Vol. 1, No. 8 - October 22, 2004
- This Week at Amtrak reader David P. Carleton of Central Florida has provided a fascinating analysis of the railroad industry and Amtrak. Mr. Carleton’s thoughts are:
"…A book, Main Lines - Rebirth of the North American Railroads, 1970-2002 [provides interesting data]. On page 26 there is a very interesting chart of Ton Miles, Employees, and Ton Miles per Employee.
"In general, the ratio of ton miles per employee improved modestly during the first half of the twentieth century, albeit with exceptions such as at the beginning of the great depression and at the end of World War Two. The second half was quite different, however. Here are the numbers:
1950 484,787 1960 732,394 1970 1,351,590 1980 2,002,787 1990 4,787,037 1998 7,450,549 "Just look at that, a ten times improvement in productivity in only forty years! Ton miles went up - way up - and employment actually went down. Oh, let’s count the ways that this doesn’t apply to Amtrak!
"First of all, passenger miles aren’t going to go up if they don’t buy enough cars and keep them serviceable. Sounds simple enough, but this is Amtrak … So there goes the ability to gain productivity through growth.
"Second of all, the establishment still follows the [mid 20th Century] Robert Young [A financier who controlled the C&O Railroad, among many other things] era junk science which says that corridors are where it’s at. He had a product called Train X, and he had tried to control the train’s manufacturer, Pullman. His team pushed data (dubious in some opinions) supporting corridors as a growth business, and this is still held as truth. But it’s difficult to get improvements in passenger miles per passenger on corridors because they are inherently short. Train miles can increase, but if passenger miles per passenger can’t grow much then that will limit opportunities to improve productivity.
"The research team eventually determined that adding sleepers and diners to trains was not economical, trains should be five or six cars, and should run very frequently (as opposed to adding and removing cars). Hey, that would be perfect for Train X. But wait a minute, this is from the same guy that had a vested interest in Train X. Sure. No conflict of interest there!
"And even though it’s been half a century, those findings are still widely held as fact.
"And third, when the Railpax law was written in 1970, the railroad business was earning less for its investors than they could have gotten by putting their money in the bank. When Amtrak started business, its first professional management built an enterprise which was full of all sorts of the same inefficiencies which were strangling the railroads of that time.
"The railroads make good money now. In fact, their biggest headache is too many ton miles and not quite enough personnel. Amtrak, on the other hand, has gone the other way.
"In the years after Amtrak got the Northeast Corridor, the NECIP (North East Corridor Improvement Program) projects were folded into Amtrak. Since the NECIP had been a clearing house for northeastern rail projects, Amtrak has come to be regarded as the program agency for northeastern high speed rail.
"A long time ago, when I was working on some railroad related engineering projects, we were told that NECIP actually meant “Never Ending Crisis In Progress”. In its current form, not only does Amtrak embody the kinds of inefficiencies which wrecked the railroads, now they also host the Never Ending Crisis!"
- David Carleton
Mr. Carleton’s correspondence aptly makes the point that Amtrak, as it stands today, has all of the costs and overhead of a major railroad or business enterprise, but it does not have the efficiencies of volume of output. Simply said, the size of Amtrak is too big for the number of trains it runs in the national system. Instead of cutting the national system or leaving it stagnant, if the national system was allowed to grow, it would eventually grow into its cost structure, and eventually (if well managed) revenues would outstrip costs. This is not some strange concept, just common business sense.
- Amtrak issued a press release on October 14th bragging about increases in ridership for the second straight year. (Yawn). When the company is ready to talk serious numbers, such as revenue passenger miles, wake us all up. In the meantime, actual body counts are meaningless. It’s not how many passengers you carry, but how far you carry them that makes the difference. Body counts are for transit systems, not long distance passenger carriers. Why is Amtrak the ONLY long distance common carrier that insists on using body counts versus revenue passenger miles? Does everyone else know something that Amtrak refuses to acknowledge? Or, is this just another con game from Amtrak, hoping to obfuscate the real financial and operational pictures? (Note in the item above that freight railroads use ton miles as the accepted unit of measure, not individual pieces of freight moved. Why has Amtrak strayed so far from reality?)
- Amtrak has new change in travel plans policies going into effect November 1st. Many former rules are relaxed, some charges waived, and in general, the overall policies are favorable to passengers versus what is prevalent in the travel industry. Amtrak is making very good use of its unique ability to offer passenger convenience in a world that is generally dominated by airlines and the airline herd mentality.
- Stations are another area of Amtrak where the company has almost unlimited opportunities that are often being squandered. While it is true that stations are expensive to operate, each one provides Amtrak with a window on a specific city or town.
Let’s break Amtrak stations down into what they really are: each one has all of the costs and potential of an individual business. Every station has the cost of management and personnel, electricity, maintenance, signage, a parking lot, and everything else that it costs to run an individual business.
The tragedy of most stations is that each one has a sparse product to sell, such as only one train a day in each direction, or in some even more tragic cases, only three trains a week in each direction.
This is, again, a classic case of under utilization of assets. Under the Transit Trio of Downs, Warrington, and Gunn, Amtrak has responded by doing what a bankrupt railroad would do, close or destaff stations, worsening the overall problems instead of working to make them better.
When stations close or are destaffed, revenue and community relations opportunities are lost. Relying on the Internet or central toll free phone centers does not and cannot replace live, local bodies behind a ticket window or manning a station when passengers are boarding or detraining late at night.
This also contributes to Amtrak greatest problem, being the best kept secret in America.
There are several ways to fix this problem, among them increasing the number of daily trains on each route, creating a partnership with local governments to jointly operate the stations, and franchising stations to private industry. The only bad idea to fix the station problem is to close or destaff them. While that has short term gains in expense reduction, the long term loss in revenue is disastrous.
Other station problems that must be addressed are location, parking, and security. Many stations are in historic locations in parts of cities and town that are no longer desirable or safe. Many stations should be relocated to safer parts of town that are more easily reached from today’s local traffic patterns, not traffic patterns of a century ago. Also, many stations have grossly inadequate parking facilities. Until passengers feel it is safe to leave their automobiles at an Amtrak station, they are not likely to consider passenger rail travel as convenient and comfortable.
Many historic train stations have been magnificently restored into local showplaces. Much thought and money has been put into these structures. The real question, though, is whether or not these newly renovated stations fit the needs and conveniences of today’s rail passengers. Would it not be better to restore the stations for historical purposes, and build new stations that fit the needs of today’s passengers in many cases?