Brian Yanity

United Rail Passenger Alliance (URPA) respectfully submits this Statement to the Subcommittee. URPA is an independent national research and education organization on rail passenger transportation issues.

Amtrak’s response to the Covid-19 epidemic has been schizophrenic. At the same time it undertook a campaign to clean its stations and trains to reduce the risk of virus propagation, and a masking requirement for employees and customers, it has also prejudiced the mobility needs of the American public by announcing the withdrawal of the majority of its train services in the only part of its business where Americans have returned to using trains in large numbers. It makes no sense to reduce operations in its largest, most productive and most commercially-successful business segment, the national system of inter-regional trains, just as demand for these services has rebounded more than anywhere else in the system.

URPA applauds Amtrak’s cleaning and masking (and social distancing) initiatives. But URPA condemns Amtrak’s abandonment of the demonstrated transport needs of the American public at a time of crisis brought about by the Covid-19 epidemic.

Amtrak has deceived the Subcommittee in respect to the performance and prospects of its three operating divisions, the Inter-regional trains, the state-sponsored intra-regional corridors, and the federally-subsidized Northeast Corridor (NEC).

Contrary to Amtrak’s misrepresentations, the inter-regional group of trains is Amtrak’s largest, most productive and most commercially-successful segment. These are the trains to which Americans have turned during the Covid-19 epidemic.

The inter-regional group of trains (sometimes referred to as “long-distance” trains) is Amtrak’s largest business—it carries the most intercity passengers of any segment of Amtrak’s operation. NEC trains’ passengers consist predominantly of customers who are classified by the Department of Transportation as commuters, not intercity passengers; the intercity component of Amtrak’s NEC traffic is no more numerous than the intercity component of the inter-regional trains, and in some years, less. (In many years, the state-sponsored corridor trains also carry more intercity passengers than do Amtrak’s NEC trains, leaving the NEC—in terms of true intercity passengers carried—as Amtrak’s smallest division.)

The inter-regional trains are also Amtrak’s most productive. They have the highest load factors in the entire system (50-60+%, in operations where an annual load factor of 65% is a sold-out condition due to the large number of stations served and the regular turnover of passengers en route; on the western inter-regional trains, it is customary for each seat and berth to turn over on average 2 ½ times per trip). The load factor in the NEC by contrast rarely exceeds 50%, and south of Philadelphia and east of New Haven Amtrak’s NEC trains arithmetically cannot have load factors that exceed 28%–more than two-thirds of their proffered inventory goes unsold, a most unproductive use of scarce federal subsidy capital. In the traffic vacuum in the NEC during the Covid-19 epidemic, these NEC load factors are even lower.

The inter-regional trains also always produce 150-200% more transportation output annually than do the NEC or state-sponsored corridor trains. Output is measured in annual revenue passenger miles (not “ridership,” which merely measure transactions). This is the most important index of size and productivity of a passenger transportation network, and nothing else that Amtrak does comes even close to the inter-regional trains in producing annual passenger miles. This is doubly so in the Covid-19 epidemic. (The state-sponsored corridors produce about the same output each year as does the NEC.)

The interregional trains are also the most commercially successful trains that Amtrak operates, measured by their market share for intercity passenger transport. In their respective corridors, the inter-regional trains ordinarily generate market shares of 5 to 6%. In the NEC, Amtrak’s market share (not the air-rail modal split that Amtrak sometimes publishes) for intercity passenger transport in the region rarely reaches as high as 1 1/2 %, and that has shrunk for decades. Today, intercity buses carry more passengers in the NEC than do Amtrak’s trains.

In the current Covid-19 epidemic, Amtrak’s transaction volume (“ridership”) and output plummeted. But they did not do so uniformly across the system. Amtrak has tried to deceive the public and the federal government by emphasizing its system totals rather than breaking out the separate performance in the epidemic of its three operating divisions. The inter-regional trains fell far less than did the shorter corridor trains, and the NEC fell the furthest. At the same time that Acela demand dropped to zero, the inter-regional trains initially retained 15% of their demand, and then quickly rebounded, in some cases to near-normal levels.

As the system struggles to recover—as Americans regain their confidence to make intercity trips—the inter-regional trains have recovered far faster than the corridors, and especially the business travel-dependent NEC, which remains severely depressed. URPA research suggests that the western inter-regional trains, by sharp contrast, recovered to normal, pre-epidemic, traffic levels during the late Spring and Summer peak period.

This finding is corroborated by the fact that in the four months ending July 31, 2020, the inter-regional trains brought Amtrak more revenue, and URPA believes more revenue passenger miles, than all of the other trains (including in the NEC) combined.

Based on these objective and relevant criteria, therefore, the inter-regional trains are, and remain during the epidemic, Amtrak’s largest, strongest, most successful, and most relevant group of trains. The inter-regional trains, in fact, appear to be the trains that serve the demonstrated demand of a clear majority of American travelers for rail transport during the Covid-19 epidemic, just as in more normal times..

Against this background, Amtrak’s decision to charge ahead with procurement, testing and deployment of costly new high-speed Avelia trains in the NEC—a market for which demand has dropped to and remained near zero—while eliminating even once-a-day services in its largest, most productive, and highest-demand segment, the inter-regional routes (except Auto Train), is bizarre, biased, political and irrational. Amtrak could not have more disserved the American public during the Covid-19 epidemic than by reducing the frequencies of its inter-regional trains.

Amtrak’s coy hints that the interregional trains might be retained if only congress appropriates massive new subsidies is exactly the same ploy, in almost exactly the same terminology, that Amtrak used in 2002 after the roll-out of the Acela program in the NEC exhausted the company’s cash and rendered it insolvent. Congress should not allow itself to be taken in again. Instead, congress should insist that Amtrak use its existing resources first to sustain the trains that customers are actually using:  the heavily-used national network of inter-regional trains.

Respectfully Submitted,

United Rail Passenger Alliance

Minneapolis, Minnesota

Andrew C. Selden, President

612.229.9592

NCL25@yahoo.com

Amtrak has recently requested additional funds to cover operating costs and reduced revenue because of the Covid-19 pandemic. A corollary to this request is a plan to reduce long distance service from daily (in most cases) to three or four times a week.

RailPAC President Steve Roberts replies:

Amtrak’s request for funds – How should advocates respond?

Identifying and defining the costs will be critical. Advocates should start first by strictly defining the assumptions and timeframe. The time frame Amtrak says it is addressing is a 9-12 month period (FY21) where overall travel demand remains substantially lower than normal and discretionary travel is dramatically less than has been seen historically. Ridership on the trains will average about 50% of historic norms. Assuming the roll-out of a vaccine or more consistent social protections and the slow continuation of an economic rebound in late winter/spring of 2021, there should be a steady growth in ridership by Summer of 2021. In short, we are looking at a one year event.

On the cost side there is a reason why this is important. It means the estimates of cost savings need to focus on short-term avoidable costs without allocated additives. (Additives are added to direct costs to account for overheads directly link with an activity, i.e. the cost of crew base management shared by many routes accounted for with an additive on for example a conductors salary cost, a specific known cost). When you make a change for only a year you save the cost of the conductor’s salary but the cost of the crew base remains. Any proposal to reduce service needs to focus on short-term avoidable costs – fuel, on-train wages, train supplies, turn around maintenance, etc. The decision should not be made based on fully allocate costs, i.e. backbone costs, that are allocated to train routes as part of the accounting process (A perfectly fine academic accounting exercise but totally useless for deciding tri-weekly vs daily).

Two revenue areas that are important.

The first is connections. It varies by route, but looking at arrivals at the major hubs around 30% of the riders are connecting to other trains. Many are connecting to corridor trains but many are also connecting to other long-distance trains. It is impossible to have all the long-distance trains operate tri-weekly and still have connectivity in Washington, Chicago, LA and Seattle. So that is a big loss in revenue from breaking those schedules. Only daily service can maintain the utility of the National Network.

The second is what is called “claw-back”. Claw back is the percentage of riders who will shift their travel date to match a tri-weekly schedule. Longer distance vacation/leisure travelers are those where the greatest percentage of riders will shift their travel days. For those traveling strictly for transportation, a lower percentage will shift. Sleeping car riders are more likely to shift, 300 to 500 mile coach travelers are the riders least likely to shift but will choose another mode. The key difference driving these differences is that leisure travelers are making longer duration trips with more options for layover days. Shorter distance travelers are making shorter duration trips where adding a day to match a train schedule can add 30% or more to the trip duration. Because there have been numerous instances of LD trains moving from daily to tri-weekly and then daily again Amtrak has data to correctly calculate “claw-back” should it choose to use it.

So why is this important? The answer is who is going to be traveling in FY 21? Will it be seniors taking long circle trips in sleeping cars around America or will it be coach passengers traveling between 300-500 miles on the long-distance trains, strictly for essential transportation, to handle personal business, a medical treatment, to help elderly parents, etc. The level of service required for this type of market in FY 21 is daily service. A tri-weekly train is exactly the wrong kind of service for the market in FY21.

Steve Roberts – RailPAC President