My Bio and This Blog's Purpose

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I'm here to spread my ideas on how passenger rail can be improved in America without telling the same stories most people in the rail community have told for nearly 43 years. I offer a different perspective on passenger rail because things need to change in a hurry given divided government in Washington and an interest from outsiders to operate intercity service.

Tuesday, April 15, 2014

Tackling the Headlines 62

East-west Amtrak corridor promoted in Illinois
Take: This is looking like a Plan B since Iowa is totally uncooperative with extending the route across its state. Maybe, when Terry Branstad is sent to the retirement home, the Iowa DOT can return to Earth and provide the funds to produce a route that is not necessarily operated by Amtrak and doesn't necessarily stop at Union Station in Chicago.

Black Hawk update
Take: So, is Canadian National trying to replace Union Pacific as the most passenger hostile Class I railroad? Anyway, it's better to get part of a route working than to end up with with a situation like Ohio.

Indiana puts the Hoosier State up for bid...
Take #1: So, it begins. If Amtrak loses this route, then, this will be a ripple effect across the nation as other states look more closely at their budgets, with the goal of saving money by selecting the operator who will provide them the most service for the smallest amount.

Take #2: My official take and what it could mean for Amtrak can be found here.

Take #3: Assuming that all of the hurdles with the tracks and all six hosts are overcome, the new operator could extend one frequency to Cincinnati with a second one to follow shortly thereafter and another to Louisville for a total of four Chicago-Indianapolis frequencies plus the Cardinal.

Take #4: The only thing I don't like is the extremely short timespan that other companies have to submit bids. However, if a competent operator steps up, then the April 29 deadline will be moot.

...and Oregon and Washington State could be next
Take: If this happens, then Amtrak management should very, very worried because the Cascades' southern neighbor could follow.

Talgo shifts its focus where?
Take: Even Michigan is interested in making Wisconsin look foolish. Enjoy those leftover Horizon Cars, Scott Walker.

Chief fight moves to Congress 
Take: Now is the time for the innovators and D.C. pols to step up and provide a real workable solution.

Vermont House OKs Ethan Allen rail extension
Take: This move is the right one. Rather than rerouting an existing train, Vermonters will get an extra option to travel to New York City.

Wednesday, April 9, 2014

Amenities

These links (1 2 3) got me interested with how Amtrak should handle amenities. There has to be communication between the operator's unions and contractors so there isn't a repeat of the Subway experience with Empire Service trains. 

I don't agree with Mica's cherry picking at all because the passengers who are willing to pay extra fares deserve specialties like free wine and champagne. It's a shame that Boardman didn't at least defend the Auto Train's amenities on the ground that #52 & #53 are special trains. 

Worley was right about vending machines being unsuitable on long distance trains because Southern Pacific tried this in the 1960s and it ended up losing passengers in the process (of course, one could argue that this was SP's goal all along). Vending machines only work on routes that are as short or shorter than the 173-mile Piedmont. A better solution for corridor trains would be regional foods.

As Amtrak looks to avoid repeating the dreaded Diner Lite experiment, potential competitors will find ways to contract some of the very items the national carrier eliminated last Monday to private companies in addition to installing wi-fi on future routes.

As for the people who have a "so what" attitude about all of this, they only need to take a look at the airline industry to see how a reduction in amenities has ruined the experience of flying. When I last flew to San Francisco 18 years ago, I had a full meal along with in-flight entertainment. Now, people have to pay for subpar, prepackaged food.

Sunday, March 23, 2014

Addendum: Alternative History

Feasibility: High. Southern held out of Amtrak for almost eight years and was still able to run a top notch train (Crescent). Meanwhile, the Seaboard Coast Line nearly stayed out of Amtrak so it would make sense if the ACL and SAL had merged with other railroads instead of each other, they would still be running trains today.

Feasibility: Moderate to high. If the federal government had reduced the burdens it imposed on the railroads much earlier, then, the U.S. would still have the world's best passenger rail system. Of course, the side effect would be that no one would be talking about high speed rail due to the efficiency of the networked rail system.

Also, the effort to provide a national intercity rail system composed of nine major railroads would have the support of the Bush 43 and Obama Administrations.

Feasibility: High. Both railroads reluctantly joined Amtrak, but they could have easily have gone the other way. If the Santa Fe and the SCL had joined the six holdouts, there's no doubt that those two railroads would have continued operating trains to this day.

Amtrak would be a reduced entity because of NS's push to mandate competition in the intercity passenger sector. Section 214 of PRIIA and Amtrak's losses when it comes to bidding would have likely been a campaign issue in 2016 with Republicans wondering whether if Amtrak needs to exist at all when various host railroads and independent operators are dominating the intercity rail market.

Feasibility: Low. As ideal as it might have been, the Democrats were very firm in their opposition to giving federal money to private railroads, so there wouldn't have been enough votes to do anything but to nationalize the passenger trains. 

Moderate. It comes down to how much willpower the Erie and the DL&W had to serve New York City proper.

Streetcars: High

Subway: High


Other rail modes: Low. Maglev is expensive and would have been excluded from the 30/10 Plan. The Airtram idea may have been scrapped just due to time. There was a limited amount of time for the People Mover to have been built, and if no tracks had been laid down by 1981, then, it just wasn't going to happen. The Monorail may have been built--only if the original subway system had already been in place. The Carveyor was just an idea that was too futuristic. 

Saturday, March 1, 2014

Disrupters, Innovators & Rent Seekers in Rail

Introduction

The purpose of this post is to demonstrate how disruptions, innovations, and rent seeking apply to the world of passenger rail just like it does to any other form of business.

Here are some examples of business disruptions. Such actions have resulted in life being much better for society today. 


Rent seeking is the yang to disruption's yin. As Steve Blank says about this counterbalance:  

Rent seekers are individuals or organizations that have succeeded with existing business models and look to the government and regulators as their first line of defense against innovative competition… Rent seekers spend money to increase their share of an existing market instead of creating new products or markets…


Overhauling the Paradigm Could Make the Passenger Train Thrive Once Again

Here are some possible scenarios of how passenger rail could drastically change for the better:
  • Operators provide multiple classes of service--beyond today's coach, business, first classes
  • Premium and specialty food service on trains
  • New operators using historic stations in major cities that are currently commuter only or have no meaningful Amtrak service
  • Train tickets that include non-rail connections and transfers between multiple stations in the same city
  • Rail operators providing other services at stations, like real estate agencies 
  • Private industry like travel agencies and cruise companies getting into the world of passenger rail
  • Expanded Auto Train service, regardless of operator
  • Some ideas for unconventional rail travel Jon Fostik and I separately proposed a few years ago
  • All-sleeper trains that are affordable but also offer premium rates
  • The recent move by the feds to allow Caltrain to use European style equipment on U.S. tracks
  • Different ways to finance passenger rail given that politicians aren't readily receptive to funding trains

Who Are Passenger Rail's Innovators Today?

Passenger rail ridership in America is at its highest in decades but most expansion plans to draw even more riders are stuck at the station due to congressional gridlock. There are disagreements over whether Amtrak—and by default, the public sector—should continue its role as a monopoly operator or if other carriers—some of whom are privately run—should be allowed to compete.

In the midst of the fight over passenger policy, there are several renegades who are not waiting for Congress or the White House to set new laws. In the last three years, Iowa Pacific has emerged as a potential shortline powerhouse by planning and providing passenger service to areas that hadn't carried people in decades while Florida East Coast’s All Aboard Florida has laid the groundwork for passenger service in 2015. 

Meanwhile in Amtrak's own backyard, Housatonic and New England Central have plans to provide service to cities that are underserved by the national carrier.

Last year, two different companies provided plans to run private service between Portland, ME and Montreal--one during the day, the other, at night. For years, the feds have included a Boston-Montreal route as part of a national high speed rail system, but the problem is that HSR money has dried up and even if it hadn't, there would have been some serious disagreements over where the route should go (via the Downeaster/western ME, central NH or Springfield, MA/Vermonter).



The Roadblocks to Innovation

Just as there are people who are thinking beyond an Amtrak (-only) world, there are many others who aren't willing to give up the existing order without a fight:
  • The aviation and highway lobbies along with their allies like think tanks and politicians
  • The Class I railroads and the AAR's Amtrak only stance
  • Amtrak management's complacency (continued focus on the NEC at the expense of its other routes)
  • Rail activists who support the status quo and oppose competition
  • Amtrak friendly politicians who resist meaningful changes for the national carrier (NJ Transit & politicians and the Northeastern congressional delegation)
  • A segment of the rail community that is opposed to lighter equipment being used because they allege that the European cars are "too dangerous" despite the fact that bulky equipment currently used on U.S. rails has its own safety issues
  • True Believers who think that giving more money to Amtrak is the answer while failing to realize that the agency's management is too focused on the Northeast
  • The FRA's inane standards on things like equipment crash-worthiness 

How Rent Seeking Is Blocking a 21st Century Rail Renaissance

I will now provide some examples of how rent seeking behavior is hurting the cause for passenger rail by responding to three of Blank's quotes:

Instead of offering better products or better service at lower prices, rent seekers hire lawyers and lobbyists to influence politicians and regulators to pass laws, write regulations and collect taxes that block competition.

When foreign operators devised plans to run HSR in late 2009 and early 2010, Amtrak was forced to create an HSR department just to keep up.


Amtrak president Joe Boardman sent a letter to four congressional leaders to impose burdens on some of these would-be HSR competitors by playing the liability card.

In 2012, the Senate proposed three provisions that would have stunted competition. Amtrak claimed plausible deniability because Senator Durbin and Majority Leader Reid took the brunt for proposing such foolishness. It wasn't coincidental that the move was directed at the very operators that have constantly outbid Amtrak on commuter contracts and formed the Association of Independent Passenger Rail Operators in 2011 to bid on intercity routes.

When companies are protected from competition, they have little incentive to cut costs or to pay attention to changing customer needs.

The Tea Party backlash of 2010 led Amtrak to primarily focus on the Northeast Corridor without much detail to the rest of the system. Remember, the non-NEC states are paying Amtrak for Section 209.

The FRA’s foot dragging on Section 214 provisions led Amtrak to tell three states to pay for a non-corridor train or lose service in 2016. That lax federal enforcement has also led Amtrak management to not make any serious efforts to provide additional equipment for the Western long distance trains.


The national operator is planning to completely phase out its remaining Heritage fleet while providing no additions to its eastern long distance capacity and completely neglecting inactive Superliners. Rumor has it is that Amtrak would rather scrap its older equipment than see other companies use it for state-sponsored services. 

Startups, investors and the public have done a poor job of calling out the politicians and regulators who use the words “innovation means jobs” while supporting rent seekers.

The Nightmare Scenario or the possibility of Amtrak only running overnight routes (plus the NEC) would stifle any hopes for reviving passenger rail in this country yet most rail advocates haven’t gotten this message, choosing instead to support the near monopoly.

On the other hand, it’s to the AIPRO’s credit that it got a jump start in challenging the rent seeking activities by pointing out the regulatory burdens. Now, someone needs to point the following out to the unions: If they are opposed to non-Amtrak operators, then they are in effect opposed to more jobs.


Conclusion

Innovation has helped other businesses and can help passenger rail—if entrepreneurs are allowed to. Rent seekers are around the corner and will seek to keep the laws as they are. If this latter group succeeds, then the public will be the biggest losers as America would continue to have mediocre rail service, and anti-rail forces will then continue to mock passenger trains as "outdated."

Tuesday, February 25, 2014

Tackling the Headlines 61

FL governor to fund Orlando airport intermodal station


Take: It's a change from his stance three years ago. Of course, he's also funding the terminal because he has taken a lot of beating for being more fixated on roads than rail. Whatever the case, this is nothing but a huge plus.


A couple of news items from Oklahoma 

The OK DOT has reduced the number of bidders for the Oklahoma City-Tulsa rail line from four to two: Watco-owned Stillwater Central Railroad and previous owner BNSF. At the same time, Iowa Pacific has laid down the gambit by providing a concrete plan to operate passenger service in a letter to Governor Mary Fallin even though his company missed the final cut.

Take: The ball is your court, Oklahoma. Neither the governor nor the DOT can now say that "no one will ride the the train" because ample evidence has been provided to the contrary. If that line is uttered, then, it's a clear signal on how anti-rail the state really is.


Hawaii rail project clears final hurdle


Take: The 50th state will soon have regularly scheduled rail service, which is really good news for all.


Group wants return of passenger rail, others have doubts


Take: Given that South Carolina is a "small government" state, it would be in the advocates' best interest to also talk to other passenger operators via a competitive bidding process in order to hold down costs.


About that Germany-UK service...

Delivery delays have now led to Deutsche Bahn to put the Frankfurt-London service on hold while it focuses on providing services to Brussels and Paris instead.

Take: This is a major blow to the EU's plans to open up the rails to international travel.


Nutmeg State's Central Corridor

It's almost TIGER time again, so Eastern Connecticut leaders have made a full-court press by getting Congressman Joe Courtney to lobby the feds to get funding for the Central Corridor this year.

Take: Now, the other pols in the area need to get onboard. After all, the clock is ticking for passengers in Amherst who currently take the Vermonter.

Monday, February 24, 2014

Alternative Hoosier State routing & stations

The state of Indiana is currently accepting bids from private operators to run the Hoosier State once its contract with Amtrak is up in October--even though it could let Amtrak continue running the train until next February. 

It's rumored that IN DOT is pretty unhappy with the way Amtrak is currently operating the Hoosier State. Assuming that the state lets another operator run the train, it's likely that the new operator will have to find a new home in Chicago. This map shows that there are two options: LaSalle Street Station and Millennium Station.

The plan is pretty doable for the likes of First Group, RATP Dev, or anyone who potentially replaces Amtrak since Union Station is overcrowded.

Wednesday, February 12, 2014

A pivotal moment for Oklahoma

Last week, the state of Oklahoma officially put up the 97.5 miles of rail line it owns for sale and received bids from four companies:

  1. BNSF, from whom the state bought the line in 1998
  2. Watco Companies, which has trackage rights on parts of the route 
  3. Iowa Pacific Holdings, which is jointly operating the Eastern Flyer with Watco-owned Stillwater Central Railroad 
  4. Fortress Incorporated, owner of All Aboard Florida and Florida East Coast 

The Eastern Flyer sold out at the end of last year and is scheduled to make two more roundtrips between the Oklahoma City and Tulsa metro areas this month following Sunday's inaugural run. The state would be crazy to jeopardize the possibility of private entities running passenger trains

Some reports quote groups who have suggested that the private effort is somehow an affront to plans of extending the Heartland Flyer from Oklahoma City to Wichita via Newton, KS. There is no need for the zero-sum mentality has to stop because there's no reason why the Heartland Flyer couldn't coexist with the Eastern Flyer one bit. How the state is willing to sell the line by April or May yet not be done with a separate feasibility study for Oklahoma City-Tulsa route until mid 2015 is perplexing to me.