Amtrak has kicked off a “ready-to-build” campaign, making it clear that the money-losing company faces close to $30 billion in major infrastructure projects in the Northeast Corridor on top of the corridor’s $11 billion “basic infrastructure backlog,” meaning tracks, signals, and power facilities. In addition to the $20 billion Hudson River tunnels project, Amtrak wants to spend $5 billion on a new tunnel under Baltimore, $1.7 billion on a new Susquehanna River bridge, $1.5 billion on another new bridge in New Jersey, and unspecified billions more for building or rebuilding train stations in New York (which alone is costing more than $2 billion), Philadelphia, Baltimore, and Washington.
In short, taxpayers are looking at a bill of well over $40 billion just to keep the supposedly profitable Northeast Corridor running. Amtrak must believe that “ready to build” sounds like a more positive message than “we need at least $40 billion just to keep the wheels turning.” No doubt Amtrak is relying on the image it has create that its Northeast Corridor trains make money, when in fact they merely cover operating costs, not the costs of maintenance or depreciation. Adding maintenance and depreciation not only eliminates profits, it brings subsidies to at least 10 cents per passenger mile–and that’s before counting the $40 billion or so needed to bring the corridor up to a state of good repair.
Amtrak divides its operations into three categories: the Northeast Corridor, state-supported day trains, and overnight long-distance trains. In addition to claiming that the Northeast Corridor makes money, Amtrak strongly implies that subsidies to the day trains are entirely covered by the states, leaving only the long-distance trains requiring federal subsidies. In fact, before adding depreciation and maintenance, federal taxpayers fund more than 20 percent of the subsidies to the day trains, and after depreciation and maintenance, it is more than half. Continue reading
Amtrak’s co-CEO Wick Moorman has announced that the passenger railroad is thinking of offering a new service to compete with the airlines: economy seating that is crammed together as tightly as airline seats. This was immediately blasted by Senator Charles Schumer (D-NY), saying, “Amtrak should not throw out one of the best things about Amtrak and train travel — that is, you at least get a seat you can sit in and be comfortable.”
In fact, this idea makes no sense not because heavily subsidized train travelers somehow deserve more comfortable seats but because it would cost Amtrak more in lost revenues than it will save. Airlines fill 85 percent of their seats and on lots of flights they fill 100 percent. Amtrak fills only 51 percent of its seats, so cramming more seats into a railcar will simply mean more empty seats.
According to USA Today, Amtrak seat pitches–the distance from the back of one row of seats to the back of the next–are 39 inches for day trains and 50 inches for overnight trains. Airline seat pitches are 30 to 33 inches while buses are 28 to 31 inches. That means Amtrak could squeeze in four rows of seats where it now has three on day trains and five rows where it now has three on overnight trains. Continue reading
While the Antiplanner was preparing to take Amtrak trains from Portland to Washington, DC, Amtrak was suffering from a spate of derailments, one near Chicago Union Station on March 26 and two in New York’s Penn Station on March 24 and April 3. Moreover, Amtrak now admits that it knew about the defective track that led to the Penn Station derailments, and didn’t fix it because it didn’t realize how serious the problem was.
Tracks are held in place by ties that were once all made of wood but that lately have been made of concrete. The Penn Station tracks still had wood ties, and an assessment before the accident found that some of the ties were partly rotted away. Replacing ties is difficult on heavily used rail lines, so Amtrak didn’t replace them right away, a mistake that led Amtrak’s CEO to make a public apology.
The accidents led New Jersey Governor Chris Christie to withhold state funds that New Jersey Transit pays to Amtrak to run its trains on Amtrak’s tracks. I suppose if I were paying money for a service, I would withhold funds if the service turned out to be unsafe. But Amtrak needs money to replace ties, so withholding funds might be the wrong solution in the long run.
After traveling three days and three nights in coach, I treated myself to a sleeping car on the last leg of my journey to Washington, DC. Most Amtrak sleeping cars have a shower and I appreciated using it after having slept in my clothes for three nights. The sleeping room was clean and everything was functional, but it was, of course, very small. I also noticed that all of the seats in the Sightseer Lounge car swiveled, so I guess the ones on the Coast Starlight and California Zephyr were just rusted in place after all.
Given that the East has a lot more people than the West, you’d think Amtrak would have more trains connecting the East Coast with the Midwest. In fact, there are the same number of trains from the nation’s heartland to the West Coast as there are to the East Coast, which is four–or or three-and-a-half since one on each side of the country goes just three days a week. The eastern trains are the Lakeshore Limited from Chicago to New York and Boston; the Capital Limited from Chicago to DC, the Crescent from New York to New Orleans, and and the three-day-a-week Cardinal from Chicago to both New York and Washington. The Cardinal must attract mainly local traffic as it takes nearly 24 hours to go to DC and 28 to New York compared with 17 to DC on the Capital Limited and 19 to New York on the Lakeshore.
The Antiplanner is enjoying Amtrak’s California Zephyr through the Colorado Rockies today. Assuming all went well, I boarded the Coast Starlight in Portland on Saturday, then changed trains to the Zephyr Sunday morning, and will arrive in Chicago on Tuesday. From there I’ll take the Capital Limited to Washington, DC, all part of my research on the viability of passenger rail transportation in today’s America.
The California Zephyr near Granby, Colorado. Detail of photo taken by William Kratville for Amtrak in 2000.
I love passenger trains, but I planned this trip with some trepidation. I took Amtrak across the country many times in the 1970s, but since then Amtrak has succeeded in making its trains boring at best. My experience during the 1980s was that the seats were less comfortable, the overnight accommodations were prohibitively expensive, and the food was mediocre, leading me to switch to air travel for most long trips. Now I’m taking this trip to see if things have improved or are as bad as I remember them.
The Antiplanner recently had the privilege of meeting Amtrak’s new president, Wick Moorman. He is a charming guy who has impressive managerial skills that allowed him to rise to be CEO of Norfolk Southern, one of America’s largest railroads. Those are probably the talents that Amtrak needs right now.
Since we both love trains, we have a lot in common so we agreed to simply ignore our disagreements on the future of passenger trains. I did tell him that, if he were an efficient manager, he would kill Amtrak’s worst-performing train, the Los Angeles-New Orleans Sunset Limited, but I knew he couldn’t do it for political reasons. So I was chagrinned to read that, not only is he not proposing to cut it, he wants to extend it to Orlando, Florida.
The Sunset Limited was originally a Southern Pacific train and starting in 1894 it went all the way from San Francisco to New Orleans. Passengers could take a steamship from New Orleans to New York and arrive just about as quickly as taking a train. In 1930 the train was cut to Los Angeles-New Orleans, and San Francisco passengers would have to change trains in L.A., which probably wasn’t a huge inconvenience.
The Antiplanner has previously argued that Amtrak uses “accounting tricks” to make the Northeast Corridor appear profitable and the system as a whole appear to cover most of its operating expenses out of revenues. The most important of these tricks is that it appears to count maintenance as a capital cost. As a 2001 Congressional Research Service report noted, “Under generally accepted accounting principles, maintenance is considered an operating expense,” but Amtrak excludes it when it compares operating revenues and expenses.
Recently, I met with an Amtrak official who explained that the situation is a little more complicated than I described. Historically, he said, railroads had counted maintenance against revenues when calculating their bottom lines, but this led some railroads to defer maintenance in order to improve their apparent profitability. As I understood his explanation, the Interstate Commerce Commission corrected this several decades ago by changing the accounting rules so that maintenance would be included in capital costs. This eliminated any incentive to defer maintenance.
I sort of understood that, but I’m not an accountant, so I looked up the history of ICC accounting rules. The best explanation was in a 2007 paper in the Accounting Historians Journal called “The End of Betterment Accounting.”
Amtrak issued its F.Y. 2016 unaudited financial results last week with a glowing press release that claimed a “new ridership record and lowest operating loss ever.” Noting that “ticket sales and other revenues” covered 94 percent of Amtrak’s operating costs, Amtrak media relations called this “a world-class performance for a passenger carrying railroad.” The reality is quite a bit more dismal.
Many new high-tech firms attract investors despite losing money, but a 45-year-old company operating an 80-year-old technology shouldn’t really brag about having its “lowest loss ever.” The “world-class performance” claim is based on the assumption that trains elsewhere lose money, which is far from true: most passenger trains in Britain and Japan make money, partly because they are at least semi-privatized.
Moreover, a close look at the unaudited report reveals that Amtrak left a lot of things out of its press release: passenger miles carried by Amtrak declined; ticket revenues declined; and the average length of trip taken by an Amtrak passenger declined. The main reasons for Amtrak’s positive results were an increase in state subsidies (which Amtrak counts as passenger revenue) and a decrease in fuel and other costs.
Last week’s commuter train crash in New Jersey has left people wondering how safe our transportation system really is. We can answer this question with data from National Transportation Statistics, which show passenger miles, fatalities, and injuries by mode of transportation since 1990.
Table One: Fatalities per billion passenger miles by mode. As noted in the text, the most recent decade is 2005-2014 except for commuter rail, which is 2003-2012. Sources: Calculated from National Transportation Statistics, tables 1-40, 2-1, 2-34, and 2-35.
|Mode||1990-1999||Last 10 Years||Change
The statistics show transit data only through 2012, but the Federal Transit Administration has safety data for the years since then. Unfortunately, the Federal Railroad Administration, not the Federal Transit Administration, monitors commuter rail safety, and it doesn’t seem to publish those numbers, so we only have them through 2012.
Amtrak’s plan to use most of the $2.45 billion “loan” it received from the Department of Transportation to buy new high-speed trains for the Northeast Corridor has come under fire from, of all people, a high-speed rail advocate named Alon Levy. The new trains will cost about $9 million per car, which Levy points out is nearly twice as much as France is paying for Eurostar train cars. The reason for the high cost is that the new trains can go more than 200 mph and tilt on curves more than any previous trains.
Levy is a transportation writer who takes a highly mathematical approach to reviewing proposals and who says he is for “good transit” but against boondoggles. He says the problem with the expensive new trains is that Amtrak tracks can’t support trains that are as fast as they can go, and in order to support such fast trains, they would have to reduce curvature so much that they wouldn’t need to tilt as much as the new trains. Levy argues that Amtrak should have spent less on the trains and more on the infrastructure needed to boost speeds. As another high-speed rail advocate put it, “They need to speed up the slow bits first, which isn’t something you do by blowing money on trains.”
Amtrak hopes that Democrats will sweep Congress this November and give it the $290 billion it wants to rebuild the Northeast Corridor to higher speeds. But, as Levy points out in other articles, Amtrak’s Northeast Corridor plans are far more expensive than they need to be.