Management issues of State funded services

[cirdan]

I am not sure how this plays in, but only Amtrak has guaranteed access to any line that hosted passenger service in 1970 that hosted passenger service at low cost, avoidable cost based rates. You could probably outsource everything but actually operating the trains (T&E crews) and keep Amtrak’s low access costs, but my reading is if another operator came in you'd lose it.

True, but laws can be changed. I can imagine both conservatives getting behind this (because removing Amtrak's monopoly) and progressives (because getting things done faster and thus more rail service).

 

[PaTrainFan]

It could just as well backfire.

The Hoosier State debacle showed that private companies do not necessarily do a better job than Amtrak.

It would be hugely embarrassing for all those who criticize Amtrak, if after a few months California had to crawl back to Amtrak on their knees asking for forgiveness.

Indiana had no serious interest in making any of it succeed.

 

[Just-Thinking-51]

It could just as well backfire.

The Hoosier State debacle showed that private companies do not necessarily do a better job than Amtrak.

It would be hugely embarrassing for all those who criticize Amtrak, if after a few months California had to crawl back to Amtrak on their knees asking for forgiveness.

The Hoosier State was a complete mess, and should not be anything other than a cautious story about reading your contract, and that Amtrak does not play well with others.

 

[user 14106]

With some of Amtrak's problems lately I'm sure it's easy for some to get into an attitude of "ABA" (Anybody but Amtrak) but one should be cautious. If one looks at what's been going on with the freight carriers lately they are facing some of the same operational problems (much self inflicted with PSR fever) but "anybody but Amtrak" may not necessarily be the panacea it may seem and the fact that an operator is private doesn't automatically mean they will do a better job - I'm sure it will come down to costs though and I'm sure Herzog and some others may low ball to try to get their foot in the door. With so many labor difficulties it may be a difficult time and messy time to swap operators too. I guess we'll see what they do. We have Herzog on our local line up here (New Haven - Springfield line) but CTDOT only bid out its CTrail branded trains. Amtrak is still around as well and operates the trains that CTDOT cost shares with MassDOT. Basically each operator operates about half the service and CTDOT has a "one ticket any train policy" so that you can use either operators' ticketing for any train. (The Vermonter is excluded from the program and doesn't make every stop.) They seem to do a decent job for the trains they run.

 

[Amtrak25]

Boardman's Amtrak went bazerk when VRE yanked their commuter contract from them and gave it to Keolis after years of digust with a variety of Amtrak's shenanigans, mostly maintenance, may even have threatend to toss them out of Wash Union Station. That wasn't even an Amtrak service.

I don't know what the right answer is in dealing with Amtrak's ineptitude and arrogance, but get plenty of unsalted popcorn ready when a disgusted entity next pulls the trigger on Amtrak. They do not play well with others, and they do not like to be made to stand in the corner. (VRE never caved).

 

[JWM]

Indiana had no serious interest in making any of it succeed.

This fourth generation Hoosier agrees.

 

[jis]

The Hoosier State debacle showed that private companies do not necessarily do a better job than Amtrak.

But the Hoosier State was never operated by any entity other than Amtrak. All that happened is that Iowa Pacific provided the equipment for it and provided OBS service. T&E was always Amtrak. So one could say that Amtrak just proceeded to screw up which incidentally IMHO was completely by design given that Indiana was hell bent on figuring out a way of spending zero dollars on it anyway. It was quite astounding that Iowa Pacific signed that essentially no path to breaking even deal with Indiana DOT and Amtrak.

 

[MARC Rider]

As someone who had managed government contracts, my experience has been that it really doesn't pay to contract out something unless you want to have a job done that you only need to have done intermittently. When you contract out, you not only have to pay for the direct costs of performing the service, you also have to pay for the contractor's overhead and some level of profit for the contractor. You will get billed $200 an hour for an engineer who gets paid $60 an hour, and so on down the personnel ranks. In addition you have to pay the overhead costs of the government management and oversight of the contract. If the government runs the service themselves, they would save the cost of the contractor's overhead and profits, and there should be no reason why government managers should be any worse than private sector managers. These principles also apply to outsourcing by private-sector companies. Whatever cost savings are realized by this sort of outsourcing is usually achieved on the backs of the workers by low pay and poor working conditions. If outsourcing to private contractors was such a good idea, then we would have abolished the US Army, the Navy, the Marine Corps, and the Air Force years ago and just relied on privateer captains and mercenary companies to secure our national defense. Heck, we wouldn't even have to pay them anything, just let them collect booty of war for their expenses.

 

[Barb Stout]

Amtrak owns nothing in california other than the LA shops.

Amtrak doesn't own anything in the Bay Area? So does that mean that maintenance/cleaning/whatever on the California Zephyr is done by a contractor? Or who/what does own whatever site that maintenance/cleaning/whatever is done on it?

 

[jis]

Amtrak doesn't own anything in the Bay Area? So does that mean that maintenance/cleaning/whatever on the California Zephyr is done by a contractor? Or who/what does own whatever site that maintenance/cleaning/whatever is done on it?

I believe Amtrak still own some part of the Oakland Maintenance Facility, but substantial part of the new facility put into service in the first decade of the century is likely owned by some combination of California State agencies, since they substantially funded it.

BTW, ownership of facility has little to do with who employs the staff working there. Just because a facility is primarily owned by some other entity does not mean that Amtrak staff could not be doing the work there. Indeed that is the case with many many stations in the country, the facility is owned by someone else but staffed by Amtrak.

 

[John Webb]

Good that new equipment is on the way for the San Joaquins. Unfortunately the SJJPA made the stupid decision to get rid of the Cafe Cars on the new equipment. Vending machines instead. Let them know you don't like it. SJJPA phone #: (209) 944-6221

 

[zephyr17]

True, but laws can be changed. I can imagine both conservatives getting behind this (because removing Amtrak's monopoly) and progressives (because getting things done faster and thus more rail service).

Well, the National Rail Passenger Act of 1970 has contractual aspects that cannot be changed without consent of both parties. The railroads which joined Amtrak agreed to provide access at avoidable cost to lines hosting passenger service in 1970 in exchange for being relieved of their common carrier obligation to provide passenger service. They signed a voluntary contract, they didn't have to join, and some didn't. Some didn't have to because they no longer hosted passenger service and had no need, like WP and FEC (the reason Amtrak never served Florida's east coast cities), others for other reasons, like Rock Island being broke and not having money for the buy in. Oh, that's another contractual aspect, the railroads had to pay to join.

It is a contract whose terms were established by law, not just a law alone. One party cannot change the terms of a contract unilaterally, even one whose terms were set forth by statute.

Of course, Congress could use a bigger hammer, like eminent domain, to get the needed access. But that would involve both much bigger political lift as well as a court fight lasting years if not decades as railroads would fight it tooth and nail and have the resources to drag it out almost indefinitely. As well as having a good shot at winning in the end. Access at avoidable cost might well constitute an "illegal taking" of return on investment.

 

[zephyr17]

But the Hoosier State was never operated by any entity other than Amtrak. All that happened is that Iowa Pacific provided the equipment for it and provided OBS service. T&E was always Amtrak. So one could say that Amtrak just proceeded to screw up which incidentally IMHO was completely by design given that Indiana was hell bent on figuring out a way of spending zero dollars on it anyway. It was quite astounding that Iowa Pacific signed that essentially no path to breaking even deal with Indiana DOT and Amtrak.

And Amtrak did everything it could to sabotage IP.

Unfortunately, while Ed Ellis and company had great intentions, their business savvy appears to have been quite lacking.

 

[jis]

And Amtrak did everything it could to sabotage IP.

I expected nothing less. Afterall Amtrak effectively ceased to have a stake in the success since they were told that they were incapable of running it and IP was going to fix all its ills. The only way it could have succeeded is if Indiana had contracted with Herzog or some such, but they could not because the track access depended on Amtrak. The whole thing was an idiotic idea from the getgo IMHO.

 

[zephyr17]

I expected nothing less. Afterall Amtrak effectively ceased to have a stake in the success since they were told that they were incapable of running it and IP was going to fix all its ills. The only way it could have succeeded is if Indiana had contracted with Herzog or some such, but they could not because the track access depended on Amtrak. The whole thing was an idiotic idea from the getgo IMHO.

But it was a lovely train while it lasted.

I agree that it was effectively a suicide pact for IP, though.

 

[GDRRiley]

It would be hugely embarrassing for all those who criticize Amtrak, if after a few months California had to crawl back to Amtrak on their knees asking for forgiveness.

California does everything itself outside of ops from setting timetables to owning the equipment. Not sure who pick the contractors for mechanics and service techs.

DB's record and reputation even inside Germany has deteriorated a lot over the last few years. With under investment in infrastructure, understaffing, poor customer service and poor accountability being among the factors that lead to poor performance. This has been aggravated by poor leadership and DB being used as a playball by the government.

DB here has been doing a ton of planning and has influenced CAHSR some. They know what to do the issue in germany is they don't have funding.

With some of Amtrak's problems lately I'm sure it's easy for some to get into an attitude of "ABA" (Anybody but Amtrak) but one should be cautious. If one looks at what's been going on with the freight carriers lately they are facing some of the same operational problems (much self inflicted with PSR fever) but "anybody but Amtrak" may not necessarily be the panacea it may seem and the fact that an operator is private doesn't automatically mean they will do a better job - I'm sure it will come down to costs though and I'm sure Herzog and some others may low ball to try to get their foot in the door. With so many labor difficulties it may be a difficult time and messy time to swap operators too. I guess we'll see what they do. We have Herzog on our local line up here (New Haven - Springfield line) but CTDOT only bid out its CTrail branded trains. Amtrak is still around as well and operates the trains that CTDOT cost shares with MassDOT. Basically each operator operates about half the service and CTDOT has a "one ticket any train policy" so that you can use either operators' ticketing for any train. (The Vermonter is excluded from the program and doesn't make every stop.) They seem to do a decent job for the trains they run.

The state does most of the major work already we mostly need someone to operate the trains and do upkeep.

Amtrak doesn't own anything in the Bay Area? So does that mean that maintenance/cleaning/whatever on the California Zephyr is done by a contractor? Or who/what does own whatever site that maintenance/cleaning/whatever is done on it?

Thats a caltrans owned facility with Amtrak employees. The only shop in california that amtrak owns is LA.

 

[Amtrak25]

IPH heritage coaches had AC issues. The 3 locomotives were old ex-NJT Sandy-damaged flood engines with mechanical issues.

Indiana didn't want to pay $3 million to subsidize it. They are all in on with NICTD double tracking, rebuilding Michigan City ROW, and their 8-mile branch to Dyer.

Indiana is fine with subsidizing their residents commuting to Chicago and bringing their paychecks home to spend, but not with Indianans spending their tourist money in the Windy (Wicked) City, whether run by Amtrak, Herzog, or anyone else.

The train is gone and forgotten without a whimper.

 

[Anderson]

It could just as well backfire.

The Hoosier State debacle showed that private companies do not necessarily do a better job than Amtrak.

It would be hugely embarrassing for all those who criticize Amtrak, if after a few months California had to crawl back to Amtrak on their knees asking for forgiveness.

This depends on ow you define "do a better job". Considering that Amtrak wasn't even willing to put a cafe on that train until Indiana was ready to walk, I'll say that Iowa Pacific did a far better job of running the train than Amtrak did.

The cautionary tale is, as others have said, about reading contracts and so on. There's also a bit about making sure that your underlying operations are stable before doing something new and speculative, something which Brightline is probably going to keep in mind before they do anything massive outside of the FL and CA projects.

 

[Amtrak25]

IPH's philosophy was to make lemon-aide out of lemons of the Hoosier State and mimic VIA Rail. Run nicer heritage equipment, have great on-board service and food to pass the time away for 5 hours. Finaically, it didn't work. Ridership response was not good, providing the 4th trip per week was inefficient with deadheading just as it was for Amtrak equipment, Indiana-DOT was content to put everyone on Greyhound and Megabus that pay tolls on the highways if they insist on going to Chicago.

 

[zephyr17]

I'll vouch for the quality of service on IP's Hoosier State. It was great.

Aside from Amtrak's intransigence, INDOT's indifference, and IP's own questionable business sense, I want to add scheduling and frequency as a factor. It only ran 4 days a week on the same schedule as the Cardinal. Unless they were knowledgeable and tracking it, the average rider might have gotten the superb IP Hoosier State or the mundane Cardinal (which may not have been anywhere close to on time by IND). They might have gotten one one way, and the other on the return. So establishing a reputation separate from Amtrak would have been difficult. In addition to the crapshoot (to a casual rider) on whose train you'd be on, the times in Indy were (and are) truly awful and inconvenient.

The deck was stacked against IP in almost every way possible. I had the sense at the time it could not be long for this world, and went out of my way to ride it, since I have family in Indy. I am very glad I did.

IP is a cautionary tale. They really tried, with their operations out of Alamosa, Saratoga, the CONO "Pullman" and the Hoosier State. I don't know all the factors that sunk them, but sink they did.

 

[west point]

IMO it would have been beter to run it 7 days a week at a different schedules.

 

[zephyr17]

IMO it would have been beter to run it 7 days a week at a different schedules.

Yep, it certainly would have. But Indiana would have had to pay for that, and they wouldn't. Ultimately, they decided they wouldn't even pay for 4 days, but that was long after IP exited the scene.

It certainly wasn't up to IP, nor Amtrak.

 

[user 14106]

There are a few factors that could make this more bark than bite. For one Amtrak is the only operator with guaranteed access to freight tracks - obviously I don’t know what the specifics of the San Joaquins as far as track access but it’s a factor generally favoring Amtrak as an operator generally. Secondly Amtrak is the only operator that has legislative authorization to spend federal subsidies operating state supported intercity services provided the PRIIA provisions are followed. While the states pay the vast majority of costs for state supported routes via payments (which Amtrak considers revenue) Amtrak as a whole overall loses money on the business line even after taking into account state payments and a portion of the National Network account covers the federal subsidy for the state supported business line - it’s much lower than long distance but it’s still a sizable chunk of change north of $100 million. Commuter services that Amtrak has operated and lost contracts on are ancillary business activities not under the state supported line and have to be revenue positive as Amtrak is not authorized to spend federal money on such activities. Lastly Amtrak is the only operator that has its mission by law operating intercity passenger rail service and by definition is obligated to do so. Any other operator is going to want to make money on the enterprise and is under no obligation under its business charter to continue to operate the service. There maybe lines where a new operator is feasible and maybe the SJ is one - but it’s important to remember why Amtrak was created in the first place. If operators were lining up in droves with legitimate proposals wanting to operate trains all over the country then there wouldn’t be a reason to continue Amtrak at all. Pie in the sky proposals like Ameristar Rail for the NEC don’t count. Finally chopping it off Amtrak means separate ticketing for a standalone service. For a big enough market like Brightline’s that’s not going to be an issue - but the markets Brightline is looking at are uniquely suited for private operation.

As a result I expect for the most part states will complain but ultimately push for changes to PRIIA and Amtrak accounting rather than moving away on the end. Maybe some will find a way to go - but there’s no guarantee that will be a smash success either.

 

[Amtrak25]

From what I understand, from Amtrak's Fully Allocated Cost accounting, Amtrak pays 15% of that for PRIAA trains. That does not fit my definition of losing money since many of us regard their accounting as not terribly valid.

 

[user 14106]

In FY2023 the state supported business line had a $237.4 million loss on a fully allocated cost basis. So they spent about 40% of the amount of federal dollars that they spent on long distance which was $596.4 million. There's a few individual state supported routes that break even after state payments are factored in. My point is that a private operator doesn't have any federal dollars backing them. A private vendor is going to want to not only break even, but be profitable.