United Rail Passenger Alliance

The ONLY person or group using the dreaded “b” (bankruptcy) word as some sort of threat if Amtrak doesn’t get what it thinks is enough free federal money, is Amtrak’s most unproductive best friend, the National Association of Railroad Passengers. In NARP’s ongoing quest to boost its own membership and attempt to demonstrate relevance, it’s keeping to its usual off-key tune that Amtrak will be forced into bankruptcy if it isn’t given the whole amount NARP thinks Amtrak should receive from the public treasury.

In its usual habit of ignoring facts, NARP says that $900 million in free federal money would force Amtrak into bankruptcy. Rubbish. Amtrak’s own internal financial results show the company needs a nationwide operating subsidy of less than $500 million, which leaves $400 million left over the Railroad Retirement and other needs. The only real victim of such a low free federal monies figure would be the ongoing infrastructure rehabilitation of the Northeast Corridor, which, if it had to wait a few months, well, it would have to wait a few months. It would not bankrupt the company.

What matters is what the real figure will be for FY 2008, probably in the $1.4 billion range, close to what the company received for the current budget cycle.

Amtrak President and CEO Alex Kummant commented in the last few weeks before Congress that even if the company received billions and billions of dollars, it does not have the capability of managing projects that large; that he was comfortable with projects running in the $200 million range; a reasonable comment.

• Despite annual infusions of federal and state monies, Amtrak’s cash needs are growing, not shrinking. Annual subsidies seem to be more of an enabler than a cure, much as giving drugs to a junkie at Christmas. Financial results are more muddied than clear.
• The overall condition of Amtrak locomotives and rolling stock is not improving. Equipment breakdowns remain frequent, and even when equipment is operating properly on the road, much of it is shabby, out of date, and covered with rust and neglect inside and out.
• Amtrak’s route system is stagnant at best, if not in decline. Most routes are under served and non-passenger friendly. Almost a third of the passenger equipment Amtrak owns is out of active service, and, for the remaining equipment on the active equipment list, sometimes as much as 12% to 25% of that equipment is out of service for routine maintenance or breakdown. The locomotive fleet, on average, fares about the same, with sometimes nearly 20% of the fleet out of service. Any older equipment which may have been remotely serviceable for future expansion, either the lengthening of trains or starting new services, was sold off or scrapped by the three prior administrations before Mr. Kummant’s arrival.
• Initial terminal on-time departures are unacceptable low. Systemwide average for the year is around 92% of trains departing their initial terminals on time, but on some days that figure dips below 50%. If Amtrak can’t get it own trains out of its own yards and terminal facilities and onto host railroad tracks on a timely basis, why should the host railroads worry about running trains on time? The very great majority of initial terminal delays are the result of equipment breakdowns, unavailable employees because of too few extra board employees (or, none at all), or turning and servicing late arriving trains which become the next departure. This could be fixed with more equipment taken out of dead storage and restored to service.
• Amtrak still does not report any relevant information regarding load factors or revenue passenger miles, but, instead, clings to useless figures relating to ridership and revenue (without reporting corresponding expense figures).
• Of the generous amounts of money from the various governmental sources Amtrak receives, it constantly invests that money in its least productive services, the NEC and other short distance corridors, even though Amtrak’s own accounting system (flawed as it may be) still shows Amtrak’s best and most efficient revenue and revenue passenger mile generators are the long distance trains. If you were the CEO of an ongoing enterprise, and you were given five or 10 or 100 million dollars of free money, which business would you invest capital improvement money in, infrastructure on the NEC (often for the benefit of local commuter agencies), or getting money-making passenger cars on the road which are the primary income generators of the company?
• The great majority of Amtrak’s passenger stations and terminals are either in undesirable areas of the towns and cities they serve, in poor condition, or lack basic facilities like shelter, safety, and running water. Since its inception, Amtrak has used a prior century’s station facilities, with a prior century’s amenities and locations. Quaint, nostalgic locations offer little comfort for passengers seeking a modern travel experience. Often, many of these same stations also lack adequate, protected automobile parking, or any type of security measures for passengers using the facilities during nocturnal hours. Even though Amtrak has instigated a Great American Stations program to try and fix this problem, progress is too slow and inadequate, with little coordination with state and local governments, or private developers. Even with the Great American Stations program, it’s tough to forget Amtrak history, and how many cities and towns have invested public money heavily in locally owned stations, to have Amtrak abruptly cancel train service on that route. Add to that Amtrak’s excuses about the lack of serviceable stations on the Sunset Limited route east of New Orleans as a reason to keep any train out of that area, and one has to wonder how serious Amtrak is about stations. If local communities can strive to fix up stations along the route of the California Zephyr, then, why can’t local communities along the Hurricane Katrina ravaged Gulf Coast do the same, so desperately needed train service can return to this area?
• On the whole, Amtrak employees and lower level managers, are underpaid and under motivated, and have been working far too long without a current union contract. This shameful condition has led to a decline in passenger services, which has been exacerbated by poor hiring choices and a willingness to keep too many employees which never should have been hired at all. Often, the personalities of many front line and passenger services employees are in direct contradiction with their job descriptions and responsibilities, resulting in ongoing, unhappy experiences for both the employees and passengers.
• Many Amtrak managers have survived and thrived because of membership in the “good old boy” system, which has rewarded ineptness with promotions or lateral moves to get rid of certain managers by making them “someone else’s problem.”
• For almost all of Amtrak’s corporate existence, there has been no identifiable surface transportation policy coming from the executive or legislative branches of government. As a result, Amtrak has been an untamed child, sentenced to wander listlessly over the landscape, existing on handouts from the goodwill of others. No one has ever comprehensively looked at how Amtrak can completely fit into our nation’s domestic transportation matrix, and what it can realistically contribute in a positive way. Instead, Amtrak has continued to ignore market opportunities, focused on the worst type of capital investments, and not really cared how many travelers do or do not become Amtrak passengers.
• Amtrak’s overall relationship with its host railroads often is hostile instead of friendly or mutually beneficial. The wars have gone on for so long, it’s often difficult to tell where common middle ground may be found to make Amtrak the best customer of the host freight railroads, instead of the most disdained customer.
• The overall marketing of Amtrak remains poor. Amtrak, regrettably, remains America’s best kept secret. No one really knows how much pent up demand there is for passenger train service in America simply because a great many Americans have no idea Amtrak exists, or if it serves their town or city.
• Amtrak continues to say the dog ate its homework and not restore the Sunset Limited east of New Orleans, or offer a similar substitute service. If Amtrak is allowed to continue this charade, a precedent will be set that will allow the company to discontinue any portion of any route with impunity. Amtrak passengers and train-related employees will find themselves without a train to ride or work on simply because some Amtrak manager decided a certain route or part of a route was too difficult to manage.

  Now, if you are a banker (or Member of Congress or Capitol Hill staffer gathering information for you boss to make an informed vote), no matter what good things you may or may not perceive Amtrak to do, how could you, in good conscience, continue to throw billions of more dollars at Amtrak after it has already received nearly $30 billion since it was formed in 1971 and is in its present, reduced circumstances?

  Since Amtrak, with the able assistance of NARP and other organizations of its ilk, has constantly done a poor job of informing the public of the real benefits of running passenger trains, and presenting the real facts, either financially or about expansion opportunities, it’s tough for people of any sort to make competent decisions about Amtrak, and its future potential. Therefore, many are operating on the theories that it’s only government money, and therefore from an unlimited pool, or if everything humanly possible isn’t done to keep a broken company like Amtrak operating, then passenger trains will go away, forever. Both of these theories are wrong.

  Amtrak has serious problems, but is slowly attempting to fix many of its problems. Inch by inch, some progress is being made. But, until Amtrak is able to publicly demonstrate a better commitment to passenger service, improve its on time performance by beginning with better initial terminal starts, and willing to grow, either by lengthening too short trains or outright adding service, then the perception is going to remain of that of a seriously flawed and broken organization. If Alex Kummant does what he says he is going to do, Congress can make a better decision in coming years about the future of Amtrak.

  Alex Kummant has already cleaned house of many senior managers and executives who allowed these problems to fester over entire careers. More needs to be done, on all levels. The entire corporate culture of Amtrak must be changed, one employee at the time. It’s not wrong to demand more, as long as the tools and incentives to provide more are in place. It’s not wrong to find productive solutions to problems with host railroads; every problem has some sort of solution, whether it’s a pleasant or painful resolution.

  For those who wish to enable Amtrak simply because it’s the only game in town, that is wrong and unhelpful. Amtrak has the potential for greatness, but that will never be achieved when mediocrity and the corporate slovenliness of Amtrak are tolerated.

First, on the Sunset Limited route between Los Angeles in Iowa Junction in western Louisiana, the UP promised to run the Sunset in a more timely manner of only Amtrak would adjust the trains schedule, and add more pad time (time to catch up to the published schedule in case the train is running late). Amtrak agreed, and moved the departure of the Sunset in Los Angeles back nearly eight hours earlier. Whoops! The Sunset is still one of Amtrak’s worst performing trains for timekeeping.

Earlier this year, Amtrak and UP came to a similar agreement along the route of the California Zephyr between the San Francisco Bay area and Denver. Amtrak added more pad time to the schedule, moved up the departure time to an earlier time, and allowed for UP infrastructure maintenance and construction along the route. The Zephyr was supposed to run sometime close to on time, by promise of the UP. Whoops! Some, but no real improvement. Trains are still running too late.

Apparently, to the Union Pacific, contracts aren’t very important, or, absent that, their dispatchers just don’t understand how to keep trains moving out on the rails. Either way, Amtrak is paying a heavy price in passenger dissatisfaction, poor equipment utilization, and onboard and station employee overtime just because UP doesn’t understand how to do business in an honorable way. Keep in mind, this is the railroad which is constantly named the best railroad in the United States. Perhaps new criteria needs to be established for that honor.

Boy, you should have heard the howls of protest. That exercise proves why it is so difficult to propose anything new or perceived as radical when it comes to the broken concepts of Amtrak. Every argument imaginable was made against the service, from the fear of higher costs (which would be almost impossible due to Amtrak’s current sleeping car service costs versus the passenger benefits provided) to the fear the service might actually be successful and rock the Amtrak boat.

The reality is, unless Amtrak continues to think in terms of interesting and innovative strategic partnerships such as with GrandLuxe, it will never emerge beyond the poor condition it is in today. Everyone should be hoping for the success of GrandLuxe in its current form, because it is a successful travel services marketer, and provides high value for the services offered to its passengers. If this experiment works, then a wide door for other improvements will be opened, offering hope for the American passenger train beyond the often rolling slums they are today.

By William J. Lindley

Recently we have been looking at how Amtrak can do more with what it has. As we consider increasing revenue (not merely ridership), the main concern is on maximizing the use of scarce resources. Engineers and conductors can be hired fairly quickly. Food, fuel, and other supplies are readily available. Stations and new routes, take time to ready, but can be usable within a year or two. What is not readily available now, is additional railcars. Let’s look at how combining two short corridors into one longer route can maximize equipment usage and revenue.

Amtrak operates four daily round-trips between Chicago and St. Louis, and two between St. Louis and Kansas City. Since the April schedule change, the first train to St. Louis from Kansas City arrives an hour too late to catch the last train to Chicago. >From Chicago to St. Louis (284 miles) is about five and a half hours; from St. Louis to Kansas City, 283 miles in about six hours.

Checking the timetable, we find Amtrak needs seven sets of equipment — a “set” being locomotive and cars — to run today’s schedule. Each set, on average, is used only about twelve hours a day. Because terminating a train, servicing, and turning it takes awhile, and because short-haul trains need to operate at reasonable hours of the day, there is little room for improvement in corridors of 300 miles. (The January timetable could have been operated with six trainsets instead of seven.)

Let’s consider, however, using six trainsets with each train operating the entire length of a joined Chicago – St. Louis – Kansas City corridor. Each trainset will run five and a half hours from Chicago to St. Louis, with a half hour there, and six more hours to Kansas City (total twelve hours), then lay over six hours. That’s 18 hours from entering service until it’s ready to again enter service … or, thirty-six hours from when it leaves Chicago until it’s again ready to leave Chicago.

If we divide that 36 hours in two, as with two trainsets, there would be a train every 18 hours. With three — every 36/3 = every 12 hours. With four trainsets, every 9 hours; and with six sets, every six hours.

The schedule could look something like this:

Chicago southbound:

• 6 A.M., noon, 6 P.M., and midnight.

St. Louis:

• for Chicago, 6 A.M., noon, 6 P.M., and midnight.
• for Kansas City, 6 A.M., noon, 6 P.M., and midnight.

Kansas City east and northbound:

• 6 A.M., noon, 6 P.M., and midnight.

These four daily 567-mile round trips would require zero new equipment, zero new station personnel, and zero new stations compared to today. Daily train-miles, crew, and operating expenses would increase about 25% while offering many more daily destination ticket opportunities.

Factor in the “matrix effect” and you’ll find new revenue from passengers riding the Southwest Chief from Albuquerque to Kansas City and then to Springfield, Illinois. You can’t do that, now. Nor can you ride the train from Jefferson City to Bloomington today, without spending a night in St. Louis. The whole matrix starts to open up with service like this … which can lead to revenue increasing faster than expenses.

Folks are already riding the expanded Illinois service far more than critics expected. Let’s build on that experience.

What are the problems? Money, for one. Missouri would likely be asked to pay twice what it does now “since you’re getting twice the service.” Meanwhile, Illinois probably wouldn’t be asked to pay less. Why would this be wrong?

Let’s assume for a moment that capital costs — depreciation and maintenance on the locomotives and passenger cars — account for one half of the annual expense, and operating costs — onboard personnel, food, fuel, and such — the other half. If capital expenses increase, say, 10% (with the same amount of equipment used, running six extra hours a day) and operating increases 25%, that’s a total of under 120% of today’s.

If Missouri today pays $.50 and Illinois pays $1.00, then a fair allocation could be each paying $.90 (50% of 120% the current grand total of $1.50). How exactly that would work is a matter for Amtrak and the States to decide … but Illinois’ share should certainly decrease.

Money is just one of the points of dispute in rearranging and combining corridor and commuter rail operations, as we’ll see in an upcoming column about Southern California.