged Transit or Light Rail, but as I see it know there is a slim chance of a good system being built. Chances are some half baked BRT plan will get built that will end up not having a major impact. 

You could run the streetcar down Barbur and Capitol Highway to the Hilsdale area. This would allow TriMet to cut routes such as the 45 at Capital/Sunset and make routes such as the 44 and 12 faster through the area speeding up bus rides for those through travelers. 

When it comes down to it, streetcars can function both as a feeder from major rail routes to major employment and dense residential areas. It can also be a relief valve for busy bus routes along major dense corridors. What it comes down to is that streetcar routes need to be done right the first time. No matter how successful the route would be there will be naysayers, however if a route is well designed and does the job it is easier to counterbalance the CAVE (citizens against virtually everything) types. 

Related articles

• New website to help fund streetcar line

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• Anti-Streetcar Resolution Narrowly Defeated in County Transit Committee

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• No federal money for KC streetcar

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• Arlington to Vote on Streetcar Agreement with Alexandria

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• Morning Poll: Streetcar vs. Articulated Bus

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• Councillor Ball renews push to get streetcar service back on track

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• The Star's editorial | Pursue KC's streetcar line but re-examine funding

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• Public Feedback Requested on Pike Streetcar Plan

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• Another Streetcar Line

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This Week at Amtrak

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From the United Rail Passenger Alliance.

This Week at Amtrak, Vol. 8 No. 14
Volume 8, Number 14



From the Editors…

In this issue, the conclusion of our two-part series where we look at the modern-day history and contemplate the future of the NEC.

Amtrak’s Northeast Corridor

“It will remain for the future to show how that institution can be preserved, and the way provided for its continued progress in usefulness and effectiveness for the public, for its employees, and for its owners.” - Martin W. Clement, President of the Pennsylvania Railroad Company, forward to Centennial History of the Pennsylvania Railroad Company 1846-1946

The first six years of Amtrak operations on the NEC could be described as “business as usual.” From coast to coast, Amtrak was taking responsibility for all remaining passenger services, thus the NEC was just another piece of railroad. Operating crews, conductors and engineers, were still provided by the host railroads. Federal monies were made available to prop up the failing railroad infrastructure of the Northeast, including the NEC, until a permanent fix could be agreed upon. For more than five years between May 1, 1971 and sometime in 1976 Amtrak, itself, governed all of its local and long distance trains in the NEC as a tenant of Penn Central. (This is still the case almost everywhere else in the U.S. on other host railroad properties.) PC was still responsible for the dispatching of their freight trains and the many, many commuter trains that PC continued to operate over the NEC facility. It was during this brief but bright moment that the 1973 oil embargo hit the country, and suddenly the population began to take notice that there were still passenger trains running.

The Railroad Revitalization and Regulatory Reform Act (4R Act),signed into law on February 5, 1976, would forever change the NEC and domestic passenger railroading. In the fire sale that was the end of Penn Central, the NEC south of New Rochelle, New York and between New Haven, Connecticut and the Rhode Island/Massachusetts state line was ceded from the newly-formed ConRail to Amtrak as per the 4R Act on April 1, 1976; the remainder went to State agencies. Transfer of ownership of the NEC to Amtrak in 1976 was orchestrated by the United States Railway Association not because of the magic of Amtrak owning its own railroad, but in order to get the financial albatross of NEC ownership off the back of the brand-new ConRail, and onto Amtrak's books, where the presumed continuing flow of free public money to sustain it would be more appropriate. Also, with the 4R Act came the Northeast Corridor Improvement Project (NECIP) and $1.75 billion in Federal funds, with the goals of achieving New York-Washington running times of two hours forty minutes, and Boston-New York running times of three hours forty minutes. The pitfalls and temptations of government money were all too soon apparent:

“A highlight of the first year of the NECIP was a three-inch-thick Environmental Impact Statement, which came to the startling conclusion that there would be no environmental damage from continuing to run trains where trains had been running for over a hundred years.” - Tom Nelligan and Scott Hartley, Trains of the Northeast Corridor, Quadrant Press, Inc, 1982

At one point, the FBI was summoned to investigate a $16 million discrepancy between material purchased and material on hand. By 1979 Congress knew what to do: Increase the NECIP budget to $2.4 billion and extend the deadline for completion from 1981 to 1985. In 1981, the Reagan Administration cut $600 million from the NECIP, and the plan to extend electrification to Boston would have to wait.

The wait ended January 31, 2000 when regular electrified service commenced to Boston’s South Station. The four-year $2.4 billion project had its own drama, with FBI raids of contractors' offices. But the biggest fraud would be the Acela Express trainsets; an untested, one-of-a-kind fleet of heavy energy users, dubiously procured and never to be repeated.

Today, the maintenance needs of the NEC are about a half billion dollars per year. Yet, due to its nature, the bulk of patronage was not, nor would ever be, Amtrak ticket-paying customers. Even so, prior to direct State assumption of commuter rail services in 1983, Amtrak would be called upon to subsidize those local needs. New amendments to Amtrak’s governing laws in the early 1980s assured that the “formulas” contained therein would never allow Amtrak to recover the huge costs of subsidizing massive commuter rail operations. Unfortunately, that situation still has not changed:

“We are paying a lot of money not needed to operate rail passenger service. We are also cross-subsidizing some of the commuter operations in the Northeast Corridor. That’s a matter of policy, and we are not urging that be changed. But the fact is, it’s not an operating cost of intercity rail passenger travel service. [Cross subsidization] is about $47 million a year.” - Interview with Graham Claytor, Trains Magazine, June 1991

Asking those states which utilize the corridor to ante up would bring Amtrak closer to solvency. Doing so, however, would mean ceding some degree of control to those states. Repeal of the commuter subsidy “formulas” was attempted in the original version of what became the 1997 Amtrak reform law, but the political clout of the NEC states on both sides of the aisle proved too strong. As of this writing, ceding any jurisdiction of the NEC to anyone other than itself is anathema to Amtrak. Emboldened by shear ownership, the NEC has taken on a life of itself; it is no longer a part of the Amtrak network but rather the core of Amtrak, to which all other lines of service must cede.

Amtrak is a political animal, and as such, political expediency will always come before business acumen. Amtrak currently touts its “market share” in the Northeast as 52% between Boston and New York, and 65% between New York and Washington. These numbers, however, are strictly a modal split, as between Amtrak and the air shuttle carriers. Using U.S. DOT Bureau of Transportation Statistics data for intercity travel (non-commuter trips over 100 miles), you get a true “market share” value for rail of somewhere under 2%, and Amtrak itself reports its own paltry load factors. Mobility in the Northeast is just as important as anywhere else in the country, but are these results of a thus-far $30 billion investment worth it?

Breaking the cycle of [Federal] dependency

Whereas the 2008 economic downturn was characterized as a failure of business, the 2011 economic malaise has been defined as a failure of government. The populous will spend the rest of the decade, if not longer, asking and answering some very deep and basic questions regarding who pays for what and how much.

To this end, U.S. Representative John L. Mica of Florida, Chairman of the House Transportation and Infrastructure Committee, and U.S. Representative Bill Shuster of Pennsylvania, Chairman of the Railroads, Pipelines and Hazardous Materials Subcommittee, presented a new initiative called the “Competition for Intercity Passenger Rail in America Act.” The press release of June 15, 2011 reads in part:

“After 40 years of costly and wasteful Soviet-style operations under Amtrak, this proposal encourages private sector competition, investment and operations in U.S. passenger rail service,” Mica said. “Competition in high-speed and intercity passenger rail will cut taxpayer subsidies, improve service, and bring our nation into the 21st century of passenger rail transportation.”

“Amtrak has repeatedly bungled development and operations in the Northeast Corridor, and their new long-term, expensive plan to try to improve the corridor is simply unacceptable,” Mica continued. “The nation cannot afford to continue throwing money away on this highly subsidized, ineffective disaster.

“It is time for a new direction. Around the world, other nations and the private sector have successfully competed to develop high-speed and passenger rail service,” Mica said. “There is no reason we cannot do the same in our most densely populated and congested region. By giving the private sector the opportunity to bring its resources and expertise to the table, we can lower costs, increase efficiency, and improve high-speed and intercity passenger rail service across the country.”

The intent is to transfer title of the NEC from Amtrak to the U.S. DOT or some other organization to allow for more flexibility in operations and investment. It should be noted that relieving Amtrak of the NEC property (and its attendant endless capital needs) is something that has been recommended by members of the United Rail Passenger Alliance for over a quarter century:

“But Amtrak need not own the NEC. It can be sold and its costs of ownership eliminated without adverse effect on train operations…

“Shared ownership is not unprecedented. It simply treats the NEC as a large terminal district; many hotly competitive railroads jointly and profitably own feeder lines, terminal districts, and union stations…

“Structuring the buyer of the NEC as a limited partnership (the customary means of syndicating large real estate projects) would enable Amtrak to be the general partner, retaining needed day-to-day operational control. The limited partners would be allocated the tax and other financial benefits of ownership.” - Andrew C. Selden (URPA Vice President Law and Policy), How to get Amtrak out of the woods, Trains Magazine, January 1986

On the international railroad scene, this is already a reality. In Great Britain, the national network of track is owned by Network Rail, a government-created "not for dividend" company. Network Rail's customers are separate and for the most part private-sector “train operating companies” (passenger) and “freight operating companies” who operate under periodically-renewed franchise contracts. An interesting exception to the private-sector passenger operations is the East Coast Main Line: London-York-Edinburgh. The through trains are currently being operated by another government-created company, Directly Operated Railways, because the last for-profit franchise holder, National Express, bailed out in dramatic fashion after discovering it was losing its shirt running trains even over subsidized tracks. Numerous companies, fast passenger and slower freight, operate over Network Rail and have learned how to play well together over somebody else’s infrastructure. The British experience did not come without its fair share of unpleasantries, but in the end the nationalized British Railways were successfully weaned off the public dole, and succeeded by multiple entities; private where profitable, public where warranted. This was not just to keep the trains running, but to grow and continuously improve national rail transportation. Its progeny now have a chance to learn from this experience.

The Mica-Shuster initiative was immediately castigated as total “privatization” and declared dead-on-arrival by those who may be on the losing end of this potential transaction. One amusing erudition emanating from this fracas involves invoking the final phrase of the Fifth Amendment, “nor shall private property be taken for public use, without just compensation.” The NEC was “private property” which was ceded by Penn Central to public ownership upon its exodus from the transportation business. Amtrak, a “quasi-public corporation," does have preferred and common stockholders. All of the preferred stock is held by the U.S. DOT. The common stock is held by the successors of the original Amtrak-participating railroads who accepted stock in lieu of tax credits that would not aid their fiscal malaise. Today this class includes a financial group and three class-one railroads. The Amtrak Reform and Accountability Act of 1997 “required Amtrak to redeem at fair market value the shares of common stock outstanding as of December 2, 1997, by the end of fiscal year 2002.” Despite this being law, it has not come to pass. If, indeed, the NEC is property of Amtrak and therefore property of the stockholders, then that stock may be worth more than wallpaper, after all.

The other side of the “taking” coin, however, is that Amtrak received the NEC in 1976 subject to a 999-year balloon mortgage, held by U.S. DOT, who holds the mortgage on the NEC property as security on billions of dollars of debt owed back to U.S. DOT by Amtrak; which they cannot repay. All of this is laid out in Amtrak’s annual report. Thus, it is not a question of a “taking,” but one of foreclosure on a lien that has existed for 35 years, is in default, and is callable whenever U.S. DOT chooses. That is a matter of political and commercial will, not constitutional rights. Extinguishing the mortgage in return for a title transfer to U.S. DOT could also eliminate the constitutional objection. Moreover, current law [49 U.S.C. 24907(c)] already immunizes and indemnifies Amtrak and its board of directors from liability regarding any transaction “related to” the mortgage.

Also, a foreclosure would not necessarily directly impact Amtrak’s operating rights, except to the extent that U.S. DOT or its successor might choose to price access to the infrastructure at levels closer to actual cost recovery. Even that would not change anything, except to make the actual accounting losses of the NEC (especially Acela) a lot more visible.

Separating the NEC from Amtrak with all its legal gyrations will take a few years. Even then it is highly unlikely the property will be in the hands of one or more private companies. More likely is a compact of those Northeast states that will hold and become responsible for the whole corridor. (Congress pre-approved such interstate compacts for passenger rail service in the 1997 Amtrak reform law.) Today there are five state commuter agencies operating under the wire of the NEC. Add to this Amtrak and limited freight operations. Yet, once upon a time this was all under the banner of one railroad. Will we ever make it back to one operator?

The Baltimore & Ohio’s overreach of the late 19th Century bears out a pertinent object lesson for us today. The B&O concentrated its resources on a short-haul piece of railroad due to its location in what was believed to be the most valuable stretch of real estate in the country. As a result of neglecting their long-haul routes to the west, however, the railroad would become an “also ran.” The B&O would be controlled at various times by various railroads including the PRR. Ultimately the B&O found security as a lesser partner of the Chesapeake & Ohio. Today there are no major railroads headquartered in Baltimore. This is the purposeful outcome of the free market.

Today Amtrak, self-described as “America’s Railroad,” pours the lion’s share of its meager resources into the NEC to the detriment of the national network. Unfortunately, as a public entity, the laws of the free market are not allowed to be applied. Amtrak points to sheer passenger counts, opposed to passenger-miles, as justification for this aberration. With government deficits growing and public patience waning, this dichotomy cannot continue indefinitely. The longer the decision is forestalled, the fewer resources will be left available to enact said decision. Inaction is an expensive option which is no longer plausible.

This Week in Amtrak

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This Week at Amtrak Vol. 8 No. 10
Volume 8, Number 10

From the Editors…

With the same assurance as the sun setting in the West, once again all of Amtrak’s perpetual financial woes are blamed on its long-distance trains.

Oh, really?

“Ducking this issue calls for real leadership.” - Springfield Mayor “Diamond” Joe Quimby, The Simpsons

Passenger rail ridership is up, of this there may be no doubt. Using the rudimentary yet flawed number of “riders,” Amtrak carried 28.7 million people in fiscal year 2010. This year should be even higher. Of course, now-a-days Amtrak never discusses “passenger miles” or “revenue per passenger mile” but this was not always the case.

Even so, when questioned by Congress as to why increasing “ridership” did not correlate to a drop in losses, the standard chestnut was brought out one more time, “It’s the long-distance trains,” said Amtrak President Joe Boardman. “They’re all unprofitable.” Oh, really? We have all heard this before, but how long will this broken record continue to play?

For many, the long-distance trains are the perceived final connection to an earlier era. Many a parent has packed up his family for an overnight trip with the proud exclamation, “We’re going to ‘Travel in Pullman Safety and Comfort’ like our grandparents did.” Obviously, there are no more open sections or drawing rooms. If there is an observation car it is privately owned. Oh, and when was the last time someone shined your shoes for you whilst you slept? Today’s long-distance train is a mere shadow of the former glory that once was the grand conveyance. Whereas average citizens could not afford fine linens, china, and silver service, these were commonplace for all who frequented the dining car; it was their chance to live like royalty, if only for a few hundred miles. Do today’s trains even come close to emulating such an emotion? Alas, such only exists for those who remember when, or who have studied the subject.

Things behind the scenes have changed, as well. Even into the early Amtrak days, long-distance reservations still used the old tried-and-true drum system. Dozens of agents sat around a rotating metal carousel with compartments containing train accommodation diagrams, while talking to customers or agents by phone. Today all of this is computerized. The ragtag collection of locomotives and rolling stock has been replaced by standard designs. Locomotive fuel economy has never been higher. Steam heating has been replaced by electric. Operating crew districts are no longer 100 miles. Bases for maintenance have been consolidated and centralized. Yet with all of these changes, which should have led to better economies, the long-distance trains still “lose money.” How can this be?

The Vision from 20 Years Ago

For Amtrak’s 20th anniversary, then-Amtrak-president Graham Claytor boasted of its cost control:

“Amtrak is determined to continue to improve bottom line through better service and controlled cost until 100 percent of operating costs are covered by earned revenues. At close to 80 percent in 1991, we are nearing that goal.” - All Aboard Amtrak 1971-1991, Railpace Publications

At no time in any of the historical records has it been found where Mr. Claytor blamed any of Amtrak’s financial woes on just the long-distance trains. Mr. Claytor was a railroad executive starting with a career at Southern Railway in 1963. He knew the numbers and, more importantly, knew what they meant:

“A year before Amtrak, railroads carried intercity passengers 4.9 billion passenger-miles and lost the 1991 equivalent of $1.5 billion doing it. In Fiscal Year 1990, Amtrak carried its 22.2 million intercity passengers 6.1 billion passenger miles and pared operating losses to about $330 million.” - All Aboard Amtrak 1971-1991, Railpace Publications

Mr. Claytor understood that the true measure of output is “passenger-miles” and revenue per passenger-mile, not the mere number of tickets sold. Tickets sold is the measure of the number of transactions, but ten $1 tickets are not as valuable as one $20 ticket. To this end, it must be noted that during the last five years the long-distance trains have averaged a growth rate of 3.7 percent, with no years of negative growth; something not even the regional or corridor trains can claim. Even more surprising is that the LD trains showed any growth at all, since they were statistically almost sold-out to begin with, and over the last 15 years (post-Claytor), their aggregate capacity (measured in “available seat miles” or even just “car miles”) has declined. This is growth in a product line defined as distance of 750 miles or greater on trains that have not seen any additional equipment in over a decade. Even so, this growth in patronage should correlate to higher revenue. What went wrong?

Since the passing of Mr. Claytor, there has not been a seasoned railroad executive at the helm of Amtrak. As a result Amtrak, a ward of the state, has reverted to a function of government; a workfare/basic transportation/federal entity charged with placating the public while twisting in the political winds. As a result it finds itself stuck between the dichotomous mandates of affordable transit and covering debts. The July/August 1974 edition of the Official Railway Guide lists the one-way coach fare between Chicago and Los Angeles at $113.50; corrected to 2011 dollars, this would be $514.47. Today's fare is one-half to one-third the inflation-corrected fare. After checking coach fares between numerous city pairs, today’s fare is one-half or less than that of 35 years ago (when corrected for inflation). Remarkably, sleeper fares are on par to then, when correlated. The result of this has, in effect, reduced Amtrak’s trains (long distance in particular) to Greyhound buses on rails. Was this always the plan? Not according to Mr. Claytor:

“They [fares] are going to increase just as fast as competitive factors permit… Because our service has been improving, and more and more people have been willing to ride, and as long as more and more people are willing to ride, and pay higher fares, the fares are going up. This is not new. This is the policy that we have been following for at least 10 years.” - Interview with Graham Claytor, Trains magazine, June 1991

Today there appear to be “more and more people willing to ride,” yet in the last 20 years Amtrak ticket sales have gone from 22.2 million to 28.7 million. Just 6.5 million more riders per year in 20 years? This is hardly anything to crow about. During the same period, as aggregate intercity travel has increased (and air traffic has quadrupled), Amtrak’s aggregate national market share has declined. How, after all this time, could ridership remain so paltry? Perhaps no one at Amtrak knows how to grow ridership and increase output. Mr. Claytor knew how to do both. When asked about service expansion and the goal of full cost recovery:

“That is one of the ways we hope to reach it and to get additional equipment in order to increase our revenues faster than our costs. That spread is what counts. With the new order for locomotives already in [to General Electric], and with the orders for new Superliner cars we hope to make this year, these would give us the additional capacity to increase our revenues. We are up against the stops on many ways, because many times of the year we can’t carry more people. We have more people wanting to go than we can carry, because we do not have the capacity. The first priority is to get more capacity on the routes we serve. The second priority will be to start new routes that we think have a good possibility of working.” - Interview with Graham Claytor, Trains magazine, June 1991

Mr. Claytor’s “first priority” fell by the wayside after his passing. Instead, focus shifted and intensified on the corporation-owned Northeast Corridor (NEC). This would culminate in the extension of electrification from New Haven, Connecticut to Boston and the notorious Acela trainsets. While these are demonstrative improvements in infrastructure and passenger amenities, it is still a short corridor, and as such offers limited potential for passenger-mile revenue growth. While total NEC ridership has grown, Amtrak’s overall market share has declined sharply, and is less than 1.5%; all of this is hardly enough to offset the costs of infrastructure maintenance, and the high maintenance and power consumption of the Acela trainsets.

Ultimately, passenger railroading in America has been held hostage by misconceptions. In the 1950s, hucksters such as Robert Young convinced people that the only future for passenger rail was the short-haul train; conveniently, short-haul trainsets were what he was attempting to sell. The outcome of a 1958 Interstate Commerce Commission investigation has been dubbed the “Hosmer Report,” after ICC examiner Howard Hosmer, wherein:

“This examiner’s proposed report included an oft-quoted speculative conclusion that railway passenger coaches would likely soon become museum pieces along with stagecoaches, sidewheelers, and steam locomotives. Such language was not adopted in the subsequent formal ICC decision.” - Amtrak’s Long-Distance Service, Can it be Made Viable?, Gordon Gill

Today’s weary chant of “the long-distance passenger trains are a money drain” is nothing more than a continuation of the "junk science" formulated over 50 years ago by those lobbying for their own agendas. The public at large blithely accepted that junk science as fact, since passenger trains, for the most part, were not germane to everyday life. As growth in passenger rail with long-distance trains, in particular, has shown, junk science no longer cuts the mustard for today's savvy travelers. Amtrak had better find a new mantra.

Past is Prologue

Recently, someone was nice enough to publicly post a picture of a train gate at Chicago Union Station from 1964, showing the makeup of that day’s South Wind: http://www.rrpicturearchives.net/showPicture.aspx?id=2487104 Even at this late date, seven years before Amtrak, notice there are eight sleeping cars assigned to this train along with five coaches. On today’s trains, if the number of sleepers is equal to the coaches, it is a miracle; in the East, the sleepers are outnumbered by coaches. Moreover, Amtrak does not have an adequate supply of spare equipment to increase train length to match fluctuating demand. If Amtrak had kept the proper ratio, at least the income from the First Class section of the train would still be the same as 35 years ago.

Is it rational to expect Amtrak to provide “First Class” amenities? Does Amtrak really provide a First Class Service? Is the provision of a mattress enough to be classified as “First Class?” If so, try to remember that, the next time Motel 6 leaves the light on for you.

Even though Graham Claytor believed it was possible, perhaps Amtrak is not capable of providing the equipment, let alone the proper business acumen/model for overnight service. It should be remembered that for most of the history of American passenger railroading, overnight rolling stock, sleepers, and diners were provided by a third party: The Pullman Company. Pullman was a private enterprise employed by the private railroads to provide a service. For most of its life, Pullman made money. Relieving Amtrak of this chore should allow it to concentrate on its core business; the equivalent of buses on rails.

This Week in Amtrak

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This week a tale of caution, a tale of woe, a tale of passenger rail investment in our 21st Century.

Beware the Law of Unintended Consequences

Basic physics teaches us that for every action there is a reaction. The sociologists tell us such reactions may bring unintended consequences; unanticipated and potentially undesirable outcomes. It is widely held that such unintended consequences fall into one of three categories: Positive, negative, and perverse (wherein the results of the reaction are opposite to what was intended). Prominent sociologist Robert Merton cited numerous reasons for this lack of foresight, but perhaps the most dangerous in the political arena is the “imperious immediacy of interest” wherein “…paramount concern of the immediate excludes consideration of further or other consequences …”

At this time last year, passenger rail was garnering more than its usual share of the public eye. This was entirely due to the Administration’s said goal of building “High-Speed Rail” projects all around the country, even likening these to the Federal Interstate Highway program of the 1950s. As a result, many states pulled their decades-old dreams for intrastate passenger trains off their respective shelves, shook off the dust, and slapped on “High-Speed Rail” labels. One of these was the state of Ohio which wrote, in part, in its High Speed Intercity Passenger Rail Application of October 2009:

"During the past 35 years, the State of Ohio has continued planning for the reinstitution of passenger train service on its Cleveland-Columbus-Cincinnati corridor and vested several state agencies with that responsibility. In 1973, the Ohio Legislative Service Commission (LSC) moved to ‘study the feasibility’ of establishing a rapid transit system connecting Ohio’s ‘major cities’ in response to the Arab Oil Embargo. In 1977, the Ohio Rail Transportation Authority (ORTA) was created by the Ohio General Assembly to continue feasibility planning. In 1979, the Ohio legislature passed a law urging neighboring states to join them in exploring the potential for the development of a regional rail system within the Great Lakes Region. Following the 1982 defeat of a statewide sales tax initiative to advance high speed rail service, ORTA was abolished and its staff moved to the Ohio Department of Transportation.

“The initiative advanced in 1991 when the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) was enacted funding safety improvements at highway-rail grade crossings on corridors that were ‘designated’ as high-speed intercity passenger rail corridors based on their present utility and their potential for future development. It was in 2000 that the FRA designated the 3C Corridor as an extension of the Chicago Hub network and included the primary points or cities along the line: Cleveland, Columbus, Dayton and Cincinnati.

“Subsequent and current initiatives to advance passenger rail service in Ohio have been the responsibility of the ORDC, which was established by the Ohio General Assembly in 1994. In 1996, ORDC joined the Midwest Regional Rail Initiative (MWRRI), which calls for the development of a ‘Chicago Hub’ a system envisioned as a 3,000-mile rail system with eight passenger corridors serving 60 million people in a nine state region. The most current Midwest Regional Rail System (MWRRS) Plan report was issued in October 2004.”

Another of these was the state of Wisconsin. Although its rail aspirations were not as long-lived as Ohio, Wisconsin did bring its checkbook. In July 2009, the state entered an agreement with Talgo America to purchase two train sets for $47 million. As part of that agreement, Talgo would establish an assembly plant within the state’s borders. In doing so it would set the standard for the Midwest. Its High-Speed plan, also of October 2009, was the guideline for reintroducing service of some 85 miles between the state capital of Madison and Milwaukee. Although tagged with the “High-Speed” label the proposed service would never have exceeded 110 mph. The plan read in part:

“WisDOT is the lead state for the [Midwest Regional Rail Initiative] and will manage the efforts of the Steering Committee to identify the preferred train set equipment type. WisDOT also is involved in the nationwide effort to identify and acquire the preferred train set equipment through their involvement in the Next Generation Corridor Equipment Committee (mandated by the Passenger Rail Investment and Improvement Act of 2008, Section 3605).”

Talgo, for its part, kept its end of the bargain. They set up shop in the former Tower Automotive facility in Milwaukee with the promise of jobs in an area perpetually hit by hard times. The train sets to be delivered are of the new Talgo Series VIII, which are to be fully FRA-compliant and needing no waivers. The two sets ordered in 2009 will be placed in service on the existing Chicago - Milwaukee Hiawatha service. (The state of Oregon also ordered two sets, also to be built in Wisconsin.) It was initially hoped that two more train sets would be ordered for the expanded Madison - Milwaukee service. Ultimately, a new maintenance facility would be established in Madison.

At face value, this seemed like a good idea; a state connecting its largest city to its capital. New Mexico accomplished the same in 2008 when it connected Albuquerque with Santa Fe; however, the New Mexico Rail Runner has the look and feel of a commuter train, and has a total length of 97 miles. Recently the Commonwealth of Virginia announced its intention to connect its second largest city, Norfolk, with the state capital of Richmond, a distance of 109 miles. At no time in either case was the moniker “High-Speed” ever used or applied.

As with most parties these days, however, after the champagne stops flowing and the music stops playing, comes the stark dawn of day. The HSR party was no different. This ersatz High-Speed Rail was deemed as grossly indulgent in an era of austerity. New regimes elected to high office in Ohio and Wisconsin view HSR as too rich for their blood. Both new projects have been canceled, and the Federal monies reallocated to other states.

Talgo, for its part, will continue to hold up its end of the bargain; however, instead of filling the 125 positions originally projected, it will fill just 65. The four train sets on order for Wisconsin and Oregon will be completed by 2012. If no new orders are secured by then, the Milwaukee plant will only be used as a maintenance base for Wisconsin’s equipment. [As we go to press it has been reported Talgo shall move its operation to Illinois. Details of this shall be forthcoming.]

It was believed by many that these projects of Ohio and Wisconsin were reasonable -- and realistic -- due to their basic nature. Despite the “High-Speed” label, they were really in fact just a return to the past, with schedules that would not have been out of pace just two or three generations ago. Since these were really conventional trains and not the gold-plated fast trains of another continent, it was hoped those in charge would see past the HSR-“imperious immediacy of interest“; however, this was not to be. Even though all that glitters is not gold if it is perceived by the public to be gold, then it is a target. And whereas the call was for “High-Speed Rail” to be built around the country, it appears its collapse will doom many conventional rail projects as well. Can any other reaction be more “perverse?”

This Week in Amtrak

Image via Wikipedia
With this edition, we conclude the coverage of this year’s Passenger Trains on Freight Railroads conference presented by Railway Age magazine.

How does one brake a high-speed rail?

By Daniel Carleton

For many years, two prominent gentlemen have always been a presence at these soirées to act as guiding lights and voices of reason: Gene Skoropowski of California’s Capitol Corridor Joint Powers Authority, and Thomas Mulligan of Union Pacific. Today, both have retired from their long, distinguished careers; therefore, it was a real treat when they took the stage, engaging in a simulated freight/passenger negotiation session with a twist -- reversed roles. Skoropowski represented the railroad, and Mulligan the local municipality seeking to start a commuter rail service. Assisted by Kevin Sheys (Partner, K&L Gates LLP) and his two hats, the hour-long simulation was both humorous and sobering.

Many times railroads learn about plans of starting passenger service by reading about it in the newspaper. By the time they are invited to discuss the plan, the governing municipality has garnered numerous ideas about the railroad and its operations, most of which are completely erroneous. The railroad is left to quell these preconceived notions before the real discussion may begin. Any excess capacity on the railroad is owned by the shareholders. Liability costs must be borne by the new commuter entity.

The current Amtrak rates for track access to preexisting routes do not apply, and actual access fees will be some $7-10/train mile. Non-railroad capacity studies are “not worth the paper they’re printed on.” Railroads are receptive to incentive payments for service, but not penalties. Ultimately, the right business deal is needed to make such service a reality.

Martin Schroeder of American Public Train Association (APTA) addressed the gathering on safety standards development. Currently, APTA has over 200 standards in publication, and they are recognized by numerous professional and government agencies. The result of this proactive effort has been minimization of government regulation and an educated influence on the final outcome of said regulation. Fixed standards equal reduced liability for those adhering to them.

Alan Zarembski, President of Zeta-Tech Associates, spoke to us about engineering hurdles required for higher-speed corridors. Anyone looking to build or upgrade track for high- or higher-speed trains needs to enlist Zarembski’s expertise. Through numerous charts and graphs, he illustrated requirements for making a higher-speed corridor, as well as conflicts between the needs of freight and passenger trains.

Simply put, passenger track is expensive. For instance, a #20 turnout (a broad track switch) costs about $100-120K. A #30 turnout (an even broader switch) costs over $250K. In the U.S., track maintenance dollars are spent on rails and ties; in Europe, the resources go into right-of-way surfacing. When asked about the failures of concrete ties in the U.S., he stated that since the 1970s over 300 million concrete ties have been installed, and about 5-10% of these have suffered chemical degradation.

Rodney Case presented an outsider’s view of European freight and passenger operations. Europe does, indeed, have a mixed-operation network, and private investors are showing up in the European Union. He concluded by asking aloud if projects such as Access to the Region’s Core and East Side Access would not be fundamentally more attractive if jointly constructed to accommodate freight across Manhattan. He also asked, Why does the U.S. rail industry approach the government and stakeholders in such a fragmented approach?

Thomas Mulligan graciously received this year’s Graham Claytor Award for Distinguished Service to Passenger Transportation. A self-effacing man, he humbly summarized his railroad carrier. Early on, one of his superiors once declared him ambidextrous; he could not take shorthand with either hand! The ovation Mulligan received was well deserved, and we wish him the best that retirement can offer.

Over lunch, casual conversation turned to some quite shocking and virtually unmentioned facts about Positive Train Control (PTC). Overall PTC will make transit times longer. How can this be? Was not one of the touted benefits of PTC higher speeds? It was explained this way: Suppose a train is entering a 40 mph curve. Currently, the engineer may enter the curve at 41-42 mph with no discernable difference in train operation. This will not be possible with PTC. The train will have to be at 40 mph (or less) entering the curve, or there will be a penalty. That conversation ended with, “We’re still working on the algorithms.” It would appear Casey Jones truly is dead.

There was a panel discussion on U.S. high-speed rail initiatives. The panel Chair was Al Swift, former Representative from Washington State, who started the discussion with the admonition, “Advisory committees are there to be ignored.” He later made the salient point that we use the term “High-Speed Rail” indiscriminately, and we need to make some agreement on what it means. Art Guzzetti of APTA made the point that ARRA was a “jobs bill” and not a rail program. Currently, most intercity rail work is building back to a state of good repair and capacity expansion. Of note, one of the scheduled panelists, Drew Galloway of Amtrak, could not attend (as he was attempting to save the ARC program).

During the question/answer period, this author inadvertently kicked the hornet’s nest. The point was made that all true High-Speed Rail programs around the world began as augmentations or replacements of existing conventional rail systems. The two true HSR programs proposed in this country, Florida and California, are not replacing existing conventional corridors. Without a pre-existing rider base to naturally migrate from an existing service to an improved service, any new-start HSR service may not meet preconceived notions for ridership.

Would not such a failure on the national stage have long-lasting negative impact on operation/expansion of passenger rail in the U.S.?

There was a pregnant pause. A stunned backlash followed. One of the panelists responded, “I’m just a consultant.” The sternly-worded formal answer, from someone actively working on the Florida project, defended his efforts with the standard line, pointing to existing state-owned right-of-way and choice of station location as being surrounded by nothing but parking lots. The existing renovated station in downtown Tampa is purportedly unsuitable, as there is currently nothing near it.

The final presentation was an update on the higher-speed initiatives in Illinois. This primarily focused on the upgrade between Chicago and St. Louis, where speeds of 110 mph will be recognized. By that time, the majority of attendees had vacated, starting their way back from whence they came. How many traveled by train?

Epilogue

It has been less than two months since the conference, and yet it seems everything has changed. In the elections of last month many candidates ran, at least in part, on a platform of ‘stopping the train.’ Higher-speed plans in Wisconsin and Ohio may be cancelled. Even the true HSR project in Florida is in question. It would appear at least at this early date that passenger railroading in America has had yet another false start.

The first exposure this author experienced with passenger rail and politics was the High-Speed Ground Transportation Association convention of 1996. The crowd was huge. The air was electric. We were going to set the world on fire. Amtrak had officially signed to buy the American Flyer (later Acela) trainsets for the Northeast, and Florida was to get the Florida Overland eXpress (FOX). Before the end of the decade, the FOX was cancelled and Acela suffered setback after infamous setback.

Yet it is the same people from back in 1996 who have been coming again and again to Washington, and to similar meetings around the country. Now, with a probable payout for the first time in 14 years, they were practically tripping over one another to sell their wares. After 14 years, their angst is entirely understandable; so when the long-awaited call for “shovel ready” HSR projects came, about the best Florida could come up with was a dust-covered plan for the FOX.

But this is not 1996. The paradigm has most definitely changed. Is this really the best idea for denizens of the Sunshine State? The new anti-rail sentiment now threatens the future of SunRail, the Orlando area commuter rail system. Is the audacity of HSR such that it may endanger all potential rail projects in Florida? Instead of asking these and other questions, those would-be builders of HSR are running ahead full throttle. Their actions border on malicious compliance. High-Speed Rail is not the devil incarnate, as some politicians would contend; however, all successful HSR programs follow successful conventional passenger rail programs. This is something this country has not enjoyed for almost a half century.

Just as a baby learns to crawl before walking, we the people must learn (or re-learn) the basics of passenger railroading before contemplating moving forward. It is a generational arrogance that believes elementary steps may be skipped, yet viable results still be achieved. Seldom does arrogance go without receiving its due reward.

This Week in Amtrak

Image by Madbuster75 via Flickr
After a slow August in the world of passenger rail, we return to a busy soon-to-be autumn.

According to Fred Frailey in TRAINS magazine,

Union Pacific has told Amtrak that changing the Sunset Limited‘s frequency from tri-weekly to daily will cost the government-supported company about $750 million in capital improvements.

That’s almost as much as Phoenix spent building an entirely new 20-mile “light rail” system — including two large bridges and a complete modern maintenance facility and fifty computer-controlled trolley cars. We eagerly await U.P.’s wish-list. One wonders, once you spend some millions to restore a missing connection at San Antonio to eliminate back-up moves, add a couple formerly removed station tracks at places like Tucson, add a bridge here and some signals there … how do you come up with three-quarters of a billion dollars to run one train once a day?

Meanwhile, Berkshire’s BNSF issued a two-part $750 million bond, $250 million for a 10-year period at 3.616% and a 30-year $500 million part at 5.074%, both paying a premium over Treasury bonds.

In his annual letter to shareholders, Berkshire chief Warren Buffett wrote: “Overall, we expect this regulated sector to deliver significantly increased earnings over time, albeit at the cost of our investing many tens — yes, tens — of billions of dollars of incremental equity capital…” So the same dollar figure that U.P. wants for one passenger train, it seems, is the same as BNSF’s first installment in sprucing up its entire system. Does one of those numbers seem a bit off?

Next, to Ohio, where Republican gubernatorial candidate John Kasich has “vowed to kill the 3C plan if elected.” This train, which would connect Cincinnati, Dayton, Columbus and Cleveland, is in line for a $25 million for a preliminary study. Kasich and his advisors apparently are fretting over the $400 million starting price tag, and continuing state outlays. One does wonder, where is one penny of income from Ohio’s libraries? From Ohio’s fire departments? From Ohio’s superhighways? Oh, you say they result in increased education, decreased property losses, and increased economic and social activity, right? So why do we not frame trains in the same way? What is the cost of a trip not taken…

Yet we rail advocates find ourselves in a nasty predicament. Every time good work gets done, as in Ohio, toward a new train… or in Boise… or anywhere across the country where cities and states who want better transportation, and the social and economic benefits that stem from trains… Every time new Amtrak service is proposed, the price is so high and the service to be so slim that nothing ever happens. A year ago we looked at Amtrak’s Ohio report, one of three wrong-think reports issued around that time. We saw how “Amtrak really doesn’t want to be in the passenger railroad business” and, although there were some hopeful signs in subsequent months, we seem still stuck in the same doldrums as for the past 40 years.

One correspondent writes,

Amtrak’s complaints are so ingrained in politicians’ and voters’ minds that when some good public relations is needed, the cupboard is not only bare, but snarling back at those seeking relief.

Another writes that Amtrak,

has spent most of the last forty years not only saying, but proving, that passenger rail is a fiscal sinkhole. Needless to say the green eye-shade brigade in state capitals that must produce a balanced state budget every year takes on massive new obligations only with trepidation.

Add to this carriers like Union Pacific pulling massive numbers, some might think out of a hat, but perhaps out of reasonable expectations based on past dismal performance of a government-run passenger railroad, and here we sit, stalled again.

Perhaps the most excellent description of the conundrum is Steve Forbes’ recent commentary on high-speed rail. Forbes, logically unconvinced by what trains might be able to do, looks at projects like the Acela so-called high speed train which have failed to deliver on practically any of their promises, and at the cost of billions including a hidden billion-dollar loan from Canada… and rightly asks, Where is the benefit? Forbes doesn’t see any. And without benefit, what is the point of pouring billions more dollars into it? At some point, there have to be results. Call it return on investment.

To succeed in business, to succeed in the real world, you have to become indispensable. Apple has done that. Google has done that. Some might say Amtrak seems to have concentrated on becoming irrelevant.

Perhaps the renaissance of passenger trains will have to occur from the bottom up. USA Today reports that Denver has broken ground for its commuter train to the International Airport that replaced Stapleton Field. This is to be the long-anticipated first of four commuter lines radiating from Union Station which will complement Denver’s light-rail system. The article continues,

Denver joins a growing list of U.S. airports that are trying to promote public rail transportation. Others that will be connected directly via rail in the coming years include Dallas Love Field, Salt Lake City, Phoenix, Miami, Dallas/Fort Worth, Oakland, Washington Dulles and Los Angeles.

An AP newswire story tells how even Arizona is planning on a commuter and regional train system:

“It will not be possible to accommodate growth and avoid traffic congestion by improving roadways alone, so passenger rail should become a key component of the Sun Corridor transportation system,” the draft plan stated, referring to a planning area that stretches from Prescott on the north to Nogales on the south and includes both Phoenix and Tucson.

Phoenix is seeing results with its Metro trains, with monthly averages up to 44,000 daily riders, far above the projected 26,500, and continuing year-over-year increases. With few exceptions, every city that has built a rail system in the past decades has met or exceeded expectations, and brought new development and a renewed sense of place and community pride. The cost has shown its benefit. Why should there be any different standard for intercity trains?

Finally, as promised, this on first-class accomodations.
AMTRAK SLEEPING CARS ARE THE BEST VALUE AMTRAK OWNS

Commentary by Andrew C. Selden and Randy Schlotthauer, URPA

Note: This item was on (Congressman) Eric Cantor’s list of budget cuts he wants people to vote on. Only 48% of respondents to the poll favored the idea, but on Thursday, July 22, Mr. Cantor and some of his followers appeared on the floor of the U.S. House to extol the desirability of this cut. An amendment to a pending bill was introduced to implement the idea, but was rejected 234-179. We asked Mr. Selden and Mr. Schlotthauer to comment on the reasons this idea was not a good one. – Russ Jackson

Eric Cantor: “Prohibit ‘First-Class’ Subsidies on Amtrak; Potential savings of $1.2 billion over ten years. While only 16 percent of Amtrak long-distance passengers opt for “sleeper class” travel, as opposed to coach class, federal taxpayers provide substantial extra subsidies for this first class travel. Passengers in long-distance first class travel are provided a sleeping room, many with a private toilet and shower, turn-down service, and complimentary entertainment and pre-paid food. Yet, Amtrak loses more than twice as much per passenger (an average of $396) for first class service as compared to coach class service. These losses are made up by taxpayers. This proposal would eliminate subsidies for first-class service and require Amtrak to provide any first class service at cost.”

Andrew C. Selden: The issue is the corrupt Amtrak RPS-based internal MIS/cost accounting system. Large subsidies to western sleepers are an artifact, if not an intentional distortion, caused by the system, not the business activity. We can show (and have often done so) that these sleepers are substantial net contributors of free cash flow to Amtrak, failing only to cover arbitrarily allocated shares of other system, not operating, costs, only some of which are even indirectly related to the operation of these services.

The Superliner sleeping car, measured by business economic factors like return on capital investment, load factor, revenue per dollar invested, etc., is the best thing Amtrak owns. These members of Congress should look closely at actual sleeping car fares out west, where many passengers are paying thousands of dollars for a single trip. There is NO POSSIBILITY that these fares are losing money on a direct cost basis. The catch is always to audit deeply what costs Amtrak is charging against the sleeping car revenues to determine that a loss exists in the first place. That is where the members of Congress were being conned.

The collateral issue is the subsidy that these sleepers provide to the dining cars. FIRST, diners are indispensable to all travelers on LD trains, where the AVERAGE trip runs 15-20 hours in duration (varying by route). These people therefore (including every coach passenger) are on board over two to four meal periods (and of course some for even more). Lose the diner, and you’ll lose ALL the passengers, not just the “fat cat” families and retirees in the sleepers. The sleeper fare transfer to the diner is what keeps the diner on at all—by including meals in the sleeper fare, Amtrak guarantees a predictable base of revenue to the diner. Take away the sleepers and that fare transfer, and with the loss of sleeping car passengers (most of whom wouldn’t be caught dead making a two or three day trip in coach) and their fare transfers to the diner, the diner would have to charge obscene prices that would drive out the remaining coach passengers, and without meals over two to three day trips, no one will ride and the trains would be empty.

If Congress wants to look for subsidies to first class riders, have them divide the Acela first class revenue by its proportionate share of the annual two-thirds of a billion dollars of subsidy “invested” each year into the NEC. Those numbers are real and staggering, even though Amtrak never reports them as such.

Randy Schlotthauer: Were it not for the frightening lack of concern by our government about the concerns of citizens, not to mention their misplacing of the Constitution (I have several copies of my own that I would be happy to donate to them), this entire debate over “first class” subsidies would be so tiresome that I would not be drawn to the laptop to respond to it. Those of us that have been involved with Amtrak since THE BEGINNING (that would be before many supporters and opponents were born) have seen this windmill tilted at every year. I remember when we were desperately phoning and writing politicians, interest groups, and anybody else that would listen over a $246M TOTAL SUBSIDY that promised that the pin would be pulled on October 1, (fill in the year). This was in the good old days when there were just two types of cars: Amfleet and everything else, which wasn’t much. Though few of us at the time would have granted it, Amtrak President Graham Claytor managed to “modernize” the fleet with new equipment which in retrospect probably saved the LD trains, which we were convinced he was conspiring with THEM to eliminate.

Though designed with the promise and physical capability to deliver a high quality LD experience, through active sabotage by some crew members and a benign neglect (read: stupidity) on the part of management. None of the LD trains ever made full use of the features designed into the cars, and did not repair equipment that was damaged or stolen by passengers, crew, and the denizens of 16th St, 8th Street, and other “maintenance facilities”. As a result, even the best attempts by individual route managers to ended up flowering and then all too soon downgraded due to budget cuts that often were the disguised jealousies of other route managers. Despite the efforts of the original RailPAC-URPA group to introduce market economic laws and theories to Amtrak and it’s 485 owners, every year it was a battle for survival, with Amtrak management’s RPS accounting system proving that they could be profitable if not for those nasty LD trains.

Never was enough capacity provided to even approach break even, which was all any serious advocate discussed. If every seat in every car on every train on every day were filled at the highest tariff fare, there would still be a loss. Even Herb Kelleher (Southwest Airlines) couldn’t do anything with one triweekly plane to its largest potential markets. He recognized that planes (and trains too!) make money only if they are moving and filled with people. In fact Herb was one of Amtrak’s greatest opponents, because he knew what a well run passenger railroad could do.

So today we are discussing the proposed elimination of the First Class Subsidy, in order to “save” the railroad. First of all, the last trip I took in a Deluxe Bedroom on #3 and #4 could not be called luxury by any stretch of the imagination. Indeed, Denny’s offers superior food, service, and even entertainment (if you are at the right one at the right time of night). When you kill the sleepers you kill the diner and lounge. When you kill those, you are the Southern Pacific in the 1960′s, although this time there are not enough people that buy the line that America NEEDS Amtrak. I can build you a great case for a quality passenger rail service, including multiple classes of service. I can even build you a case of how you make it break even in 10 years. RailPAC-URPA’s Dr. Adrian Herzog did the math a long time ago, and it still works. What I cannot do is build a case to justify an Amtrak First Class Subsidy for LD trains. There is corporate culture at Amtrak that would fight any attempts to a really make things work.

This Week in Amtrak

Image via Wikipedia

Volume 7, Number 17
June 14th, 2010


A weekly digest of events, opinions, and forecasts from



United Rail Passenger Alliance, Inc.

America's foremost passenger rail policy institute



Jacksonville, Florida USA

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

------------------------------------------------------------------------

Positive news for commuter operations, and ponderings on the future of high speed and intercity operations. But let us begin with two brief preludes; first, a short poem, called a "Grook" by its author, Danish poet and philosopher Piet Hein.


Thoughts on a Station Platform

It ought to be plain
how little you gain
by getting excited
and vexed.
You'll always be late
for the previous train,
and always in time
for the next.

A second lead-in: a note on why we are all here. Marcus Garnet, of Transport Action Atlantic in Canada, writes in a Progressive Railroading internet journal ,

What is commonly overlooked, is that time spent on a full-service
long-distance train is also available for other purposes, including
overnight sleep, meals, work, meetings, socializing or simply the
enjoyment of scenery. Overnight train travel serves a transportation
function, but also offers a total experience, especially for those
who are able to afford a bedroom. These passengers do not just
travel on the train, they live on the train. Whether for tourists or
traveling Canadians, this is a vital market distinction from other
land transport modes.

Mr. Garnet sums up many of our feelings and motivations for being passenger train advocates. Yes, trains are a vital part of our national infrastructure, but we want trains because of what they do for us personally, what they do for our friends and families and neighbors, what they do for our economy and our ecology. Trains are special and we need many more of them.

One last item, from the Inbox: Reader Ole Amundsen wrote in regard to the referenced article on VIA Rail Ocean Train Service:

The comments around this exceptional piece of work seem to be
getting at the heart-wood of the rail passenger conundrum in this
country. My positions come from being 70 years of age, nurtured by
an old school conservative view of individual responsibility,
educated in business and economics, and experienced in national
agendas...

When Amtrak was started, I was only interested in getting the
/Montrealer/ re-instated so I could avoid driving from my new home
in Vermont to family in Connecticut. It is easy to look back and say
Amtrak should have been done differently: it has performed the task
of "place holder" for passenger rail but that is about it. Those
were dark days for railroads, but we are now in a very different
world: then I paid 16 cents a gallon for fuel oil to heat my drafty
Vermont farm house! Today, we have 75 million boomers aging out;
they control about 75% of the nations wealth, they love to travel,
they are fit but getting more prone to medical situations, they have
"done it all" and want to continue to have adventures, they enjoy
creature comforts and are enjoying being grandparents. This is not a
market block to be ignored, it is not solely a market for "luxury
train travel;" it is a major component of the traveling public which
does not opt for speed alone, but which prefers reasonable mode
frequency, reasonable adherence to published schedules, reasonable
and clean accommodations, reasonable food, accessible and
accommodating equipment and a minimum of hassle...

My friend, the late Paul Weyrich, had all the conservative
credentials a person could have; and he was a strong voice for
passenger rail and trolley ("light rail") as well as integration of
inter- and intra-urban service. This problem, this opportunity, must
be addressed without falling back on old reasons not to, and [there
must be a way we can] come together with fresh ideas on how to
really run the railroad.

Now, on to the news.

The /San Mateo County Times/ reported on 27 May that

Caltrain officials have convinced federal safety authorities to
allow quick European-style electric trains to zip from San Francisco
to San Jose... common in Europe, the smaller electric trains... [had
been considered] unsafe. But after three years of tests and
research, Caltrain will become the first railroad in the nation to
use the technology after being granted a waiver... [this] will
essentially be a pilot operation for the trains, called electric
multiple units. If successful, commuter railroads and planned
high-speed rail networks throughout the nation would have access to
cheaper, greener and faster trains...

Even with several restrictions, the advent of modern equipment used successfully and safely for years elsewhere around the globe is a huge step forward for the implementation of regional rail lines around and between American cities.

For those who saw the Ayn Rand quote last week as being "the politics of the past," we turn to Paul Merrion 's article in Chicago Business this June 10th , regarding high-speed rail (emphasis mine):

In a move that reportedly "stunned" the rail industry, the Federal
Railroad Administration last month proposed stiff terms for the
grant agreements that railroads must sign with states to get funding
to upgrade their rail systems... Among other things, *the FRA said
railroads must be required to pay, without limit, for any further
improvements or fixes needed to meet on-time performance goals* set
out in the grant agreements, or else pay back the federal
grants.Even Boston-based non-profit, National Corridors Initiative
Inc., a high-speed rail advocacy group, questioned whether that is
feasible."While the objective of these guidelines --- to protect the
taxpayer against the (mis)use of their money when federally assisted
railroad projects are built --- is a valid one, the prescriptive,
punitive nature of the proposed FRA regulations are and will be
non-starters for any normal businessperson who has to carefully
assess projects for risks to his company, or face the wrath of his
stockholders," the group said in a statement on its Web site...

The FRA holds over the railroads, not just the billions in high-speed rail grants effectively controlled by Amtrak, but also the impending imposition of Positive Train Control (PTC), a worthwhile safety and capacity improvement but one that will cost billions and take years. It is still not certain how much of PTC the railroads are expected to shell out of their own pockets. Is the Obama administration seriously going to require the railroads to pay /any/ price so Amtrak can operate its government-funded high speed trains?

In parallel developments, concerning the Gulf oil spill, "Obama said he had no interest in undermining the value of BP" (Reuters story , 12 June 2010), but meanwhile "U.S. House of Representatives Speaker Nancy Pelosi said on Friday BP should be subjected to unlimited liability costs and should pay all damage claims" (Reuters story , 11 June 2010). How can one impose unlimited liability without undermining industry? What person or corporation in their right mind would continue operating under those conditions?

(Caution: Ayn Rand reference follows; the timid may avert their gaze.)

In /Atlas Shrugged/, Rand populates her dystopia with officials who do not understand how the world works. Rand's bureaucrats have only ever ridden, as a Mr. Guthrie would put it, "their fathers' magic carpet made of steel," never seeing the engineering brain-power and the technical muscle-power behind a railway, imagining that trains function by magic, that oil pumps itself, that commerce and industry exist in a mythical land of everlasting continuation unaffected by taxes, regulation, and legislation. Rand posits a government whose popular and well-intentioned enactments "for the public good" strangle commerce and industry, slowly as a gentle flurry at first, finally escalating to a murderous avalanche.

Arthur Laffer explained in the /Wall Street Journal/
one June 6th why this neverland of perpetual sameness does not exist:

People can change the volume, the location and the composition of
their income, and they can do so in response to changes in
government policies... It has always amazed me how tax cuts don't
work until they take effect. Mr. Obama's experience with deferred
tax rate increases will be the reverse. The economy will collapse in
2011.

Dire predictions of impending doom aside, will the Obama administration, having already started down the dystopian road (One of the characters in Rand's 1957 book asks, When they nationalized health care, did anyone ask what the /doctors/ wanted?), truly enact scorched-earth policies in one economy sector after another? If so, look for oil and rail executives to be among the first to relocate to Galt's Gulch.

Back in the high speed arena,

Amtrak announced it is reorganizing and establishing a new
department to pursue opportunities to develop new intercity
high-speed rail service in select corridors around the country...

"Amtrak is the unparalleled leader in high-speed rail operations in
America today and we intend to be major player in the development
and operation of new corridors," said President and CEO Joseph
Boardman...

-- Amtrak press release, 22 March 2010


Aside from the omission of a word (does Amtrak intend to be /*a*/ major player, or /*the (only*/) major player?), does it not sound as if Amtrak might be jockeying for a near-monopoly in high speed rail? Will we see a resuscitation of the dead corpse of its former monopoly over all intercity trains, moved to HSR? Prior to the passage of S.738, the Amtrak Reform and Accountability Act of 1997, U.S. Code: US Code, Title 49, section 24701(b) read (emphasis mine):
"Except as provided in section 24306 of this title, a person may provide intercity rail passenger transportation over a route over which Amtrak provides scheduled intercity rail passenger transportation under a contract under section 401(a) of the Act *only with the consent of Amtrak*."

The "monopoly clause" indeed prevented state agencies as well as private companies from even talking to railroads about running passenger trains.
Would Amtrak have approved trains like New Mexico's RailRunner?
Doubtful. Certainly not in the short time it took from its announcement to the first cue for the "Meep-meep!" of the RailRunner departure door chimes.

That provision having been rescinded, will the liability issue now be how private operators are forced out of business?

Perhaps echoing liability concerns voiced frequently by North
America's Class I freight railroads, Amtrak President and CEO Joseph
Boardman has cited similar concerns "emerging as a significant
obstacle to the improvement of existing passenger rail service and
the development of new, including high speed and intercity corridor,
passenger rail service in the United States."

Boardman, in a five-page letter to four congressional leaders dated
Feb. 26, says in part, "The core of the problem is the unwillingness
or inability of a growing number of entities, including states and
other public bodies, to enter into the kind of agreements for risk
allocation ... and/or to purchase insurance at all or at sufficient
levels ..."

"Moreover, the attitude from a number of private parties and state
entities alike seems to be that Amtrak, in significant part because
of its federal funding, should assume the greater share or risk of
liability." That, Boardman warned, could curtail or terminate
state-supported services Amtrak currently provides...

-- Railway Age, 2 March 2010


Airlines are feeling a similar pinch. According to Susan Stellin in the /New York Times/ , this 7 June, reporting from the first meeting of the Future of Aviation Advisory Committee, air travel will look much different within half a decade.
Small cities will continue to lose air service, or at best will have ever-fewer flights at ever-higher prices, while some large cities with aggregated volume will see volumes above today's and low prices from further rate wars.

...Glenn Tilton, United's chairman, stated it more bluntly: "There
are clearly going to be winning cities and losing cities," he said,
addressing the fact that the industry cannot sustain service to
destinations that don't have the passengers to fill planes...

High speed trains have the same problem as airplanes: They just do not serve enough places. California's governor Schwarzenegger has proposed running a "high speed lite" train before he leaves office. Here is what Noel Braymer of RailPAC has to say in a letter to the /Los Angeles Times/:

According to the letter signed by the Governor, it looks like there
are plans to run rail service between Los Angeles and San Diego by
November in about 2 hours. It looks like the new train would only
have 3 stops at Los Angeles, Anaheim and San Diego. Just dropping
the six other intermediate stops would save 30 to 36 minutes on the
current schedule of 2 hours 40 minutes.

Generally express trains are not successful. By skipping stops such
trains also loses the business from those stations. Amtrak has tried
several express trains and they have all failed. A local example of
this was the /San Diegan Metroliner/ which ran for about a year
starting in September of 1984. It rarely carried more than a busload
of passengers. It lost the traffic the other trains carried from the
skipped stations. There was only one train a day leaving Los Angeles
for San Diego in the morning and returning in the afternoon. Saving
10 minutes wasn't worth the extra money for passengers if the return
train ran at an inconvenient time. Another problem with the
Metroliner was most cities with train stations lost a train to run
this new train. Many of these cities had gone to great trouble to
build new or rebuilt their stations and had not been consulted about
this decision. These cities were not happy...

Precisely this same scenario is playing with the English Javelin trains, the California HSR project, the Florida HSR, and soon coming to a minor city near you whose airport terminal will lose scheduled flights.

Looking back to Mr. Garnet's thoughts about the vital market distinction of rail, clearly the nation's towns and smaller cities, the ones left without air service, and nowadays without even bus service or anything at all, are the market for regular passenger trains. Even fifty or a hundred years of mangled government transportation policy cannot hide the basic utility and need of trains over cars and airplanes. The difficulty will be to create something that works more like a free market, replacing today's lack of choice or hope for too many towns and people.

The way forward involves tort reform, reasonable liability caps, and getting government back to /governing/, not operating, passenger trains. The same prescription holds for the freight railroads, the oil industry, even our highway and airway systems. This involves the dreaded "C" word -- Change -- and nobody much likes change; not lawyers, not unions, not management, not stockholders, and certainly not government.

We had better get started quickly.

\\/
William Lindley

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