The Ghosts of the Past Have Returned to Haunt the Passenger Train
As one fortunate to experience our great passenger trains throughout the 1950s and 1960s, it is with much regret I hesitantly approach this topic. To best explain what is happening once again to threaten the American passenger train, I rely on the famous malapropisms by the great Yogi Berra* to emphasize how Amtrak’s Board of Directors and Executive Management has caused its degeneration to the extent that it is well beyond controlling its own destiny.
As Amtrak now is at the precipice helplessly looking over, much accomplished by pushing itself internally, the question do we draw conclusions from the points below that we are helpless but to accept Amtrak’s inevitable fate? However, are we astute to successfully triage and save the relevant pieces; rebuilding a national passenger rail system within a more viable structure? Indeed, this issue will produce follow-up articles, including one in research now: “Repeal and Replace Amtrak’s Board of Directors: Persistently Whiffing Their Stewardship.”
“When You Come to a Fork in the Road, Take It”*
Just this past week, rail advocacy found itself upon a slippery slope, with Amtrak’s CEO issuing powder puff statements directed at the Class 1s re Positive Train Control (PTC) before Congressman Denham’s (D-CA) House sub-committee on Railroads, Pipelines, and Hazardous Materials. Once again, Amtrak evidenced its Potomac naïveté that continues to push it to the precipice of relevancy as a mode of transportation. Given such an opportunity to make the right impact before Congress, even if just at Rep Denham’s sub-committee, why would CEO Anderson fail to make the most poignant point: Congress needs to make a fiscal patch to its unfunded mandate for PTC, particularly for the Class 1s allowing track access for inter-city, long distance, and commuter rail traffic. Indeed, given Anderson’s vast background in commercial airlines, he certainly had the credibility to speak-up to remind Congress of its modal bias when it fully funded installation-and maintenance to this day-of the Air Traffic Control System, clearly for the benefit of the commercial airlines.
Instead, Anderson offered up a version of Br’er Rabbit threatening the Class 1s to pull Amtrak off of their tracks if they are not compliant with PTC by 31 December 2018. So PTC has now become today’s “briar patch,” which the Class 1s are eager to jump into. This would legally eliminate the dispatching and economic claims by the Class 1s, without inviting a black eye in the public and Congress. Or, given Washington’s machinations, will PTC become Anderson’s “briar patch” to allow Amtrak to walk away from the long distance trains at year-end in order to legitimately maintain Amtrak’s current focus and resources exclusively upon the Northeast Corridor (NEC)..?
Given the indifference to Amtrak by Secretary of Transportation Chao, we should not fail to anticipate Amtrak utilizing its own version of the “Hunger Games,” where only the NEC comes out with the dedicated financial resources. Given the mannerism how politics are played on the Potomac, including how Amtrak’s Board has obviously blessed the dilution of Generally Acceptable Accounting Principles (GAAP) for the benefit of the NEC, apparently without objections from Congress, GAO, or OIG. This is a perfect segue to how Amtrak itself is uninterested, or, uninformed, of the contribution to revenues-and the NEC by the long distance sector. Also interesting is how nobody dares to even mention the six year severance payout to union employees in any shutdown of the long distance sector. Consequently, this scenario of deliberate mis-information and political leveraging could become a reality.
As they say in Texas,“we need to get down to the level of weeds where the goats graze,” where we cannot help but see a convergence of the same issues from the past. Just as David P. Morgan’s superb analysis of “Who Shot the Passenger Train” (April, 1959 TRAINS) set the stage for understanding the disintegration of our passenger trains in the 1960s (with exception of AT&SF; SCL), we are indeed witnessing “deja vu all over again” with the current operational deficiencies and executive management indifference of Amtrak. Add into this mix an Amtrak Board with its own agenda to sacrifice the national system by tilting exclusively towards the NEC; a Congress through the decades that was content to make a Faustian pact with the unions, Northeastern real estate interests, and some rural areas, and than walk away from funding the economic requirements of a national passenger rail system. How Amtrak has torn itself internally and externally left by the wayside has inevitably produced this environmental decay increasingly pushing away revenue passengers.
“We Made Too Many Wrong Mistakes”*
Today, we are witnessing the ghosts of the past with these inconceivable parallels to the 1960s, including:
Running “the wheels off of the equipment” on the Superliner long distance routes with no proformas before Congress for replacement or rehabilitation orders in the future. Breakdown of power as well that cannot be maintained. (If CAF ever completes production, the single level long distance eastern/southern routes will have new sleepers, diners, and baggage; but no order for coaches or lounges.)
A telltale sign not requiring tea leaves to read, as both an experienced CEO railroader as Wick Moorman, and an experienced airline CEO as Anderson, know the basic facts-equipment life span is a known quantity; its replacement requires advanced planning to negotiate optimal pricing and securing funding.
In a clear salute to the 1960s, executive management is content to operate broken, dirty equipment. This can be attributable to insufficient equipment for scheduled time to properly maintain and repair; or lack of funding; or unacceptable supervision of yard workforce for maintenance and cleaning. (Industry talk reflected how only Mr. Claytor could “motivate” the yard workforces to do their jobs and conduct themselves appropriately.)
Executive management has not been required by the Board, and has persistently evidenced no interest to create proformas to support expanding new routes; increasing frequencies; seasonal services; overcoming artificial capacity limitations to fulfill peak travel demands–all elements that would contribute to increased revenues. Now that the new Acelas are on order, paid by the federal government, is Amtrak’s focus on equipment now complete; no need to go “to the well” again for other equipment? If so, Amtrak could be the first business not to strive to consistently increase revenues and be profitable-in all of its sectors.
Notice how quiet at Amtrak HQ the issue over On-Time Performance (OTP) has become in the past year, despite how it negatively impacts the customer experience with late arrivals and missed connections; causes the increased financial burden to the long distance sector for “unplanned” costs: labor overtime or additional T&E/OBS crews; increased Food & Beverage (F&B) costs for late trains; the cost of missed connections-hotels, taxis, F&B, alternative travel to accommodate missed connections, lost revenue on connecting trains; perhaps even the additional cost for track access and dispatching; certainly, the PR black eye. (How true the old adage-“a late train only gets later.”)
OTP has been sacrificed concomitantly to the continued padding of schedules to the disdain of passengers and the higher labor and F&B costs to Amtrak. Only the Class 1s are delighted, as Amtrak has further expanded the target zone for their achieving what is pathetically referred to as “Performance Bonus.” Bonus for what performance? How does OTP and other metrics play into this formula? Just like not knowing how Amtrak decided to sacrifice tax dollars to alleviate the Class 1s for their liability causing derailments wrecks, property damage business interruptions, injuries, and deaths, we lack the details of Amtrak’s contracts and bonus agreements with the Class 1s. Interestingly, Amtrak takes a legal corporate position for competitive secrecy on those issues; yet, walks away from pursuing new revenue opportunities that directly impact taxpayer funds.
Evidencing the demise and lack of first class, deterioration of food & beverage (F&B) services, and excessive pricing for sleepers is a clear indication Amtrak seeks to exit the long distance market. Couple these irrefutable facts to the lack of new equipment proformas; continued shots in the media and Congress as encouraged by executive management of the allegedly “huge deficits” of the long distance routes “covered” by the NEC, and we have the trifecta for a perfect triangulation formula to collapse the long distance operations.
Taking a page out of the “Who Shot the Passenger Train” cookbook recipes from the infamous 1960s, we will soon experience the withdrawal of sleeping cars, perhaps initially on select routes, or, reduction in consists. Just as in the past, first class services are cut, concomitantly with the downgrading and eventual elimination of dining and lounge services (e.g., “Silver Star”).
Cutting the Pacific Parlour concept with no offer of substitution has begin the withdrawal of the feature cars, to be followed up with the Superliner sightseer/cafe cars, by initially cutting the LSA and sales in that car. (Of course, the excuse will be to cut labor costs, and save on maintenance/repair, depreciation, and fuel costs. But fuel costs will only increase against the remanning revenue consist). Just look at what passes for a “lounge car” today on the single level eastern/southern routes. However, they too will go the way of the Superliner sightseer cafes. Pushing all lounge and cafe sales into the diner becomes a question of service and practicality, beyond work hours and union agreements, given how a 72-seat Superliner diner somehow cannot accommodate coach passengers at meal time, contrary to how the 48-seat diners achieved on the western streamliners operated by the privately-owned railroads.This certainly could be attributed to the inability of Amtrak executive management so focused on the NEC as to not appreciate history and understand how the western railroads always operated in the consist a full grill/coffee shop/lunch counter/lounge for all passengers. Certainly, this operational model relieved the diner, and provided good, nourishing meals far above the DQ level of the cafe cars today.
Yet, if Amtrak was really interested in revenues, do you not think for ‘a New York minute’ it would not invest in training LSAs in mixology to competently craft cocktails; provided the necessary condiments and tools of the trade? What explains Amtrak’s reluctance inability to secure beer kegs from regional crafted breweries, as well as regionally crafted wines? Again, notice the lack of any effort to up-sell in the diner for cocktails or wines? Their training, mentality, and supervisors is all predicated upon the number of meals served, instead of the increased revenues they collected. Does anybody at Amtrak HQ even respect the history of the NYNY&H how its largest profit center was its bar cars? Apparently, we continue to peel this onion to learn how revenues are not relevant in Amtrak’ executive management group, which helps to explain why the product development concepts from motivated, competent people in the field are historically ignored, and their promotions derailed .
Lacking any meaningful oversight beyond its executive managerial subservience to the political demands of serving the political and real estate patrons of the NEC, how are we to intelligently decipher Amtrak’s Kabuki Theatre over equipment coming on line for the single level eastern/southern long distance trains? How does any company with a mission to increase revenues and build traffic, let alone to wisely utilize taxpayer assets, build baggage cars concomitantly to depots becoming unstaffed? Why does Amtrak build full diners when it pushes a food quality below Guantanamo; continuing to cut back on quality and choices, and to also push cafe sales, while these diners will not be able to serve the coach passengers?
“If You Don’t Know Where You Are Going, You Might Wind Up Someplace Else”*
As the persistent drying up of resources and support in a deliberate corporate move to achieve a withdrawal and discarding of the long distance routes is so obvious, what do we fail to see? Their is absolutely no meaningful marketing or sales effort to promote and encourage traffic on the long distance routes. We are dealing with a national transportation firm lacking any route branding, and without any brand mangers to cultivate and develop the routes. This goes beyond the obvious lack of funding, as Amtrak does not help itself with a necrotic executive management group of long-term invested apparatchiks kowtowing to the whims of a conflicted Board. It is no secret how Amtrak’s Board genuflects to their puppet masters in Albany and Trenton, who are beholden to the real controllers, the real state interests and politicos they support.
“The Future Ain’t What It Used To Be”*
We already should know that the rampant inflation during the Korean War (9% in 1951), and how the CPI increased 23% between 1965-1970 in the Vietnam War, seriously impacted the costs of passenger train operations. We should be disgusted with the fact that Amazon pays no federal tax; hedge funds are allowed carried interest with no tax; the extraordinary waste of government funds and resources in Afghanistan, Iraq; and 42,00 abandoned federal buildings that costs the government over $2 Billion per year.
Although Railpax achieved some significant gains by centralizing purchasing, maintenance and repair, reservations, and commissaires. what we did not envision was how Amtrak would severely increase labor costs by creating a Potomac fortress for its Politburo approach that has pushed out many good, competent managers and employees in the field. Such a mentality at HQ explains the contentment to allow peak season “Auto Train” equipment to idle in the Sanford, FL yard, instead of increasing asset utilization by deploying on a summer seasonal schedule (e.g., Chicago-Colorado). How Amtrak HQ has manifested itself in such a mañana, ‘don’t rock the boat’ manner is further exemplified by the inevitable ‘back to the future’ fade to the devastation of convenient frequent schedules, replacing diners and lounges with a cafe (i.e., food bar coach), and the downgrading from first to sleeper to what’s left class.
We know Amtrak has been financially stymied by a lack of consistent annual funding in order to plan and purchase effectively. This is a normal process in the world of business which Amtrak is expected to achieve-by politicians who few ever worked in a real job before joining the Potomac class. Not having a dedicated line item of annual funding in the federal budget cripples the enterprise altogether. Yet, cost control is a joke at Amtrak. Why are the Class1s exempt for their liability from being culpable in wrecks of Amtrak they cause? Why are the Class1s allowed to pull numbers out of the clouds for expanding Amtrak frequencies on routes currently with low freight traffic? Look at the newest shakedown by CP to allow Amtrak to increase a few ‘Hiawatha” frequencies–at the “bargain” price of $195 Million; much of this going towards building elongated sidings in the toniest suburbs of Chicago. So much for the common good of the public.
“In Baseball, You Don’t Know Nothing”*
In respect to John Dean, who stated during the Watergate hearings, “we have a cancer within,” it is highly unlikely that the current Amtrak Board will ever veer away now from their dedicated mission creep to achieve their goal to exclusively focus attention and resources just on the NEC. Amtrak’s executive management is entrenched and survives by feigning motivation in their doting to the Board, concealing their own ineffectiveness, to the contentment of the Board. What we certainly know is how Amtrak will not not change its stripes, given how these attitudes are ‘baked in.’ Passenger trains cannot survive, let alone, rebound, minus a meaningful commitment from the top to a true national system, including effective marketing and product development.
As we respond once again to the annual gong announcing “battle stations” over funding, time is rapidly approaching when we will be required to fully assess and appreciate this deteriorating situation. Either we will persist ignoring the obvious and growing pitfalls of Amtrak, or, to truly preserve and expand intercity corridor and long distance rail, we must be open to alternatives that can enable such a market to grow and evolve, by supporting a new paradigm for American passenger trains. At what point do we realize no option could be worse than allowing the perpetuation of Amtrak’s failure? However, identifying the problems is easier than finding the right solution, as we have no depth of a passenger train industry; no experienced, motivated people to change the dynamics.
Given the current performance of those operators in the U.S. for commuter rail, and those who still promote themselves as potential operators, the ‘well is dry’ here for the necessary mix of competence and experience.
Perhaps for a later article, but we already know:
The need to eliminate Amtrak’s current Board of Directors and its beholding political patronage to the Northeast.
To identify a firm, perhaps DB now that it is in California, to assume control from Amtrak over the NEC infrastructure, by managing its maintenance, repair; prioritizing and securing fundings from states and feds; securing payments from commuter, freight, and Amtrak for operating and infrastructure costs. Such a firm ideally would also have the experience to either directly operate intercity passenger trains on the NEC, or, the ability to vet potential private operators to bid on franchises, or, even open access. As well, expansion of infrastructure could be achieved, perhaps through P3, and increasing utilization on the NEC by allowing mail and parcel trains at night.
As OTP and fast, frequent passenger schedules will be key to success on all corridors and long distance routes, a new contract must be secured with the Class 1s to negotiate reasonable fees for track access, dispatching, and schedule timing; to build via P3 where possible an additional main track to eliminate potential interference with freight traffic.
This is a concept that continues in research, but cannot dismiss the obvious requisite points above. Accepting how necrotic Amtrak has become will allow us to work in parallel to identify an improved concept for 21st century passenger trains in America. We should be guided by how Edgar Allan Poe advised, “believe nothing you hear, and only one half of that you see.”