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Amtrak Regionals and the NEC are both at risk

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Amtrak Regionals and the NEC are both at risk
Posted by Carl Fowler on Thursday, June 25, 2020 12:27 PM
IT IS NOT JUST THE LONG-DISTANCE TRAINS THAT ARE AT RISK.
 
CORRIDORS ARE ALSO IN AMTRAK'S CUT-BACK PLANS.
 
Perhaps we've all (myself certainly included) been so focused on Amtrak's plans to cut the National Network routes to three times per week in 2021, that a parallel threat to the various corridor and regional services has been missed. This quote is from Trains Magazine's Bob Johnston's very astute Newswire story on the 2021 Amtrak Tri-weekly Service announcement. There was a direct promise to cut corridors (both NEC and Regional) included as well.
 
Amtrak spokeswoman Christina Leeds said in a statement, “We are still in the planning phase, so we can’t answer most of your questions at this time. Due to the long-term impact of COVID-19 on ridership, Amtrak has made the decision to operate with reduced capacity through FY21. We are planning 32% fewer frequencies on the NEC, 24% fewer for our state-supported service and plan to reduce most long-distance trains to three days per week, beginning Oct. 1, 2020. Our goal is to restore daily service on these routes as demand warrants, potentially by the summer of 2021. We will use specific and measurable metrics to guide our restoration of frequencies and service.”
 
It may well be appropriate that Amtrak plans to restructure the NEC. We know they are very slowly bringing back the ACELA EXPRESS service (understandably given its nearly exclusively business-focused clientele). But the situation with state-supported corridors is more interesting. These routes run solely because states request them, and pay for them--based on the frequency/level of service previously agreed on offer.
 
The Amtrak portion of the CARES Act contained $239,000,000 in FY 2020 to help the states off-set losses on these "less than 750 miles" regional trains. And indeed most of these services were reduced--or in some cases like the VERMONTER, ETHAN ALLEN, ADIRONDACK, DOWNEASTER and PERE MARQUETTE temporarily suspended. But both the DOWNEASTER and PDERRE MARQUETTE lines are already seeing at least a partial service recovery. This is also true for the HIAWATHA corridor from Chicago to Milwaukee.
 
But how can Amtrak know now that its state-partners will want to run 1/4 fewer trains in FY 2021? And this is what Amtrak proposes if it gets the over $1B supplement it is demanding for that year!
 
The state-supporter regional trains are required by law to receive full operational funding from those state partners. So is Amtrak saying to Maine and Washington state--for example--that yes, you normally have five daily DOWNEASTER/CASCADES trains--but we will only run 3 of them, even if you want them all restored"? Does California agree to drop PACIFIC SURFLINER service by four-five daily trips through at least September 30, 2021? Does Michigan want only two daily Detroit-Chicago trains? The answer may be yes--because of state budget woes--but Amtrak can't know that now.
 
And of course in the present fiscal period the states got the $239m in CARES $ to off-set this problem. The correct approach to this from Amtrak should be to tell the Congress and the states what would be needed to go back to the norm and why the existing contracts are now purportedly not enough.
 
Amtrak does not do this in its FY 2021 budget request with any business or product line. Indeed, after demanding a $1B supplement to its normal budget for FY 2021, it still threatens these cuts. And Amtrak claims the less than 750 mile corridors are its future?
 
Amtrak can and should adjust the NEC within reason at its own initiative. It is worth noting, however, that Amtrak still plans to start spending $400,000,000 on upgrades to 30th Street Station in Philadelphia in 2020/2021.
 
The purported savings from the long-haul network cuts are only $150,000,000. I suspect every NEC train could also return if this project was allowed to wait. Unlike the Portal Bridge replacement project, this work in Philly is an example of something nice, but not essential!
 
And as noted above, less than half of this single station renovation spending would preserve daily service on the national network as well.
 
When it comes to its state partnerships things with Amtrak should be different. Unless Amtrak has some miraculous undisclosed foresight into the intentions of its state partners, this promise to cut 24% of the state-supported regional trains is at best an arrogant threat. This is particularly so as applied to trains which Amtrak already bills directly to the states.
 
Remember that before the pandemic Amtrak President Richard Anderson announced the carrier would show an operational profit in FY 2020 by counting the state-supported service revenues as positive income.
 
What we really see here is Amtrak's eternal institutionalized pessimism. They, of course, do not know now how things will be next year in terms of ridership or revenues--but the trends already in place, and proven in their own April and May reports, belie the need for everything they propose.
 
This post will close with Bob Johnston's spot on analysis from the Trains Newswire of how well system-wide Amtrak ridership and revenues have already risen just between April and May. Of course the irony here is the National Network brought in more income than all corridors (NEC and regional) combined, but all product lines are on the rise.
 
"While ridership and revenue remains suppressed because of the pandemic, long-distance ticket revenues climbed 71%, from $6.8 million to $11.6 million, between April and May. Operating with approximately the same frequencies, Northeast Corridor billing rose about 60% from $1.5 million to $2.4 million, and state supported trains generated less than a 50% increase, from $2.3 million in April to $3.5 million in May. So existing long-distance service, mostly operating seven days a week, provided almost double the May revenue of Corridor and state-supported operations".
 
With a trend like this, why plan now to garrotte your future recovery? Only at Amtrak?!!
 
Tell your Congressional Delegation to stop this even if you only use Corridor/Regional trains.
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Posted by JPS1 on Thursday, June 25, 2020 3:14 PM
The new norm should be based on market demand.  That is how a real business operates.  Amtrak is supposed to be a business, although its critics seem to believe it is a welfare agency.
 
How do you know what discussions Amtrak management has had with state officials about any service adjustments for the remainder of this year or FY21?
 
Amtrak has not released its Monthly Performance Report for May 2020.  What is the basis for the claim that long-distance revenues increased from April 2020 to May 2020?  Moreover, revenues are only part of the accounting equation.  Operating expenses as well as fixed charges need to be considered.  The key question is the bottom-line impact? 
 
I have written to management as well as my representatives in the House and Senate.  I have told them the smart thing to do would be to kill the long-distance trains and redirect the ultimate savings into upgrading existing corridors or establishing new ones.
 
The national debt is $26.2 trillion; it is estimated to surpass $29 trillion by the end of the fiscal year.  State and local government debt is another $3.1 trillion.  The federal debt is 122 percent of GDP, which is approximately WWII levels; total government debt is 136 percent of GDP.  Using debt financing to run little used trains, irrespective of the cause, is irresponsible. 
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Posted by Gramp on Thursday, June 25, 2020 4:18 PM

At this point, would rather see an orderly shut down of the whole Amtrak system. Pay the employees their severance be it 6 years or what the contracts are. Let the states/regions set up what service they deem necessary.  Get the Feds out of the people-hauling business. It's got a lot more important issues to deal with. 

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Posted by BaltACD on Thursday, June 25, 2020 5:55 PM

Gramp
At this point, would rather see an orderly shut down of the whole Amtrak system. Pay the employees their severance be it 6 years or what the contracts are. Let the states/regions set up what service they deem necessary.  Get the Feds out of the people-hauling business. It's got a lot more important issues to deal with. 

At this point in time I DO NOT TRUST the government of the USA.

Never too old to have a happy childhood!

              

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Posted by JPS1 on Thursday, June 25, 2020 8:07 PM

BaltACD
At this point in time I DO NOT TRUST the government of the USA. 

I'll up you one.  Or maybe more!  I don't place a lot of trust government at any level.  Some of the worst abuses occur at the state, county, and city level.  

A significant portion of my career involved interacting with government regulators at the state, city, and county level.  The ignorance that they displayed regarding what they supposedly were regulating was mind boggling.

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Posted by alphas on Thursday, June 25, 2020 10:12 PM

I had to work many years with all levels of government in the USA as well as in foreign countries.    The non-national levels in some of the foreign countries were the worse as too many of them woudn't do anything without bribes and they were all very bureaucratic.    The US Fed gov. could be maddening because its personnel practises reward those who don't make mistakes so very few of its civilian employees showed any initiative.    Many of the states were the same, particularly those that had unionized employees.   Some of the states and many of the local governments simply had way too many incompetent employees.   Some state and local governments actual weren't too bad.     They were generally the low or non-unionized ones who somehow avoided having too much incompetence and were, or located within, less populated states.    

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Posted by daveklepper on Friday, June 26, 2020 2:19 AM

Again, I think my station restaurant scheme can make the LDs worth riding again and at least break even.  Sleepers would have to have charges for their incremental costs and run only in those markets where travelers are willing to pay the price, but most LDs would have an upgraded coach class, a business class.  And the broad manue restaurant food would be available to all passengers, not included in the ticket prices.

LDs have been a part of American civilization, and lots would be missing if they were ended.

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Posted by JPS1 on Friday, June 26, 2020 9:56 AM

daveklepper
 Again, I think my station restaurant scheme can make the LDs worth riding again and at least break even.  Sleepers would have to have charges for their incremental costs and run only in those markets where travelers are willing to pay the price, but most LDs would have an upgraded coach class, a business class.  And the broad manue restaurant food would be available to all passengers, not included in the ticket prices. 

LDs have been a part of American civilization, and lots would be missing if they were ended. 

Interestingly, the IG as per Food and Beverage Services, dated October 31, 2013, found that Amtrak could substantially reduce the cost of F&B by outsourcing it.  It estimated that doing so would reduce labor costs by $51.4 to $60.5 million along with other savings.

The labor unions pushed back vigorously.  If I remember correctly, Amtrak attempted to outsource F&B on the Empire Service trains between NYC and Albany, but the push back was so severe that it had to drop the effort after a few days.  

As soon as Amtrak's management proposes meaningful cost reduction strategies, at least for the NEC and so-called national network, the unions run to the Congress, where they are usually able to find support to block any meaningful steps to reduce costs.  

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Posted by Electroliner 1935 on Friday, June 26, 2020 12:13 PM

Isn't the food service on the Cascades and the Downeaster lines non-Amtrak? 

Also P/O the problem on the overnight LD trains is that the staff has to be on the train for the duration of the trip. If the food service were contracted, could it be set up for the food to be rolled on to the train along with the serving people at meal times and then taken off after dinner. I remember a trip on the NYC's Cincinnati-Chicago where the diner was added at Indianapolis to serve lunch enroute to Chicago. Obviously, the switching cost was considered to be less than the savings. 

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Posted by Flintlock76 on Friday, June 26, 2020 12:56 PM

JPS1

 

 
BaltACD
At this point in time I DO NOT TRUST the government of the USA. 

 

I'll up you one.  Or maybe more!  I don't place a lot of trust government at any level.  Some of the worst abuses occur at the state, county, and city level.  

A significant portion of my career involved interacting with government regulators at the state, city, and county level.  The ignorance that they displayed regarding what they supposedly were regulating was mind boggling.

 

You said it!

I think most of us would be amazed at the amount of office-holders, not all of course, but many, who've never been in out in the "real world" and have never held a "real job."  I think most would recognize what I mean by a real job without my going into specifics.  Hell, we've got a young woman running for mayor of Rcihmond, 28 years old, who went straight from college into political staff positions for various local office holders and has no other work experience.  What does she know of how the real world operates?  What does she know about real people from all walks of life?  I don't expect her to beat the incumbent, but you see what I mean? 

Trusting the federal government?  Many of us who lived through those years lost it during Vietnam.  But hey, sometimes you have to trust 'em on something.  They don't get it wrong all  time.

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Posted by JPS1 on Friday, June 26, 2020 1:05 PM

Electroliner 1935
 Isn't the food service on the Cascades and the Downeaster lines non-Amtrak? 

I believe that you are correct.  But the Cascades and the Downeaster are state supported trains.  The states contract with Amtrak to operate them.

The IG's report focused on Amtrak's trains.  Acccording to the report, approximately 99 percent of the loss on F&B was incurred on the long-distance trains.  This is the root cause of the problem. 

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Posted by York1 on Friday, June 26, 2020 1:13 PM

1.  I think JPS1 brought up an important point.

Outside the NEC, Amtrak is trying to run a 21st Century railroad using 1950s ideas.  A move to change Amtrak is met with opposition from unions and powerful Congressional office holders.  The response to reform is that if we just spent more money, Amtrak would be a success.

 

2.  The discussion of workers who have no real life experience reminds me of something school administrators have known:  teacher colleges are often staffed and run by professional educators who have no real-world experience in actually teaching.

York1 John       

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Posted by Flintlock76 on Friday, June 26, 2020 3:19 PM

York1
2.  The discussion of workers who have no real life experience reminds me of something school administrators have known:  teacher colleges are often staffed and run by professional educators who have no real-world experience in actually teaching.

So I've heard, first hand, and that would include educational theorists.

I've lost track of how many times I've been in a teachers lounge or workroom fixing a copier and overheard conversations that typically included this:

"They want us to do WHAT?  WHO comes up with this ***?  When was the last time they were in a classroom?  Have they EVER been in a classroom?  Why don't they ask US before they promulgate these stupid directives?"

You hear a lot when you're unobtrusive and blend well into the background, trust me.

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Posted by SD70Dude on Friday, June 26, 2020 3:27 PM

Service workers make the best spies

Greetings from Alberta

-an Articulate Malcontent

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Posted by York1 on Friday, June 26, 2020 3:47 PM

I've mentioned before -- the most popular person ever to visit a school is the copier repairman.

York1 John       

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Posted by Flintlock76 on Friday, June 26, 2020 5:30 PM

SD70Dude

Service workers make the best spies

 

BWA-HA-HA-HA-HA!!!!!   Devil

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Posted by Flintlock76 on Friday, June 26, 2020 5:32 PM

York1

I've mentioned before -- the most popular person ever to visit a school is the copier repairman.

 

You know why? 'Cause by the time I got there all the rage had worn off, and all they felt was relief at the sight of me!  

But my God, what they did to those machines!  Ay-yi-yi!!  Surprise  Ick!  Crying

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Posted by Convicted One on Saturday, June 27, 2020 11:35 AM

JPS1
Amtrak is supposed to be a business, although its critics seem to believe it is a welfare agency.

I would argue that many of Amtrak's proponents seem to think of it as a welfare agency, as well. 

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Posted by GERALD L MCFARLANE JR on Saturday, June 27, 2020 6:51 PM

JPS1
Amtrak is supposed to be a business, although its critics seem to believe it is a welfare agency.

It's supposed to be a business as much as the United States Postal Service is a business, both are supported by subsidies.

JPS1
The national debt is $26.2 trillion; it is estimated to surpass $29 trillion by the end of the fiscal year.  State and local government debt is another $3.1 trillion.  The federal debt is 122 percent of GDP, which is approximately WWII levels; total government debt is 136 percent of GDP.  Using debt financing to run little used trains, irrespective of the cause, is irresponsible. 

As for this statement, you really should read what Warren Buffet has to say about the U.S. government and  deficit spending.  Just look up why Warren Buffet says the government will never default on debt.  It might open your eyes some to the above garbage.

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Posted by JPS1 on Saturday, June 27, 2020 7:49 PM

GERALD L MCFARLANE JR
 As for this statement, you really should read what Warren Buffet has to say about the U.S. government and  deficit spending.  Just look up why Warren Buffet says the government will never default on debt.  It might open your eyes some to the above garbage.

Warren Buffet's expertise is investing in marketable securities.  He is not an expert on national debt.  Moreover, over the last decade Warren has lost of bit of his edge.  His investments have done no better than the S&P500.

No one said the U.S. would default on its debt.  But it can be a burden.  Ultimately, it has to be serviced one way or the other.  

After WWII the U.S. was able to work down the debt.  From a high of approximately 122 percent of GDP at the WWII, it was able to reduce it to approximately 25 percent of GDP by 1975.  How did it do it?

Although he is no longer with us, one of the best authorities on the subject was Martin Feldstein.  He studied the issue extensively and found two major drivers contributed to the reduction of the debt from the end of WWII to 1975.  The first was real growth in the economy.  The other was monetization of the debt, which means inflation.

As John Maynard Keynes point out, inflation is like a thief that comes in the middle of the night and steals the wealth of its citizens without their knowing it.

At some point many financial experts believe that excessive governmental debt can crowd out private debt, which can have negative consequences for the economy. 

The bottom line is simple.  Using debt to fund trains that carry less than 1 percent of intercity travelers is a poor financial decision irrespective of how they are funded.  

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Posted by charlie hebdo on Saturday, June 27, 2020 8:46 PM

There are good reasons to refocus Amtrak's funding into running trains that make sense as transportation.  Amtrak's miniscule contribution to national debt is a triviality. 

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Posted by GERALD L MCFARLANE JR on Saturday, June 27, 2020 11:54 PM

JPS1
The bottom line is simple.  Using debt to fund trains that carry less than 1 percent of intercity travelers is a poor financial decision irrespective of how they are funded.

The amount of money Amtrak gets in relation to the overall budget is miniscule, something like less than .1% if not even less than that.  I also don't think it's being funded by debt so much unless it comes out of the general discretionary portion of the budget.  Either way, doubling the amount of money they currently get could easily increase the percent of intercity travelers they carry.  If they had the proper management and marketing to take advantage of the current situation, which they don't.  We could also have done what France did with the airline bailout, restrict them to longer corridors and focus the short corridors towards rail.

The biggest deficit hog is the DoD, and they did an internal investigation(that was buried of course), that showed $125 Billion dollars in waste annually. (You can probably find it on Google).  The reason it was buried was because the DoD was afraid Congress would cut their budget by said $125 Billion dollars, which they probably would've at the time.  Of course they could've been smart, admitted there was a lot of waste and then turned around and funneled that money into real items, then we wouldn't have had to boost spending to the rediculous amount that Trump is giving them.

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Posted by alphas on Sunday, June 28, 2020 12:13 AM

Presidents can't get anywhere on funding without the approval of both houses of congress.    One problem the country has is congress often pushes for military spending the military itself doesn't want.     In order for the military to get what it wants it has to accept what congress demands.     The other major problem right now is the real skilled positions in the military have had much better paying job offers from the private sector.   Bonuses being paid to get skilled pilots to continue their military career were amazing in recent years.    Noe if the economy doesn't right itself, that won't be as much of a problem.     

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Posted by MMLDelete on Sunday, June 28, 2020 8:23 AM

If the government spent a small fraction on Amtrak of what it spends on motor vehicle transportation and air travel, Amtrak would have all the subsidy it needs to run a good national system.

Governments build airports and provide air traffic control. Governments build street, roads and highways. If the government built and maintained Amtrak's infrastructure, it too could be "profitable."

Let's not abandon passenger rail. Instead, let's do like smart countries everywhere and provide ample support for this third leg of the surface transportation triad. Trains have their place in all civilized nations.

Killing off the LD trains would be a cruel blow to this country. It's the only way one can travel while relaxing and seeing the great splendor of our nation. And it's a part of our heritage.

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