Is ignorance or malice driving Amtrak cutbacks?

A host of actions taken by Amtrak since March, which have been detailed in this blog and in Trains News Wire, will —whether intentionally or not — have the combined effect of discouraging patronage and shrinking revenues for the company’s long-distance National Network trains. Based on what I know about how Amtrak is managed and on conversations with others who are knowledgable, I will offer three possible explanations for this dismal trend.

On-board service staff is being cut to the bare minimum (according to my sources, the Texas Eagle will lose its on-board chefs within the next two months), tour operators (some of the long-distance trains’ most reliable customers) are being discouraged from reserving sleeping car space, and many stations in small and mid-sized cities are losing their ticket agents, in spite of an attempt in the U.S. Senate to reinstate some of them — the amendment, sponsored by Ohio senators Sherrod Brown (D) and Rob Portman (R), was dropped from the final bill at the behest of Sen. Mike Lee (R-Utah). 

Based on some recent trip reports, Amtrak may be creating a record high number of ‘never-agains,’ passengers so put off by bad experiences that they won’t buy another Amtrak ticket, at least not on a long-distance train. Among these are troubling observations by former Amtrak Board member Ross Rowland from a recent Syracuse-Denver round-trip on the Lake Shore Limited and California Zephyr. Rowland reports that sleeping car passengers are now being limited to one bottle of water, one hand towel and one washcloth per room with only six towels available in the communal shower for the entire trip, that complimentary juice is gone and complimentary coffee is limited to one half pot per car per day, a lack of cleanliness due to the furloughing of a number of coach cleaners in Chicago, waste tanks on the eastbound Zephyr that were not emptied in Oakland, a burnt-out Lead Service Attendant on the Lake Shore who was the sole food service provider to two full Viewliner sleepers, and that agents in Chicago were ordered to throw away all remaining inventory of printed schedules and timetables. When asked to comment about this report, Amtrak spokeswoman Kimberly Woods declined.

The first scenario that could account for what we’re seeing is that the decision makers at Amtrak — be it President & CEO Richard Anderson, members of the Board of Directors, others in senior management, or a combination thereof — are acting out of ignorance rather than malice. Many of the long-time senior-level personnel in the marketing, finance, corporate communications, planning and business development departments have retired or moved on, and their successors appear to be lacking in knowledge of and/or passion for Amtrak’s product. There may simply be a bureaucratic, bean-counting culture that considers the cost of everything but the value of nothing. Managers may be so blinded by balance sheets that they fail to see the company’s product from the customer’s perspective.

When under pressure to reduce the carrier’s federal operating grant (i.e. for nearly its entire history), Amtrak management has long sought to reduce costs but has not put anywhere near equal effort into increasing revenues by offering a better product or a greater quantity of said product, which would enable the railroad to spread the high fixed costs characteristic of railroading over more paying customers. The recent further cost-cutting measures may simply reflect this philosophy run amok, and will almost certainly prove counterproductive. As I’ve said time and again, a passenger railroad cannot cut its way to self-sufficiency, yet current management seems to remain convinced otherwise.

The second possibility, which is a corollary to the first, is that Anderson and those behind him have good intentions and want to make Amtrak successful, but are led by misconceived notions of what the company’s mandate is and what needs to be done in order to close the remaining 7% gap between passenger revenues and operating expenses. Reports that Anderson has told the rail directors of the state departments of transportation that Amtrak intends to make the states cover long-distance routes’ operating deficits by breaking them into segments of 750 miles or fewer each (thus coming within the 2008 statutory threshold for state-supported routes) would tend to corroborate this explanation.

Amtrak spokespeople have defended several of the recent decisions, including the choice not to operate charter trains, by arguing that Amtrak’s mission is to provide safe, reliable intercity passenger transportation and that the kind of ‘extraneous frills’ that most major companies engage in so as to foster the public’s goodwill take limited resources away from that mission. Yet the statutory language that spells out Amtrak’s charge is intentionally broad and can easily be achieved through a strategy that focuses on the revenue side of the ledger and not simply on the cost side. There are ways to increase revenue besides squeezing the existing market for all it’s worth through aggressive bucket pricing and offering occasional sales, which is all Amtrak seems to know how to do.

The third and most sinister possibility is that all of the relatively minor individual actions we are seeing — starting with the discontinuance of most charter trains and the numerous restrictions on private railcar moves and continuing with the downgrading of food service and slashing of amenities, the de-staffing of stations and the hamstringing of tour operators — are in fact part of a plot to eventually terminate or siphon off the long-distance trains. Amtrak management could be borrowing from the playbook of the 1960s Southern Pacific, New York Central and other carriers that sought to justify discontinuing trains by making service as bad as it could be to drive away potential riders. This could be spearheaded by individuals within Amtrak management who may have long wished to divest the company of the national network routes and now have the CEO’s ear. Alternatively, the White House or the upper echelons of the U.S. Department of Transportation may be pulling the strings.

If this is the case, however, whoever is leading this charge finds themselves starkly at odds with the overwhelming will of Congress, including the vast majority of Senate Republicans. The Senate adopted an amendment to the fiscal 2019 transportation spending bill on July 25 by a 95-4 vote, only four Republicans voting in the negative, that reaffirms the sense of the Senate that “long-distance passenger rail routes provide much-needed transportation access [and are] particularly important in rural areas” and “should be sustained to ensure connectivity throughout the National Network.” For anything to receive that broad, bipartisan support in the current political climate is impressive. Additionally, the spending bill that includes this amendment also includes sufficient funds to more than cover each long-distance route’s losses, and this bill passed the Senate 92-6 on Aug. 1 and is now before a House-Senate conference committee (a version of the bill without the Amtrak amendments passed the House 217-199 on July 19).

Some may believe that Amtrak would be better off if it only operated short-distance corridor trains. But the long-distance network really is the glue that holds the entire enterprise together, both physically (the existence of the network as a whole enhances the bottom line of each individual route that is connected to it, and allows for more efficient use of equipment and labor) and politically (Amtrak’s support in Congress would collapse if the majority of states and Congressional districts lost service). Let’s hope we don’t come to a point where the co-dependency of the Northeast Corridor and the national network is truly put to the test.