Anderson Speaks on Long Distance Trains

[crescent-zephyr]

I'm still quite confused on the funding situation...

The Corridors pay for themselves via the states.

The NEC "makes a profit" (yeah I know.. but that's what is claimed).

So what's left to be subsidized... the long distance. So where does the subsidy for Long distance trains go? Does Anderson want to eliminate LD trains and therefore eliminate the LD subsidy? Well if that's what the government wants, they can do that already. If it's not what they want then why is Anderson going that route?

If the government is voting to give amtrak LD subsidy... and even being picky that said money cannot go to food and beverage costs... it would seem the government wants and sees value in the LD network.

 

[dlagrua]

Rail passengers should decide to have a say about the direction that Anderson is taking Amtrak. I've thought about possible actions. If we organized a national boycott of the LD trains that might end up hurting employees and reinforce the position that no one rides the trains. I believe that best way to to have petitions available in every dining car that state our position for the LD trains and for the dining car. We will suggest to the dining car crew on our trip next month.

It is my belief that if we do nothing, right after the meal service is killed off, the LD trains will follow..

As for Amtrak being made profitable, it must be asked is Social Security, Medicare, Affordable housing, the National Highway system, National Parks and other government owned agencies profitable??, Why should Amtrak be the only exception??

 

[jis]

I would prefer it if people would stop equating Social Security and Medicare, which have their own taxes that is paid over a lifetime, with Amtrak which has no specific taxes associated with it (which is part of the problem). It just confuses the issue and makes one look ridiculous. Let us just stick to talking about subsidy for transportation modes and leave it at that.

 

[jebr]

I actually don't disagree with Anderson on the general pretense that most people use trains as essentially a corridor service, even on the "long distance" trains. I also think that's likely what Congress is intending to fund - not the rides of 2, 3, or more full days that can, at least in part, be replaced by commercial air service, but the shorter (under 24 hours, and mainly under 12 hour) journeys that people take when they can't drive or is in a sweet spot where driving is a bit too much but it's not enough (or a small enough market) where flying doesn't make sense. If certain services don't really dissuade people from taking those shorter journeys but are only really major selling points on the multi-day journeys, then they only really make sense if they're self-sustainable. Even from a smaller market like Havre, MT, if someone's traveling to Florida it makes more sense to take the train to MSP, SEA, or PDX and fly the rest of the way, and even a Chicago - Florida train wouldn't really make that sort of trip viable for most people.

It makes more sense to advocate for long distance trains as essentially overlapping corridors where the strength comes from having numerous corridors all served by a direct train. Sure, you could theoretically break up the trains at certain points, but does it make sense to do that when you can run the train through, especially if there's no real other service to connect to? For example, trying to have the Empire Builder only run Spokane = St. Paul and having corridor trains serve the rest isn't really helpful when the only other intercity rail service you can connect to is the one that continues to Chicago. That's generally true across the long-distance network, and having the ability to have that one train continue through and be overlapping corridors is the best way (in my opinion) to advocate for it.

That does mean that we'll likely wind up having to de-emphasize saving certain things (such as the dining car; it's not really necessary even over a couple meal times as long as there's decent food in the cafe car) but there's still a place for sleeper car service (overnight journeys over a corridor; Minot - St. Paul is a good example of one, as is Illinois/Iowa - Denver.) Overall, though, to me it makes the most sense to advocate for things that reinforce Amtrak's place as a transportation mode first and foremost.

 

[rrdude]

I have mostly held the position that Amtrak, while being directed to be "All things to all people" (and in turn ios mediocre, at best) could indeed cater to different markets: 1) Core basic transportation. 2) Semi-luxury travelers. However, I think the optics of catering to the latter, kill the idea, tho Via Rail, in a very different environment, does "get away with it".

Not sure of the demand for "First Class" anymore on Amtrak. But, I'd pay a premium above what sleepers cost now, given:

• Linen, China, and glassware
• Fresh flowers on table
• Turn-down service @ nite with choc or other
• Wine or non-alcoholic beverage upon boarding
• Amenity Kit
• Wine tasting or other local samplings
• Exclusive lounge car access. (PPC perfect example)
• Menu could pretty much stay the same, except for desserts and salads.
• Ice, Coffee, juice all day in sleepers
• etc., etc.

Now, the $64K question is, at what yield or occupancy rate, do you cover your increased costs to provide the above "extras"......

 

[bretton88]

I suspect the message that Anderson is trying to convey is to get the states moving on more corridor service (i.e. Seattle to Spokane, Chicago to MSP). His biggest problem is the 750 mile rule, which requires a state partner. It's very possible he's trying to turn the long distance trains into a loophole allowing Amtrak to provide corridor service within the 750 miles.

 

[jis]

I suspect the message that Anderson is trying to convey is to get the states moving on more corridor service (i.e. Seattle to Spokane, Chicago to MSP). His biggest problem is the 750 mile rule, which requires a state partner. It's very possible he's trying to turn the long distance trains into a loophole allowing Amtrak to provide corridor service within the 750 miles.

The logic of this eludes me. Why would he want to get rid of the 750 mile rule. It gives him leverage to get states to fund things. He has very little incentive to take those trains fully in house in terms of funding. In general he correctly believes that Corridor services is where the growth is and is going to be. But that does not mean he necessarily wants to take on the entire financial risk of it. I am sure he would like to run them and get someone else to contract him to run them with adequate subsidy. The Corridor trains that run today at their fare levels, barring a few unusual corridors that are extensions of the NEC, are actually spectacular money losers.

 

[bretton88]

I suspect the message that Anderson is trying to convey is to get the states moving on more corridor service (i.e. Seattle to Spokane, Chicago to MSP). His biggest problem is the 750 mile rule, which requires a state partner. It's very possible he's trying to turn the long distance trains into a loophole allowing Amtrak to provide corridor service within the 750 miles.

The logic of this eludes me. Why would he want to get rid of the 750 mile rule. It gives him leverage to get states to fund things. He has very little incentive to take those trains fully in house in terms of funding. In general he correctly believes that Corridor services is where the growth is and is going to be. But that does not mean he necessarily wants to take on the entire financial risk of it. I am sure he would like to run them and get someone else to contract him to run them with adequate subsidy. The Corridor trains that run today at their fare levels, barring a few unusual corridors that are extensions of the NEC, are actually spectacular money losers.

It's not getting rid of the 750 mile rule, ideally he'd like to run corridors that are only state supported, the problem he faces is states don't necessarily want to cooperate or pay for it. Let's say he splits up the EB into three segments (Seattle to Sand Point, Sand Point to Grand Forks, GF to Chicago for example, choosing points that are longer than 750 miles) he could possibly have 3 possibly more reliable corridor trains that outperform the original LD train. Or the Chicago to GF train capturing the market for Chicago to MSP and the captured Seattle to Spokane corridor traffic would outperform enough to cover for the weak middle segment. This could be done without dealing with uncooperative state governments. I am not advocating for this, but his statements about DMUs and such make me think this is a direction he's going.

 

[crescent-zephyr]

I ask again... why is he wanting to do this? The government is giving money specifically to operate "Long Distance Trains" that's what the money is for.

Now... could it be that his plan is to eliminate the dining cars and make all LD trains transit only with limited food service? So the LD trains become totally bare bones... and then focus on state supported corridors running in addition to these trains? Ok... well that at least makes sense.

His "answers" just beg for more questions!

 

[chrsjrcj]

My opinion- Anderson sees Amtrak as a for-profit corporation, with the Federal government being more or less the sole shareholder. His objective is to reduce any costs to the shareholder (Federal subsidies). It's likely why he is more than happy to accept state funds (and count it as revenue), and would be okay with running the LD trains if the states funded it.

It's the difference between a business minded CEO like Anderson and someone like David Gunn who understood the benefit that a national passenger rail service provides.

 

[Mystic River Dragon]

I agree completely, chrsjrcj--I think you've put it very well.

I believe Anderson has been hired explicitly to cut expenses down to the bone. That is it. I believe his feeling is probably if Amtrak survives, fine; if it doesn't, fine--either way, he will have done the job he was hired to do. To be fair to him, I believe he is doing what he feels it is his mandate to do.

When Anderson has left, though, after he finishes what he considers to be his work, are there any railroad people left who would be able to step in and repair the damage? Or are they all retired or no longer with us?

I am sorry about Wick Moorman--he was just in the wrong place at the wrong time, because he could have been the one. And David Gunn is retired up there in Canada and has no intention of coming back.

 

[Trogdor]

Theres nothing about which to feel sorry for Wick Moorman. He was more or less doing Amtrak a favor by taking the job when he really didnt want. He was retired and really had no intention of coming back to work, but he was the one that felt sorry for Amtrak, and took the job, temporarily, to help Amtrak extend the search for a permanent CEO.

When Boardman announced his retirement, essentially nobody wanted the job. Thats why Moorman was brought in.

You typically bring in an interim CEO when there is a sudden and unexpected departure (death, sudden resignation to take another position somewhere else, a scandal forcing an early departure, etc.). Boardman announced his retirement many months, if not a year, in advance. Even if he hadnt explicitly announced it, his age and years of service in the industry should have caused the company/board to work on some sort of succession plan. If there was anybody both willing and qualified for the job, they should have been known and hired prior to Boardmans departure. Instead, after a many-months-long search, we wind up with someone who was already retired and said up front that he was only going to be there a short time.

So, whatever people think of Anderson, he was (and I dont like using the word literally very lightly) almost literally the only person they could get to do the job. And he, himself, was essentially already retired. I know Ive said on here before that Amtrak was an organizational mess. Its something that executive-level folks with a future career left dont want to touch.

Its unfortunate that long-distance trains are suffering, but lets be honest, theyve been suffering a slow, steady decline for a couple of decades (or more). The quality of food in the dining car has decreased. The amount of cooked-on-board food has decreased. Individual route menus have been replaced with standardized menus system-wide. Sleeping car perks have been reduced or eliminated. And much of that happened long before anyone associated Richard Anderson with a railroad.

Many folks dont like Anderson, but I really dont know who would be qualified for the job and actually want it. Experienced railroad executives are better off with freight companies (and they know it), and experienced passenger executives are better off at more stable transit and commuter railroads (and they know it). Who does that leave you with?

Edit: apologies for the lack of proper apostrophies. The iOS mobile website bug seems to have removed them all.

 

[Ryan]

You raise an interesting point.

Has anyone gone on from the Amtrak job to go and do great things elsewhere?

 

[JRR]

I am not into accounting, but allocation of costs and revenue with respect to food service, seems to be just an accounting issue with respect to the sleepers. As some have suggested, raise the price of the sleeper to cover the food service costs or, more imaginatively, allocate more of the sleeper revenue to the food service.

Recognizing the fiduciary responsibility of management, a reasonable combination of the two approaches would seem to be a workable solution.

I think one could even upgrade the quality of the food, cover the costs and increase ridership with an imaginative advertising campaign featuring the “experiential” benefits of traveling on Amtrak. “Your vacation starts when you step on board!”

 

[Devil's Advocate]

In the end there will be less LD trains, but Amtrak's pax and revenues will increase and require less subsidies. LD trains are not going anywhere, but sadly there will be less of them.

As we have witnessed in the past Amtrak's long distance network continues to shrink over time. Whenever another route is scaled back or abandoned the other routes suffer reduced connections, discouraged supporters, and weakened budget relevance. Over a long enough timeline each and every route will eventually fall victim to becoming the weakest link in the chain. When only one long distance route remains it will be too weak and isolated to maintain continued relevance on its own.

 

[NorthShore]

I tend to agree with frequentflyer, specially given the $1.3 billion appropriated for National Network, that all LD trains are unlikely to vaporize in the near future, though a prportion that was not intended by the House and Senate Appropriators may be diverted to short/medium corridors thus short changing the LD system.

I think Thirdrail has summarized the current situation quite well.

Every time my (Democratic Chicago) Congressman addresses questions I pose about Amtrak funding at community meetings, this is essentially what his answer amounts to, also.

 

[NorthShore]

He believes corridors are the future and he believes that operations should concentrate on the heavily used stations. Does that mean the death of the LD trains or does that mean the elimination of many, low usage stations in an effort to reduce the running times along the route?

Sounds like it means Greyhound.

 

[Philly Amtrak Fan]

In the end there will be less LD trains, but Amtrak's pax and revenues will increase and require less subsidies. LD trains are not going anywhere, but sadly there will be less of them.

As we have witnessed in the past Amtrak's long distance network continues to shrink over time. Whenever another route is scaled back or abandoned the other routes suffer reduced connections, discouraged supporters, and weakened budget relevance. Over a long enough timeline each and every route will eventually fall victim to becoming the weakest link in the chain. When only one long distance route remains it will be too weak and isolated to maintain continued relevance on its own.

Nah, Amtrak has had the same weakest link for the last 40 years. They've just canceled other better routes and kept it around instead. Maybe if there is a round of cuts and the right cut is made some other train will actually be the weakest link for a change. At least he's dead now.

 

[frequentflyer]

Ironic isn't it? We all know Amtrak cannot keep operating as it has for the past 40 years, yet no can agree what it needs to change to to prosper. The status quo is not prospering.

 

[KmH]

Amtrak exists because private railroads could no longer break even running intercity passenger rail service back in the late 60s.

None the less, Amtrak has steadily improved regards generating revenue and at present is said to be covering 94.7% of its operating costs.

Interestingly, the biggest problem area regards costs is apparently the often touted NEC.

While Amtrak makes a profit from the rails up on the NEC trains, Amtrak is said to be many billions of dollars behind in maintenance and improvements to the NEC infrastucture.

LD train infrastructure is maintained by the host railroads, with some miles of exception, like the miles the Southwest Chief uses between La Junta and the Dalies Junction south of Albuquerque.

 

[Devil's Advocate]

Ironic isn't it? We all know Amtrak cannot keep operating as it has for the past 40 years, yet no can agree what it needs to change to to prosper. The status quo is not prospering.

Prosper how? Compared to what? Financially Amtrak is doing better now than it ever has in the past. Unfortunately Amtrak has also raised prices, increased penalties, and reduced or removed many services and amenities along the way. I think this disconnect is where the complication lies. How do we improve and solidify Amtrak's financial standing without being left behind in the process.

 

[AGM.12]

I seem to remember that one of the PRIIA laws directed Amtrak to begin the efforts to turn some of the long distance trains over to private operators. I would be curious to see what Mr. Anderson's thoughts are on this idea.

 

[crescent-zephyr]

Not sure who would want to run a money losing train. Iowa Pacific tried to get in the business and... Lost money. I had hoped that Iowa Pacific would succeed and become the "new Pullman" and slowly take over 1st class on overnight trains.

Plus there is the liability. The CSX wreck wasn't Amtraks fault, but they lost crew members, equipment, and who knows how much $$$. Who wants to be responsible for all that?

 

[Bob Dylan]

Not sure who would want to run a money losing train. Iowa Pacific tried to get in the business and... Lost money. I had hoped that Iowa Pacific would succeed and become the "new Pullman" and slowly take over 1st class on overnight trains.

Plus there is the liability. The CSX wreck wasn't Amtraks fault, but they lost crew members, equipment, and who knows how much $$$. Who wants to be responsible for all that?

This!!!

 

[bretton88]

I am not into accounting, but allocation of costs and revenue with respect to food service, seems to be just an accounting issue with respect to the sleepers. As some have suggested, raise the price of the sleeper to cover the food service costs or, more imaginatively, allocate more of the sleeper revenue to the food service.

Recognizing the fiduciary responsibility of management, a reasonable combination of the two approaches would seem to be a workable solution.

I think one could even upgrade the quality of the food, cover the costs and increase ridership with an imaginative advertising campaign featuring the “experiential” benefits of traveling on Amtrak. “Your vacation starts when you step on board!”

And you have just stated the exact marketing on how to alienate Congress. How do you think subsized vacations would go over in Congress? VIA gets away with this because even they admit they don't even register on the radar in Canada anymore. The Canadian is supposedly still a money loser even with premier class.