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Amtrak and Securities Fraud

By | | Transportation
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Amtrak claims that its FY 2018 operating losses were the “lowest in decades” at a mere $168 million. However, there is no way to verify this because Amtrak has not yet published its FY 2018 financial reports.

Private companies are not allowed to drop hints about their financial health before the official results are released to the public. Elon Musk and Tesla got fined $40 million for securities fraud after sending out tweets before the release of Tesla’s annual report. But Amtrak gets away with the same sort of fraud that it commits in a blatant effort to boost its political standing.

Here are the numbers in Amtrak’s press release: total revenues were $3.38 billion; capital investments were $1.46 billion; and operating losses were $168 million. An AP story adds that Amtrak received $1.9 billion in federal subsidies. But what do these numbers mean? Continue reading →

Paying for New Jersey Transit

By | | Transportation
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Delays to commuters and Amtrak passengers caused by a bridge malfunction are putting pressure on the Trump Administration to fund the $20 billion Gateway project, which would reconstruct bridges and tunnels connecting New York’s Penn Station with north New Jersey. Although New York and New Jersey politicians claim that this project is vital to the region, none of them are willing to ask their constituents to put up a single cent towards its completion.

Instead, they want the federal government to pay half the cost up front, and to put up the other half in a federally guaranteed, low-interest loan. Considering that neither New Jersey Transit nor Amtrak have the revenues needed to repay that loan, there’s a good chance the federal government would end up paying for it all.

Though this seems ridiculous, transit advocates have tried to make it appear that Trump is the bad guy here. In fact, the bad guys are the local politicos who want someone else to pay for their pork-barrel projects. Continue reading →

Turning Off Life Support

By | | Transportation
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“Degradation of the U.S. passenger railroad system was not a natural development — it was a result of national transportation policies that invested billions of dollars into highways and air transportation,” argued Vukan Vuchic in his advocacy piece for high-speed rail. “Meanwhile, Amtrak is supported at the survival level.”

There is some truth to that. The billions of dollars spent on interstate highways virtually all came from highway user fees, so can’t really be considered an unfair competition with passenger rail. However, in the 1940s and 1950s, Congress spent about half a billion dollars — several billion in today’s dollars — on airport construction. Subsidies to airports continued on a large scale until 1970, when Congress allowed local airports to fund themselves out of ticket fees.

At the same time, the airlines were throttled by regulation. In 1960, domestic airlines carried only about 31 billion passenger miles. Today, when they have been deregulated but receive relatively minimal subsidies, they carry more than twenty times that many. There is little reason to think passenger railroads could have competed with deregulated and unsubsidized airlines. Continue reading →

Watch Romance of the Rails Live

By | | Transportation
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Today, the Cato Institute releases Romance of the Rails with a forum that starts at 11:30 am Eastern and continues to 1:30 pm. The Antiplanner will introduce the book, followed by comments on the book from Art Guzzetti of the American Public Transportation Association; Jim Mathews, of the Rail Passengers Association; and Marc Scribner, of the Competitive Enterprise Institute. If you can’t be in Washington DC this midday, watch it live here.

I don’t know if this is my best book yet, but it was the most fun to research and write. With so many railroad history books out there, I didn’t think I would be able to write something that hadn’t already been written a hundred times. In fact, I think a lot of the history in the book — and the book is more than half history, less than half policy analysis — will be new to even many ardent rail fans. Continue reading →

Amtrak vs. Freight Trains

By | | Transportation
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Trains magazine columnist Fred Frailey is an unabashed lover of passenger trains. So when he suggests that Amtrak is unfair to the freight railroads whose tracks it uses, passenger train supporters should listen.

Railfans often blame the freight railroads for late Amtrak trains, saying that the railroads should always give passenger trains priority under a 1973 law that states, “Except in an emergency, intercity passenger trains operated by or on behalf of [Amtrak] shall be accorded preference over freight trains in the use of any given line of track, junction, or crossing.” But, as Frailey points out (paywall), that 1973 law may be effectively stealing from the railroads when they are running near or at capacity.

For example, the oil boom is generating huge business for BNSF in western North Dakota. BNSF’s east-west main line across North Dakota has a single track with sidings, which should be able to support around 48 trains a day. But Amtrak’s Empire Builder is scheduled to run at 79 miles per hour, while freight trains typically run at only about 59, and the difference in speed means that the Amtrak train effectively reduces the line’s capacity by two or more freight trains a day. Continue reading →

Amtrak’s Real Problem

By | | Transportation
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Amtrak’s dream of restoring passenger service between New Orleans and Jacksonville — service disrupted by Hurricane Katrina — died, at least for the foreseeable future, when the governors of Alabama and Mississippi refused to provide funds to subsidize this train. Meanwhile, Amtrak CEO Richard Anderson incurred the wrath of his predecessors last week when he tried to explain to state legislators why Amtrak should end the Southwest Chief service between Newton, Kansas and Gallup, New Mexico.

“This is the first time that a management team has ever come out against continuing services Amtrak currently provides,” worried former Amtrak president David Gunn, as reported by Trains magazine (paywall). “It’s dishonorable and dishonest,” chided Joseph Boardman, another former Amtrak president.

Actually, Anderson was being perfectly honest. His presentation noted that only about 175 people a day ride that segment of the Chicago-Los Angeles train, which gets most of its ridership in the Chicago-Kansas City segment followed by the segment between Los Angeles and Albuquerque. Because BNSF, which owns the tracks, no longer runs freight trains on this route, it is the only private rail route in the country that sees only Amtrak trains, making all capital and maintenance costs the sole responsibility of Amtrak. Continue reading →

Amtrak in Turmoil

By | | Transportation
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The Antiplanner isn’t alone in suggesting that hiring an airline executive to run Amtrak is a bad idea (at least for Amtrak). Last week, a former Amtrak official (who wishes to remain anonymous) sent a letter to Maryland Senator Chris Van Hollen asking that former Delta CEO Richard Anderson be fired from his current job as CEO of Amtrak. Alternatively, suggested the letter, Anderson should be constrained “taking actions which will jeopardize the
existence of the Amtrak system.”

The letter cites some of the examples mentioned in the Antiplanner post: downgrading of food services and elimination or reduction of special trains and private car moves. But it also notes that Anderson proposes to replace the electric-powered trains between Washington and Boston with diesel trains even though the diesel trains would be slower and cause pollution problems in tunnels into and through New York.

Even more significantly, former Amtrak CEO Joseph Boardman wrote a letter defending long-distance trains and specifically the Chicago-Los Angeles Southwest Chief. One of Anderson’s controversial policies is to demand that railroads install positive-train control by the end of this year. The train most threatened by this may be the Southwest Chief, as the Kansas-Colorado-New Mexico portion of that route that goes over Ratón Pass is on tracks that BNSF doesn’t even want to maintain for freight, much less spend hundreds of millions for passenger trains that it earns little profit from. Continue reading →

Big Changes at Amtrak

By | | Transportation
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A severe curtailment of charter trains. New restrictions on hauling private cars. Elimination of dining cars on some trains. Elimination of the Coast Starlight‘s Pacific Parlor Cars, which the Antiplanner called the only redeeming feature of Amtrak’s long-distance trains. Perhaps even phasing out long-distance trains completely.

These are some of the changes taking place under Amtrak’s latest CEO, Richard Anderson, a former Delta Airlines executive. Amtrak’s previous CEO, Wick Moorman, was in charge for only about a year and the main work he did was to shake up the executive suite to make it operate more efficiently. Anderson, however, seems more willing to take on sacred cows in the name of efficiency. If you love intercity passenger trains, however, the things he is doing are likely to alienate many of the company’s political supporters.

The long-distance trains are only the most obvious example. With them, Amtrak serves all but four states. Without them, it serves less than half the states. If less than half of the members of Congress support Amtrak, Amtrak disappears. Continue reading →

Amtrak 2017 Report

By | | Transportation, Useful Data
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Amtrak recently posted its September 2017 Monthly Performance Report, which includes cumulative data for F.Y. 2017 as a whole. Unfortunately, with the September report, Amtrak changed the format of its monthly reports, reducing the size from 90-some pages (such as this one for 2016) to five. What is Amtrak trying to hide?

Unlike an annual report (which Amtrak hasn’t yet published for 2016), the monthly performance reports have data for each of 46 Amtrak routes. This includes the Northeast Corridor (broken down into Acela and “regional” trains), 29 state-supported day trains, and fifteen overnight or long-distance trains. The abbreviated train-by-train data in the new-format reports includes gross revenues, operating expenses, fare revenues, seat miles, and passenger miles. Continue reading →

Why Railroads Are Dragging Their
Wheels on Positive Train Control

By | | Transportation
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In 2008, Congress required that railroads install positive train control, which would automatically cause trains to slow or stop to prevent derailments or collisions, on all lines that carry passengers or hazardous materials by December 2015. That deadline is two years passed, yet–as last week’s accident revealed–still has not been met by most railroads.

The Washington train wreck was a special case. The rail line, improvements, passenger train, and upgrades were owned or done by four different government agencies. It seems particularly galling that neither Sound Transit, which owns the tracks and is spending billions on rail construction, nor the Washington State Department of Transportation, which received close to a billion dollars from the federal government to upgrade this particular line, bothered to install a working version of positive train control before inaugurating service on this route.

In general, however, the railroads have two very good reasons for not enthusiastically installing positive train control as Congress has demanded. First, the cost is high: the Federal Railroad Administration estimates it will cost as much as $24 billion, which is probably more than the annual capital budgets of all the private railroads in the country. Continue reading →