Documents attached:

• Rail Competition Bill Package
• Rail Competition Bill, Section by Section
• Rail Competition Bill Discussion Draft

The absurd myth of the First Class Subsidy just won’t die. Thanks to Amtrak-o-nomics, formerly known as the Route Profitability System, in which you add up every expense and divide by every income to create meaningless numbers, Amtrak’s figures seem to suggest that coach passengers are subsidizing first class passengers, when in reality the opposite is true.

Nevertheless, Rep. Mac Thornberry of Texas, presumably taking Amtrak at its word, has introduced the Cheese Sandwich Bill,  H.R. 4801 (link on Thomas) which, taking the complaint taxpayers are subsidizing linen turn-down service! toward its logical extreme, surely leads to the complaint that taxpayers are subsidizing steak in the diner! and the demand that only government cheese sandwiches be served even on three-day long journeys. (And you had better not want mustard on your cheese sandwich.) Here is the text of the bill in question:

(a) Amendment- Chapter 243 of title 49, United States Code, is amended by adding at the end the following new section:

`Sec. 24317. Sleeper class service

`(a) Pricing- Amtrak shall ensure that the fares charged for sleeper class service on all long-distance routes are priced to equal all of the operating costs for providing such service.

`(b) Discontinuance- Amtrak shall discontinue sleeper class service on any long distance route with respect to which total costs of such service exceed total revenue for such service for the first full fiscal year beginning after the date of enactment of this section.

`(c) Funding Limitation- Amtrak may not use any funds provided by the Federal Government to subsidize sleeper class service.’.

David Carleton writes,

It’s useful to look at the quantity of inventory in a sleeper as compared to a coach. A Viewliner sleeper has fifteen rooms, each with two bunks, so call that space for thirty passengers. An Amfleet 2 coach has 59 seats. So the sleeper has only half the inventory of the coach.

Based on the above, in order to keep the sleeping car passengers from receiving a higher subsidy in comparison to the coach passengers, then the sleeping car passengers would have to be paying more than twice what the coach passengers are. By every measure they are paying even more than that. Not only are the fares higher, but the average length of trip is much longer for sleeping car passengers causing the sleepers to enjoy a much more favorable load factor compared to the coaches.

Not to mention that one sleeping-car passenger needs less time with reservations agents than the equivalent two or three coach passengers. True, each sleeping car has one attendant, versus one per every two or three coaches, but the fact remains that sleeping car passengers are paying far more than their fair share.

The myth of the first-class subsidy is a direct result of dividing revenues by ridership — never mind the potential revenues and economies of scale which might be possible from system expansion. Andrew Selden explained in this column last October:

The most glaring example is Amtrak’s endless blathering about “ridership.” Ridership is only a measure of a sale transaction. It does not differentiate among the size of the sales. One “rider” from New Haven to Boston is, by this yardstick, exactly equal to one rider from Washington, D.C. to Boston, or even Los Angeles to Boston. Amtrak makes this worse by blurring useful sales data (ticket prices) into averages by which they measure (actually, it’s just arithmetic, not really “measuring” anything) “yield,” which is the average revenue per passenger mile on a train or route. This tends to reinforce the false belief any one passenger is pretty much the same as any other.

In an urban transit system where every passenger pays the same fare, that might be okay.

But on Amtrak, where a typical “corridor” customer might pay $10 to $30, but a family in a sleeper to the west coast could be paying $1,000 or more, these “riders” are decidedly unequal. Fifty of the former are less than two of the latter. But Amtrak is obsessively focused on “ridership.”

A yardstick Amtrak tries to hide, and apparently never uses to make important resource allocation decisions, is load factor. Load factor is the percentage of your inventory you are able to sell. Airlines live and breathe load factor.

Load factor is available seat miles (total inventory) divided by revenue passenger miles (seat-miles sold to paying passengers)… The Northeast Corridor’s low load factors show Amtrak is already over-invested there: it offers much more inventory than it can sell for $30, or even give away. Long distance trains, with high load factors, show where Amtrak is under-invested, turning away potential $1,000 customers by the hundreds.

Simple “ridership,” without consideration of load factor, is classic “Amtrak accounting” that disregards the cost and utilization of capital…

Meanwhile, it is only the sleeping car passenger under fire, a nearly entirely Outside-the-Beltway phenomenon. When is there mention of cutting back the first-class service for those well-heeled intelligentsia who partake of the heavily-subsidized Acela First-Class service to Washington?

Bottom line: None of Amtrak’s accounting systems were ever designed to predict what might happen if routes or services (like sleeper cars) were expanded or cut. None of Amtrak’s figures are meaningful in that regard.

The lack of a holistic approach is endemic in the rail and transit industry. A perfect local example is in Phoenix, Arizona, where Metro is continuing to plan an LRT line in the middle of a superhighway, despite the fact that plans for commuter rail — which were not on the table in 2000 when the LRT plan was originally approved — now appear to be ready to precede light rail expansion. It is not just the competition between to separately funded transit modes (LRT and commuter rail) that parallels Amtrak’s internal competition (Northeast versus the rest of the country), but the failure to consider the Matrix Theory, the failure to consider urban form, the failure to consider how our cities feel and work, that are frustrating.

Light Rail in Freeway Medians? Not Really a Good Idea

By John J. Gale, Arizona Rail Passenger Association

Imagine standing in the middle of a freeway as cars, trucks and motorcycles rush by on either side. Maybe you have experienced this if you have waited for a train at an in-median station. I have in Los Angeles, on the Metro Green Line which is located in the median of Interstate 105 (Century Freeway), and certainly there are such stations in other locations around the country such as Chicago and the Bay Area. It is not particularly fun to wait for a train at these types of station. Now imagine doing that in Phoenix when it’s 110 degrees!

One of the proposed extensions to the popular new Metro Light Rail in Phoenix is a line heading west in the median of I-10, from generally the State Capital area to the Desert Sky Mall area. Stations would be located at the overpasses of the arterial streets that cross the Interstate. Station access would be in the middle of the interchange. Several ARPA members think this is a bad idea, and have expressed that opinion at public hearings related to this proposed line. It is unpleasant, and in fact unhealthy, to wait for a train in a freeway median, and further that the land uses adjacent to interchanges are not conducive to generating transit trips.

Unfortunately it seems that Metro Rail has made up its mind that because the right-of-way is available, they should use it. They also seem to be infatuated with the thought of their trains speeding past stopped traffic on I-10 during rush hours, not that that isn’t a nice thought to have. Often, public input is dismissed as not coming from “experts” but from “fans.” So let’s consult an expert and see what he has to say about locating transit lines with stations in freeway medians. Vukan R. Vuchic, Professor of transportation and transit planning at the University of Pennsylvania, widely acknowledged “Dean of Transit Planners” and author of the “Transit Trilogy” (Urban Transit: Systems and Technologies; Transportation for Livable Cities; and, Urban Transit: Operations, Planning and Economics) has this to say about transit in freeway medians (all quotes are from the last named book):

“First and basic, no freeway in North America was planned with considerations for the optimum alignment for a transit line.”

While I-10 was designed with a 50-foot median for “future transit purposes,” that in and of itself does not mean it is a good alignment for transit. The same holds true for the Century Freeway/Green Line facility in the Los Angeles area. The Century Freeway/Green Line was hyped as a “model” of intermodal transportation when it was planned, designed and built. It included extensive high-occupancy vehicle facilities and a light rail line with the freeway from the inception. But the simple fact of the matter is that traffic engineers determined the route of the freeway, and a light rail line was simply added to it. It is in no way optimal as a transit line.

The same holds true for I-10 here: traffic engineers determined the route. A reservation for future transit was made, but the adjacent land use is related to the Interstate, not a transit line.

Of course I-10 is already used for transit, for express buses running from suburban park-and-ride facilities to downtown Phoenix. And that’s just fine; in fact Vuchic states that freeways are perfect for establishing “line haul” operations such as express bus services, especially when priority measures such as a reserved lane and ramps are available for them, as they are on I-10.

But as far as lines with stations along freeways, Vuchic goes on to say this:

“The second problem is that stations in freeway medians are by definition remote from any trip-generating objects.”

This is certainly true. Around any of the I-10 interchanges you will find truck stops, gas stations, convenience stores, and fast-food restaurants. Hardly big trip generators. Apartment complexes and houses are generally several blocks away. Most employment centers are large transshipment warehouses. Because of their large “footprint” they spread out the jobs (lower the density), meaning only a few jobs are within a reasonable walking distance. And can you imagine crossing the Interstate ramps as a pedestrian to get to and from the station access in the middle of the overpass?

Vuchic further states:

“Finally, stations in freeway medians are in an extremely nonhuman- friendly environment: intensive noise and air pollution are constantly produced by high-speed vehicular traffic on both sides…”

As I pointed out in the opening, it’s just not a pleasant place to be!

So we can conclude that the best practices established by Professor Vuchic in his textbook would seem to indicate that professional planners should be avoiding use of a freeway median to establish a transit line with stations. But the “fans” already knew that.

Not to simply be negative, and always supportive of the expansion of well planned rail service, this author and several others in ARPA believing that locating a light rail line in the median of I-10 would result in a line which does not meet the ridership potential that other routes would provide, do have ideas for alternate routes for light rail, and also believe that to take trips off of I-10 to the west, commuter rail service on the Union Pacific line is the best bet. In the interim express buses are doing a fine job of the line haul service from suburban park-and- rides to downtown, and need to be expanded.

The most likely candidate for an alternate route for light rail is Thomas Road. Bus Route 29 on Thomas is currently the busiest bus line in the Valley, which would indicate it should be looked at for introduction of high-capacity transit. Further even if a route on Thomas were chosen, there is no reason it would preclude an additional route to the west located further north, such as a route to and through downtown Glendale, possibly on Glendale Avenue.

According to Fred Frailey in TRAINS magazine,

Union Pacific has told Amtrak that changing the Sunset Limited‘s frequency from tri-weekly to daily will cost the government-supported company about $750 million in capital improvements.

That’s almost as much as Phoenix spent building an entirely new 20-mile “light rail” system — including two large bridges and a complete modern maintenance facility and fifty computer-controlled trolley cars. We eagerly await U.P.’s wish-list. One wonders, once you spend some millions to restore a missing connection at San Antonio to eliminate back-up moves, add a couple formerly removed station tracks at places like Tucson, add a bridge here and some signals there … how do you come up with three-quarters of a billion dollars to run one train once a day?

Meanwhile, Berkshire’s BNSF issued a two-part $750 million bond, $250 million for a 10-year period at 3.616% and a 30-year $500 million part at 5.074%, both paying a premium over Treasury bonds.

In his annual letter to shareholders, Berkshire chief Warren Buffett wrote: “Overall, we expect this regulated sector to deliver significantly increased earnings over time, albeit at the cost of our investing many tens — yes, tens — of billions of dollars of incremental equity capital…” So the same dollar figure that U.P. wants for one passenger train, it seems, is the same as BNSF’s first installment in sprucing up its entire system. Does one of those numbers seem a bit off?

Next, to Ohio, where Republican gubernatorial candidate John Kasich has “vowed to kill the 3C plan if elected.” This train, which would connect Cincinnati, Dayton, Columbus and Cleveland, is in line for a $25 million for a preliminary study. Kasich and his advisors apparently are fretting over the $400 million starting price tag, and continuing state outlays. One does wonder, where is one penny of income from Ohio’s libraries? From Ohio’s fire departments? From Ohio’s superhighways? Oh, you say they result in increased education, decreased property losses, and increased economic and social activity, right? So why do we not frame trains in the same way? What is the cost of a trip not taken…

Yet we rail advocates find ourselves in a nasty predicament. Every time good work gets done, as in Ohio, toward a new train… or in Boise… or anywhere across the country where cities and states who want better transportation, and the social and economic benefits that stem from trains… Every time new Amtrak service is proposed, the price is so high and the service to be so slim that nothing ever happens. A year ago we looked at Amtrak’s Ohio report, one of three wrong-think reports issued around that time. We saw how “Amtrak really doesn’t want to be in the passenger railroad business” and, although there were some hopeful signs in subsequent months, we seem still stuck in the same doldrums as for the past 40 years.

One correspondent writes,

Amtrak’s complaints are so ingrained in politicians’ and voters’ minds that when some good public relations is needed, the cupboard is not only bare, but snarling back at those seeking relief.

Another writes that Amtrak,

has spent most of the last forty years not only saying, but proving, that passenger rail is a fiscal sinkhole. Needless to say the green eye-shade brigade in state capitals that must produce a balanced state budget every year takes on massive new obligations only with trepidation.

Add to this carriers like Union Pacific pulling massive numbers, some might think out of a hat, but perhaps out of reasonable expectations based on past dismal performance of a government-run passenger railroad, and here we sit, stalled again.

Perhaps the most excellent description of the conundrum is Steve Forbes’ recent commentary on high-speed rail. Forbes, logically unconvinced by what trains might be able to do, looks at projects like the Acela so-called high speed train which have failed to deliver on practically any of their promises, and at the cost of billions including a hidden billion-dollar loan from Canada… and rightly asks, Where is the benefit? Forbes doesn’t see any. And without benefit, what is the point of pouring billions more dollars into it? At some point, there have to be results.  Call it return on investment.

To succeed in business, to succeed in the real world, you have to become indispensable. Apple has done that. Google has done that. Some might say Amtrak seems to have concentrated on becoming irrelevant.

Perhaps the renaissance of passenger trains will have to occur from the bottom up. USA Today reports that Denver has broken ground for its commuter train to the International Airport that replaced Stapleton Field. This is to be the long-anticipated first of four commuter lines radiating from Union Station which will complement Denver’s light-rail system.  The article continues,

Denver joins a growing list of U.S. airports that are trying to promote public rail transportation. Others that will be connected directly via rail in the coming years include Dallas Love Field, Salt Lake City, Phoenix, Miami, Dallas/Fort Worth, Oakland, Washington Dulles and Los Angeles.

An AP newswire story tells how even Arizona is planning on a commuter and regional train system:

“It will not be possible to accommodate growth and avoid traffic congestion by improving roadways alone, so passenger rail should become a key component of the Sun Corridor transportation system,” the draft plan stated, referring to a planning area that stretches from Prescott on the north to Nogales on the south and includes both Phoenix and Tucson.

Phoenix is seeing results with its Metro trains, with monthly averages up to 44,000 daily riders, far above the projected 26,500, and continuing year-over-year increases.  With few exceptions, every city that has built a rail system in the past decades has met or exceeded expectations, and brought new development and a renewed sense of place and community pride. The cost has shown its benefit. Why should there be any different standard for intercity trains?

Finally, as promised, this on first-class accomodations.

AMTRAK SLEEPING CARS ARE THE BEST VALUE AMTRAK OWNS

Commentary by Andrew C. Selden and Randy Schlotthauer, URPA

Note: This item was on (Congressman) Eric Cantor’s list of budget cuts he wants people to vote on. Only 48% of respondents to the poll favored the idea, but on Thursday, July 22, Mr. Cantor and some of his followers appeared on the floor of the U.S. House to extol the desirability of this cut. An amendment to a pending bill was introduced to implement the idea, but was rejected 234-179. We asked Mr. Selden and Mr. Schlotthauer to comment on the reasons this idea was not a good one. – Russ Jackson

Eric Cantor: “Prohibit ‘First-Class’ Subsidies on Amtrak; Potential savings of $1.2 billion over ten years. While only 16 percent of Amtrak long-distance passengers opt for “sleeper class” travel, as opposed to coach class, federal taxpayers provide substantial extra subsidies for this first class travel. Passengers in long-distance first class travel are provided a sleeping room, many with a private toilet and shower, turn-down service, and complimentary entertainment and pre-paid food. Yet, Amtrak loses more than twice as much per passenger (an average of $396) for first class service as compared to coach class service. These losses are made up by taxpayers. This proposal would eliminate subsidies for first-class service and require Amtrak to provide any first class service at cost.”

Andrew C. Selden: The issue is the corrupt Amtrak RPS-based internal MIS/cost accounting system. Large subsidies to western sleepers are an artifact, if not an intentional distortion, caused by the system, not the business activity. We can show (and have often done so) that these sleepers are substantial net contributors of free cash flow to Amtrak, failing only to cover arbitrarily allocated shares of other system, not operating, costs, only some of which are even indirectly related to the operation of these services.

The Superliner sleeping car, measured by business economic factors like return on capital investment, load factor, revenue per dollar invested, etc., is the best thing Amtrak owns. These members of Congress should look closely at actual sleeping car fares out west, where many passengers are paying thousands of dollars for a single trip. There is NO POSSIBILITY that these fares are losing money on a direct cost basis. The catch is always to audit deeply what costs Amtrak is charging against the sleeping car revenues to determine that a loss exists in the first place. That is where the members of Congress were being conned.

The collateral issue is the subsidy that these sleepers provide to the dining cars. FIRST, diners are indispensable to all travelers on LD trains, where the AVERAGE trip runs 15-20 hours in duration (varying by route). These people therefore (including every coach passenger) are on board over two to four meal periods (and of course some for even more). Lose the diner, and you’ll lose ALL the passengers, not just the “fat cat” families and retirees in the sleepers. The sleeper fare transfer to the diner is what keeps the diner on at all—by including meals in the sleeper fare, Amtrak guarantees a predictable base of revenue to the diner. Take away the sleepers and that fare transfer, and with the loss of sleeping car passengers (most of whom wouldn’t be caught dead making a two or three day trip in coach) and their fare transfers to the diner, the diner would have to charge obscene prices that would drive out the remaining coach passengers, and without meals over two to three day trips, no one will ride and the trains would be empty.

If Congress wants to look for subsidies to first class riders, have them divide the Acela first class revenue by its proportionate share of the annual two-thirds of a billion dollars of subsidy “invested” each year into the NEC. Those numbers are real and staggering, even though Amtrak never reports them as such.

Randy Schlotthauer: Were it not for the frightening lack of concern by our government about the concerns of citizens, not to mention their misplacing of the Constitution (I have several copies of my own that I would be happy to donate to them), this entire debate over “first class” subsidies would be so tiresome that I would not be drawn to the laptop to respond to it. Those of us that have been involved with Amtrak since THE BEGINNING (that would be before many supporters and opponents were born) have seen this windmill tilted at every year. I remember when we were desperately phoning and writing politicians, interest groups, and anybody else that would listen over a $246M TOTAL SUBSIDY that promised that the pin would be pulled on October 1, (fill in the year). This was in the good old days when there were just two types of cars: Amfleet and everything else, which wasn’t much. Though few of us at the time would have granted it, Amtrak President Graham Claytor managed to “modernize” the fleet with new equipment which in retrospect probably saved the LD trains, which we were convinced he was conspiring with THEM to eliminate.

Though designed with the promise and physical capability to deliver a high quality LD experience, through active sabotage by some crew members and a benign neglect (read: stupidity) on the part of management. None of the LD trains ever made full use of the features designed into the cars, and did not repair equipment that was damaged or stolen by passengers, crew, and the denizens of 16th St, 8th Street, and other “maintenance facilities”. As a result, even the best attempts by individual route managers to ended up flowering and then all too soon downgraded due to budget cuts that often were the disguised jealousies of other route managers. Despite the efforts of the original RailPAC-URPA group to introduce market economic laws and theories to Amtrak and it’s 485 owners, every year it was a battle for survival, with Amtrak management’s RPS accounting system proving that they could be profitable if not for those nasty LD trains.

Never was enough capacity provided to even approach break even, which was all any serious advocate discussed. If every seat in every car on every train on every day were filled at the highest tariff fare, there would still be a loss. Even Herb Kelleher (Southwest Airlines) couldn’t do anything with one triweekly plane to its largest potential markets. He recognized that planes (and trains too!) make money only if they are moving and filled with people. In fact Herb was one of Amtrak’s greatest opponents, because he knew what a well run passenger railroad could do.

So today we are discussing the proposed elimination of the First Class Subsidy, in order to “save” the railroad. First of all, the last trip I took in a Deluxe Bedroom on #3 and #4 could not be called luxury by any stretch of the imagination. Indeed, Denny’s offers superior food, service, and even entertainment (if you are at the right one at the right time of night). When you kill the sleepers you kill the diner and lounge. When you kill those, you are the Southern Pacific in the 1960′s, although this time there are not enough people that buy the line that America NEEDS Amtrak. I can build you a great case for a quality passenger rail service, including multiple classes of service. I can even build you a case of how you make it break even in 10 years. RailPAC-URPA’s Dr. Adrian Herzog did the math a long time ago, and it still works. What I cannot do is build a case to justify an Amtrak First Class Subsidy for LD trains. There is corporate culture at Amtrak that would fight any attempts to a really make things work.

We hear from the UTU that the contract of Amtrak’s President Joseph Boardman has been extended to 2013, leaving only the Amtrak Board incomplete for the upcoming year.

The Board is now more populated than at any time since the Clinton administration, but one opening remains. Representation of the West has been less than sparse in recent decades, and somewhat surprisingly comes news that both Senators from the State of California, and 24 of its United States Representatives, noticed this fact and sent a letter to President B. H. Obama, calling for the lone open seat to be filled by a Californian:

CONGRESS OF THE UNITED STATES

July 7, 2010

President Barack H. Obama

Dear Mr. President:

We write you today to urge you to consider a qualified individual from California with a clear understanding of the unique California Amtrak system as you make nominations for the remaining vacancy to the Amtrak Board of Directors.  Currently, no states west of Texas are represented on the board.

The Passenger Rail Investment and Improvement Act of 2008 states that the President shall “try to provide adequate and balanced representation of the major geographic regions of the United States served by Amtrak” when nominating members to the board.  As it stands, no such balanced representation exists.  The lack of geographical diversity on the board is contrary to Amtrak’s authorizing language.

California has the highest Amtrak usage of any state in the country.  In 2009, one in five of Amtrak’s 27 million passengers rode in California.  Three of the top six most traveled routes in Amtrak’s system are in our state.  In addition, California’s Amtrak system has a unique and highly successful partnership with the State, and California is likely to be the first to integrate the needs of high speed rail and Amtrak.  We believe that with seven voting members appointed by the President, at least one individual with expertise in California’s passenger rail system is warranted.

The role of passenger rail is as vital to the West as it is historic.  We urge you to consider Amtrak’s significant presence in California by nominating a qualified Californian to the Board of Directors.  Thank you for your consideration of this request.

Sincerely,

(signatures by the following)

U.S. Senators:  Dianne Feinstein and Barbara Boxer

Members of Congress:  Jane Harman, George Miller, John Garamendi, Henry Waxman, Linda Sanchez, Jackie Speier, Zoe Lofgren, Mike Honda, Adam Schiff, Lois Capps, Jim Costa, Judy Chu, Laura Richardson, Bob Filner, Diane Watson, Brian Bilbray, Ken Calvert, Jerry McNerney, Grace Napolitano, Mike Thompson, Gary Miller, Dennis Cardoza, Lucille Roybal-Allard, and Loretta Sanchez

It is a testament to the many who have created the California rail renaissance that members of Congress from both sides of the aisle are increasingly taking notice.

Whither the Sunset?

Looking eastward, the anticipated Sunset Limited service changes have neither proceeded, nor failed to proceed. The town of Maricopa (in Pinal County, not Maricopa County which contains Phoenix) has protested against a schedule change, on the not unreasonable grounds of public safety. The poorly designed depot there has a platform far too short for the Sunset to stop, so the train will stop once to change crews, move a hundred feet or so, stop for the first sleeper, move again, stop for the coaches, and so on. This can take ten or even twenty minutes, during which time the train blocks the state highway and bisects the town, isolating new homes from the fire department and causing large traffic jams.

The Arizona Rail Passenger Association passed  a resolution in support of daily service, but something needs to be done about Maricopa. Something like finding a way for the train to directly serve America’s fifth largest city of Phoenix, perhaps.

Norfolk Service Planned

Now to the eastern seaboard, where there is excitement in Virginia over a new train which has received state funding. The Commonwealth seeks to create an entirely new route between Norfolk, and Petersburg, just south of Richmond, and on into the Northeast Corridor to Boston. You can read the Executive Summary at the Virginia Department of Rail and Public Transportation site.

Norfolk, the huge military and industrial hub, is part of southeast Virginia’s sprawling Hampton Roads region, which includes major population centers on two sides of the James River and the mouth of the Chesapeake Bay. Included are Norfolk, Chesapeake, Suffolk, Hampton, Portsmouth, Virginia Beach, and Newport News. Any of these cities by themselves are larger than most stops in the Amtrak system. Newport News has always had Amtrak service, including two daily trains today. But, it takes an Amtrak Thruway bus connection to make it across the bridge into Norfolk.

John Lee writes us,

There is much to like about this proposal, but one key flaw.

A piece of railroad track owned by Norfolk Southern, which hasn’t seen passenger service since the 1950s when it was the Norfolk & Western Railway, will again be hosting a daily passenger train. The train will originate in the City of Norfolk, which itself by any passenger rail carrier has not seen service since well before Amtrak.

Norfolk at one time was a major passenger rail hub, especially during World War II when the Navy and other military were the predominant force in the Hampton Roads area. Norfolk had a large, grand station, which included an office tower above the head house. Sadly, that structure, when only about 50 years old, was destroyed in the name of urban renewal for downtown Norfolk in the destructive years of the 1960s, as was the fate of the Pennsylvania Station in New York City.

In the 21st Century, Norfolk is building a new station for new service. But, the flaw in the service being commenced by Virginia and Amtrak is the train will begin in Norfolk, and after stopping about 10 miles out at Bower’s Hill, travel non-stop, first west and then north — right through the highly populated city of Suffolk — to Richmond, the state capital.

Suffolk, a city of 67,000, is eleven miles west of Bower’s Hill but (according to Google Maps) a twenty-five minute drive away. The train also will pass through Windsor (population 3,000), Wakefield (a town of about a thousand, the “Peanut Capital of the World” and home of the famous Virginia Diner), and Waverly (population 2,300) without stopping.

There is an incorrect expectation that potential Suffolk passengers will drive east to take a train west and north. Under the current plan, all the population in the five farm counties – about 100 miles worth – between Suffolk and Richmond which have no other means of transportation other than surface road transportation and a couple small airfields, are ignored.

The two trains to Newport News will continue to operate, and enjoy intermediate stop business at the tourism mecca of Colonial Williamsburg. Petersburg will continue to have service for the Silver Meteor, Silver Star, Palmetto, and Carolinean. But, it is again going to be a classic example of “you can’t get there from here” for Norfolk and the surrounding countryside.

Virginia officials are enthusiastic about spending $93 million of Commonwealth  monies to start this service, and it’s a good start. They proclaim a second frequency will soon come, after the first frequency shows its chops, as the new service on the westerly Norfolk Southern line between Lynchburg and the Northeast Corridor has shown. But, the Lynchburg service, which is showing a profit (no state subsidies required since ridership and revenue is much above projections), also has the second frequency provided by the Crescent. The new Norfolk service is only one frequency in the beginning.

As this plan goes forward, and, so far, most of the plan has been sound, will Virginia and Amtrak entertain modifying their plan to allow other areas to provide local stations? Suffolk certainly is large enough to warrant a station, and at least one of the other towns along the route should be considered for a truly regional service.

For decades, people serious about passenger rail have clamored for more than one station stop in major metropolitan areas. In Florida, the Central Florida/Orlando area has four Amtrak stops in less of the geographic area than the new Virginia service, and all of those stops produce good ridership. Yet, just down the track, in Tampa, that huge area, comparable to Hampton Roads, only has two stops, and the rest are serviced by Amtrak Thruway busses. Tampa could easily support at least one more metropolitan area stop in Plant City.

“Build it and they will come” is true to a certain extent. The new Norfolk to Richmond to Boston service is a good start, and it should enjoy decent ridership. But, what is being left on the table? If at least two more stops were added, which would only add to operating costs in a minuscule way (It does cost diesel fuel to stop and restart a train), how much more ridership and revenue would be gained?

This is a state subsidized train, which means Other People’s Money is being used to start the service and maintain the service. When using OPM, it is always best to look at all possible scenarios to make every dollar spent work as hard as possible to create revenue to repay that dollar as quickly as possible.

Next time, we intend to look at Republican U.S. Representative Mac Thornberry’s call to allegedly save $1.2 billion over a decade by axeing Amtrak’s first class service.

Positive news for commuter operations, and ponderings on the future of high speed and intercity operations. But let us begin with two brief preludes; first, a short poem, called a “Grook” by its author, Danish poet and philosopher Piet Hein.

Thoughts on a Station Platform

It ought to be plain
how little you gain
by getting excited
and vexed.
You’ll always be late
for the previous train,
and always in time
for the next.

A second lead-in: a note on why we are all here. Marcus Garnet, of Transport Action Atlantic in Canada, writes in a Progressive Railroading internet journal,

What is commonly overlooked, is that time spent on a full-service long-distance train is also available for other purposes, including overnight sleep, meals, work, meetings, socializing or simply the enjoyment of scenery. Overnight train travel serves a transportation function, but also offers a total experience, especially for those who are able to afford a bedroom. These passengers do not just travel on the train, they live on the train. Whether for tourists or traveling Canadians, this is a vital market distinction from other land transport modes.

Mr. Garnet sums up many of our feelings and motivations for being passenger train advocates. Yes, trains are a vital part of our national infrastructure, but we want trains because of what they do for us personally, what they do for our friends and families and neighbors, what they do for our economy and our ecology. Trains are special and we need many more of them.

One last item, from the Inbox: Reader Ole Amundsen wrote in regard to the referenced article on VIA Rail Ocean Train Service:

The comments around this exceptional piece of work seem to be getting at the heart-wood of the rail passenger conundrum in this country. My positions come from being 70 years of age, nurtured by an old school conservative view of individual responsibility, educated in business and economics, and experienced in national agendas…

When Amtrak was started, I was only interested in getting the Montrealer re-instated so I could avoid driving from my new home in Vermont to family in Connecticut. It is easy to look back and say Amtrak should have been done differently: it has performed the task of “place holder” for passenger rail but that is about it. Those were dark days for railroads, but we are now in a very different world: then I paid 16 cents a gallon for fuel oil to heat my drafty Vermont farm house! Today, we have 75 million boomers aging out; they control about 75% of the nations wealth, they love to travel, they are fit but getting more prone to medical situations, they have “done it all” and want to continue to have adventures, they enjoy creature comforts and are enjoying being grandparents. This is not a market block to be ignored, it is not solely a market for “luxury train travel;” it is a major component of the traveling public which does not opt for speed alone, but which prefers reasonable mode frequency, reasonable adherence to published schedules, reasonable and clean accommodations, reasonable food, accessible and accommodating equipment and a minimum of hassle…

My friend, the late Paul Weyrich, had all the conservative credentials a person could have; and he was a strong voice for passenger rail and trolley (“light rail”) as well as integration of inter- and intra-urban service. This problem, this opportunity, must be addressed without falling back on old reasons not to, and [there must be a way we can] come together with fresh ideas on how to really run the railroad.

Now, on to the news.

The San Mateo County Times reported on 27 May that

Caltrain officials have convinced federal safety authorities to allow quick European-style electric trains to zip from San Francisco to San Jose… common in Europe, the smaller electric trains… [had been considered] unsafe. But after three years of tests and research, Caltrain will become the first railroad in the nation to use the technology after being granted a waiver… [this] will essentially be a pilot operation for the trains, called electric multiple units. If successful, commuter railroads and planned high-speed rail networks throughout the nation would have access to cheaper, greener and faster trains…

Even with several restrictions, the advent of modern equipment used successfully and safely for years elsewhere around the globe is a huge step forward for the implementation of regional rail lines around and between American cities.

For those who saw the Ayn Rand quote last week as being “the politics of the past,” we turn to Paul Merrion‘s article in Chicago Business this June 10th, regarding high-speed rail (emphasis mine):

In a move that reportedly “stunned” the rail industry, the Federal Railroad Administration last month proposed stiff terms for the grant agreements that railroads must sign with states to get funding to upgrade their rail systems… Among other things, the FRA said railroads must be required to pay, without limit, for any further improvements or fixes needed to meet on-time performance goals set out in the grant agreements, or else pay back the federal grants.Even Boston-based non-profit, National Corridors Initiative Inc., a high-speed rail advocacy group, questioned whether that is feasible.“While the objective of these guidelines — to protect the taxpayer against the (mis)use of their money when federally assisted railroad projects are built — is a valid one, the prescriptive, punitive nature of the proposed FRA regulations are and will be non-starters for any normal businessperson who has to carefully assess projects for risks to his company, or face the wrath of his stockholders,” the group said in a statement on its Web site…

The FRA holds over the railroads, not just the billions in high-speed rail grants effectively controlled by Amtrak, but also the impending imposition of Positive Train Control (PTC), a worthwhile safety and capacity improvement but one that will cost billions and take years. It is still not certain how much of PTC the railroads are expected to shell out of their own pockets. Is the Obama administration seriously going to require the railroads to pay any price so Amtrak can operate its government-funded high speed trains?

In parallel developments, concerning the Gulf oil spill, “Obama said he had no interest in undermining the value of BP” (Reuters story, 12 June 2010), but meanwhile “U.S. House of Representatives Speaker Nancy Pelosi said on Friday BP should be subjected to unlimited liability costs and should pay all damage claims” (Reuters story, 11 June 2010). How can one impose unlimited liability without undermining industry? What person or corporation in their right mind would continue operating under those conditions?

(Caution: Ayn Rand reference follows; the timid may avert their gaze.)

In Atlas Shrugged, Rand populates her dystopia with officials who do not understand how the world works. Rand’s bureaucrats have only ever ridden, as a Mr. Guthrie would put it, “their fathers’ magic carpet made of steel,” never seeing the engineering brain-power and the technical muscle-power behind a railway, imagining that trains function by magic, that oil pumps itself, that commerce and industry exist in a mythical land of everlasting continuation unaffected by taxes, regulation, and legislation. Rand posits a government whose popular and well-intentioned enactments “for the public good” strangle commerce and industry, slowly as a gentle flurry at first, finally escalating to a murderous avalanche.

Arthur Laffer explained in the Wall Street Journal one June 6th why this neverland of perpetual sameness does not exist:

People can change the volume, the location and the composition of their income, and they can do so in response to changes in government policies… It has always amazed me how tax cuts don’t work until they take effect. Mr. Obama’s experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011.

Dire predictions of impending doom aside, will the Obama administration, having already started down the dystopian road (One of the characters in Rand’s 1957 book asks, When they nationalized health care, did anyone ask what the doctors wanted?), truly enact scorched-earth policies in one economy sector after another?  If so, look for oil and rail executives to be among the first to relocate to Galt’s Gulch.

Back in the high speed arena,

Amtrak announced it is reorganizing and establishing a new department to pursue opportunities to develop new intercity high-speed rail service in select corridors around the country…

“Amtrak is the unparalleled leader in high-speed rail operations in America today and we intend to be major player in the development and operation of new corridors,” said President and CEO Joseph Boardman…

– Amtrak press release, 22 March 2010

Aside from the omission of a word (does Amtrak intend to be a major player, or the (only) major player?), does it not sound as if Amtrak might be jockeying for a near-monopoly in high speed rail? Will we see a resuscitation of the dead corpse of its former monopoly over all intercity trains, moved to HSR? Prior to the passage of S.738, the Amtrak Reform and Accountability Act of 1997, U.S. Code: US Code, Title 49, section 24701(b) read (emphasis mine): “Except as provided in section 24306 of this title, a person may provide intercity rail passenger transportation over a route over which Amtrak provides scheduled intercity rail passenger transportation under a contract under section 401(a) of the Act only with the consent of Amtrak.”

The “monopoly clause” indeed prevented state agencies as well as private companies from even talking to railroads about running passenger trains. Would Amtrak have approved trains like New Mexico’s RailRunner? Doubtful. Certainly not in the short time it took from its announcement to the first cue for the “Meep-meep!” of the RailRunner departure door chimes.

That provision having been rescinded, will the liability issue now be how private operators are forced out of business?

Perhaps echoing liability concerns voiced frequently by North America’s Class I freight railroads, Amtrak President and CEO Joseph Boardman has cited similar concerns “emerging as a significant obstacle to the improvement of existing passenger rail service and the development of new, including high speed and intercity corridor, passenger rail service in the United States.”

Boardman, in a five-page letter to four congressional leaders dated Feb. 26, says in part, “The core of the problem is the unwillingness or inability of a growing number of entities, including states and other public bodies, to enter into the kind of agreements for risk allocation … and/or to purchase insurance at all or at sufficient levels …”

“Moreover, the attitude from a number of private parties and state entities alike seems to be that Amtrak, in significant part because of its federal funding, should assume the greater share or risk of liability.” That, Boardman warned, could curtail or terminate state-supported services Amtrak currently provides…

– Railway Age, 2 March 2010

Airlines are feeling a similar pinch. According to Susan Stellin in the New York Times, this 7 June, reporting from the first meeting of the Future of Aviation Advisory Committee, air travel will look much different within half a decade. Small cities will continue to lose air service, or at best will have ever-fewer flights at ever-higher prices, while some large cities with aggregated volume will see volumes above today’s and low prices from further rate wars.

…Glenn Tilton, United’s chairman, stated it more bluntly: “There are clearly going to be winning cities and losing cities,” he said, addressing the fact that the industry cannot sustain service to destinations that don’t have the passengers to fill planes…

High speed trains have the same problem as airplanes: They just do not serve enough places. California’s governor Schwarzenegger has proposed running a “high speed lite” train before he leaves office. Here is what Noel Braymer of RailPAC has to say in a letter to the Los Angeles Times:

According to the letter signed by the Governor, it looks like there are plans to run rail service between Los Angeles and San Diego by November in about 2 hours.  It looks like the new train would only have 3 stops at Los Angeles, Anaheim and San Diego. Just dropping the six other intermediate stops would save 30 to 36 minutes on the current schedule of 2 hours 40 minutes.

Generally express trains are not successful. By skipping stops such trains also loses the business from those stations. Amtrak has tried several express trains and they have all failed. A local example of this was the San Diegan Metroliner which ran for about a year starting in September of 1984. It rarely carried more than a busload of passengers. It lost the traffic the other trains carried from the skipped stations. There was only one train a day leaving Los Angeles for San Diego in the morning and returning in the afternoon. Saving 10 minutes wasn’t worth the extra money for passengers if the return train ran at an inconvenient time. Another problem with the Metroliner was most cities with train stations lost a train to run this new train. Many of these cities had gone to great trouble to build new or rebuilt their stations and had not been consulted about this decision. These cities were not happy…

Precisely this same scenario is playing with the English Javelin trains, the California HSR project, the Florida HSR, and soon coming to a minor city near you whose airport terminal will lose scheduled flights.

Looking back to Mr. Garnet’s thoughts about the vital market distinction of rail, clearly the nation’s towns and smaller cities, the ones left without air service, and nowadays without even bus service or anything at all, are the market for regular passenger trains. Even fifty or a hundred years of mangled government transportation policy cannot hide the basic utility and need of trains over cars and airplanes. The difficulty will be to create something that works more like a free market, replacing today’s lack of choice or hope for too many towns and people.

The way forward involves tort reform, reasonable liability caps, and getting government back to governing, not operating, passenger trains.  The same prescription holds for the freight railroads, the oil industry, even our highway and airway systems. This involves the dreaded “C” word — Change — and nobody much likes change; not lawyers, not unions, not management, not stockholders, and certainly not government.

We had better get started quickly.