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With a new administration in D.C., it's time to think outside of the box because passenger rail's survival just may depend on it

Saturday, April 30, 2011

Should America Start Over?

A Brief Rundown

Tomorrow will mark 40 years since Congress officially relieved the private railroads from operating passenger trains. Yet as this anniversary approaches, there are fewer trains and train routes than in 1971. Current and recent Amtrak management have been very inattentive to the National System and recently as 1 ½ years ago put out very flawed studies on the feasibility of restoring old routes.


In the wake of the Passenger Rail Investment and Improvement Act of 2008, most people who care about the future of passenger rail in America have come to the realization that the status quo no longer works. The real problems are the people who are standing in the way and the ridiculously archaic rules for any challengers to Amtrak. The main purpose is to find out exactly what starting over would look like and what should it look like?


Problems

Amtrak only has plans to replace old equipment rather than add to its already shortened supply. This move will result in fewer available seats at peak times of the year and when gas prices are already approaching September 2008 levels. Others have pointed out that Via Rail Canada has done more with less—equipment, frequencies, and routes—in the last 21 years (when the Mulroney Cabinet crippled the Canadian agency) while Amtrak seems way too eager to ditch its old equipment. I’ll take it a step further by saying that the state of North Carolina has found a way to revamp a handful of Heritage equipment Amtrak didn’t want.


When the Rio Grande gave up passenger service on April 24, 1983 and the Georgia Railroad ended mixed train service five days later, Amtrak was a statutory monopoly. The Amtrak Reform and Accountability Act of 1997 made the company a de facto monopoly. States have been free to explore other operators for the last 13 ½ years. The problem is that practically each state already had a deal with Amtrak in place. Northern New England and Missouri were the only two areas that had the option of selecting a different operator. The Downeaster’s organizers voluntarily went with Amtrak in 2001 while Missouri nearly chose Herzog in 2003.


The competition aspect brings me to my next point: While foreign rail operators and transit agencies have expressed an interest in operating intercity routes, officials in Washington, D.C. and most rail advocates have been asleep at the switch! PRIIA mandates competition for both corridors and long distance routes.

Rifts within the Community

Over time, the rail community has more or less splintered into competing factions—True Believers and Business Oriented Pragmatists. The first group has been Amtrak’s biggest backers from Day 1 and contends that the carrier has never received sufficient funding. The latter group has more of a big picture view and is more than willing to challenge Amtrak on all issues, not just on service reductions.


I have found myself drifting from being in a peacemaker role to firmly siding with the BOPs because what True Believers have offered isn’t enough now that the tide has turned against air and auto travel due to rising gas prices. On the debate front, the extreme positions represented by True Believers (unlimited subsidies for Amtrak) and anti-transit libertarians (rail is 19th century technology) pollute the true issues on passenger rail’s future.



I see divisions within the rail community to be more generational than ideological or philosophical. Many True Believers went through the dark days where the Class Is cut routes and let their equipment deteriorate. I was born between the Carter Administration cuts and the passage of Staggers and most BOPs are in the 25-45 age range. This is more or less the demographic that is the most entrepreneurial and, therefore, more willing to envision a world that has multiple operators. We aren’t willing to have a perpetual pledge drive mentality. Instead, we want to evaluate areas where Amtrak has failed to utilize because most people in the rail community fail to realize that passenger service is a business first.


Proposed Solutions

Recent solutions have ranged from privatizing Amtrak to breaking it up into a few pieces to handing all rail service back to the Class I railroads. There was an article in the March issue of Progressive Railroading that highlighted competition in the transit sector. The writer pointed out that only Amtrak and Herzog used to win contracts all the time but other companies have now stepped up to bid for commuter rail, light rail and streetcar services.

In addition to the five that I proposed last summer, here are several other options that others have proposed:

Nationalize all the railroads to split up infrastructure and operations. Rail infrastructure would stay in public hands but there’d be brand new private Class I railroads who would pay track fees and run the trains. A bidding process would be in place and would include Amtrak
• Use the German model of controlled competition and let the states use other operators for certain intrastate/intraregional routes (usually less than 250 miles long) while Amtrak holds on to Regional HSR (250-750 miles long) corridors. The states would be financially protected for the short-distance routes
• Have separate operators based on regions or states
• Make Amtrak a private nonprofit (the Korean Model) or a for profit organization (failed effort by the Bush 43 Administration)
• Break up Amtrak into several regions
• Separate Amtrak’s long-distance operations from its corridors (Note: All breakup options were opposed by the rail unions in 2002 and still are today)


Regional and shortline railroads across the country are either operating passenger trains or in the process of launching passenger service. It may seem impossible for the major railroads to relaunch passenger service or tolerate non-Amtrak operators on their lines but it isn’t. All that’s needed is a better set of liability enforcement guidelines, which in their current state, will be a bigger obstacle than Tea Partiers.


Companies like Herzog, Veolia and Keolis have mostly limited their interest to municipal transit for now, but how long will it be before these agencies decide to expand into the world of intercity rail? Given the recent news, I’d say such a move has already started. Veolia was one of eight teams that sought to operate the doomed Florida High Speed Rail project. Also, a new group representing these operators has formed. There is the potential for Congress to step up to the plate and enforce PRIIA guidelines on competition.


My Personal Plan

What I’d like to see is a combination of several of the aforementioned options. First, separating infrastructure and operations like the British would be in the best interest of the railroads because they would no longer have to pay for track improvements, only fees to access the tracks. Instead, a track maintenance organization operated by either the FRA or the USDOT will oversee the conditions of tracks and bridges and take appropriate action if something is out of the ordinary.

Second, I would like to see the federal government give the seven major railroads a subsidy or grant to operate passenger service. Out of all of the alternatives to the status quo, returning all passenger services to the Class Is--while not the worst thing--would prove to be the most problematic. As a result, they will be forced to get back into the game whether that means the feds start enforcing PRIIA guidelines or if the smaller railroads shame them into doing so. In giving these railroads financial guarantees and obligating them to operate passenger routes means that the private sector would once again be involved at all three levels. These moves automatically eliminate the Association of American Railroads’ Amtrak-only stance, which is a major roadblock to non-Amtrak passenger service.

Once we have a track maintenance organization, the government would set guidelines. The big railroads would operate the overnight routes and would have a consortium to handle routes that are on multiple railroads so passengers don’t have to change trains despite staying on the same route. Can anyone say Orbitz for train travel or a railroad version of HotWire? This kind of streamlining will make it very easy for train travelers to use multiple operators. Long-distance routes must have at least three trains each way so riders can plan accordingly while more popular routes should have at least four roundtrips. More long-haul routes or even enhanced passenger service will complement and relieve saturation on the other routes. On setting guidelines, the current liability requirements will have to be scrapped in favor of something that is much more sensible. This means that it’ll be essential that the railroads aren’t paying costs for track maintenance. The historic Ski Train was killed off in 2009 when new owner Iowa Pacific Holdings balked at paying Amtrak $200 million in liability insurance because the latter claimed that the 56-mile route between Denver and Winter Park resembled a commuter operation rather than an excursion. Amtrak has also used the liability issue to either delay agreements with commuter rail projects or pass on bidding for such routes altogether.


The bidding process would resemble this:

• Host railroads contract specialty rail routes out to foreign operators, independent passenger operators and cruises/tourist destinations via a PPP
• Host railroads (solo and via a consortium) and Amtrak would be eligible to bid on long-distance routes
• Amtrak, foreign operators, and independent operators would be eligible for Express and Regional HSR routes
• For Emerging HSR routes, Amtrak and independent operators would be able to bid on routes that are between 250 and 749 miles long. Any route with a distance less than 250 miles long would go to independent operators while states would be given financial support for these routes from the FRA via subsidies
• Corridors would be divided into 10 regions—Northeast, Southeast, Florida, Gulf Coast/South Central, Texas, Southwest, California/Nevada, Northwest, Rockies, Midwest
• Outside of the Northeast, the number of assigned operators would range from two to seven and will change based on ridership and demand. Class II and III railroads would not count against a region’s given allotment because they enacted passenger service on their own. Neither would any private company like the Triangle Railroad Holding Company since it doesn’t want any government funding. The Northeast may remain an Amtrak-only zone in exchange for the carrier giving up several routes and corridors in other parts of the country

I would keep Amtrak in the mix because certain regions will want to keep it as their carrier, but there will be major tweaks in a future of multiple operators. My proposal involves Amtrak being the operator of a certain number of long-distance routes as a way of fulfilling its national requirement even as it becomes more of an NEC organization. This move would allow Amtrak to thrive, not just survive as it has since the dreary 1970s. The new roster would be composed of the Carolinian (because NC is paying for that route), the Cardinal (since it’s congressionally mandated), all Silver Service routes, the combined Texas Eagle/Sunset Limited route, the new San Antonio-New Orleans route, California Zephyr, and Coast Starlight. Amtrak would keep all of its current equipment and be given the opportunity to add service along existing routes (an example would be Silver Service routes being complemented with additional frequencies that run counter to the Silver Meteor and Star).


Some people would get upset if another railroad operates a route that is currently run by Amtrak and hires nonunion employees. My plan is simple and would primarily apply to areas that are historically hostile to unions: Allow union members to relocate to an area that is served by Amtrak or another unionized railroad if the route in question is selected by a nonunion organization.


Historic stations in major cities must play a role in the future of passenger rail. It has been two decades since Grand Central Terminal last saw intercity service. If things go to plan, Housatonic may serve the facility in five years. Special themed trains to Canada and the Midwest should complement the Class III railroad at GCT. Speaking of the Midwest, among several things that left me underwhelmed is that the MWHSR is relying too much on Union Station in Chicago. Last spring, I chastised a plan for a standalone HSR station just a few blocks away from Union Station because it would become just as overcrowded as the current Amtrak station. As a matter of fact, I am still disappointed that MWHSR has failed to take advantage of utilizing the city’s other three stations other than combining Ogilvie Transportation Center with Union Station. My guess is that the organization has likely written in Amtrak as the operator of every non-Express HSR route. Personally, Amtrak should keep all of its services at Union Station while other railroads should operate trains out of LaSalle Street Station, Millennium Station, and the OTC. Those three stations could also host themed rail travel. Long-distance routes operated by a host or in a partnership with the host and another operator would be the only non-Amtrak intercity routes handled out of Union Station.

Conclusion

The endgame is that just about everybody who cares about rail travel realizes one thing: The status quo is a failure! The current way of doing things cannot be allowed to continue because America will be harmed by falling further behind. Several problems must be worked out in order for train travel to move forward. Forcing certain elements of PRIIA to introduce competition, goading the Class I railroads back into the people-carrying business, and liability guidelines that won’t force other railroads to go bankrupt are the main three things that must happen. Many True Believers fail to realize that railroads are businesses first.


President Obama is right in the sense that China should not have some of the fastest trains in the world while America stagnates or worse. However, only five areas of the country have earned the right to build trains that are up to par with the Asians and Europeans or within striking distance. Before the entire nation turns on train travel, it is best to reevaluate the passenger rail policy of America. Doing so means that the daytime (formerly known as medium-distance routes) and overnight route network must be vastly improved from what it is today. Reopening shuttered markets will add ridership. Allowing special types of passenger services will provide the public with something other than just speed: options. If we are to build a national high speed network, we have to realize that it will come in bits and pieces like the Interstate Highway System and that it will be a few more presidents before something more presentable is fully embraced by Beltway politicians.


This brings back to the question raised in this post’s title: Should America start over? I say no because what’s really needed is a genuine reform of a system that is run by the feds and needs more than one operator. The 40 year experiment has lived its purpose. What we need today is federal funding for infrastructure and services for certain routes but private operators running most of the trains. This doesn’t mean that Amtrak should be abolished. Far from it, I just want the company to focus on its strengths while following the rules per the 1971 mandate to be a national system rather than a system of disjointed corridors while paying lip service to the overnights.

1 comment:

  1. "Can anyone say Orbitz for train travel or a railroad version of HotWire?"

    The airlines charge some pretty exorbitant rates for short hops of 100 to 200 miles, so these sites should already be including Amtrak ticketing in order to capture the very-short-haul travel market. Existing conventional-speed trains can easily win on price and still have good travel time. Travel agencies are generally linked to the Sabre system for airline ticketing, and Sabre already has some hooks into Amtrak's ticketing. Unfortunately, I haven't found any online service that makes use of it (some traditional travel agents probably do, though).

    The travel sites should also link into Greyhound's ticketing system, which has services for Greyhound itself plus several of the regional carriers around the country. Airport shuttle bus services should also be included in the mix -- they're often more expensive than intercity buses, but can run much more frequently and even offer service to specific addresses in some cases.

    Rather than specifying source and destination airports, these sites could start asking for starting and ending addresses and try to calculate the best mix of services that balances travel time with cost. Heck, I'd love it if Google Maps popped up a little box with price quotes for various alternatives whenever I asked for directions for an intercity route.

    There are lots of people who drive themselves long distances and pay high parking rates, or have family or friends shuttle them back and forth, or pay for expensive rental cars in order to escape airfares of $200, $300, $400, or more for short hops. There is a lot of time, money, and fuel being wasted when we only focus on cars and airplanes. Travel service integration would help make things more efficient and help show where there is latent demand for future rail services.

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