Defining the Destructive Power of a State-Owned Enterprise:
Political Hemineglect, Marketing Myopia, and Anti-Competitive Monopoly
By M. E. Singer
Apparently, an integral aspect of the devious plan hatched at Amtrak’s HQ bunker to derail the long distance trains has included to consciously prevent any potential possibility to be misconstrued as a favorable element of long distance rail travel. As if dropping Chaff as a counter-measure to deceive radar echoes of Congress, Amtrak has been furiously turning over every piece of ballast to make its deceptive case against the long distance trains.
Collateral Damage by Amtrak’s “Fake News” Attack Against Long Distance Trains-National Park Tour Trains:
Such willful, mischievous dis-information has included: claiming lack of PTC on route segments to cut route, or, destroy continuity and substitute with bus (although segment exempted by the FRA); denigrating to no return on-board dining and beverage services; de-staffing depots; breaking connections (SB “Coast Starlight” to EB “Southwest Chief” in LA); scheduling pathetic early or late arrivals at end points (EB “Sunset Limited” arrive New Orleans and WB “Sunset Limited” arrive LA); claiming traffic decline (but shortening consists, broken connections); eliminating PVs and restricting to selective end points; eliminating charter and special trains; defying GAAP by loading up long distance allocation of costs from the NEC and corporate overhead; no advertising or marketing; no proforma to replace/build new equipment to increase frequencies, expand routes, increase consists, and provide seasonal services.
This explains why we no longer see the traditional marketing push in late winter/spring to book all inclusive rail tours to our western national parks, as Amtrak has deemed that market but another revenue base to dismiss; all the while ensuring no private venture seizes the unmet opportunity. However, just in this month of July, we have seen two major articles on our national parks, neither mentioning Amtrak; or referencing past private railroad seasonal operations; or, even the once and future American Orient Express (AOE).
In the LOS ANGELES TIMES story, “How To Cope With The Crowd’s At The West’s Busiest National Parks” (1 July), it vividly pointed out the growing problem with over-crowding and auto traffic; with no resolution in sight. THE WALL STREET JOURNAL ran “The Great American Road Trip Goes Luxe-For Better Or Worse” (12 July) which pointed out how travel firms are creating detailed, deluxe itineraries that dramatically have upgraded “the old-fashioned road trip.” The per diem costs for such trips are not inexpensive, as they include knowledgeable guides, top notch hotels and food, plus connections. The emphasis is on no need to expend time planning such trips, or, reliving any of the other issues associated during the era of road trips.
What Motivates Amtrak to Ignore Market Opportunities or Prevent Development by Other Sources
Their is a rationale explanation for the on-going political circus inside Amtrak’s hyper-politicalization within its bunker on the Potomac. Amtrak is a poisonous concoction of hemispatial neglect and marketing myopia that reinforces its fiercely anti-competitive, purest version of a state-owned enterprise monopolist. No other business in transportation focuses upon only one dimension of viewing their purpose in business as defined by one business line; dismissing all other business lines as irrelevant. It would be as if Delta Airlines was only concerned with Atlanta-NYC flights, but not its Northeast Shuttle, transcons, let alone its international flights; actively endeavoring to destroy those other operations by refusing to see how inter-linked they are to Atlanta-New York flights; with investment, for those other business lines to also stand on their own.
1) Commitment to Political Hemineglect:
Clearly, in the case of Amtrak, its Board and management suffer from a severe form of “political hemineglect” by only seeing and be concerned with the NEC. The National Network of long distance and state-supported trains have only one purpose–to contribute their funds derived from an unaudited, non-GAAP compliant excessive allocation of costs to subsidize Amtrak’s NEC “black hole.” In medical terms, this is called “Hemispatial Neglect,” a medical syndrome where half of the patient’s world does not exist, impacting present memory and recall perception.
2) Embrace of Marketing Myopia:
This poisonous perspective of Amtrak’s business raison d’être is further exacerbated by its defiant persona as defined by marketing myopia that leads to its self-deceiving cycle as a “belief that there is no competitive substitute for the company’s product.” Indeed, Amtrak personifies the pure definition of marketing myopia as “a situation when a company has a narrow-minded marketing approach and it focuses mainly on only one aspect out of many possible marketing attributes.”
Accordingly, Amtrak has seized upon the neglect of the media and lack of institutional knowledge of Congress who persistently have failed to “connect the dots” to appreciate the unique opportunity afforded by rail to our national parks; how Amtrak over the past fourteen years has not supported the concept of privately-operated tour trains. So, once again, the lack of competent congressional oversight has allowed Amtrak to roll “snake eyes” towards contributing to the economic development of states home to national parks; as well as the economic opportunities entrepreneurial PV owners and special train operators eagerly sought to serve. Simply, this is the classic mannerism of an unregulated monopoly that has honed its singular attitude, “if we are not doing it, not planning to do it, and will not do it; we do not want anybody else to do it either!”
3) Arrogant Perspective of an Anti-Competitive Monopolist:
Given how under CEO Anderson Amtrak has been stabbing with a bloody bayonet by now everything related to long distance trains, such inappropriate, anti-competitive behavior must be judged within the classic concept of how “ordinarily the harm from monopolies are higher prices, less output, and reduced quality.” As well, these other points also clearly define Amtrak’s arrogant, Kremlin-like business mentality: we have experienced less innovation in the rail markets as dominated by this monopoly; that with no competition Amtrak faces less pressure to change its opaqueness; without viable competitive alternatives the bargaining power for any PV or private operator is quite uneven. Also interesting is how we have experienced Amtrak’s monopoly having a chilling impact on any passenger-related innovation requiring consumers to contend with a lower quality product without options.
Why No Privately-Operated National Park Trains:
Important to national park privately-operated trains are the significant costs imposed by Amtrak’s control of the key solitary platform (e.g., Class 1 track access; insurance, depots, etc) that is used to exclude rivals (e.g., Amtrak’s current grab for Chicago Union Station to prevent any third party operators of intercity, long distance, or O’Hare Airport trains). In my research to validate this opinion, I came across this case from the U.S. Supreme Court: Aspen Skiing Co v. Aspen Highlands Skiing Corp, 472 U.S. 585, 601 (1985). In essence, substitute Amtrak decision re PVs and charter/special trains for the defendant’s name and understand the court’s ruling how “the unilateral termination of a voluntary (and thus presumably profitable) course of dealing suggested a willingness to forsake short-term profits to achieve an anticompetitive end.”
The Time Machine of Reality:
There was a time when we did not have to abide by and suffer from this statement of no choice in a USA TODAY article (2/21/17) on touring national parks: “Amtrak is the sole national passenger rail service provider in the United States and therefore the primary means of traveling by train to some of America’s national parks.” The bottom line is how our railroads once relied upon meaningful competition to distinguish their deluxe trains, their faster or more direct routes, and certainly, their expertise and knowledge of western national parks they built, advertised, and served, including:
Northern Pacific: Yellowstone National Park; Old Faithful Inn.
Union Pacific: Yellowstone National Park; West Yellowstone Inn/restaurant.
Great Northern: Glacier National Park; Glacier Park Lodge and Many Glacier Hotel.
Santa Fe: Grand Canyon; El Tovar Hotel.
Southern Pacific/Santa Fe: Yosemite National Park.
Southern Pacific: Sequoia National Park.
Growing up in a middle class family in Evanston, IL in the 1950s/early 1960s, I lived nearby and followed the C&NW main line between Chicago-Milwaukee. Although some seasonal trains were being eliminated, until 1958, the C&NW ran its “North Woods Fisherman 400” overnight from Chicago, thru Evanston, to the many prime fishing towns en route to Ashland, WI. This was in addition to its daytime companion, Bi-Level ” Flambeau 400″, as well as the Bi-Level “Peninsula 400” to Ishpeming, MI. Already, by 1961, thru train service between Chicago-Mackinaw, MI was cut despite the popularity of Mackinac Island, and the difficulty continuing today of the long, harsh drive, or, expensive flights that do not go all the way.
Fortunately, I hit every major western national park from Chicago traveling in coach in the 1950s and early 1960s; later on the American Orient Express (AOE) in deluxe sleeper with my daughter. Forget Europe and cruises, as who can compete with these national park itineraries that were available everyday at a time when the railroads, despite being pounded by federal and state modal competitive bias and taxes, continued to compete and offer the best of the national parks. Later, the AOE was an admirable successor to those railroads. This time machine of reality included:
Summer, 1957: Simply going to the Union Pacific ticket office on LaSalle/Madison in Chicago to book its “YRG” (Yellowstone/Royal Gorge)Tour. Who can imagine traveling on these wonderful long distance trains and with direct service?
UP “National Parks Special” Chicago-direct to West Entrance Yellowstone Park.
Breakfast upon arrival at UP restaurant-West Yellowstone.
Riding yellow “Jammer” buses touring Yellowstone, Grand Teton, Jackson Hole.
UP overnight (unnamed train) Jackson Hole-Salt Lake City.
DRG&W “Royal Gorge”--Salt Lake City-Colorado Springs; including 10 minute stop on ballast in Royal Gorge.
MP “Colorado Eagle”–Colorado Springs-Denver.
UP “City of Denver”–Denver-Chicago.
Summer, 1959: Simply going to the Great Northern ticket office on Madison between Wabash/Michigan in Chicago to book its complete US/Canada Glacier Park Tour. To think we had a dedicated train direct to East and West Glacier stops.
GN “Western Star”–Chicago-direct to East Entrance Glacier Park via Grand Forks and Great Falls.
Note: Overnight Chicago-St. Paul “Western Star” Pullmans and coaches via CB&Q “Black Hawk” with Q heavyweight diner/lounge. At St. Paul, diner and coffee shop/grill from 1947 “Empire Builder” added; Pullman-lounge Mountain-series added from 1951 “Empire Builder.” Riding red “Jammers” throughout the park and to Canada (Waterton National Park).
GN “Western Star”--West Entrance Glacier Park (Belton)-direct to Chicago.
Summer, 1962: Simply going to the Santa Fe ticket office at Jackson Blvd/Michigan Ave in Chicago to book Cartan Tours trip to west coast. Truly, “Santa Fe All the Way”
AT&SF “Super Chief” (coach)–Chicago- Flagstaff (Grand Canyon). Only AT&SF could operate full diner and lounge cars in this coach section offering three possible trains during summer to LA (“El Capitan,” “Super Chief”-first, “Super Chief”-coach).
AT&SF “San Francisco Chief”–Flagstaff-Richmond (SF).
AT&SF “Golden Gate”–(SF) Richmond-Merced (Yosemite Park).
AT&SF “Golden Gate”--Merced-Bakersfield/bus to LA.
UP “City of Las Vegas/”Las Vegas Holiday Special”–LA-Las Vegas. Boring trip despite Cajon; inferior products on buffet.
UP “The Challenger”–Las Vegas-Chicago. Great to see #104-1 come in with 19 Pullmans from LA/SF; our all coach #104-2 included Milwaukee Road Super Dome in consist; lacked full diner and lounge–only lunch counter diners.
Summer, 1966: Picked-up interline tickets from Santa Fe ticket office in Chicago for my father’s first visit to the West Coast.
AT&SF “San Francisco Chief” (SF) Richmond-Merced (Yosemite Park).
SP “San Joaquin Daylight”–Merced-LA. Interesting during airline strike articulated coaches and French Quarter lounge operated in consist. No dome over Tehachapi Pass.
AT&SF “San Diegan” LA-SD. Busy weekend; crowded bar car.
AT&SF “Super Chief” –LA-Chicago (first Pullman trip; in re-build Indian-series 11 DBR during airline strike).
By Summer, 2004 the only way to ensure my daughter could see the major western national parks on one trip, in one season was to combine two tours into one complete trip on the American Orient Express (AOE). This was accomplished by:
AOE Albuquerque-Grand Canyon (directly backed in on ex-ATSF Grand Canyon Railway track from Williams!)
AOE Flagstaff-Bryce/Zion Canyons-Yellowstone (UP destroyed all bridges when direct line between Victor-West Yellowstone closed in 1972); Jackson Hole.
AOE Jackson Hole-Salt Lake City.
AOE Salt Lake City-Victor (Yellowstone; Jackson Hole).
AOE Yellowstone-Helena-West Glacier Park.
Red Jammer tour in Glacier.
AOE East Glacier Park-over Stampede Pass-Seattle.
In retrospect, we now understand the extensive financial investment of working capital required to acquire and operate a private tour train. From experience, we also know that the American European Express and Grand Luxe Express failed when they attached their equipment onto scheduled Amtrak trains. We know Pullman Rail Journeys also failed by attaching its equipment onto the elongated schedule of the “City of New Orleans,” as well as required to meet the financial heft required by Amtrak to add a second locomotive.
However, American Orient Express (AOE) successfully operated two dedicated trains of elaborately furnished first class, dining, and lounge cars; during the summer, one operated throughout Canada; the other for the western national parks (with ex-NYC “Century” observation car!). Why it was eventually sold and its format diminished when it became the Grand Luxe Express, requires a separate article. From personal experience in 2004, AOE offered a first class operation that provided the service and itinerary that required their high tariff; offering unique routing throughout both trips not available on Amtrak. The collateral damage from Amtrak’s anti-competitive philosophy surely explains much of the AOE’s demise, given that it relied upon Amtrak for two locomotives, crews and Class 1 access, on top of supplying an acceptable insurance to Amtrak.
Their is no doubt in my mind of the unfulfilled demand for such dedicated rail tour trains today that would offer far more than the bare bones reliance upon just Amtrak for any current rail touring of the western national parks–unless you really like long bus rides. If Amtrak was not stuck on its one dimensional perspective, long ago it could have initiated its own summer season service between Chicago-Denver utilizing the “Auto Train” Superliners stored off season in the Stanford, FL yard. It did not, and will not ever be so entrepreneurial with a long distance train, when it is exclusively focused upon the NEC. In comparison, it is interesting to note how the non-Amtrak Alaska Railroad has so aggressively embraced tour-oriented trains, with the inclusion of dedicated, self-contained, double deck vista cars from multiple cruise ship lines, e.g., Holland America, Celebrity, Royal Caribbean, Carnival, etc. Apparently, both Alaska Railroad and the cruise ship industry successfully avoided Amtrak’s marketing myopia and understand how to optimally serve and benefit from this market opportunity.
Regrettably, Amtrak’s intrinsic attitude to prevent opportunities to serve our national parks with PVs, special trains, and private trains continues to escape scrutiny by Congress and the media, despite this anti-competitive gesture being so demonstrably harmful to consumers. Given the extent of the significant contribution provided by national park trains, this market becomes yet another opportunity deliberately missed by Amtrak, ensconced in its Potomac swamp, with blinders to only look north and south upon its NEC.