Diaspora's Greatest Hits 3

Ambitious hopes for commuter rail in Milwaukee

Art at Sydney Central Station

BNSF's policy is a bummer

Add this to “Missed Opportunities for the Motor City”

San Jose's train to nowhere

Crosstown extension on 125th Street 

Random thoughts #16

1. The FRA Long-Distance Study is definitely a nice start, but the whole thing of Amtrak being the only operator of the revived routes rubs me the wrong way (entities like AIPRO operators partnering with other companies as part of my rail consortium should also be a part of new long distance routes). That issue aside, I am willing to give this a shot because adding back some long distance routes is something that should have been done more than a decade ago. Existing areas should be amplified and other regions without service should be represented so people aren't forced to make lengthy transfers to New York, D.C. or Chicago.
2. The feds could be forcing Amtrak to focus more on overnight routes than state-supported routes, which would reorient the company into focusing on serving the entire nation rather than just the Northeast. 
3. Another thing about this possible decentralization of Amtrak is that a future Congress could split Amtrak into two or three units and that Stephen Gardner or his successor could subsequently be the leader of only the Northeast Corridor once competition for intercity services is underway while the long distance person ends up being more tuned into the overnight trains.
4. There's no excuse for North America not being more electrified.
5. Ever since the threat of a rail strike loomed back in the fall, there have been calls to nationalize the railroads with one YouTuber even wanting the feds to recreate Conrail at the Class I level. I've been mixed on the idea. I've long understood that railroads are businesses first, but on the other hand, the major railroads have shot themselves in the foot way too many times--lobbying to keep a late 1860s braking system in place rather than adjusting to the 21st century, Precision Scheduled Railroading, the sick day fiasco that almost led to the railworkers striking in the first place.
6. Regarding the station situation in Jacksonville, the Regional Transit Center opened in May 2020 to buses and the elevated Skyway trains. The JTA and FDOT have discussed moving Amtrak closer to downtown since the late '00s. The city's proposed commuter services list the JRTC as the downtown location rather than the Prime Osborn Center. 
7. Speaking of the Osborn Center, the city has deemed the site of the historic Union Terminal as too small given that Jacksonville has lost out on events to cities the size of Daytona Beach. The city is pondering a new, larger convention center.
8. Once the City of Jacksonville has a new convention center in place, it will be possible for both Union Terminal and the JRTC to host passenger rail. Union Terminal: Amtrak, FDOT intra-Florida corridor service, Rail Consortium East, Rail Consortium Central. JRTC: Brightline, future HSR, Nightjet, JTA commuter rail.

Gulf Coast Service: CSX Responds

And now CSX has said "Not so fast!" All of this could have been prevented if Amtrak had actually resumed service 15 years ago when the host railroad told them that the tracks east of New Orleans were ready post-Katrina. 

The end of the Hoosier State

Amidst much scrutiny, the final Hoosier State left Chicago on June 30. In late April, the Indiana General Assembly slashed $3 million a year (total $6 million until 2021) set aside for Trains #850 and #851 following Governor Eric Holcomb's own exclusion of the train route in his budget.

Thus ends a six-year debacle that started when Indiana balked at PRIIA Section 209 requirements. I will analyze the big players' roles starting with...

...Amtrak

• Management reportedly told ex-CEO Joseph Boardman to not pursue CSX on making the Cardinal daily
• Responsible for Section 209 in the first place
• Delayed handing the Hoosier State over to Corridor Capital
• Offered free amenities when Corridor Capital was yanked and then rescinded them after five months
• Briefly provided Business Class after IPH pulled out

Indiana

• Was the only state to hold out of Section 209 payments
• Conducted a bidding process for the Hoosier State
• Passed on Herzog, who wanted to operate the train in favor of contracting out the route while keeping Amtrak crews
• Almost sabotaged the route before partial private service even began
• Made no effort to upgrade the route to daily
• State officials at best merely tolerated the route while it was the cities who exhibited far more interest in it
• Imposed onerous requirements that made it impossible for IPH to operate the Hoosier State at a profit

Corridor Capital

• Had the cars to operate the route
• Maybe not much the expertise
• Had to deal with a saboteur

Iowa Pacific

• Had the equipment and made good use of it on the Hoosier State
• Also made the best of its limited situation
• Ran out of money in 2017

D.C.

• The FRA attempted to classify states as rail carriers in early 2015
• Congress had the power to enforce PRIIA and FAST Act provisions encouraging private sector competition but did nothing

Railfans

• Most of them hated the idea of anyone other than Amtrak even touching this route from the beginning
• Rejoiced when Corridor Capital was booted and when IPH handed the Hoosier State back to Amtrak

The final verdicts
Thumbs down to Amtrak: If it wanted to, it could have made either the Cardinal or the Hoosier State daily. That it made such a fuss about keeping the train when others made bids on it says a lot about management and its culture. Yet another part of the country has been ceded to a startup bus company.

Thumbs down to the state of Indiana: Misstep after misstep led to the route's demise and state officials botching things. It is worth noting that all alternatives to Chicago-Indianapolis are either circuitous or they no longer exist.

Thumbs in the middle to Corridor Capital: It never got to prove itself. Hopefully that changes with the planned Eau Claire-Twin Cities route.

Thumbs up to Iowa Pacific: It was able make the best out of a bad situation. Unlike middle mangers in D.C. and Chicago, you can't deny the passion that Ed Ellis had for providing more than decent services on the Hoosier State.

Thumbs down to D.C. politicians: First, the executive branch under Obama cooked up a harebrained idea of making states rail carriers. If the intention was to prevent the states from selecting AIPRO members or any other non-Amtrak operator, then, mission accomplished. The attempted power play just set passenger rail back another 5-10 years when we couldn't afford to waste any more time.

Next, the legislative branch. Congress has no excuses because it has heard from enough experts so it needed to make sure that anyone bidding on existing Amtrak routes had a fair shake. Instead, state departments are more scared and even more risk averse all because our so-called leaders were willing to sit on their hands while a previously tolerated status quo could now lead to intercity rail crumbling from within.

Thumbs down to railfans: Their attitude over the nation's only non-daily corridor service vindicates everything I said  5 1/2 years ago.

Gulf Coast Service: The Latest

Recently, part of the Sunset East Route between Pensacola and Jacksonville was sold by CSX to RailUSA-owned Florida Gulf & Atlantic Railroad.

Just when railfans were trying to figure out what the sale meant for the odds of passenger service being restored, Mississippi Senator Roger Wicker announced that service will return to the western portion of the Sunset East Route between New Orleans and Mobile.

The catch is right there: Only the CSX portion of the Sunset East is involved. It would be up to FG&A to restore the easternmost portion and even then, there would still be a gap between Mobile and Pensacola because neither Alabama nor Florida has shown an interest in restoring passenger service. If only the affected states (Louisiana, which is also paying for the restored service, is the fourth state involved) had actually talked to SNCF, that portion of the country would already have some kind of passenger service. After all, it was Virgin's interest in a Charlotte-Atlanta route for example that forced Amtrak to look at that same area for expansion earlier this year. Had SNCF tapped Keolis to run the 620-mile route, it may have motivated Amtrak management to at least restore the Sunset Limited or produce an entirely new route.

So, what we'll end up with is a third incarnation of the Gulf Coast Limited--the first one ran in the mid 1980s and the second one ran in from mid 1996 to mid 1997. The second version didn't even operate on a flipped schedule vis-à-vis the Sunset Limited--Train #24 operated about two hours earlier than #2 while #23 operated 2-3 hours earlier than #1. That said, an opportunity arises where dueling roundtrips could provide consistent ridership. Not to mention, a revived Gulf Breeze that is extended to the Crescent City should also be on the table after 2021.

Alternative History #7

Scenario

An agreement is reached between Florida East Coast management and employees, averting a strike

Point of Departure

1963

Storyline A (Seaboard merges with Southern and the ACL merges with N&W)
Amtrak doesn’t serve Florida in 1971 since the three Class I railroads still do. Governor Lawton Chiles chooses corridor service over the high speed Florida Overland Express in 1996, effectively killing future efforts for high speed rail in the state. The Florida Rail System is formed the following year.

In 1993, the Norfolk Coast Line interlines its Gulf Wind route with Amtrak to provide true bicoastal service. A dozen years later, Amtrak withdrew its support citing unreliable Union Pacific timekeeping out west.

Today’s Likely Outcome

There are only modest changes to the schedules.  

Storyline B (the Ripley Plan is adopted)

The FEC became a subsidiary of Southern Railway long before the 1970s in the same way the LIRR is a subsidiary of the ACL (the FEC route officially became a Southern route in 1992). 

In 1997, Congress responded to growing state interest in corridor service by transferring routes that are less than 500 miles long to the states. It was at this point that the former FEC routes were handed over to the FL DOT. Eleven years later, Congress increased the corridor length to 750 miles in response to interstate pacts.

Today’s Likely Outcome

East Coast service is increased alongside Southern’s presence in Florida. There are two overnight frequencies along the route. Due to the increase in intrastate service, the railroads alter their schedules so that certain trains provide overnight service in Florida

Storyline C (the SCL holds out of joining Amtrak)
The Southeast Rail Coalition was formed in the late 1980s to expand passenger rail in Virginia, the Carolinas, Georgia and Florida so passengers have more daytime options. 
FEC rebranded its overnight routes in 2001 as a premium, all-sleeper service. A few years later, other Class I railroads were so envious of CSX’s success that they got Congress to pass a provision in PRIIA that allows intercity competition against Amtrak.
The Miami Intermodal Center opened ten years ago and continues to serve Amtrak, CSX and FL DOT passenger trains.

Today’s Likely Outcome

Amtrak’s frequency remains as is, CSX promotes several routes to year-round status, the FEC has added another roundtrip, and the FL DOT system continues its expansion.

Storyline D (the FEC competes with Amtrak for Jacksonville-Miami passengers)

Throughout the 1970s, the FEC was very leery of interlining with Amtrak due to there being no other private railroads available. In the mid to late 1980s, FEC agreed to allow commuter service in South Florida as I-95 is being widened. About a decade later, Tri-Rail’s service between downtown Miami and Jupiter intrigues state officials so much that it explores similar service along the CSX route. The result was the 1998 launch of Amtrak Florida. With double decker cars in tow, the first routes the state launched were Orlando-Miami and Tampa-Miami. The state extended service to Jacksonville in 2000 along both the A and S Lines. A daytime Jacksonville-Pensacola route was launched in 2005, months before Hurricane Katrina suspended Sunset Limited service east of New Orleans.

At the turn of the millennium, Amtrak targeted Southwest Florida as a part of its short-lived Mail & Express expansion plan. In late 2004, the national carrier decided to pull out of the Tampa market rather than the S-Line once it terminated carrying mail (the Silver Star is put back on the route once the Palmetto is cut back to Savannah). Sunrail launched service in 2006 without any difficulties.

In the fall of 2011, FL DOT objected to the Section 209 PRIIA provisions and terminated its agreement with Amtrak two years later (this move made Indiana the second state to hold out of the PRIIA standards), opting to contract with Sunrail operator Bombardier at the beginning of 2014.

The FEC did a massive rebranding campaign in 2012: Local stops service became Coastal, night service became the Owl, and a new limited stop service was originally named All Aboard Florida (now known as Brightline) in advance of expansion to Tampa. 

Today’s Likely Outcome
The FEC opened new stations in Jacksonville, West Palm Beach, and Fort Lauderdale in 2014 with Miami Central replacing the old downtown location the following year. Service to Orlando Airport began two years ago while the extension to Tampa opened in time for the Memorial Day weekend last month. FEC now has over 40 frequencies around the clock as a result of the rebranding and expansion.


Divorcing itself from Amtrak has paid the FL DOT huge dividends as it rebranded the rail service as FLORail, added new frequencies, expanded to new cities, acquired new equipment, and taken over certain stations previously neglected by Amtrak. FLORail trains also serve the historic station in Jacksonville and the Miami Airport Station. The former was the result of FL DOT’s vision to relocate corridor trains and the latter happened because the state wanted to make things easier for airport travelers. One of FLORail’s biggest hits is the Panhandle route (a feasibility study on extending service to New Orleans is underway). Southwest Florida service to Venice and Naples is also in the works. 

As for Amtrak? Having its role reduced to being a bit player in the state, it decided to end service to smaller cities and to limit its southbound stops to discharge only and its northbound stops to receive only so no one can travel locally within Florida on Amtrak any more.

Tackling the Headlines 92

Section 207 of PRIIA declared unconstitutional
Take: It's finally over. One hurdle for Amtrak's competitors has been obliterated.

CATS Blue Line Extension delayed
Take: Facepalm! I was hoping to catch the train from North Charlotte to the Arts District and Uptown this summer.

Fragmenting Long-Distance Passenger Trains?

Railfan & Railroad, August

NEC a different matter 

• Not only is the NEC huge but the region but the region's congressional delegation would block any effort by AIPRO members to compete against Amtrak
• Maybe when the folks in D.C. get serious about infrastructure, then, we'll see Amtrak face competition in its home region. Until then, I wish the LEO Express people good luck because they'll need it
• By avoiding the NEC, Chambers is sticking to what he knows since the bulk of the AIPRO's commuter contracts are outside of Amtrak-friendly Northeast and Chicagoland territories

Opaque

• By opening the overnight routes up to competition, we'd finally be able to find out the truth about the financial condition of the routes

Cutting a deal?

• By capping the subsidy at 90 percent, the FAST Act is actually doing all potential Amtrak competitors a favor because these newcomers will be hungry and eager to demonstrate that the long distance train of the future is better off without Amtrak

Amtrak--another shot at the target

• "America's Railroad" may get the chance to counterbid but it'd be wise to figure out just which three routes it can do without

Role of Class Is

• As far as the major railroads go, Sections 209 & 214 of PRIIA as well as Section 205 of the FAST Act supersede their long-held Amtrak-only stance
• If the major railroads (continue) flout(ing) the laws, then Congress will have to play hardball: Allow non-Amtrak operators who fairly get contracts for state-supported or overnight routes on your rails or you'll be in charge of every intercity route outside of the Northeast--and in the process, reducing Amtrak to an NEC-only entity

Who bids?

• To me, it's simple: A partnership between independent and Class I railroads--shades of my rail consortium

Another thorny complaint

• Vernon discusses how the major railroads have griped about how Amtrak has never paid them market rates for access on their tracks. As it turns out, a fellow AIPRO member Stan Feinsod advocated a scenario in which other operators would use the commuter model in order to access freight tracks
• In the event the AIPRO is able to see its vision happen, then perhaps we could actually see some of its members revive and actively push for the restoration of service along routs Amtrak abandoned

High mountains to climb

• As far as the RRIF loan scenario goes, whatever it takes

The New Passenger Paradigm

Railway Age, July

Initial takeaway: Rail activists would be keen to read and reread the first sentence on what really led to the creation of Amtrak so they can stop spewing their defeatist nonsense whenever someone tries to propose out of the box ways to expand passenger travel in this country.

Third paragraph: Herzog was prescient and took notes before anyone on Capitol Hill even drafted PRIIA. Even though the AIPRO is small, it should say something that its members have the bulk of commuter rail contracts when a couple of decades ago, Amtrak had a near monopoly outside of the Northeast and Chicago.

Fourth paragraph: This expert nails it: The status quo cannot be maintained after 45 years when multiple operators have expressed interest in running intercity trains.

Fifth paragraph: The New Passenger Paradigm matches up with the late Gil Carmichael's Interstate II and my rail highway concepts.

Sixth paragraph: Based on what Mr. Chambers is saying, all that's needed is for the feds to actually enforce the laws and end the stasis once and for all. After all, when the time came to enforce the Pilot Program in accordance to PRIIA guidelines, the FRA waited a full two years to do so and by that time, there were too many loose ends that the old program just withered away despite immense interest. Another thing is to make sure that the feds do not play favorites--i.e., rig the process to maintain Amtrak's near monopoly (the 2012 near miss comes to mind).

Second column: Regarding the push for new legislation, somebody has to do it because the resident rent seekers sure won't. When it comes to Section 301 not being enforced, one can only look at the executive branch and ask: What happened, President Obama, USDOT, FRA? Was it in any way retaliation to some states returning stimulus money? Was the lack of enforcement actually stimulus related?

If the feds had followed the German model, we would already have: 1) states having greater flexibility to select operators and set their own standards and 2) Amtrak having a surplus amount of equipment due to it experiencing the same type of contract losses of its intercity routes that it's had with its commuter service. The next president and Congress would be very wise to adopt AIPRO's statutes. The second proposed statute would be an excellent way to make money. JR West does this now and Brightline and Housatonic plan on turning their station areas into prime real estate.

Tackling the Headlines 84: New Amtrak CEO

Last Friday, the Amtrak Board surprised everybody by announcing that former Norfolk Southern CEO Wick Moorman will succeed Joe Boardman on September 1--a month early.

The People Who Were Passed Over

Various magazine issues speculated as to who could replace Boardman presented various names earlier this year. In the May issue of Trains, AAF's Gene Skoropowski gave Don Phillips a list of four railroad leaders who were in their 30s or 40s. In the following issue, Phillips looked at former Amtrak veterans Al Engel and Richard Phelps--both of whom left Amtrak in 2011 (it is worth noting that in that same June issue, the Amtrak Board ignored Boardman's handpicked search firm/successor).

In the Second Quarter issue of Passenger Train Journal, NARP CEO Jim Mathews warned about the dangers of an NEC-centric board could have on the next president's agenda. The magazine reported that the Amtrak Board also ignored suggestions from the States for Passenger Rail Coalition.

As Jim Wrinn said, Amtrak was on time for once. When Tom Downs was replaced, the Board named George Warrington as the interim president and didn't remove his name when challengers stepped up. The result? Amtrak almost went bankrupt due to his all-in focus on the Acelas. It took the Board a year to transition from David Gunn to Andrew Kummant. Then, after Kummant left, Boardman, fresh off of his FRA duties, was appointed as the interim boss for over a year before the Board removed the interim tag. Until last Friday, it looked as though the Board would appoint yet another temporary person who would become the permanent head.

My Prediction vs Actual Outcome

I thought for sure that the Board would pick someone who would continue along the same path of taking the states for granted and still be in reactionary mode in the wake of competition. As far as Moorman goes, he falls outside of the names listed by magazines and rail experts only because he initially told everyone that he was going to just enjoy his retirement.

Amtrak's Path Forward

The operator is in need of fresh blood. The last railroader to run Amtrak--Andrew Kummant--was a low-level Union Pacific leader and had a very uneventful two-year tenure. Amtrak is staring at a future where: 

1. All Aboard Florida's Brightline is about to resume the era of private passenger service. A successful run may mean that Florida's leaders implent their version of a California-like system without even talking to Amtrak
2. Regional and shortline railroads are either providing intercity services or are planning to
3. A trade group representing Amtrak's commuter competitors is chomping at the feet of "America's Railroad" to grab intercity contracts of state-supported corridors and overnight routes courtesy of the FAST Act (and PRIIA before it)
4. Congressional pull alone may not be enough for Amtrak to maintain its near monopoly on passenger routes. Ironically, the tipping point may have been the Senate's failed attempt to drive private competitors out of the business in the spring of 2012
5. The states themselves may be tired of paying high prices to keep Amtrak as the contractor of their routes when they have budgets to balance and expansion is met by the national operator by endless studies to nowhere. Indiana may have gotten the ball rolling by contracting the Hoosier State to Iowa Pacific, but there will be a state or group of states that will completely break away from Amtrak

What It Means for Competitors

With a former Class I executive running Amtrak, it may or may not be a bit more difficult for AIPRO members and others to get existing routes away from the national operator but time will tell. However, I will say this: It's very unlikely that Mr. Moorman will be as combative towards other operators. If anything, the new Amtrak CEO may decide on his own just which routes are worth keeping in the Amtrak system and which ones would be better off in the hands of someone else.

Tackling the Headlines 82

Long distance competition at last?
On Wednesday, the FRA finally complied with Section 205 of the FAST Act and set the standards for bidding on long distance routes

TL;DR analysis: For once, the FRA is following the law on time. I want to see what the Ed Ellises and the AIPROs of the world do with overnight routes. 

Full analysis: Go to Tumblr.

More destaffings
Recently, Amtrak has been turning staffed stations into unstaffed stations. Now, Homewood, IL and Wolf Point, MT have been added.  

Take #1: I seriously wonder if Joe Boardman has enacted some kind of a scorched earth policy on his way out. The rash of destaffings and stripping the Silver Star of its dining cars come to mind as possible ways the lame duck Amtrak president is getting back at a lot of people. The latter act is also justification for the FRA's actions a couple of days ago.

Take #2: I am also getting tired of know it all railfans justifying small towns and suburban locations losing agents. Not everybody has access to technology and not everyone wants to handle computers. That mentality is exactly why so-called "flyover country" is in open rebellion against city folks. Instead of reducing staffed stations, a responsible company would be adding staffed stations.

Alabama rising?
Earlier this month, news broke that Corridor Capital was planning a regional rail system for Alabama and two other states and headquarters in Montgomery. As it turned out, Alabama media ran with this story big time. However, last Friday's NARP's newsletter poured cold water on exactly who was backing Corridor Capital's efforts. The Southern Rail Commission not only denied supporting CorrCap but also decided to stress how it was working with Amtrak among others.

Take #1: I had to reread the stories from the Alabama press and not once did I ever get any idea that CorrCap was even mentioned as an operator.

Take #2: A comment on the Trains Magazine page on the SRC's disavowal of CorrCap says it all: "So I guess if you are a private sector entity seeking improved passenger rail service the politicians don't want you." When I said that advocacy groups needed to adapt to a post-monopoly era rather than going all in with Amtrak, I didn't think that I'd have to also apply this to the states but given this development and Minnesota picking Amtrak to run the Northern Lights Express even though the planned second Chicago-Twin Cities frequency won't serve Minneapolis, I guess I have to.

Take #3: I wonder if NARP got into the SRC's ear and told them to distance themselves from Corridor Capital given how attached to Amtrak NARP really is.

Take #4: There is no excuse for the New Orleans-Orlando route to still be "suspended" after 10 1/2 years! If someone else can come along and get something going, that group should be commended not ridiculed the way CorrCap is now.

Take #5: Going back to Mr. Norton's comments in the Trains article, he's right on. The Floridian (1971-79), Gulf Breeze (1990-95), and the Gulf Coast Limited (1984-85 & 96-97) have all come and gone. If an entrepreneur is trying to provide a service that is absent and the only thing the current operator is doing is subjecting states to endless feasibility studies, sooner or later, the public will have to go with the person who is thinking outside of the box.

St. Louis Union Station excursions
Links can be found here, here, and here.

Take: Until non-Amtrak operators are allowed to run overnight trains and America gets serious about European-style high speed rail, this might be as good as it gets. But at least, Union Station is finally being used for its original purpose 38 years after Amtrak left.

It's a draw

The Supreme Court delivered its ruling on Monday...just not on the Section 207 metrics. Instead, the high court ruled that Amtrak is a public organization.

I agree with those who say that SCOTUS punted and is setting up a much bigger battle later on. All of the buildup ends in a whimper. One would hope Congress will clarify the metrics in the upcoming rail bill but we'll see.

DOT vs AAR

I don't even pretend to understand the minutiae of PRIIA Section 207 but the case that was recently discussed may in its own way alter the future of passenger rail. The thing is that I'm not sure if I'm supposed to side with the USDOT the way NARP has given that its friend of the court brief was the only one that supports the DOT's effort to overturn the Court of Appeals ruling.

The AIPRO filed its own friend of the court brief, asking the high court to uphold the appeals court ruling. The case could be made that keeping Section 207 of the 2008 law could actually be a bigger detriment to the future of passenger rail than striking it down.

Some excerpts from the brief:

ARGUMENT
SECTION 207 OF THE PRIIA IMPERMISSIBLY CONFERS
ON AMTRAK REGULATORY AUTHORITY OVER ITS COMPETITORS
IN THE PASSENGER-RAIL INDUSTRY.
A. The Provision Of Passenger-Rail Service
Is A Competitive Industry In Which
Amtrak Is But One Competitor. 
The first important move toward this new competitive
regime was Congress’s enactment of the
Amtrak Reform and Accountability Act of 1997, Pub.
L. No. 105–134, 111 Stat. 2570, which terminated 
Amtrak’s monopoly over intercity service.
Section 217 authorizes States to select “an
entity other than Amtrak to provide services
required for the operation of an intercity passenger
train route * * *.” PRIIA § 217, 49
U.S.C. § 24702 (note).
 Section 301(a) authorizes the Secretary of
Transportation to “make grants * * * to assist
in financing the capital costs of facilities,
infrastructure, and equipment necessary to
provide or improve intercity passenger rail
transportation.” PRIIA § 301(a), 49 U.S.C.
§ 24402(a)(1). A State that applies for a grant
must either “select[] the proposed operator of
its service competitively” or “provide written
justification to the Secretary showing why
the proposed operator is the best, taking into
account price and other factors, and that use
of the proposed operator will not unnecessarily
increase the cost of the project.” PRIIA
§ 301(b), 49 U.S.C. § 24402(b)(3). 
Section 214 directs the Federal Railroad Administration
to establish an Alternate Passenger
Rail Service Pilot Program, under
which “a rail carrier or rail carriers that own
infrastructure over which Amtrak operates
a[n] [intercity] passenger rail service route”
may “petition the Administration to be considered
as a passenger rail service provider
over that route in lieu of Amtrak * * *.” PRIIA
§ 214(a), 49 U.S.C. § 24711(a)(1) (emphasis
added). 

Translation: The days of only one company operating trains are over because Congress said so--twice. The best way for passenger rail to progress is to let each route be open for bidding.

B. Section 207 Unconstitutionally Delegates
To Amtrak Regulatory Authority Over
Amtrak’s Direct Competitors In The Passenger-Rail
Industry. 
1. Amtrak’s Section 207 standards expressly
apply to all intercity passenger trains, not
just to Amtrak’s trains. 
Adding to the unfairness is the fact that, although
Section 207 directs Amtrak and the FRA to
consult with certain other stakeholders in developing
the performance standards, the statute does not afford
even this limited right to Amtrak’s competitors
in the provision of passenger-rail service before permitting
Amtrak to impose regulations on them. See
PRIIA § 207(a), 49 U.S.C. § 24101 (note) (listing
stakeholders with consultation rights). Thus, when
Amtrak and the FRA initially proposed the Section
207 metrics and standards in March 2009 (see J.A.
11), they solicited comments from the stakeholder
groups specifically identified in the statute (see J.A.
75) but did not afford Amtrak’s competitors in the
passenger-rail industry any opportunity to comment—even
though these competitor passenger railroads
would be directly subject to the new regulatory
standards. 

Translation: That the feds did not allow Amtrak's competitors to even comment on the metrics as laid out in PRIIA is disturbing. How was this any different than what the Senate attempted to do to private operators in 2012 (Hint: It's the same thing)?

2. Amtrak’s Section 207 standards may trigger
STB investigations and enforcement actions
against Amtrak’s competitors.
Section 213 of the PRIIA provides for investigation
and enforcement actions by the STB any time
that “any intercity passenger train”—not solely those
operated by Amtrak—fails to achieve 80 percent ontime
performance or fails to meet the Section 207
service-quality standards for two consecutive quarters.
PRIIA § 213(a), 49 U.S.C. § 24308(f)(1).

Translation: The idea that other operators could be penalized by the STB for delays even if they were caused by Amtrak is akin to some of the battles that took place in Florida earlier this decade when SunRail was held up due to liability provisions Amtrak initially found objectionable.

Final thoughts

• The dueling briefs by NARP and the AIPRO could actually be a clash of the past vs the future since the former posits itself as an advocacy organization while the latter is a trade group for other passenger carriers in the same manner that Airlines for America is for the airline industry
• The USDOT's attorney did its side no favors with the way he argued its case--even sympathetic justices were a bit perplexed
• We will find out next June just what SCOTUS will do
• Eventually, the new Congress will have to redraft the metrics in order to avoid a repeat in the future

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.

Addendum: Alternative History

#1

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.

#2

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.

#3

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.

#4

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. 

#5

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

#6

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. 

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."

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.