How the Bus Industry Continues to Re-Build Its Model at Amtrak’s Expense
By Rail Provocateur (M.E. Singer)
As rail advocates, our focus has been diverted and dissipated over the concerns of Amtrak’s multiple prongs to choke the long distance inter-regional connecting network by desiring to measure the potential pushback of its proposal to cannibalize the mid-route portion of the “Southwest Chief.” Concomitantly, in parallel to its attack on the National Network, Amtrak has persisted in creating false flags over non-existent PTC issues.
Given the cozy relationship of Amtrak’s Board Chairman, Anthony Coscia (formerly the chairman of the New York New Jersey Port Authority in reverence to his financial and development talents) and New York’s senior senator, Charles Schumer, only a knave would fail to distinguish the “roadmap” operationalized by these two Northeastern politico pals actively conspiring to shift federal funds from the National Network to shore-up the bleeding Northeast Corridor. Anybody questioning that scenario falls in line with the English Prime Minister Chamberlain who believed Hitler would be satisfied if only the Sudetenland would be surrendered to fulfill his desires. Thankfully, rail advocacy West of the Potomac does not buy into that scenario.
Regrettably, these on-going destructive campaigns by Amtrak serve to also act as an echo chamber deception from what is happening now under our radar given how our attention is diverted. Although Amtrak persists in claiming how curbside intercity buses are not a threat to its market (when did Amtrak discover marketing?), given its focus continues not to be on serving those travelers, the rapid pace of the intercity bus revamping its former business model to offer a more relevant option. This includes changes in direct express and more frequent schedules, service, comfort, pricing, and convenient curbside stops evidences a clear focus for such bus firms to become the vanguard of intercity corridor travel; to push Amtrak to the curb in most of these markets outside the well run California JPA corridors. The significance of this issue is actively studied by the Chaddick Institute at DePaul University-Chicago, led by Joseph Schwieterman, Ph.D.
Recently elaborating on his research at Northwestern University’s Transportation Center, Schwieterman was quite confident how the re-energized intercity bus firms are all on their toes with the increasing competition of foreign bus lines specializing as disrupters to the old format. Greyhound and Peter Pan abandoned their former pool agreement on the Northeast Corridor to compete head-on; Greyhound established an independent brand under its umbrella, Bolt, to provide direct express oriented services in the Northeast and Northwest; MegaBus continues to re-formulate its model to be viable as a direct express curbside service. All this in preparation for the impending green wave that is already hitting the west coast, as Flixbus from Germany establishes itself as a technological disrupter identifying market gaps currently unserved, or poorly served by rail, bus, and air. In a matter of a few years, Flixbus dominated intercity bus travel throughout Europe; now is even expanding its concept into intercity rail travel. Given how efficient Deutsche Bundesbahn (DB) is in operating its various elements of passenger rail services, what chance does Amtrak even have in this impending battle? Let alone, right there with the green wave will be the wave of other fiercely competing bus firms who smell Amtrak’s blood.
To cherry-pick these market gaps can be achieved with a Commodore 64 computer, let alone with the extensive IT abilities of Flixbus to identify unserved, or, underserved markets; to accurately prescribe popular curbside pick-up/drop-off locations; provide convenience of booking, ticketing, seating, comfort, WiFi, etc at a bare bones pricing strategy to establish a dominating market presence. As Amtrak persists in following the failed policies of its prior CEO Boardman re the “Sunset Limited” route, Flixbus has swooped in and overnight selected the very unserved ground-gap market of Los Angeles-Phoenix as its major entry point into the U.S. market.
Perhaps better understanding our ground gaps better than Amtrak and other bus competitors, Flixbus positioned itself to also roll into the Phoenix-Las Vegas and Los Angeles-Sacramento markets. Other bus firms are learning by moving into other unserved markets, e.g., Tampa-Fort Meyers; Dallas-Houston-Austin. We even see luxury options offered between Boston-NYC (with food service), and Dallas-Houston-Austin. At the same time, thruway bus connections to the California JPA lines have been firmly established; learning from that successful California bi-modal strategy, Michigan has embraced Indian Trails bus connections serving the “Wolverine” line; Oregon also eager to link the “Cascades” route with bus connections.
But their exists huge market gaps ignored by Amtrak to eventually be filled in by intercity bus, such as: Pittsburgh-Harrisburg; Allentown-Philadelphia; Louisville-St. Louis; Louisville-Cincinnati; Cincinati-Atlanta; Cincinnati-Detroit; Cincinnati-Nashville; Cincinnati-Cleveland; Detroit-Cleveland; Chicago-Kansas City; Phoenix-Boise; San Francisco-Las Vegas; Oklahoma City-Dallas; Chicago-Columbus; Chicago-Dayton; Chicago-Green Bay; Chicago-Toronto. Do note how each of these city pairs were once well served by one or more passenger rail services; yet, their are so many more multi-city gaps unfulfilled today. Just take out an ORG even from the early 1960s to identify those now emerging ground gaps that Amtrak failed to identify as its mission within a National Network. As Professor Schwieterman inquired, given the exigency of this situation, and the continued elaborate funding of federal taxes supporting EAS (Essential Air Service), “do we even care about these gaps?”
At this point, I wish to segue my analysis of what passenger rail currently faces to prior red hurricane flags raised to confront and question Amtrak’s viability, given its aloofness to certain rational aspects of rail advocacy (e.g., RailPAC), as Amtrak embraces and financially contributes towards continuing to neutering rail advocacy on the east coast. We are coming up upon the reality how Amtrak has yet to find its footing in marketing to create a passionate reason for existing, let alone dominating obvious potential corridors; as well as identifying new potential corridors beyond the hunkered down NEC mentality. Historically, RailPAC has benefited from the vision expressed in prior op-eds by Mr. Selden, Mr. Braymer, and myself; yet, Amtrak has never acknowledged and acted upon the obvious issues identified explaining the weakness of their current uninspiring approach to establish its market position in the NEC.
Indeed, in respect to my own background in “marketing warfare” as identified by the esteemed marketing gurus, Ries & Trout, I have previously pointed out to Amtrak how its failed approach to not just have a viable marketing concept to protect its flanks, but failing to acknowledge and prevent the growing incursion by the impending wave of enlightened bus firms. This persists in requiring a significant change in Amtrak’s understanding of the Northeast Corridor market. If the “Acela Express” was so successful, why was their no additional first class cars to serve the weekday rush hour demand? Even more so, why were the “Northeast Regional” consists so restricted to prevent serving the full gamut of market demand, including first class, as well as importantly, in deference to the growth of the popular curbside buses, a tourist class to compete head-on? Certainly, the disdained Horizon fleet could find a new purpose as providing a severely discounted fare for the elderly and college-age crowd flocking to the bus?
Although I would be please to further examine and identify here how the intercity bus firms are re-building their business model at Amtrak’s expense, sadly it is quite apparent that as Amtrak personifies the lack of any sense of urgency to compete to build and dominate a market, resting upon its false laurels as the owner of the NEC, nothing will ever change until we evolve our approach to corridor passenger rail, as augmented by long distance services. On that basis, we must place our faith in the incremental approach so well achieved by the three California JPAs that have evidenced a clear ability to identify, understand, and serve their markets. Caveat-as these bus firms become more sophisticated with providing the basic elements of acceptable transportation, they will surge into the other areas of passenger comfort, including new concepts of food services that do not require galleys and staff. The future of passenger rail as monopolized by Amtrak controlling equipment, track access, and services to inhibit corridor growth is not favorable going forward.
Note-I will be visiting my daughter in Spain, 5-15 November; hopefully, I can convince her that we can take another Renfe HSR trip that will not duplicate her exasperation with prior Amtrak trips.
Also, in respect to my intriguing post conference discussion in Sacramento with several members of rail labor, I would strongly suggest for RailPAC to embrace their knowledgeable opinions within the context of the weekly blog and quarterly Steel Wheels. We can not ask for a better understanding of what impacts railroading then from rail labor itself.