Volume II Number 21 – This Was The Week That Was – An Amtrak Saga

March 15, 2002

It’s officially the Ides of March. Is anyone at Amtrak fully aware of their surroundings?

1. First, the good news. Amtrak’s new Downeaster service, running between Boston’s North Station (completely disconnected from the rest of the Amtrak system) up to Portland, Maine has exceeded ridership expectations for the third month in a row. The managers of the service are seeking to revise schedules and add more capacity for the service.

   Good news, indeed, when trains venture into virgin territory and are so warmly received. One important note is that this service has several frequencies a day, offering passengers travel choices. When passengers have choices (meaning more than one departure or arrival per day), they are more willing to use the service.

   The second set of good news is that California’s state supported Amtrak San Joaquin service will gain a sixth daily round trip on Monday, running between Sacramento and Bakersfield in the San Joaquin Valley. Dedicated Amtrak Thruway Bus Service forwards the passengers between Bakersfield and Los Angeles, since passenger trains are still banned on the freight congested Tehachapi mountain pass rail line between the two cities.

2. From the keyboard of Andrew Selden, here are some thoughts on the October, 2001 United States Department of Transportation Inspector General’s report to Congress:
   

   “– Quoting the Inspector General, Amtrak will NOT make its ‘glide path’ and that is a bad goal anyway because it is unattainable and unrealistic. Trying to reach it has ‘forced’ management to divert capital into short term investments and coverage of operating costs to meet the self sufficiency goal, rather than into real long term needs of the corridors. ‘Amtrak was not forthcoming with Congress [early on] about its larger long term capital needs.’

   “–Amtrak had, and has, NO fallback plan for the eventuality of not becoming ‘operationally self sufficient’

   “–None of Amtrak’s key initiatives really succeeded: Acela, service standards, Market Based Network Analysis, labor utilization and efficiency, mail and express, and cost avoidance.

   “–Amtrak should balance its capacity and its bookings so it can accommodate the peak loading point demand on its trains.

   “–’Overall, Amtrak lacks true financial and management information systems.’ Last year, Amtrak’s outside auditor, KPMG, gave the Board a ‘management letter’ detailing ‘…several material weaknesses concerning internal control and its operation.’

   “–It is not fair to criticize Amtrak’s substantially disproportionate allocation of resources to the NEC, because (and we’re paraphrasing this, but this is ALL the IG cites as to why it is proper to allocate disproportionate resources to the NEC) that is the only significant railroad that NRPC actually owns, and because it is electrified.

   “–Amtrak’s motor vehicle fleet grew from 1,500 in 1995 to 2,700 in 2000, in many instances through violation of its own corporate policies. Amtrak’s own motor vehicle data base is not accurate and complete.

   “–Cases of employee embezzlement and unremitted ticket revenues totalling several hundreds of thousands of dollars occurred at Bakersfield, Oakland, Sacramento, Los Angeles, El Paso, Providence, Albany and at MBTA in Boston. The IG stated, ‘On board personnel have the impression that management is not actively concerned about protecting on-board generated revenues.’ The report referenced conductors, dining car lead service attendants (the employee in charge of cash) and lounge attendants alike.

   “–Numerous cases were documented of significant overcharges by host railroads on numerous accounts and occasions. Some were plainly oversight, some disputed understandings of contracts, others apparently disregard for contracts.

   “–Amtrak paid host railroads $76.8 million for operating rights and $19.7 million in on time incentives in FY 2001.

   “–Amtrak’s change order for ‘additional’ food and beverage trolleys for Acela Express trains totalled $1.7 million, of which the IG questioned about 20% of the cost.

   “–Amtrak’s party to celebrate the inauguration of Acela Express service cost $1.37 million.”

   The most astonishing part of what Mr. Selden said above is that the inaugural of the Acela Express service cost $1.37 million. Read that again – $1,370,000.00. While it’s vitally important to properly introduce a new flagship service to the public, dare we say it again, $1.37 million?

   Somewhere, the priorities and business sense must have long ago gone awry. This is the same company that is closing a station in Houston three hours before train time and shooing paying passengers that are somebody’s grandparents out into the dark and cold for budget reasons, but can spend $1.37 million for an inaugural party?

3. Other Thoughts Worth Mentioning Department: Found on the Internet, written by a confederate of your humble correspondent
   

   “… I am so sick and tired of these people screaming NO MONEY whenever anyone mentions Amtrak’s pessimism about its own future.

   “Look at us [Referring to the Internet group of which he is a participant, the All-Aboard List.] – We have no money either! At least I don’t. But we can sit down at our computers and contemplate every issue great and small and figure out what needs to be done. Amtrak clearly is put off by the very idea of doing that. What that tells me is that it’s NOT about the money.

   “I submit that if everything else was reconciled and the only remaining problem was a shortage of money, then there wouldn’t be any problem. Since better ideas require less money in the long run, money will always eventually flow toward better ideas and away from worse ones. That’s where the money is going to come from.

   “But this whole process, if it is going to include Amtrak at all, has to start in their own brains. Unfortunately for them, they refuse to engage their brains because they have no money. That failure makes Amtrak one of the worst ideas. And that, in turn, explains why they have no money!”

4. Some starch in their spine: Metrolink, the very successful heavy rail commuter system in the Los Angeles area, is annoyed at the Union Pacific Railroad for poor dispatching of Metrolink trains on a line owned by UP from Riverside to Los Angeles. Either Metrolink, Amtrak, or other commuter systems control all of the other Metrolink operating lines, but the Riverside line, which has heavy freight traffic, stays under UP’s ownership and dispatching.

   Here is what Metrolink’s press release of Monday, March 11th said:
   

   “LOS ANGELES: Since the first day Metrolink opened its Riverside Line, on June 14, 1993, the commuter railroad has been plagued by delays along the Riverside to Los Angeles route caused by the Union Pacific (UP) Railroad’s dispatching practices.

   “For years Metrolink officials have tried to work with the UP to resolve these problems, but changes have been few and short-lived, so now Metrolink is sending the UP a notice of nonperformance. This letter triggers a contract enforcement process that requires the UP to respond to Metrolink within 30 days. If, after that time, the problems are still not fixed Metrolink’s Board of Directors could authorize staff to pursue arbitration.”

   What is important about this commuter railroad problem with UP is that Amtrak is also a very large customer of the UP, and is experiencing many similar problems.

   Metrolink is a very well run organization that is standing up to protect itself and its passengers. Metrolink is vitally important handling rush hour commuters in the Los Angeles area, and when trains are late, hundreds of people are late for work. Metrolink, with squeaky clean skirts, will be able to aggressively pursue UP in court.

   Regrettably, Amtrak, on the other hand, does not have such clean skirts when dealing with its host railroads. Constant allegations of late or very, very late payments to the host railroads continue to surface, and often relations between Amtrak employees and host railroad employees are not congenial.

   The efforts of Metrolink need the broad support of all; and Amtrak needs to work to put itself in a similar position so it can then fight for the rights of its passengers, too, and not have the embarrassment of late payments and other business black clouds hanging over it.

That’s it for this edition on The Ides of March. More to come next week.