Amtrak a success? Depends how you look at it

Posted by Malcolm Kenton
on Thursday, December 20, 2018

Amtrak Senior Executive Vice President Stephen Gardner wrote a rare online op-ed column that trade publication Railway Age ran yesterday. It responds to dozens of recent op-eds about his company, most of which maintain that Amtrak is headed in the wrong direction, mainly in the areas of reliability and customer experience. In rebuttal, Gardner appears to cherry-pick examples of failure in alternatives to the Amtrak model without bothering to look into other factors that may have hampered their performance. He also focuses solely on financial statistics without considering the on-the-ground passenger experience that forms the bulk of most observers’ impressions of Amtrak.

Composite of signs of wear in the interiors of Amtrak Superliner cars. Collage by Malcolm Kenton from Internet sources.
Here are some flaws with three of the examples Gardner cites for the poor performance of non-Amtrak passenger train operators:

SNCF, the French national railway: This is hardly an apples-to-apples comparison with Amtrak because SNCF’s system is much more extensive, it owns and maintains much more equipment, and provides adequate service (i.e. more than one daily departure in each direction) within 20 miles of many more French households than Amtrak does to American households. Also, because SNCF is also France’s national rail infrastructure owner, its accounting structure differs significantly from Amtrak’s. It is likely that equipment and infrastructure maintenance account for a greater percentage of SNCF’s operating deficit than Amtrak’s.

Brightline: Gardner claims that the privately financed Miami-West Palm Beach service only recovered 7% of its operating costs from the farebox in its first nine months of operation. First, it is not fair to pass judgment on Brightline until it completes its extension to Orlando, as its entire business model is predicated on serving the underserved Central Florida-South Florida market, consisting primarily of tourist travel. Second, Brightline’s model is also based on deriving income from real estate surrounding stations — its owners and investors never intended for it to be operationally self-sufficient on farebox revenue alone.

Iowa Pacific’s Hoosier State: Gardner says this partial privatization experiment ended when Iowa Pacific “south increased subsidies after only 17 months.” There is much more to the story than that and it would be impossible to cover all the details here. Part of the issue was Iowa Pacific’s financial mismanagement, which reflects poorly only on that company and not on the whole concept of states contracting out passenger train services. Another issue was that the Indiana Department of Transportation failed to consult enough people with experience with passenger rail before writing unrealistic assumptions and expectations into its request for proposals and contract. This led at least two well-respected firms that already operate U.S. commuter rail systems under contract to opt out of bidding for the Hoosier State contract.

Gardner also touts that Northeast Corridor operations (Acela Express and Northeast Regionals, but only the portion of the latter’s routes that serves the Boston-Washington spine) “generated a $526 million operating surplus for reinvestment in NEC assets.” He fails to mention, however, that maintenance of NEC infrastructure (track, bridges, signals, electrification) is in fact carried out at a loss. This is easy to miss as Amtrak’s accounting system (as brilliantly explained by my colleague Bob Johnston in the January issue of Trains; see “Amtrak’s money mystery, ”page 50) puts infrastructure costs for the NEC in the capital column, while infrastructure costs for non-NEC routes (primarily track access fees paid to host railroads) are in the operations column.

Amtrak workers at the West Baltimore MARC station in Baltimore, Md. in March 2017. Photo by Elvert Barnes / Wikimedia Commons.
But more importantly to its customers and to passenger rail’s staunchest allies than all these figures are what the trains are actually like. Most who ride Amtrak, particularly in the majority of the country that is served only by National Network trains, come away with an image of run-down and unreliable equipment, chronically late trains, and an ever-worsening quality of on-board service, of which food and beverage service is an important component. In his opening paragraph, Gardner dismisses these concerns out of hand, negating long-distance trains as “account[ing] for only 15% of Amtrak ridership” and failing to respond to legitimate questions about the quality of the product Amtrak offers. 

Their statements indicate that Amtrak’s senior management does not see the trains that constitute and unite its national network as a viable or vital part of the railroad’s future, but without them the company falls apart and its political support dwindles. The interstate trains cannot be expected to limp along forever without a major investment in new equipment and a recommitment to doing right by passengers.

“Amtrak is growing ridership, improving its financial performance and investing it its service,” Gardner asserts. The traveling public can be forgiven for not taking these words to heart, as the only service that the company has yet to actually invest in fully re-equipping is the Acela. While the plan to begin to replace the P42 diesel locomotives is a laudable start, I will remain unconvinced of Gardner and his senior colleagues’ sincerity in this conviction until I see a solid plan to replace the Amfleet and Superliner fleets. I also look forward to seeing management’s desire to improve the operating ratio and cut costs at least matched by a desire to meaningfully address customers’ concerns about many aspects of product quality, including food and beverage service.

Disclaimer: Malcolm Kenton is a freelance contributor to Trains and an independent consultant specializing in writing, research and communications with a focus on passenger rail and transit. His clients include Herzog Transit Services, Inc. and the Association of Independent Passenger Rail Operators. He is also an avid and frequent train traveler. The views expressed in Observation Tower are solely his own and do not reflect the positions or business interests of any of his clients.

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