This Week At Amtrak 2004-09-01
Vol. 1, No. 1 - September 01, 2004
- Amtrak President and CEO David L. Gunn issued a special employee advisory on Friday, August 27th notifying company employees the railroad is exiting the mail and express business by early October.
The mail and express business, which historically has been a natural fit the passenger railroads, has been fraught with controversy since Amtrak dove headlong into the business in the 1990s.
While Amtrak has carried the U.S. Mails for most of its corporate life, only in the 1990s did it develop a business plan where it would also haul time-sensitive freight, in competition with the trucking industry - and more importantly - its host railroads. Most of the host railroads were not thrilled to have a customer (Amtrak) that was being hosted and dispatched at what all considered to be a financial loss, and have that same customer compete for high revenue, time-sensitive freight.
Amtrak made the decision that the fleet of newly acquired express cars would not be cabled for head end power operation. As a result, the traditional “head end business” as mail and express was known prior to Amtrak, was relegated to the rear of the trains, which added some new spotting and switching complications. Of even greater concern, was when each of these trains carrying material handling cars backed into a stub end or terminal station, Amtrak conductors had to ride on the point/rear car in all types of weather conditions, standing on a metal step rail and holding onto a metal handrail, causing corporate shivers in the legal and safety departments. To save money by not having to outfit the MHCs for HEP, the company was willing to risk the health and safety of conductors who were more accustomed to spending a trip inside air conditioned passenger cars rather than battling the elements hanging on to the side of a box car.
An entire business group, complete with full bureaucracy was formed at Amtrak to pluck the intended golden goose of mail and express. This came with construction of mail and freight handling facilities at various Amtrak stations, huge investments in several types of rolling stock, a ramping up of mechanical forces to handle these extra cars, and delayed passenger schedules to accommodate the mail and express loading, unloading, and slower speeds of the freight equipment imposed by the host railroads.
There were glorious plans in the beginning; national system long distance trains would be flush with mail and express business that would boost route revenues through the roof. Product line managers were congratulated by vice presidents on how well their route profitability reports would be, without having to haul a single, high cost passenger. The Promised Land was at hand.
Oops. Almost immediately, the wheels fell off this ill-conceived program. First, the host railroads resented competing with their own customer in what they considered to be an unfair arena. Then, speed restrictions were imposed on trains due to questionable mail and express rolling stock performance. Heads rolled, including the vice president who dreamed up the whole operation.
Two new routes were inaugurated based in projected revenues that never materialized. Both of those trains are gone, now. The express side of the business was discontinued, where trains such as the Sunset Limited hauled ceramic tiles (no one was ever quite sure what was “time sensitive” about ceramic tiles for builders), and other trains in the east hauled ketchup.
The mails, in the finest traditions of the postal service, continued to go through, but often with trucks substituted for trains if connections were missed or trains ran horribly late. In many instances, the mails received better treatment for connections than passengers.
Now, as one Washington wag put it, “Amtrak is the little railroad that couldn’t,” and Mr. Gunn has shut down the whole program.
This could be a good thing, if it helps Amtrak refocus on its core mission, hauling passengers in a safe, comfortable, and reliable manner.
The reality, however, is that the exiting of Amtrak from the mail and express business will likely be another excuse for the deterioration of the national system long distance trains. With the revenue from mail and express lost, only passengers (see above) can be counted on to support the trains - and we all know that Amtrak usually takes the concerns and comfort of its own operating department into consideration before that of mere passengers.
Here’s the kicker - the same business that Amtrak is abandoning is being embraced in the private sector. RailRunner, N.A., in conjunction with Norfolk Southern’s Triple Crown Services Company, is inaugurating a new service which uses truck trailers that easily convert from highway use to rail use without using a crane for loading and unloading from rail cars. This is identical to Amtrak’s now-defunct Roadrailers, which were part of the company’s mail and express business. If a private company is picking up this business and willing to gamble private investment, then a strong market probably exists. Also, moving the U.S. Mails by rail will continue, just on the freight railroads instead of on Amtrak, and probably with better on-time performance.
- The annual Amtrak free money beg fest continues in Washington. All of the usual elements and players are in place; Amtrak requested free federal monies totaling $1.8 billion for fiscal year 2005 beginning October 1, 2004, the White House budgeted $900 million, and so far, the House of Representatives has come up with an in-between number, awaiting word from the tardy Senate.
Everyone recalls dire warnings by David Gunn during the past two years, that if Amtrak didn’t receive the money it needed, he would shut the system down. Amtrak’s various lap dog organizations effectively continue this whine, wrongly labeling anything less than $1.8 billion a “shut down budget.”
There are two problems with this argument. First, the majority of the free federal money requested is to be used for capital improvement programs, not operating expenses. The $900 million requested by the White House more than adequately covers operating subsidies for the national system, Amtrak’s railroad retirement obligations, and a myriad of other areas. The rest is for NEC infrastructure improvements (many of which need to be made at some point, but will not shut down trains in Nebraska or California if they are not made). Once again, Amtrak is trying to hold train service in the national system hostage to the parochial needs of the northeast.
Second, last year a nationally known magazine “outed” David Gunn and his threats, providing a comprehensive list of every time he has threatened the public with transit or rail system shut downs if he didn’t receive some type of public monies he was clamoring for at the time. It is notable that for this year, he did not publicly repeat this now-exhausted threat.
However, he has a new threat. In a front cover article in the June 17, 2004 issue of the prestigious National Journal magazine, Mr. Gunn is quoted as saying, “If you give me $900 million, I’m gone.”
Since he assumed the stewardship of Amtrak, Mr. Gunn has received over $2.3 billion in free federal monies, plus millions more in state payments, plus at least the same amount in ticket revenue.
Yet, Amtrak is experiencing what insiders claim is practically the worst summer on record for late trains, malfunctioning equipment, delays from non-rested crews, and a number of other management-related maladies.
Mr. Gunn, where is the money? You’ve had record amounts of federal support under the Bush administration. No other White House in the history of Amtrak has been so generous with free federal money, despite what critics are too blind to see. Not even the NEC, which has been the principal beneficiary of this money is operating trains reasonably on time. Mr. Gunn, where is the money? If you can’t improve the company soon with this plethora of funding, may we take you at your word, and will you allow someone else to lead Amtrak to prosperity?
Those who do not learn history are doomed to repeat it. Keep in mind how long how many believers refused to understand what was happening to Amtrak under Mr. Gunn’s immediate predecessor. How long will the true believers wait this time, before it may be too late?
- Western long distance and California corridor trains continue to be haunted by the problems of the once great and mighty Union Pacific Railroad. UP is currently experiencing yet another meltdown in customer service and its ability to move trains over its rails, this time because railroad management failed to understand how many train and engine crews were ready to retire through a special incentive program, and the railroad was left with too few crews for too many trains.
The resulting mess has cascaded down onto Amtrak, causing trains such as the Sunset Limited and Coast Starlight to run in some cases as many as 15 hours late. The result of this has been train cancellations at the height of the summer travel season, leaving passengers stranded.
Amtrak doesn’t have much clout in this situation, since it is only a UP customer, and not policy maker. Even though, by contract, Amtrak trains are supposed by dispatched before freight trains, when both mainline and siding tracks are clogged, there isn’t much that can be done simply because of contract language.
UP says the problem is being solved by the hiring and training of new crews, but this process takes time. Look for slow trains for months to come.