What has Amtrak President Joseph Boardman accomplished ?   January 11th, 2013

Opinion by Noel T. Braymer

Amtrak President Joseph Boardman has the best of intentions. He gave priority to improving Long Distance Rail service with proposals to run daily service on the Sunset. He has supported studies to bring back the Pioneer, extend the Heartland Flyer to Kansas City, return service on the Gulf Coast between New Orleans and Florida as well local service between Baton Rouge and Dallas. He has overseen the order  in 2010 for new low level Long Distance Cars to replace equipment over 40 years old made possible with stimulus funding. Also with stimulus money he has ordered new electrical locomotives for the NEC. He started the process to order additional Acela cars to run longer Acela trains to increase capacity and revenue without needing to run more trains on the NEC.

But results don’t always match good intentions. In over 4 years Mr. Boardman has often failed to finish what he has started. When trying to get an agreement with the UP for a Daily Sunset he basically gave up when he realized the UP was going to oppose it. He should have known it was going to be a struggle and he should have had a strategy to counter the UP. Instead of taking the UP to court or before the Surface Transportation Board he settled for a new less padded Tri-weekly schedule while agreeing not to bring up daily service on the Sunset for several years. There have been no new rail service extensions despite all the studies in the last four years. Amtrak tries to forget that the Gulf Coast between New Orleans and Jacksonville is still part of the National Amtrak System. Amtrak could bring back Sunset service or run other trains on that route if it wanted too. The reason many of these projects go nowhere is Amtrak wants the States on these routes to pay them to operate these trains. No thought is given to running a service that will cover its costs and more. To do that you need trains long enough to hold plenty of passengers and go far enough to serve enough markets and make connections to bring in enough business to succeed. Instead Amtrak under Boardman continues to offer States expensive short haul service for them to subsidize with few connections to the National Amtrak System.

What holds back Amtrak’s ability to increase revenue despite growing demand with rising gasoline prices is its small fleet of cars and locomotives.  For Amtrak’s revenue to grow it needs more equipment. Larger orders for equipment also mean economies of scale so the price per car or locomotive is lower. Yet the only order so far for Long Distance Trains has been for low level cars used east of the Mississippi. This order only replaces existing equipment over 40 years old and won’t increase ridership. There are no plans for more equipment on the Western Long Distance Trains which are often sold out most of the year and could easily carry more cars and fill them if they had them. One recent order was planned to add cars to the Acela trains on the NEC. The problem with this plan was it was for equipment 12 years out of production for a small order that no car building would make money on unless the price was very high. Amtrak Management should have realized that from the start. Now Mr. Boardman has changed his mind again and wants more and all new equipment to replace Amtrak’s newest trains. These new trains are part of a plan by Mr. Boardman to build a new High Speed NEC railroad for speeds up to 220 miles per hour between Washington and Boston which is estimated to cost about 150 billion dollars.

There are plenty of simple projects that Amtrak can do on their own now which would pay for themselves. What these services need in the way of local support are improved stations and help getting funding for track improvements. The easiest project to do would be to extend the Palmetto from Savannah back to Jacksonville. The travel market between New York and Florida is more than big enough to support a third train. The Palmetto carried more passengers when it did and had connections to other trains at Jacksonville. The next easiest project is to return service on the Gulf Coast. One way to do this is extend the City of New Orleans to Florida. The City sits in New Orleans now almost 24 hours between runs which is poor use of equipment. With one additional trainset the City could serve Orlando and Miami. This would give Amtrak service from the Midwest to the Gulf Coast and Florida with connections to the rest of the country. Amtrak should run the Cardinal daily, that alone will greatly improve the performance of this train. What would work better would be a section of the Cardinal going to St Louis and Kansas City. This would add several major new markets and connections on the Cardinal to other Amtrak trains. This would turn a looser into a winner and add traffic to other Amtrak trains. Then there is the issue of extending the Heartland Flyer. Extending it now to connect with the Southwest Chief in Kansas would improve ridership and revenues on both trains for much less money than running the Flyer as a day train to Kansas City. This brings up the future route of the Southwest Chief. If local efforts gets Federal and State Funding to eliminate slow orders between Kansas and New Mexico to keep the Chief on its current route then this could be copied in other places. Already North Dakota has received Federal Funding to save part or the route of the Empire Builder in their State. A million here and a million there adds up for a better National Rail Passenger System.

Mr. Boardman is from New York State so it should be no surprise that he is interested in the Northeast. One of his successes has been having Amtrak leasing 95 miles of CSX railroad in upstate New York to oversee 181 million dollars of Federally Funded Track improvements to this local corridor rail service.  But lack of a balanced National System endangers rail passenger service both economically and politically. Amtrak  loses  hundreds of millions of dollars a year from running the NEC of  which with over 1600 trains a day about 1500 are not Amtrak’s but mostly commuter trains. Recent headlines point out that Amtrak’s losses for 2012 are the lowest since 1975:  so what happened in 1976? As part of the program to bailout the bankrupt PennCentral Railroad on April 1st 1976 Congress gave Amtrak the NEC. The NEC had been owned by the PennCentral and ownership of it was a major cause for it going bankrupt from the cost of the commuter trains service on it.

No matter how much money the Acela “makes” on an operating profit it can’t cover the cost of the NEC that it runs on. As of 2011 just the capital cost for the NEC was 575 million dollars and this doesn’t cover all the work  needed to be done. The total revenues from freight and commuter customers for use of the NEC in 2011 was 164 million dollars. Yet Amtrak claims the Long Distance Trains lose 530 Million dollars a year. The most expensive part of running a railroad is the overhead which for a railroad is mostly owning the tracks and right of way. The Long Distance Trains use the overhead owned by the Freight Railroads which Amtrak pays a discounted price to use. Running the Long Distance Trains costs Amtrak less than operating their own trains now on the NEC plus running it for the commuter trains. For years Amtrak has hidden the true cost of the NEC by charging them to Long Distance and State subsidized trains.

Amtrak’s overhead costs will get worse if it builds a new High Speed Rail NEC and still has to pay to continue to run the old NEC which is critical in the region for commuter service. Amtrak can continue  improving its bottom line with incremental expansions of service that take advantage of existing overhead to increase revenues. Expanding service on Long Distance Trains has been proven to increase revenues faster than costs in the 1980′s under then Amtrak President Claytor. Without National political support and a broader market to increase revenues Amtrak will not be able to cover all its costs without subsidy  such as from the States,  especially for  the cost of the NEC.

This entry was posted on Friday, January 11th, 2013 at 9:46 AM and is filed under Editorials.