Encouraging words, uncertain prognoses at passenger group’s 50th anniversary summit

Revised November 21, 2017.

Two weeks ago, over 250 members of the National Association of Railroad Passengers (which will soon be known as the Rail Passengers Association), of which I have been an active supporter for over a decade, gathered in Chicago (the city where the Association was founded in 1967) to celebrate the nonprofit advocacy group’s 50^th anniversary. At the summit, dubbed RailNation Chicago, there were many discussions about the role passenger advocates should play, and the messages we should promote, given the shifting dynamics in the rail industry and the seeming hostility, or at least indifference, of the current federal administration to passenger rail and transit growth and expansion.

The gathering’s keynote speaker was new Amtrak co-CEO Richard Anderson, who made what may be his first public speech (or at least his first before a group of passenger advocates) since assuming the position in late September, alongside Wick Moorman, who will step down in February. Anderson, former top executive at Delta Air Lines, sounded all the right rhetorical notes, including proclaiming “Our role is as stewards of an important public good: passenger rail transportation.”

Particularly heartening was his assessment of the role of Amtrak’s national network trains as “connecting small and large communities and bringing the most utility to the most Americans across the country.” Anderson noted that only six percent of riders on the 15 long-distance trains travel from end to end, and that airlines and intercity bus operators have abandoned many short-haul routes and smaller markets.

The biggest of the “risk points” Amtrak faces, he said, is “the host railroad problem” (others being the Administration’s proposed elimination of long-distance train funding, the dire need for more capital (particularly on the Northeast Corridor), and that Amtrak needs to become more customer-focused). He insisted that the private (now freight) railroads need to keep up their end of the deal they made with the federal government in 1970 in exchange for being relieved of their obligation to provide passenger service. They should view running Amtrak trains punctually as a way of returning the multiple forms of public largesse they have received since the land grants of the 1850s, and not as “an annoyance,” as one Class I railroad leader recently described Amtrak, according to Anderson.

When asked to describe his vision for improving service levels on the national network, Anderson emphasized the need to either overhaul or replace the long-distance train fleet, particularly Superliner cars, but also Amfleet cars and diesel locomotives. He called doing a complete rebuild of the Superliner I and II fleets, or replacing them with new equipment, the “first priority” in this regard.

But later on in the Q&A session, when asked when passengers can expect new equipment, he listed the company’s project pipeline in the following order: Amfleet I renovation, Amfleet II renovation, new Acela Express trainsets, new diesel locomotives (the Siemens Chargers that are starting to be deployed in the Midwest and West Coast), completing the order with CAF USA for 25 new diners (though he failed to mention the new Viewliner II sleepers that were part of the original order), and finally overhauling the current Acela fleet. A Superliner overhaul or replacement did not appear on this list.

The degree to which Anderson will press for a long-distance fleet revamp as a priority remains to be seen. But the bigger question is his ability to achieve any item on his extensive wish list in the current political environment. This will require shrewd and forceful diplomacy with the key Members of Congress who hold the purse strings – working Capitol Hill in a different manner than he did during his time with Delta and pre-merger Northwest Airlines.

One of the most substantive panel discussions at RailNation was on the prospects for private-sector firms replacing or supplementing Amtrak on existing routes or starting new routes and services (an audio recording of this panel can be heard here). All Aboard Florida (doing business as Brightline) and the Texas Central Railway are two companies that are in the process of starting new passenger services with very minimal government assistance and no direct public funding. Rail Passengers Association Vice President Sean Jeans-Gail predicted that the most likely places to see private passenger services develop are where companies can follow the Brightline and Texas Central model of combining rail service with station-area real estate development whose value and revenues will go back into sustaining the railroad’s capital needs. (Full disclosure: Texas Central Railway is a corporate sponsor of the Rail Passengers Association.)

The 2016 Fixing America’s Surface Transportation (FAST) Act provided for a pilot program whereby the Federal Railroad Administration (FRA) would solicit bids from private companies, with the assent and cooperation of host railroads, to take over the operation of a long-distance Amtrak route for a trial period of up to six years. FRA issued its final rule implementing this program on Sept. 5, with a deadline for bid submission of 180 days from that date. We are now two months into the six-month final period and no bids have yet been submitted.

Railroad Development Corporation Chairman Henry Posner, a panelist with copious experience with private-sector freight and passenger rail operations in multiple countries, speculated that operating just one long-distance route is a prohibitive proposition for a private firm without having an interoperable fleet of specialized equipment (sleeping and dining cars in particular) or a bundle of several routes. The entry of any company besides Amtrak into the existing intercity passenger rail market is unlikely until the insurance problem is resolved – perhaps by having an umbrella agency providing access and insurance to various operators, Posner added.

The panel’s consensus seemed to be that, once public policy makes conditions ripe for the entry of firms to compete with or supplement Amtrak by lowering access and insurance hurdles, they are more likely to enter shorter-distance markets where they can overlay their services on top of existing routes, thereby adding frequencies and connectivity. But until that happens, Amtrak will retain a de-facto monopoly in intercity passenger rail, with the exception of services like Brightline that can function independently with their own revenue streams and host railroad arrangements.