This Week at Amtrak 2006-04-11
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Volume 3 Number 17
- This is the second in a series of special editions of This Week at Amtrak concerning a report by a bi-partisan forum of congressmen known as the Amtrak Working Group, led by Congressman Richard Baker of Louisiana. This group has issued the most important government document regarding Amtrak since the final report of the Amtrak Reform Council was issued in December of 2002 by Chairman Gil Carmichael and his blue ribbon panel. The title of the AWG report is “Amtrak in the 21st Century.”The Amtrak Working Group is a part of the United States House of Representatives Committee on Transportation and Infrastructure, and consists of Republican Congressmen Richard Baker, Vernon Ehlers of Michigan, Sam Graves of Missouri, Mark Kennedy of Minnesota, and John Boozman of Arkansas. Democrat members are Elijah Cummings of Maryland, Jerrold Nadler of New York, and Brian Baird of Washington.
The report was presented to committee chairman Don Young of Alaska during the final week of March.
There are a number of important topics which will be covered in a series of This Week at Amtrak special editions. The topics will not necessarily be in the order as presented in the group’s report.
For the expediency of electronic mail reading, all footnotes and other notations have been removed from text excerpted from the report presented here. The full text, with all information and notations is available on the URPA web site at http://www.unitedrail.org. Every reader is urged to review the full contents of the report in its original context for complete clarity.
- URPA was delighted to receive a comment directly from a very senior Amtrak official about last week’s TWA Special Edition, Part 1, regarding the Amtrak in the 21st Century report. The response said, “I am afraid you are, understandably, a little out of date with what is going on at Amtrak, which has moved well beyond most of what is in the report.” That concurs with the hope expressed by all of us, even though some of the changes may not be visible yet to those of us on the outside looking in. The task facing the Amtrak Board of Directors and their chosen new senior managers is huge, cleaning up so many years’ financial calamities and self-inflicted operating wounds.As Amtrak moves to solve these problems, it is important to know and appreciate the history, and what the next generation of Amtrak managers face on a daily basis, trying to save a crippled passenger railroad. This report provides a vast insight into what Amtrak senior officials are facing as they work to correct the mistakes of the past.
Another reason this report is of importance is because much of the gist of this and Amtrak’s faulty Route Profitability System (RPS) problems were first pointed out by URPA leaders Andrew Selden and E.P. Hamilton III, Ph.D. in a 1984 Passenger Trains Journal article, and 22 years later, the same findings are finally being recognized by someone in government that has their hand on the keys to the federal treasury.
Despite the best efforts by the National Association of Railroad Passengers, its Executive Director Ross Capon, and the state level organizations associated with NARP to help mask the true problems at Amtrak and continually cry for only more free federal monies and not true reform, we now see Amtrak entering into a new era of problem solving. While there are still miles to go, and the overcoming of wrong decisions by departed managers like the implementation of Diner Lite and the deemphasis of morally admirable onboard food service, it will be interesting to watch Amtrak under the direction of its truly first professional board of directors that understands what it takes to heal a maimed company.
- Here is the House Committee on Transportation and Infrastructure Chairman Don Young’s foreword of the report, Amtrak in the 21st Century.
The Committee on Transportation and Infrastructure is charged with jurisdiction over the nation’s rail system. A major aspect of that jurisdiction is The National Railroad Passenger Corporation, better known as Amtrak, which has been a concern of the Committee for many years. Ensuring that efficient, reliable, and safe intercity passenger rail is available requires an examination of the current situation and recommendations to resolve ongoing problems.In late 2005, an informal bipartisan working group of committee members was created to examine Amtrak’s role and its performance as the major provider of intercity passenger rail service. The Amtrak Working Group (AWG) sought to highlight not only systemic management problems at Amtrak but also concerns about the irregular and inadequate funding received by Amtrak over the years. I believe this report will help guide future debate and ensure that intercity passenger rail service remains a vital component of our nation’s integrated transportation network.
I want to thank Congressman Baker for his leadership, and all of the participants in the AWG for their time and attention in preparing a report that will assist the Committee in protecting and promoting changes to assist our nation’s intercity passenger rail system as it prepares for the future. I urge my colleagues in the House to give the findings serious consideration as we work together to solve current and future passenger rail issues.
Sincerely yours,
DON YOUNG, Chairman - This is the report’s executive summary.
Amtrak Operating Environment
For more than one hundred years, the number one method of mass transportation in the United States was passenger rail service. Even though government subsidies of the rail industry had largely ended by the 1870’s, the industry was robust enough to continue growing for the next 50 years.
The advent of automobiles and then airplanes, along with the public role of financing, eventually took its toll on the intercity passenger rail market. By 1970, it could no longer be sustained under the regulatory, labor, and business climates that existed. By that time public subsidies of highway and aviation industries far outstripped public financial support for passenger rail alternatives. In addition, rail companies at the time were required to maintain both passenger and freight routes even though they were no longer profitable; the companies were compelled to pay workers for years of additional service, even on lines that were phased out; and finally, the rail companies were competing with the shifting patterns of American travelers growing increasingly dependent on the expanding network of federally supported highways and airports.
In 1970, the Congress formed the National Railroad Passenger Corporation (now known as Amtrak) to take over passenger rail service from the private railroads. By the mid-1970’s Amtrak had acquired the Northeast Corridor via legislation as well as several miscellaneous rail lines that now make up a small portion of the track used by Amtrak.
The vast majority of the Amtrak system is operated over the various freight railroad tracks located throughout the country. Amtrak pays the freight railroads a fee for operating on their tracks, while the freight railroads and the commuter services pay Amtrak for use of its tracks. However, Amtrak does not pay a pro rata share of the freight tracks it uses. It only pays the incremental increase in cost of having passenger rail operating on the freight rail system. On the other hand the price paid by commuter lines and freight railroads to Amtrak for the use of its track is much higher per mile than what they pay for non-Amtrak track usage.
The demands placed on railroad tracks by freight trains are quite different than those from passenger rail service. Freight runs at a slower pace but is much heavier. The result is a conflict in track configuration, maintenance demands, and scheduling when a common track is used by both systems.
Finally, it is useful to understand rail system scheduling conflicts to appreciate the operational management issues involving Amtrak. As currently operated, Amtrak is delayed by, as well as causes delays for, freight rail. Since the passenger trains travel faster, they frequently overtake the freight trains. Until a siding can be found to sidetrack the freight train, the Amtrak train must slow to the freight speed. This can be a reduction from 80 mph to 40 mph. When an adequate siding has been found, it may take as much as an hour to pull the freight off the active track, allow the Amtrak train to pass, and then resume the original routing at the appropriate speed. Both are delayed by a mismatch of speed when sharing a common track.
Amtrak Financial Management
Over the years, Amtrak has been called upon to serve two masters – provide nationwide passenger rail service over routes no longer in commercial demand while trying to operate as a commercially viable entity. The result has been a constant flow of federal subsidies even as the stated objectives have often included financial independence.
Over the 35 years of its existence, Amtrak has been subsidized at the average rate of nearly $1 billion per year. A significant sum, but by some accounts inadequate to overcome the maintenance and technology problems facing Amtrak as it attempted to restore a system in substantial decline. Unfortunately, the inconsistent and inadequate funding has been coupled with poor management decisions over the years. The result has been a private corporation which is heavily subsidized by the federal government, but which has not used the resources it has received efficiently.
From the Government Accountability Office (GAO) report discussed below, it is clear that there are two primary problems. Amtrak receives inadequate, unpredictable funding and the funding it gets is mismanaged to such an extent that public and Congressional confidence is very low. Based on an aggregation of the findings and recommendations of the GAO report and the Amtrak IG reports on food and beverage as well as mechanical operations it appears that Amtrak could save as much as $250 million of its annual $1-1.3 billion subsidy without any alteration in its scope of service.
Efficient use of an additional $250 million could readily be used by Amtrak to address serious maintenance, growth, and safety issues currently facing the company. When a concern is raised that Amtrak lacks funds to repair its bridges or install functioning financial systems, one need look no further than the inefficient way existing funding has been spent to see that lack of money is not the only reason corrective action has not taken place.
At the same time if Amtrak demonstrates that corporate funds are being spent wisely, it would go a long way to encouraging additional funding to support the national passenger rail transportation system. A well operated Amtrak, with its financial house in order, could also help reduce the congestion currently facing some of our highways and airports. It could also increase our security by providing additional alternatives when other transportation modes are compromised. Progress by Amtrak that would provide spinoff benefits in these areas would be welcome.
The GAO and the Amtrak IG have pointed out that some progress has been made in recent years at Amtrak in addressing the issues raised in their respective reports. However, two critical points remain. The first is that the level of fiscal responsibility remains seriously out of step with standard business practices. Therefore, while acknowledgment of improvement is noted, the task left to accomplish is extensive. The current state of affairs is unacceptable. The second and more telling point is a reflection on the concept of form over substance. It is easy to point to Amtrak’s intended reforms. Even as the Committee’s ongoing oversight has been conducted, hearings have been held, and reports have been written, Amtrak has proffered new initiatives to address the problems as they have been uncovered. Response to oversight is of course laudable. However, while some are willing to view the proposed reforms as accomplished initiatives, experience with Amtrak has shown that words and proposals are much easier to come by than solid change and financial accountability. The test is not how quickly a new policy can be articulated. It is how quickly the corporate culture can be changed so that every taxpayer dollar is viewed as a public trust and every aspect of the business is pursued with fiduciary efficiency.
Amtrak Governance
The issue of Amtrak governance must be addressed. In the years since Amtrak was established approximately 75 people have been nominated by 7 US Presidents to serve on the Amtrak board. When Amtrak was originally formed the private railroads that had donated equipment and the labor unions representing workers had seats on the Amtrak board, assuring that management included professionals with rail experience. However, between 1980 and 1997, few Amtrak board members had rail, transportation, or finance experience/backgrounds. Since 1997, when the Amtrak Reform Act was passed, only a few board members have had operational business backgrounds but even fewer have had detailed transportation sector experience. Simply put, the Amtrak board for several years was populated largely by individuals with political resumes rather than transportation experience. Even though the current board has the benefit of representatives with business experience, there are only four of them serving – a number that may be less than a legally effective quorum. Even worse, there are substantial questions whether any or all of them are serving under duly constituted terms. The Administration should promptly work with the Senate and take steps to fully populate the Amtrak board with qualified appointments.
As GAO expressly pointed out:
“Amtrak’s board of directors has a role in defining this mission, but until recently, the board has not been active in doing so. The chairman of Amtrak’s board agreed that the board is responsible for establishing a mission for Amtrak, but the Amtrak board meeting minutes between February 2002 and August 2004 did not contain any written documentation of the board discussing a vision or mission for Amtrak. The board chairman said the absence of a full complement of board members had limited the board’s ability to develop a mission for the company.”
- RailPAC is the largest passenger rail advocacy group in California. Here is a report on a recent trip on the Sunset Limited by a vice president of the group from Southern California.
JAMES SMITH RODE AND ATE ON THE SUNSET LIMITED
Trip report for April 7, 8, 9, 2006
By James Smith, RailPAC Vice President, South
(NOTE: Mr. Smith writes this as a veteran train rider, not in his official RailPAC capacity.)
Amtrak’s Sunset Limited, trains 1 and 2, have not had a good on time performance for years. Now, they are saddled with, call it whatever you want, a downgraded food service mandated by Amtrak management. Some have written excuses for what has happened, but I challenge anyone to ride that train or any of the other similarly downgraded trains (all but the Empire Builder will be so by the end of May) and say what you experience is good for the future of the company. I have to wonder whether this isn’t an attempt to end long distance first class service once and for all, not because of the unfortunate Congressional mandate but because it would make things simpler for Amtrak management. It’s bad. Very bad.
My seven year old grandson and I boarded no. 2 [Eastbound] at Los Angeles Union Station on Friday, April 7. The train departed almost on time. My grandson was riding as far as Palm Springs where his other grandparents would meet him, and I went overnight to El Paso, Texas. He loved his trip. What I am reporting on here is primarily about the food quality I experienced, and a little about safety and scheduling. The train was delayed, according to the current situation with the Union Pacific, but only had big delays in California, and mostly around the railroad’s Colton yard even though we were delayed at various times east of there including having to wait for four freight trains to pass us out near the Salton Sea.. The travel through Arizona and New Mexico went smoothly. The return trip on no. 1 [Westbound] to LAUS was four hours late on Sunday.
Comments are pouring from everywhere about the food quality. If you haven’t read it, there was a major article in the April 8 Wall Street Journal, titled, “Removable Feast: The Last Steak on Amtrak.” Be sure to also read the Special Report on what Amtrak should be doing to enhance food service revenue on http://www.railpac.org. While some have been excusing what Amtrak has done on these trains, I challenge somebody to try it, then defend it. I did, and can’t. I would not now recommend anyone ride a long distance train in first class, except on nos. 7/8 [the Empire Builder, between Chicago and Seattle/Portland].
The food is bad. I had two dinners and two breakfasts on this trip. On the dinner meals my beef choice was Salisbury steak, and I can tell you its quality was that of a bad TV dinner: rubbery. For breakfast I tried the cheese omelette, which just stuck together. The omelette is the only egg choice (no fresh egg selections), and includes a sausage choice of links or a patty which tasted like it was prepared the night before, potatoes which were ok, and black beans. This breakfast item just cannot compare with a similar breakfast I’ve had on the San Joaquins, which was very good and much fresher.
A lady across from me at the breakfast table said the only thing this food is good for “is getting air out of your stomach.” How’s that for being direct? She didn’t want the sausage links after seeing mine. A gentleman across from me said, “No bacon and eggs?” and when told no, added, “I’m from the South. No grits?” This is a train that goes into the heart of the South, and grits are an important menu item to folks there. Did Amtrak think of that? A couple who were Amtrak savvy, loudly said, “Who made up this menu?”
A family on no. 1 had the other beef entree, and had to wait 40 minutes for their meals. There was only one waitress in addition to the steward; the diner was about 3/4 full. Because of furloughs to other employees, the young waiters and stewards are gone and only the ones with high seniority are left to do the heavy work and long hours. While attendants in the other cars can help out, it leaves their passengers without assistance, which is a safety issue. My sleeping car attendant had additional responsibility in the sleeper section of the transition car. I noted also, that there is no Sightseer Lounge car on the Sunset, a coach car has been converted to a snack bar on the lower level, but the seats upstairs are not available for revenue service! Only six crowded seats are on the lower service level. I heard that management is saying that the Lounge cars are in Beech Grove for maintenance, but there are three sitting in the Los Angeles yard and I’ve have heard there are others sitting unused in Chicago. The crew on this train cannot be blamed, as they worked very hard to live up to whatever expectations they could. I passed the new train “Manager,” (whom I saw only one other time on my trip when he came in the diner to get food) and replied when he asked me, that it was “the worst food I’ve ever had” on a train. A crewman was heard after I went by, saying, “guess he didn’t like our five star menu.”
For the life of me I cannot justify spending hundreds of dollars for first class accommodations and then come back not saying anything positive now. I cannot excuse something that is just “bad.” To you readers I say, take a train, eat 6 meals and then tell me you like it. If you do, you have a bad appetite system or are lying. I’m not looking for “fancy,” I’ve ridden Amtrak too much to have that expectation. The plastic plates are ok, I could live with them, but paper cups for beverages? Just not appropriate. I heard no positive comments. I’m not alone feeling this way, the lady across from me said people are getting off the train in San Antonio, going to the nearby Denny’s, and bringing food back to the train. The serving hours on board have been extended, and that’s great, but I question whether travelers really want to reserve a breakfast time when they don’t know when they’ll get up. The reservation system seems to be working all right, though. They’ve had time to iron out most of the problems with this new system, so unfortunately what remains is what will remain.
I have to wonder if Graham Claytor was still Amtrak CEO if he would have stood still for this kind of meddling by the Congress and if he wouldn’t have killed this service downgrade before management could have it hit the rails. The bottom line on this current Amtrak food service is this: Once sleeper revenue dries up they can get rid of them. I dare Amtrak management, which must have devised this business without ever having ridden out there, and others who make excuses for them, to get on board and then make the same excuses. You can only defend what is right. This food service is wrong. Where is the Amtrak Board? Have any of them ridden (anonymously) and sampled it? My gut feeling is if someone gives you a mandate to do something and it’s wrong, then fight it or it is going to destroy your business. To excuse it makes you a part of the problem. This is not good for rail travelers. It’s bad. It will have a negative effect on revenue.
Yes, I will continue to travel by train, as it is the best way to go, but until sanity returns to the food service I will have a hearty meal before I depart Los Angeles and wait to have another meal at my destination. Am I writing to Amtrak about this situation? You better believe it! Your comments would be appreciated: jsmith@railpac.org
- On the subject of new senior managers at Amtrak, Thomas Schmidt has been appointed Assistant Vice President of Transportation. He will be responsible for operations, federal operating rules compliance, and train and crew allocation.Mr. Schmidt left CSX Transportation after serving in various leadership positions for the network operations train control technology and service design departments. He was also President of the Richmond, Fredericksburg & Potomac Railroad, a CSX subsidiary before the railroad was merged into CSX. Additionally, he was Vice President of Engineering for CSXT.
The key position being filled by Mr. Schmidt is a critical one concerning the actual operation of Amtrak trains over tracks. It is important to note Mr. Schmidt has a background with CSXT in the service design department, which determines how the railroad will optimally serve its customers and meet customer service needs on every level.
- Here’s a fun note: Guilford Rail Systems, the parent company of New England freight railroads Springfield Terminal Railway Co., Boston and Maine Corp and Maine Central Railroad Co. has changed its name to Pan Am Railways.Yes, you read that right. Guilford owns the Pan Am Clipper Connection charter airline. The company bought the rights to the Pan Am name and world famous logo a few years ago after the original Pam Am went into bankruptcy and liquidation.
Historians will recall that in the days between World War I and the Korean Conflict, it wasn’t unusual for railroads to quietly invest in airlines or outright start new airlines. One of the largest airlines in Canada was CP Air, owned by Canadian Pacific Railroad. Pan Am Railways, however, is the first time a railroad has taken the name of an airline.
It’s really a smart move. The Pan Am name and big blue globe are instantly recognizable, even though it has been more than a decade since the original airline disappeared. The modern office building built atop New York City’s Grand Central Terminal in the 1960s was the Pan Am Building.
The railroad plans to put the Pan Am name and logo on its box cars and locomotives.