What’s Wrong with Amtrak?

Anyway you measure it, Amtrak just isn’t in the same league as the major league rail passenger railroads of Europe, Japan or China. Be it revenue, on-time performance, running times, average running times,customer satisfaction, passenger miles or whatever:Amtrak just isn’t in the same league for Passenger Railroading of most developed countries. To be fair, the United States let itself be left behind and it has been slow to try to catch up with much of the rest of the world. But Amtrak often seems to be oblivious to just how far behind they are to the rest of the world and what they need to do about it..

An example of this comes from a public meeting I was at a few years ago in California. A Vice-President of Amtrak gave a presentation which was mostly a sales pitch for Amtrak winning the contract to operate California’s future High Speed Trains. A major claim for winning this contract was that Amtrak was the leader in High Speed Rail operations in this country. Since Amtrak is the only operator for intercity passenger rail service this isn’t really much to brag about. But since this meeting, Amtrak no longer talks about getting the California High Speed Rail operating contract. Amtrak when this presentation was given, likely assumed the contract for the California High Speed Rail Authority would pay them to run the High Speed Rail Trains. The fact was always that like many High Speed Rail services around the world, California would own and build the High Speed Railroad. But operators would bid to pay the highest amount to California for the franchise to operate the trains and for the operator to make money while doing it.

Even before the creation of Amtrak, there has been political pressure to build a High Speed Rail service on the Northeast Corridor. There are several problems to doing this. The Northeast Corridor is a railroad that was largely built in the 19th century. Today most of the Corridor suffers from deferred maintenance going back to the 1940’s which after roughly $20 billion in Federal spending is assumed to require another $52 billion to get it in a “state of good repair”. Most of the rail traffic on the corridor is not for Amtrak, but the commuter railroads. For example New Jersey Transit runs 20 trains an hour during rush hour to Amtrak’s 4 in and out Penn Station in New York.

In the 1990’s Amtrak President’s were Thomas Downs and George Warrington: both came from the commuter railroad New Jersey Transit. Under them happened most of Amtrak’s development of the Acela High Speed Train. This included extending electrification from New Haven to Boston for faster service for all trains between Washington, New York and Boston.

Since the 1980’s Amtrak was under increasing pressure to reduce its budget deficit and break even. During the Reagan and Bush Administrations, former Southern Railroad CEO, W. Graham Claytor was able to control overhead costs, increase revenues and make major reductions in Amtrak’s deficit. In 1993 at his retirement, Amtrak President Claytor predicted that Amtrak would be able to break even by 2000, if it continued his policies. These included some extensions of Long Distance Trains and ordering additional Superliner Cars used on the Western Long Distance trains.

In 2001 as Amtrak President, Warrington claimed that Amtrak was on the “glide path to profitability”.Much of this was based on the assumption that with higher fares the Acela would be a major money maker. Under both Downs and Warrington, Amtrak cut back Long Distance service to “save money”. There were many problems with the Acela rollout in 2000. In 2002 George Warrington suddenly resigned from Amtrak. Amtrak was in terrible shape and had borrowed a great deal of money for the start up of the Acela assuming it would be a great success. Since 2002 billions of additional dollars of government money have been spent keeping Amtrak running as it still is recovering with the problems with the start up of the Acela.

So what is wrong with Amtrak? The culture at Amtrak hasn’t got a clue how to operate passenger service at a profit. Going back the first high speed train on the NEC, the 1960’s Metroliner, the assumptions was the key to making money for rail passenger service was to copy first class airline service of the day. The Metroliners were hailed as the thing that would save passenger service on the Pennsylvania Railroad. In the 60’s and 70’s the airlines were a highly regulated industry which protected airline’s profits by restricting competition and insuring high fares. Most airline passengers then were rich or traveling on business, the costs of which were largely subsidized with tax exemptions. Air travel was faster in the 1960’s, than it is now. There were more non-stop planes, plus airports and the airplanes were less crowded then.

Then came airline deregulation in the late 1970’s and everything changed for the airlines. In order to compete, the airlines had to become more efficient and get maximum value for each airline seat. That meant having as few empty seats on a plane as possible. A major part of the survival of the airlines, was the use of hub and spokes airports. The reality was that the least productive passenger service are non-stop services. The key to ridership the airlines realized was to serve as many markets as possible, with the fewest planes as possible. This was possible with planes making connections at hubs. The result is from almost commercial airport today, a passenger can travel to almost anyplace in world, with a few connections. Through the years, Amtrak has tried many times to increase ridership and revenues by cutting stops to reduce running times on trains. The result has been every time that ridership and revenue went down. Fewer stops meant fewer markets.

What the Northeast Corridor needs more than faster, more expensive trains , are more reliable trains that go or connect to more places in the Northeast. There are people who live in Long Island and upstate New York, yet what are the connections to Amtrak NEC trains for these people? There are plenty of cities in on the East Coast and Midwest which would feed traffic if connected to the Northeast Corridor. Cities such as Pittsburgh. Cleveland Toronto, Montreal. Charlotte and many other cities in between. Good connections and reliable service are the cornerstone to successful passenger service.

Switzerland is one of the best models for this. A wealthy country, it has one of the highest per capita usage of rail passenger service in the world. Most stations have rail service at least every half hour. The trains all connect with each other with connections as tight as 2 minutes. A late train can be a major news item in Switzerland. Not only do the trains connect to each other, the trains also connect to buses, ferries, airports and many other transportation modes. Most rail passenger service in the world have good connections. The United States still has a lot of catching up to do.

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