Amtrak's future: The short-distance network

Posted by Fred Frailey
on Friday, April 22, 2011

Amtrak and states that support its short-distance trains earned bragging rights over the past seven years. Between 2003 and 2010, ridership on this network of trains exploded, rising 77 percent. The honor roll goes like this: Chicago-St. Louis trains, up 192 percent in ridership; Chicago-Carbondale, Ill., trains, 135 percent; Chicago-Quincy, Ill., 92 percent; Downeaster (Boston-Portland, Maine), 88 percent; Hiawathas (Chicago-Milwaukee), also 88 percent; and Pennsylvanian (New York-Pittsburgh), 64 percent. It’s true that frequencies increased on the first three of these routes, but that just goes to prove that if offered more opportunities to trade a car for a train, people jump aboard.

In a recent blog, I analyzed the ridership and revenue trends of long-distance trains (see “Amtrak’s $100 Million Trains,” April 22). If you missed that or fell asleep halfway through, my three bullet points are these: Yes, there were some impressive ridership gains, although the overall increase in passengers was a modest 19 percent. But Amtrak made no progress whatever in minimizing its losses; the ratio of revenue to costs remain stuck at 46 percent. And a few of those trains consumed a gawdawful amount of money to get from A to B 365 days a year.

The short-distance ridership numbers are impressive. Take the Empire Service in New York state. This is a mature market; no new trains have been added lately. Yet nearly 800 more people per day rode these trains in 2010 than in 2003. In the short Chicago-Milwaukee corridor, also mature, the increase is a cool 1,000 people per day. Same with the Chicago-St. Louis service, the Keystone service between Philadelphia and Harrisburg, Pa., and the Pacific Suftliners between San Diego and San Luis Obispo, Calif. When you can entice 1,000 more people a day to ride your trains on a route than a few years before, you have a viable service, plus political support when it comes to getting state legislatures to keep forking over the subsidies.

Yes, subsidies. Most short-distance trains are already state-supported in one manner or another. Starting in 2015, Congress says, they all must be, in a uniform manner that Amtrak and states are still trying to work out.

That’s the good news. The even better news is that short-distance trains are doing a better job of recovering fully allocated costs than their long distance brethren. As a group, their ratio of ticket revenue to total costs increased from a dismal 40 percent in 2003 to a respectable 48 percent in 2010 (all years in this article are fiscal, ending in September).

The winners in cost recovery at the farebox in 2010 are the Carolinian (81 percent) Empire Service (64 percent), Pennsylvanian (55 percent), and Downeasters (52 percent). The biggest losers: Chicago-Quincy (26 percent), Kansas City-St. Louis (30 percent), California’s Capital Corridor (33 percent), and Chicago-St. Louis (34 percent).

And I remind you (see “New Direction in the Northeast Corridor,” May 2001 Trains, page 11) that one service that didn’t even exist in 2003, a Washington-Richmond, Va., round trip, made a $2.1 million profit in 2010 after absorbing all costs. As of the first five months of fiscal 2011, ridership of that pair of trains is up 28 percent from a year ago, and they’ve already earned a $1.5 million profit, according to Amtrak. Money the state of Virginia set aside for a subsidy is going unspent.

My takeaway from this wall of numbers is that Amtrak is right in devoting the attention it does to the short-distance routes (including the Northeast Corridor, which I’ll analyze in a future piece). Love the long-distance trains as I do, they are not the future.

In the table below, covering selected short-distance routes, ticket revenue only is counted, and state subsidies excluded, in order to get an accurate comparison of the economics of short-distance services. Amtrak changed its method of cost accounting in 2010 and cautions against comparing losses for 2010 with those for prior years. Okay, consider yourself cautioned, because these are the only numbers you’re going to get from Amtrak.

Route Ridership change 2003-2010 Revenue change 2003-2010 Fully Allocated Loss 2003 Fully Allocated Loss 2010
Downeasters 88% 91% $4.8 mil. $6.1 mil.
Keystone 46% 39% $25.8 mil. $35.8 mil.
Chicago-St. Louis 192% 202% $10.2 mil. $25.4 mil.
Hiawathas 88% 86% $15.9 mil. $19.7 mil.
Pacific Surfliners 20% 43% $35.7 mil. $61.6 mil.
Cascades 42% 99% $24.2 mil. $30.9 mil.
Capitol Corridor 39% 91% $28.1 mil. $45.7 mil.
San Joaquins 25% 55% $32.2 mil. $42.3 mil.
Kansas City-St. Louis 24% 37% $7.1 mil. $9.5 mil.
Carolinian -4% 15% $12.5 mil. $4.1 mil.
Empire Service 26% 39% $35.6 mil. $33.6 mil.
Chicago-Detroit 47% 67% $15.9 mil. $19.9 mil.
Pennsylvanian 64% 42% $11.1 mil. $6.9 mil.
Chicago-Quincy 92% 108% $4.6 mil. $14.0 mil.
Chicago-Carbondale 135% 157% $4.2 mil. $11.5 mil.
Tags: Amtrak
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