I’m just thinking out loud here, so this may have been mentioned or even tried in the past or maybe (likely) there are glaring problems with the idea I haven’t initially seen. Here goes my random train of thought (no pun intended):
The problem with Amtrak, and just about any passenger rail, is that the costs to build, maintain and run the business is almost always higher than the revenue brought in. Except in the most densly populated areas where ridership is high and trips are short does there seem to be a profitability potential. Of course, I believe it is up to Amtrak and our government to provide a service, and like most services the government provides it won’t make a profit, and shouldn’t really be expected too. However, our government doesn’t seem to see it this way. And for sure, any money put into Amtrak is money not going to some other service or to lower taxes, etc.
The private railroads got out of the passenger service for the simple reason above; it was not a money maker. Amtrak has to rely on Class 1’s to allow them the track space to travel, must rely on Class 1’s to maintain their track properly, but Amtrak has a whole railroad full of employees and other overhead costs. It seems to get screwed on both ends. It has the costs of an entire railroad, but still relies on other railroads to let them through. It seems grossly inefficient.
Now for the idea: What if Amtrak was dissolved, and the passenger business was given back to the railroads? More to the point, what if the government required the railroads to run certain passenger lines? Amtrak’s equipment could be given to the respective railroads in those regions as an incentive, so they would not have to invest heavily in brand new equipment, and the government could offer subsidies to the roads based on a formula of number of miles run, on time performance, and any number of benchmarks. The subsidies could be enough to offset, at least partially, the hit to the bottom line the lines would
I think your idea is in principle correct. Ie if you had the freight railroads operating the passenger services as well you could potentially share overheads. I presume Amtrak has to pay access charges for using lines owned by other railroads, so this is one area where it would be done at cost.
But in practice, how easy would it be to persuade the freight rail roads to go back in to passenger? Even if they could be persuaded to do so with sufficient incentives from the government there is still the danger that they would see it as a distraction.
When British Rail introduced its business sectors which I described on another thred, one of the benefits this gave was that the unprofitable rural lines, which had hitherto been seen as the unwanted poor relations by the old regional management structure, now hand their own management team who were focused on operating them as efficiently as possible. As a result these lines received investment in new trains and signalling which helped to cut costs and boost revenue. Indeed in 1993/4, the last financial year before BR was broken up ready for privitisation the Regional Railways business sector just about broke even.
The success of some of the smaller TOC’s like Chiltern since privitisation suggests that perhaps small is beautiful with railways and that mergers dont always bring the hoped for benefits. So in conclusion while I think the principle behind your idea is sound I’m not so sure it would work out in practice.
From a political standpoint, it isn’t going tohappen. It is hard to " force" a non-government company to do anything and would require legislation that won’t be passed. The railroads actually have a pretty good lobby in Washington and lots of friends in Congress.
I refer you to that pesky old Constitution, in partuicular ammendment #5…“nor shall private property be taken for public use without payment of just compensation”. And if you think that’s a dead letter in the face of “a compelling public interest” just look at the furor (finally) that the imperial activist judiciary created w/ the Ct. rulling on “taking” that confused public use w/ public benefit.
I’m not saying they should be persuaded, I’m saying they should be required.
The government already forces the railroads to do lots of things in order to be allowed to run trains on rails. From safety to competition, the government regulates lots of aspects of the business already.
I didn’t say there wouldn’t be any overhead. Some consolidation could happen, but I acknowledged that it would still operate at a loss. I think, however, that if the R’s were required to do this, it would be in their best interest to figure out how to do it most efficiently, which is usually in the passenger’s best interest as well.
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QUOTE: I refer you to that pesky old Constitution, in partuicular ammendment #5…“nor shall private property be taken for public use without payment of just compensation”. And if you think that’s a dead letter in the face of “a compelling public interest” just look at the furor (finally) that the imperial activist judiciary created w/ the Ct. rulling o
I have made basically the same point on previous threads, so naturally your idea is a brilliant one.[8D] It should have been done at the advent of Amtrak, subsidizing the remaining private passenger services that still existed in 1970, rather than creating this ludicrous monstrosity we have today.
The difference that makes the difference is that such services would have the one thing missing from Amtrak: Competitive pride between natural rivals. Even with subsidies, I expect a BNSF North Coast Hiawatha would be operated in a way that calls out a challenge to a UP Californai Zephyr, and vis versa.
Care to expand and say why not? Don’t be afraid of hurting my feelings. I know little about rail operations, so I could be way off on my assesment, but it seems like a logical, doable step to me. I’m always open to constructive critisicim.
Not a very sporting thing to try. I thought the RRS were freed of their legal obligations to provide passenger service with advent of Amtrak. Why limit your imagination to the RRs? In the interest of fairness, I could make equally compelling cases for other companies to become involved. Microsoft has tons of cash, why not force them run a passenger RR instead of wasting it in diversions such as XBox? They could provide lots of outside-the-box ideas of running a RR. Or maybe the petroleum companies they have lots of ca***oo. UPS knows logistics and makes lots of money. I could imagine such an imposition being possible only with a successful communist revolution. The real problem is that Amtrak is a political issue that has little or no traction among the voters.
My impression is that the book value of their passenger car fleet is probably close to zero. I doubt that any RR is chomping at the bit to takeover Amtrak’s “assets”.
I read that the cost of shutting down the whole shebang after transferring its operations would probably be at least $10 billion. Let the RRs eat that too so it won’t be a burden on the taxpayer.
88gta350, since we have a problem with prison overcrowding, the government should REQUIRE you to host some prisoners in your private home. Of course you would be provided a subsidy to cover some of the costs, but you will have to find some way to make this proposition profitable or you will still come up short. And don’t complain that you don’t have room. Just move the kids to the basement and free up a room for the guests. And you will be happy to know the gov’t is going to give you a worn out prison van to use for your guests transportation. I know this isn’t a perfect analogy, but maybe you get the point.
I have made basically the same point on previous threads, so naturally your idea is a brilliant one.[8D] It should have been done at the advent of Amtrak, subsidizing the remaining private passenger services that still existed in 1970, rather than creating this ludicrous monstrosity we have today.
The difference that makes the difference is that such services would have the one thing missing from Amtrak: Competitive pride between natural rivals. Even with subsidies, I expect a BNSF North Coast Hiawatha would be operated in a way that calls out a challenge to a UP Californai Zephyr, and vis versa.
Oh thank goodness, for a minute there I thought you WERE 88gta350
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Not a very sporting thing to try. I thought the RRS were freed of their legal obligations to provide passenger service with advent of Amtrak. Why limit your imagination to the RRs? In the interest of fairness, I could make equally compelling cases for other companies to become involved. Microsoft has tons of cash, why not force them run a passenger RR instead of wasting it in diversions such as XBox? They could provide lots of outside-the-box ideas of running a RR. Or maybe the petroleum companies they have lots of ca***oo. UPS knows logistics and makes lots of money. I could imagine such an imposition being possible only with a successful communist revolution.
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Didn’t like my first constitutional objection? Here’s another one demolishing your law to require existing RRs, retroactively, to operate psgr trains as a condition of their doing business. This time we go to the body of the Constitution, no messing around with those pesky ammendments, specifically Article 6 that prohibits Congress from passing ex post facto laws, that is, imposing penalties retroactively that weren’t in efect before.
The railroads already are forced to keep prisoners in their house, so to speak. Amtrak runs on their rails already, it’s not a factor of not having the room for the trains. The railroads would simply be taking over the operations side of things, as well as any profit/loss.
The ex post facto law only says you have to be punished under the statutes that existed when the crime was comitted. t says nothing, and was never meant to imply anything, about running a railroad. If Congress passed a law tomorrow that said the private railroads would absorb Amtrak, there is nothing unconstitutional about that. It’s not a punishment dolled out by a criminal court, it’s a law requiring a future action. The railroads wouldn’t be running passenger trains retroactively… to my knowledge no one has yet learned how to make a train travel back in ti
Let me see if I can paraphrase your problem statement.
“Given that the Federal Government is going to provided subsidized passenger rail service, would it be more effiecient to let the frt RRs provide the service directly instead of being the landlord?”
In my opinion, the answer to this question is “not likely”.
Unless there is some sort of market force that incents efficiency, you won’t get efficiency. It is not likely that these market forces would be any easier to create for the frt RRs than for Amtrak.
Could you save the Gen’l Admin and overhead expenses? All of the “grunt level” work being done by Amtrak staff would still need to be done - you might save the cost of a bunch of execs, tho’…
If you want the trains to run on time, then you’ll have to pay the frt RRs enough to make it worth their while. If they’re going to hold an intermodal train to let Amtrak go first and this makes the intermodal train late to it’s dest., then the cost is the cost of the equipment delayed PLUS the value of the shipments delayed PLUS the loss of customer goodwill PLUS the weakening of pricing power. The last two are the most important and hardest to calculate. Amtrak incentive payments are peanuts compared to this. The frt RRs won’t jeapordize their franchise in order to earn a few thousand dollars in incentive payments.
Let me rephrase your idea. It costs me too much to run my car so I will get the government to make you maintain it and operate it so I can ride around. Good luck!
Interesting debate; some new slants on what is probably the oldest topic on this forum!
A few ramblings… first, Amtrak offers a major advantage (and having spent a good bit of time in Britain, it seems to me that this will highlight an overlooked problem with the UK system): If you want to take a train from X to Y, you have one company to work with and one ticket to buy and one reservation to worry about. Those of us old enough to remember the ‘glory days’ of passenger rail are also probably old enough to remember the incredible hassle of trying to make a connection in Chicago between the 20th Century and the Super Chief, or in Washington DC between the Merchants Limited and the Silver Meteor, or… you name it. Argh. No thanks. Further, this one stop shop substantially reduces (not increases) overhead for passenger rail operations.
Does competition improve quality of rail transport? It probably did, in the ‘glory days’, at least in the northeast, Florida and Chicago-Seattle markets, where there was competition. But one does need to remember that in those days, the improvements really were only on the top end trains – there were an awful lot of other trains… some of which, while entertaining, were pretty bad… The flagship trains were improved, and very very heavily subsidised, as advertising, to attract freight business. That won’t fly today, and I don’t really think competition would improve much today. And is it really necessary for quality service? No – good pay and good morale and a pride in the product is what is needed, and believe me the Amtrak folks do pretty well at that.
I cannot think of single good reason why a freight railroad would take on the responsibility, unless the subsidy payment was so high that they could make an honest profit out of it. And that’s a lot higher than it is now…
88gta350, my only quibble with your idea is that governnment should require freight roads to run passenger trains. As the others here have pointed out, that would be a gov’t taking of private property. A better approach would be for gov’t to make it attractive for freight roads to run pax trains. Give them a chance to turn a profit.
Airlines prosper (at least those who can control costs) because gov’t builds, operates and maintains airports, navigation facilities and air route traffic control systems. The entire FAA, including all the controllers, aviation safety inspectors and all the rules makers are on the gov’t payroll.
So to apply this to railroads, I suggest the government offer to construct higher speed lines (say 110 mph) along existing ROW in exchange for pax operations. Do you think CSX might agree to run passenger service New York to Chicago if they could also use the gov’t rails for their freight? If they didn’t have to maintain the rails or the signal systems? Could they turn a profit on such a service? I’ll bet they would give it a lot of careful thought, because it just might work for them. At least it would ease their freight congestion and add to freight profitability. And btw, that rail construction would be a lot cheaper than adding another lane to I-90. More productive, too.
You forget that Amtrak was created to relieve the railroads from the cost burden of providing passenger service. Now you are proposing to foist it back on them. You have got to be kidding!
Of course in the runup to Amtrak the politicians all said the railroads were lying, they did not loose money on passenger service. One idiot congressman was quoted at the time as saying he would not have voted for Amtrak if he thought it would require ongoing subsidy.
In the PNW Amtrak ran one pair of trains day one where BN had been running four. Gee, wonder why they did that? Maybe the ex-railroad passenger guys who moved over to Amtrak knew more than the congressman.
The freight carriers are now subsidising Amtrak becuase they have to make the track available for just short of free.
Congress can take all your property, all they have to do is pass a law. That is what due process is. Look at the history of railroad regulation if you do not believe it.