United Rail Passenger Alliance

Here’s a glimmer of information which may shed some light on the subject. SunHerald.com, the online web site of The Sun Herald in Southern Mississippi, datelined a story from Pascagoula (Senator Trent Lott’s hometown) about Mississippi Governor Haley Barbour’s recent appointment of a new member to the Southern Rapid Rail Transit Commission, which is a governmental body consisting of members from Mississippi, Alabama, and Louisiana that promotes passenger rail along the Gulf Coast. This is the same group that originally created the late, but successful Gulf Coast Limited of the 1990s, that ran daily between New Orleans and Mobile, Alabama, over the same tracks as the Sunset Limited.

Here’s a quote from the story by Sun Herald staff writer Donna Harris:

Amtrak is in talks with the Southern Rapid Rail Transit Commission about implementing various passenger services, including the Sunset Limited. The Sunset line once ran from Orlando to Los Angeles, making stops in Mobile, Gulfport and New Orleans.

The transit commission penned a resolution urging Amtrak to develop a detailed corridor investment and implementation plan. The commission has said it will work with Amtrak to pursue federal, state and local funding for operational and infrastructure costs.

Commissioner Elizabeth Sanders of Mobile told the Associated Press in November that the commission is asking for just under $22 million in federal funding to improve the tri-state rail system. The funding must be matched by the three states.

So, is the real culprit for the delay of putting the missing link of the Sunset Limited and Amtrak’s national system back into place that Amtrak is just waiting for someone else to pony up the money to do this, even though the Sunset has always been operated as part of the national system, and has never had any individual state funding?

Is this the beginning of some sort of plan where all long distance trains will be carved up into state-sponsored links where Amtrak seeks state funding instead of using its own marketing muscle to attract riders to earn revenue to operate trains?

There is absolutely nothing wrong with Amtrak seeking state funding for corridor trains. California has proven the theory of good local marketing for corridor trains easily replaces high state subsidies demanded by Amtrak, as long as Amtrak has nothing to do with the local marketing. But, holding a national system restoration hostage in exchange for all of the benefits to the national system through matrix opportunities, plus Amtrak’s national mission to operate a healthy rail passenger system is just wrong.

Jesse James at least had the professionalism and courtesy to use a gun and a mask when he was robbing someone. If Amtrak is trying to do the same thing to the Gulf Coast states, then shame on Amtrak.

Aaarrrggghhhhh!

How can any reporter that is supposed to be enlightened about the subject they are reporting on, report such nonsense?

The answer is, because Amtrak corporate communications and Amtrak executives have allowed this to happen for far too long, without challenge or an attempt to present the true facts.

Even the federal Government Accountability Office gets it wrong, and things like this make it into print, and people actually believe this nonsense.

When is all of this going to stop?

Reviewing last week’s TWA, for all of those sitting in the back of the classroom, we discover … [Begin quote from last week's TWA] [Amtrak's] own figures from FY 06 show 2,430,166,000 revenue passenger miles were generated by the long distance train national network, while the combination of all NEC trains, including Wondertrain Acela was just 1,482,448,000 revenue passenger miles, and the short distance trains, which includes state supported trains, generated only 1,448,903,000 revenue passenger miles.

To put it another way so everyone can understand, 15 daily and tri-weekly long distance trains in each direction generated 2.4 billion revenue passenger miles, 40 daily NEC trains in each direction generated 1.5 billion revenue passenger miles, and 102 short distance daily trains generated 1.4 billion revenue passenger miles.

Not to make too fine of a point, but 2.4 billion revenue passenger miles from 15 trains (two of which aren’t even daily) versus 2.9 billion revenue passenger miles from 142 NEC and short distance trains hardly seems like “lightly used long distance trains.” … >From a financial aspect, the 15 trains in the long distance network, on average each generate $23,868,066 in gross revenue (before any subsidy), and the 142 trains in the NEC and short distance networks only generate $7,035,810 each on average in gross revenue. The total operating expense (according to Amtrak figures) was $1.1 billion for the NEC and short distance networks, and $841 million for the long distance train networks.

The average load factor on the 15 long distance network trains was 55.1%, on the 102 short distance trains, 40.7%, and 45.2% on NEC trains.

As to the “money losing” aspect, that Amtrak figure is confusing and needs to be cleared up. The FY 06 books show a positive cash flow for Acela, without any subsidy necessary. But, the same books also show a subsidy requirement for other NEC trains, which use the same stations, same dispatching personnel, same tracks, and same reservation system as the Acela trains. Please explain how one set of trains, Acelas, with 2,668,200 riders can “make money,” while other NEC trains, with 6,840,200 riders, loses money.

We also know [Amtrak] executives have made statements that the long distance system loses $300 million a year (and the FRA in the past has put that figure at $100 million), but your FY 06 books show that figure at $481.6 million. Where are the books being padded? What is being charged against the long distance system that isn’t being charged against the short distance or NEC trains?

Is the difference in the cost of maintenance of way of the NEC, which you are charging to capital costs instead of operating costs? Are you even charging a set track fee to Acela and other NEC trains, or are you dumping everything into a capital costs account the “pretty up” the operating books? If the true federal operating subsidy is a total of $584 million, and you received $1.3 billion from the federal government, where did the rest of the money go, after Railroad Retirement mandatory payments and debt service?

Along this same subject was a Washington story generated last week by the Associated Press and distributed nationwide. It ran in a number of newspapers, and even in such places as Business Week magazine. There was a time when those of us who used to be in the news business knew we could depend on the AP for accurate reporting. Those days seem to be disappearing.

The AP story was an interview of Amtrak President and CEO Alex Kummant, and covered a wide range of topics. The AP reporter, Sarah Karush, seems to have done some homework in preparation for the interview, but clearly not enough homework.

Part of the story states:

The government-owned corporation reported record ticket revenue of $1.37 billion in the fiscal year ended Sept. 30, an 11 percent increase over fiscal 2005, with ridership ticking up 1 percent to 24.3 million passengers. The system, created in 1970 to take over declining passenger rail service, is heavily dependent on government funding; it received $1.3 billion from Congress, including a $485 million operating subsidy, for the 2006 fiscal year. … A November report by the Government Accountability Office concluded that long-distance routes — such as the Sunset Limited from New Orleans to Los Angeles and the Empire Builder from Chicago to Seattle — account for 15 percent of riders and 80 percent of Amtrak’s losses, and provide little public benefit.

The statement made by the GAO report is actually accurate, but totally meaningless. Yes, when you look at raw ridership numbers, long distance trains did account for 15 percent of warm bodies that stepped onto Amtrak trains.

However, again, this statement means nothing, unless you’re writing about single-zone pricing in transit. Other than Amtrak – and this is a long standing, self-inflicted wound by Amtrak for decades, now – no other common carrier, whether it’s an airline, bus company, or steamship company, reports pure ridership numbers as a measure of success. These numbers mean nothing. Revenue passenger miles are the only true measurement, and they are the only measurement which is reported in the national media when writing about airlines and bus lines and steamship lines’ success or failure.

So, why, when writing about Amtrak does the press continue to only write incorrectly about ridership? How can the press continue to embarrass itself this way? If they can’t get something as simple as this correct, what else is the press getting wrong?

Just for the sake of covering the same ground again, ridership is only a measurement of the number of bodies carried. Ridership does not measure how far each body is carried, nor how much is paid to the common carrier to carry the body. Revenue passenger miles – a measurement of how much revenue is generated by carrying each passenger one mile – tells the true story.

Using FY 06 numbers, an average passenger traveling on the Ethan Allen service in New England has an average length of trip of 191.1 miles, at 24.76 cents per mile of revenue. That means the average passenger generates $47.31 per trip.

An average passenger on the Palmetto, which serves the East Coast between New York and Georgia, has an average length of trip of 446.9 miles, at 16.55 cents per mile of revenue. That means the average passenger generates $73.96 per trip.

Which passenger would you rather have? One that generates $47.31 per trip on any given departure of the Ethan Allen on any given day, or one that generates $73.96 per trip on any given departure of the Palmetto on any given day?

Both riders count as one passenger when looking at the way the ridership figures are incorrectly used. Yet, one passenger accounts for only 64% of the revenue of the other passenger. This is why it is so important to only talk in terms of revenue passenger miles.

You may wish to say “aha!,” obviously what matters is the Ethan Allen passenger generates more revenue than the Palmetto passenger, and, therefore, the Ethan Allen is the superior business model.

Well, no, that’s not true, either.

The Ethan Allen generated 21,447,884 available seat miles for FY 06, and the Palmetto generated 147,065,912 available seat miles. At 24.76 cents of revenue per mile, (21,447,884 total seat miles for sale multiplied by 24.76 cents per mile potential revenue), the Ethan Allen could theoretically generate $5,310,496 in annual revenue. Using the same formula for the Palmetto, $24,339,408 in annual revenue could theoretically be generated. Again, which train is the best business model to follow?

The Ethan Allen has a route length of 241 miles, and the Palmetto, 829 miles. The Ethan Allen has two exclusive stations to serve the route, and the rest are shared with other trains. The Palmetto has no exclusive stations; all are shared with other trains. The Ethan Allen uses the New York City crew base, and overnights the train crews in Rutland, Vermont at Amtrak’s expense. The Palmetto uses the same crew base, and overnights the train crews in Savannah, Georgia. Both trains have all reserved coach seating, business class service, and lounge/café car service. The Palmetto carries a baggage car, the Ethan Allen does not. The Ethan Allen is primarily financed through the Vermont State Department of Transportation, and the Palmetto receives no state financing.

Other than the baggage car, the only real difference between the two trains is the route length and the number of cars on each train. Even if the Ethan Allen carried an identical consist as the Palmetto, the shorter route could still not hope to generate as much revenue as the longer route.

The only difference in costs are fuel, train and engine crews, and train mile costs. Most other costs remain very close. It’s the great difference in the revenue opportunities that distinguishes they two trains. This also explains why it is so dangerous to only measure Amtrak success by ridership, and not revenue passenger miles.

And, by the way, the Ethan Allen has a load factor of 38%, and the Palmetto, 44%, which shows the Palmetto outperforming the Ethan Allen in every category that matters.

In other parts of the AP narrative, the story says,

Amtrak’s new president wants to upgrade the passenger railroad’s image and the tracks it shares with the nation’s increasingly busy freight rail carriers, and he expects the federal government to help. … Alex Kummant said he found the much-maligned railroad in better shape than he expected. But he said it could still do a better job taking advantage of a growing appetite for rail travel fueled by high gas prices and highway congestion.

“There is a lot of good news to talk about,” Kummant told The Associated Press in an interview in his office atop Washington’s Union Station. “You have to build the Amtrak brand for people.”

Amtrak needs to work with states to expand service over medium distances and improve the long-distance trains that account for most of its losses, Kummant said. Government incentives to stimulate capital investment in the nation’s nearly maxed-out rail infrastructure are also key, he said.

Kummant, … said expectations that Amtrak could be self-sufficient are misguided. He noted passenger rail is subsidized throughout the world.

There could be room to partner with the private sector, he said, but added: “You need to walk before you can run.”

Amtrak supporters are hopeful the new Congress will pass legislation introduced last week by Sens. Frank Lautenberg, D-N.J., and Trent Lott, R-Miss., that would establish funding targets for Amtrak for the next six years. It would also create a program of capital matching grants for states that want to invest in “corridor service” — the term Amtrak uses to describe frequently traveled routes up to about 500 miles, such as the northeast corridor running from Boston to Washington. Currently, 14 states pay Amtrak for service.

Kummant said the shorter routes are Amtrak’s real growth opportunity.

“We can offer genuine solutions to public transportation problems with that type of service,” he said.

Rail service on such corridors can be competitive at 80 to 100 miles per hour, without trying to provide capital-intensive high-speed service, he said. Amtrak’s fastest train, the Acela Express on the northeast corridor, reaches 150 miles per hour, but such speeds require upgraded electrical systems and tracks.

Much of this is refreshing to read. It’s nice to know the company is in better shape than expected, and Mr. Kummant wants to improve the sadly tarnished Amtrak image, plus he is eager to expand the company to meet the growing demand for passenger rail service. More power to him.

Here is the first glimmer of what may be questionable. Mr. Kummant says Amtrak needs to work with various states to expand service over medium distances and improve the long distance trains that account for most of the losses.

Let’s stop right here.

Again, here is the statement that long distance trains account for most of the losses. Really? Is everyone sure? While Amtrak’s books are being untangled from years of Enron-style booking, are we really, really, really sure the long distance trains account for most of the losses? How is this so, if these trains have the highest load factors, generate huge amounts of revenue passenger miles, and a single daily train route has more financial muscle than a whole group of NEC or short distance trains? Until we know for sure (and many of us are pretty sure that statement is wrong about the long distance trains after a lot of research by some impressive railroad professionals), can Amtrak and its executives and spokespersons please stop using such declarative statements? Can we at least have some modifiers on those statements that say, “we don’t know for sure, but we may suspect blah, blah, blah”?

Mr. Kummant says that 500 mile corridors can prove to be the hottest area of growth for the company. That’s well and good, depending on how those corridors are put together. One very positive thing he says in the article is rail service in these corridors can be competitive at 80 to 100 mph, without having the capital intensive costs of the normal definition of high speed rail.

Somebody please give the gentleman a medal out of petty cash. Yes, yes, yes. That is so very true. Rail can be very satisfying to the traveling public at speeds which are easily achievable on most of today’s infrastructure, with few modifications for slightly higher speeds. Beyond bragging rights, there is little incentive to create what is considered true high speed rail at enormous capital costs before a mature system of conventional speed corridors are developed at much lower investments.

Corridors averaging 500 miles in length, or even up to 700 or 800 miles in length can easily host cheap to operate, but high passenger satisfaction trains similar to the Palmetto of today. The Palmetto in its various incarnations, has always been a nearly sold-out at times cash cow for Amtrak that has been inexpensive to operate. One locomotive, a half dozen or more cars, including a decent food service car, an upgraded business class car, and coaches, plus a baggage car on a mostly daylight schedule is a very attractive business model to follow. Staffing levels are kept relatively low, there are good RPMs, and often only two train sets are required for daily operation.

Use the route of the Crescent south of Washington, D.C. as an example of how this type of operation can mesh well with long distance trains. There are plenty of NEC trains between Boston and Washington without adding another frequency. However, the trip from Washington to Atlanta, Georgia, via Charlotte, North Carolina is about a 12 hour trip. The Crescent travels over this segment of its route mostly at night. Add a daytime frequency between Washington and Atlanta, a la the Palmetto. Since you’re already establishing a crew and turn maintenance base in Atlanta, add another mostly daylight run, of, again, about 12 hours from Atlanta to New Orleans, but off of the Crescent’s current daytime portion of that run by a few hours to provide the full benefits of a second frequency. Suddenly, the route now has multiple frequency service with very inexpensive operating characteristics, and the only new addition is a small turn maintenance and crew base in Atlanta. Major cities like Charlotte now have good daylight service on a route which was previously only served at night.

Look at almost any other Amtrak long distance route, and working in 12 to 15 hour time frames for route lengths, see how many cheap and easy to operate trains can be added to the Amtrak system. Then, start doing the math. We know adding a frequency to a route more than doubles ridership because more people have more travel opportunities at times that are convenient for the passenger, not the Amtrak operating department. Station and infrastructure costs go down because expenses which were formerly the burden of one train are now spread out over two or more trains.

Further in the AP story, the following was reported:

Kummant said he had no intention of abandoning long-distance routes, loosely defined as those longer than 500 miles. But he said he is working with Amtrak’s board of directors, made up of appointees of President Bush, to come up with a strategy that might include breaking some long routes into multiple state corridors.

Amtrak is criticized for the losses in the long-distance routes, but if those routes were eliminated, they would be very hard to re-establish, Kummant said. Still, he predicted future growth will likely come from corridor service, while long-distance ridership will remain flat.

If breaking some long distance routes into multiple state corridors means augmenting the current long distance trains with the type of daylight operations outlined immediately above, that is good. If this statement, which desperately needs clarification, means ending seamless long distance trains in favor of short distance corridor trains that would require passenger transfers from one train to another, that is totally unacceptable. If this statement means similar scenarios to the hijacking of the Sunset Limited restoration for return in exchange for state funds, that is also unacceptable.

Amtrak’s mission is to operate a healthy national trains system, not a disjointed series of corridors. As said before, that is nothing wrong is corridors as support for a good long distance system. Corridors in place of long distance trains goes against everything for which Amtrak was created, and is painfully, again, transit mentality versus passenger train mentality.

Mr. Kummant said long distance ridership will remain flat, that growth is in corridors. Okay, why will long distance ridership remain flat? Because in the last few years Amtrak has been systematically reducing train consists, and, therefore having less product to sell to passengers? Because Amtrak spends less than half on national system sales and marketing that it spends on NEC marketing, and only slightly more than on state supported corridor marketing? Is it possible that if Amtrak beefed the consists back up to their original sizes of only less than a decade ago, and actually spent a few dollars on long distance train marketing and stopped keeping Amtrak as America’s best kept secret that long distance train ridership would not remain flat?

If long distance train ridership remain flat, that is only because Amtrak management chooses to keep that ridership flat. Amtrak has resources to increase the ridership, but it also must have the corporate will to do so.