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Home / News & Reviews / News Wire / In letter, Amtrak CEO says national network needs ‘careful review’ NEWSWIRE

In letter, Amtrak CEO says national network needs ‘careful review’ NEWSWIRE

By Trains Staff | June 5, 2018

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The Southwest Chief passes through Hinsdale, Ill., on April 28, 2018. Amtrak’s CEO says the effort to maintain the train must be balanced against the need of the entire national network.
TRAINS: David Lassen

WASHINGTON — Responding to a letter from two major private-car organizations, Amtrak President and CEO Richard Anderson says the passenger railroad is overdue for a review of how it operates its national network. Anderson also says efforts to maintain the Southwest Chief must be balanced against the needs of the entire Amtrak system and reiterates the company’s stance on charter trains and private car moves.

In the letter to the American Association of Passenger Railroad Car Owners and the Railroad Passenger Car Alliance, dated May 29, Anderson says of the national network, “there are important service questions that have gone unquestioned and unchanged for far too long.” The presidents of the two groups had expressed concern about the future of the national network. [see “Private car groups question Amtrak’s commitment to national network,” Trains News Wire, May 4]

“Some parts of Amtrak’s business have operated in the same manner for 47 years, and the world is changing around us,” Anderson said, noting that passengers today have different expectations and travel options. “For Amtrak to respond to these changes and remain relevant, we need to carefully review how we allocate our resources, deploy our assets, and positions our products.”

Anderson also disagreed with the private car groups’ contention that end-to-end ridership on long-distance trains is meaningless, given the number of passengers who travel between intermediate points.

End-to-end ridership, he wrote, “points directly to the fact that the markets and customers that those trains attract should be better served by Amtrak. I see no reason not to be open to looking at our network and products from a fresh perspective. While change can be difficult and solutions to some of the objections you raise may not be immediately apparent, we have a responsibility to consider how to best serve our current customers and the future of the national railroad system.”

He did agree with the private car groups’ assertion that passenger rail has an important economic role, and that “there are challenges with asking the states to fund long-distance trains in their current form. And we agree that to terminate the long-distance trains with nothing to take their place would result in a crippled transportation network that would greatly diminish the value our trains offered to our customers and the communities they serve.”

But he also said that “viable transportation businesses are not static” and that Amtrak is “thinking carefully about how to attract the largest number of customers with an approach that is relevant, fresh, and financially sustainable.”

Regarding specific comments from the private-car groups about the Southwest Chief and the qualifications Amtrak has imposed a $3 million commitment toward work to maintain its route, Anderson did little to ease concerns over the train’s future.

“Our goal with the Southwest Chief,” he wrote, “is to ensure the creation of a coherent, long-term funding plan that involves commitments from all the relevant stakeholders that addresses the viability of the route, and to see the performance of this route improve. However, we must also be mindful of this particular route’s unique costs and it is our obligation to find the appropriate balance between preservation of any one route versus the needs of the entire National Network.”

On issues specific to private-car owners, Anderson reiterated Amtrak’s existing stance, that charter and private-car moves must align with the railroad’s focus on operating safely, punctually, and efficiently. Charter trains must operate on existing routes, and that extra moves should not have any impact on scheduled Amtrak trains.

“Amtrak supports the movement of private cars in regularly scheduled Amtrak trains,” Anderson wrote, “provided that we have the capacity to provide reliable private car services and that no scheduled passenger trains ever suffer any delays due to this service. Private cars will be added or removed from Amtrak trains only in circumstances consistent with this approach.”

A copy of Anderson’s letter is available here.

— Correspondent Chase Gunnoe contributed to this report.

25 thoughts on “In letter, Amtrak CEO says national network needs ‘careful review’ NEWSWIRE

  1. Sure, sure. These arguments are great!

    OK, since the Northeast Corridor is profitable, why not allow it to go to the private capital markets for its funding? There is no longer a need for government involvement at all!

    You know what, Brightline does not get government funds–why should the Northeast?

    By extension, as long as we are making specious arguments, why not eliminate government funds to public schools, EMS and fire departments? I’ve never used any of those services and don’t want my tax dollars going there.

    How bizarre. I find it amazing that some seriously think that killing the national network will somehow increase funding for passenger trains elsewhere in the country.

  2. We have been doing the same thing with the Federally funded Interstate Highways for 60+ years.Those highways have 80% mode split on trip distances up to around 700+ miles.

    http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.454.5721&rep=rep1&type=pdf (Page 20)

    But highways are increasingly funded by Federal General fund transfers ($140 Billion 2008-2018) on top of the existing (HTF) leveraged tax on the daily use of streets that are paid for locally. Additionally, the Federal government picks up the cost of major accidents on a separate account which alone are more than fuel tax revenues.

    Focus on shifting costs to the states makes no sense in this context. Shortening routes seems only to be a pretext to create this cost shift to the states.

  3. Well, Anderson certainly has corporate-speak down pat. When ever a CEO says change will be painful he means that some one or many someones will be fired; customers will be screwed, and service will go down the drain. As a stock holder (as we all are) I wish we could find a better board and a different CEO but there’s no chance,

  4. Agree with the new CEO. The current Southwest Chief arrangement is kicking a can down the road. Kansas, is notoriously cash strapped as a state and can’t afford a renewal of that type of commitment. So if they are going to pull the plug in 10 years anyway with the Southwest Chief why not do it now and save everyone the money as well as the wear and tear on the equipment. Personally, I would yank what is left of the Sunset Limited before the Chief but maybe he intends to yank both.

  5. Reading some of the responses here, it is truly amazing how what we once had and accepted as knowledgeable advocates has simply devolved into tree-huggers lacking the essential facts as they rush to support CEO Anderson and his minions for as yet an undefined revision in the national network.

    What part do they not get?
    -CEO Claytor and FRA Administrator Riley clearly understood that by operating more long distance trains would actually increase revenues and spread out the costs.
    -CEO Gunn comprehended how revenues only declined as costs increased due to the train-offs in 1979, 1993, and 1996.
    -None of them envisioned dumping long distance costs upon selected states when the NEC enjoyed a free ride.

    Also, those who make such superficial comments here have no comprehension of economics just to shrug-off any increased frequencies on long distance routes, claiming, no incentive for the Class 1s to offer more access. What they miss is the obvious point of re-negotiating track access and dispatching on a market value basis to make it worthwhile for all parties. Instead, joining Amtrak with its head in the sand, they claim nothing more can be done for the long distance trains.

    I suggest they first learn the actual statistics and facts re long distance and NEC numbers in order to intelligently comment here. Otherwise, unlike other sources, such as RailPAC, their is nothing more than a superficial, emotional “foamer” perspective expressed.

  6. Yeah, ROBERT and Yeah, GALEN. We’re starting to see some sense here. Let’s see how “profitable” NEC is, compared to say Lake Shore Limited, when we add a trillion dollars for Gateway for a dozen or so miles of the route.

  7. Re , Boardman, Would I be correct in saying more new equipment was ordered under him , than any other recent CEO? Hardly achieving nothing.
    Anderson , way to early to right him off, and even if his “reviews go nowhere, it is exactly what Amtrak needs.
    As for The SW Chief, I agree the weak link is across Kansas. Combine the Chief out of Chicago with the Zephyr, split and turn south to New Mexico at Denver. Then have a new train from Chicago via Kansas city and Newton, down to Oklahoma and Texas.

  8. This CEO is going about almost everything the wrong way. It’s clear, judging by his hostile comments towards passenger trains, he loathes rail travel and wants passenger trains to emulate unappealing air travel in every single way.

    While every successful business needs to periodically review its operations and see where things can be improved (ala improving services, adding connections, etc., to benefit the customer- not the dogmatic congressmen who hate Amtrak), this so-called “review” sounds like a veiled attempt to start the elimination of the valuable LD trains, which though small in market scope, serve a broad and important demographic of the traveling public.

    It’s amazing these 15 important national system trains have survived as long as they have.
    In the past 30 years, Amtrak has never (or rarely) marketed them. The trains are never upgraded. Expansions never occur. Needed connecting services, which would improve ridership on these great trains, (say, Salt Lake City-Las Vegas-LA on the California Zephyr) are never instituted.

    All Amtrak management has done to the LD trains is cut them, eliminate amenities, reduce staffing, reduce coaches, etc. No successful business, in the long term, survives by not investing in its product. The LD trains ARE Amtrak’s main product, the ones most Americans, in terms of geography, see.

    The move to irrationally end the LD trains comes as the LD trains have experienced record ridership, and have helped Amtrak carry a record number of travelers in 2017. The 32 million people who road Amtrak show Amtrak, albeit slowly (thanks to minimal federal investment) has reversed the trend of declining train travel, which began in the 1950s and harmed the railroads in the 1960s.

    The SW Chief (nor any other LD trains) have “weak” links. The segment in western Kansas isn’t any “weaker” than the desert in Nevada the Calif. Zephyr travels, or the prairies regions traveled by the Empire Builder, or the very small population between Kansas City and Chicago, or Omaha and Chicago, or Little Rock and St. Louis, etc. Or the interstates highways serving rural areas, like Wyoming or South Dakota. We should stop funding those roadways, too? The critics here who attack Amtrak for serving less-populated areas know little of what they’re talking about and should be ashamed of their so-called logic.

    These important national system trains get attacked frequently, even by so-called “railfans” who hate Amtrak with a vengeance. They scream about Amtrak “not making money,” but turn a blind eye to the TRILLIONS of government dollars lavished on the money-losing highway and aviation systems, which, if the total sum was considered, never made a single dime in “profit.”

    With Americans demanding more travel choices besides being forced to drive/ fly, It’s time to invest in and expand passenger rail, not contract it.

  9. Glad to see a change in the tone of commentators here from outright hostility to Anderson to – with one or two exceptions – cautious support for an agenda of modernization.

    Amtrak badly needs to be relevant which it’ll never be running the current types of service outside of its corridor services. I’m not saying I have high hopes for Anderson, he has to handle a congress that will fight tooth and nail against change even if it’s positive. I also suspect the campaign against All Aboard Florida is ultimately airline funded (American Airlines to be exact) and will replicate itself if Amtrak produces more services likely to reduce airline usage.

    But… he is definitely trying to do the right thing. Boardman was OK, and at least had the political knowledge to keep Amtrak on life support during a very hostile Congress, but being on life support is not enough. We need a rebirth of passenger rail in this country. Amtrak is best positioned to do it. If Anderson fails, I don’t know that private entities will have the resources to do it, especially when forces within Congress are so desperate to cripple rail, requiring it to be the only form of transportation that subsidizes all the others.

  10. In reading these comments I am struck by two facts.

    Those who claim that Amtrak could attract more customers to the long distance trains by increasing the number of offerings and/or stepping up its advertising program don’t cite a single marketing study to support their contention. Successful corporations, i.e. Proctor & Gamble, 3M, etc., perform robust marketing studies before changing their offerings in the market place.

    No one who claims that Amtrak’s accounting is skewed has access to the company’s books. Without that access they are just guessing at Amtrak’s internal accounting algorithms, especially those associated with allocation of overheads.

    A senior executive like Richard Anderson would dismiss most of the comments on this topic in a heartbeat. He would quickly realize that they are not supported.

    Through the end of FY15 $81.5 billion had been transferred from the General Fund to the Highway Trust Fund. Of this amount $59.5 billion was for highways and $22 billion was for Mass Transit. The FAST Act authorized a transfer of $70 billion from the General Fund to the Highway Trust Fund from FY16 through FY20. If it is split in the same proportion as the previous distributions, 73 percent or $51 billion would be for highways and $19 billion would be for transit. If the transfers roll out as planned, which is always subject in federal transfers over time, the total transfers from the General Fund to the Highway Trust Fund at the end of FY20 would be $110.5 billion.

    What does highway funding have to do with what and where the country should spend its limited resources on passenger trains? Nothing!

  11. Paul Smith, of course CEO Richard Anderson would dismiss almost anyone’s comments in a heartbeat because he obviously already thinks he knows everything about running Amtrak. The most likely scenario,however, is that he is a plant from special interest groups to destroy Amtrak from within. We alone do not have the capability to single handed perform a marketing study,but Amtrak could and if it was fair and un-biased,I venture to say that the results would be agreeable with what I stated in my previous comment. It is doubtful that Amtrak would ever do a marketing study( at least as long as Anderson is at the helm) as they don’t even seem to know how to market what they already have.

  12. The Southwest Chief probably has as much or more potential for ridership growth as any of the long distance trains. A simple extension of the Heartland Flyer from Oklahoma City to Newton,KS would connect the Dallas/Ft. Worth Metroplex as well as San Antonio and Austin to the Chief in both directions. This would give these areas a direct connection to Kansas City and if Colorado Front Range service could finally be started, by way of dual connections at La Junta and Trinidad (westbound connection at La Junta and eastbound connection at Trinidad) it would connect Texas and Oklahoma to Denver as well as Pueblo and Colorado Springs. A connecting train at Flagstaff through Williams,AZ would bring Phoenix into the system and provide Denver-Phoenix,Kansas City-Phoenix,Albuquerque-Phoenix and Chicago-Phoenix connections. Furthermore, if a couple of the San Joaquins could be originated from Barstow,CA then Bakersfield,Fresno and the Bay Area could be connected to the Southwest Chief system. I believe that all four of these connecting trains are doable and that with these enhancements,the Chief would live up to its potential and the popularity of these additions would ultimately require another train on an alternate schedule. However,if we lose the Chief as Anderson vaguely implies,then we have lost,probably forever,the possibility of any of the aforementioned city pairs ever being served.

  13. I’ve seen nothing to counter my view that Anderson intends to replace the LD trains with more useful services along the same routes, not “eliminate” them. It’d be nice to see those who cry that the sky is falling in for once justify their needlessly inflammatory and completely ridiculous assertions to the contrary.

    I appreciate there’s myopia in the US passenger rail community, with people absolutely convinced that you can’t create anything better than some coaches, a diner, a buffet, and some sleeping cars hauled by three underpowered diesel locomotives 1,000 miles stopping at every city with a population of three people and a horse in the middle of the night, running once a day, taking two days to get to wherever the frig it’s going, but to those of us who have lived in countries with real rail systems that take rail seriously, I can tell you that technology and good practices have moved on somewhat from the “golden age of American rail travel” in 1922.

    The LD trains need to be replaced with useful services. It’s not hard. You just run several trains a day along the same route, serve the stations during daylight hours, and instead of stopping at every station, serve the major ones in large, transit served, cities, and use buses to fill in the gaps.

    Anderson gets it.

  14. Paul Harrison,the long distance trains are national treasures (especially the western routes). They are by far the best way to see America and certainly the most comfortable way. I think you are missing the point,that within each long distance train there exist corridors that it serves along with the intermediate sized cities as well as the endpoints. What is really needed is new or refurbished equipment,additional connecting trains and increased frequencies.

  15. I’ve heard enough….. I hereby call for the dismissal or resignation of Amtrak CEO Richard Anderson simply on the grounds of being untrustworthy.

  16. I’d say rail travelers have plenty to be scared about.
    You have Amtrak’s CEO making hostile comments — on his company’s main product, it’s “brand” (for the so-called marketing expert here) — about the important national system trains, which serve more Americans in terms of geography.

    Then, his yes-men underlings, in letters to federal lawmakers, disparaged the Southwest Chief, claiming (according to Trains Mag.), that it runs “40 percent empty” (which is 60 percent full). According to Amtrak’s own statistics, the SW Chief has a 63% load factor, higher than the NEC’s 57%. Hear that, you so-called “railfans” who constantly attack Amtrak? The national trains, as a whole, have higher load factors than the precious NEC, which is never subject to such unreasonable scrutiny.

    Airline Anderson got hot under the collar and seemed upset corridor rail advocates actually questioned him on his clandestine plans to eliminate Amtrak’s important national system trains. He acted like he’s above reproach.

    I got news for Fly Boy: Amtrak is AMERICA’s railroad — not his or the incompetent Amtrak board of directors, the lapdogs who refuse to question his irrational changes which will only harm U.S. passenger rail, including the much-vaunted (but bigger “money-losing”) short corridors.

  17. Roger, Amtrak likely does marketing studies, but the results often are positive for the important national system trains, the ones available to most Americans. I believe good news about the LD trains is deliberately hidden from public view, so Amtrak officials can attack them as “money-losing” while claiming, with straight faces, the NEC “makes a profit.” Both statements are false.

  18. Doug, you are right,everything is skewed in favor of the NEC. They apparently wouldn’t do anything that would bring about success to the long distance trains. There is actually only one train that could be considered as a connection to the Southwest Chief on its entire Chicago to LA run and that would be the Missouri River Runners from St. Louis. It is really a shame that so much untapped potential is not being realized.

  19. Amtrak management is weak.
    No successful business remains in “cruise control” for decades.

    It’s amazing the important LD trains are as successful as they are and remain. Amtrak management never markets them. Most people don’t know about them. The equipment is never upgraded. The routes are never expanded and needed connections are never started.

    They mostly run as isolated products, rarely connecting with other services (except for CHI and the West Coast).

    Imagine how much better they would do if Amtrak’s system wasn’t (by congressional dictate) limited to a skeletal system which serves many large cities, like Atlanta, Denver and Dallas, with only one train (in one direction) a day.

    It’s ridiculous a traveler in Atlanta can only travel (by rail) to Washington, DC or New Orleans. What idiot deliberately designed Amtrak so it wouldn’t carry more people?

    It’s like Amtrak could care less about them and hopes they go away.
    Amtrak treats them like STEP CHILDREN.

    Overall, the LDs carry a higher percentage of passengers than both the NEC & state routes. I know the rabid Amtrak-hating “railfans” who spew their nonsense in these articles don’t want to hear that, but it’s factual. It’s all here: https://tinyurl.com/y7jj5n9h (page 7)
    LDs: 58% load factors, NEC, 57%, state, a very anemic 40%.

    These so-called “railfans” who viciously attack Amtrak, claiming Amtrak “would do better” focusing on the short routes, don’t know how to read reports. They act like the LDs run “empty.”
    Nothing could be farther from the truth.

    The LDs have experienced ridership increases in the past decade. That growth, however, has stagnated, likely caused by increasing delays caused by freight congestion.

    The state trains carry a very low percentage of riders. Each ticket is very small compared to the higher ticket revenue LD trains bring.

  20. Paul Smith: “….What does highway funding have to do with what and where the country should spend its limited resources on passenger trains? Nothing!…”

    Wrong. The Interstate Highway Act of the 1950s spelled the death of the private passenger train. Eisenhower’s aides even told him that.
    When the Interstate highways were created, the U.S. government socialized the transportation system.

    No expense was spared to build highways and construct airports. Rail passengers during the 1950s and 1960s were forced to pay a special tax. The funding went to build airports (according to a 1959 Trains article).

    Since the early 1900s, the govt. has thrown TRILLIONS of dollars at highways, which, along with air, compete directly with rail travel.

    Rail receives crumbs compared to highways. Amtrak is constantly scrutinized. Every single cost is thrown at it, to make the LD trains appear to be “money losers,” when in reality, they “lose” far less money than the highways. The greedy “Road Gang” (which wants all money going to the money-losing highways) opposes every single attempt to fund rail improvements. It’s long been an unlevel playing field.

    Americans complain about our Third World passenger rail system. We get what we pay for.

  21. Dear Mr. Anderson,
    If you truly believe that “viable transportation businesses are not static” and that Amtrak is “thinking carefully about how to attract the largest number of customers with an approach that is relevant, fresh, and financially sustainable” then PLEASE look towards the longstanding success of the AUTO TRAIN.
    We need east/west similar service to California. Begin with the motorcyclist market who are currently paying truckers $600+ to haul one way so they can ride back touring the country. (Amtrak charges a reasonable $212 from D.C. to Florida). Then add cars and small RVs for the market that only wants to drive one way. For an example vacation trip: Every American Citizen should experience the drive along the historic Rt. 66 one way while they ride with their vehicle on Amtrak the other way. It parallels BNSF and UP main lines a majority of the way.

  22. Let’s expose the myth about the NEC…If it wasn’t for the long distance trains that Amtrak and our federal government is trying to kill off, The NEC couldn’t exist or would be a ward of the states that it serves. The
    massive overhead and expense that comes from operating an all electric system with plant and structures
    and power could never make a profit. IT takes the revenue from the LD trains to keep the NEC operating and break even in most cases. People do ride the LD trains and and most it is their form of transporation to get from town to town in most parts of the country. An example of this fact: I take the train to Florida when visiting
    family and every time I travel the Silver Star which operates between New York and Miami is always booked solid and sold out. This past Christmas, the Silver Star had every seat sold out even this past summer same thing. You take that scenario for each long distance train traveling across this nation and you will see that people are riding trains and there is money coming in for Amtrak which goes to keep the NEC running. Let’s cut the “fake news” on
    train travel and expose the truth and reality. Does Amtrak and train travel need to be tweaked and improved upon Of course it does but not at the expense of cutting or doing away with trains or service. Lets work to make Amtrak a reliable and respectable option to travel. Growth not elimnation or reduction in passenger train travel

  23. While they’re reviewing their options, they need to consider expanding service rather than contracting it. All trains need to run at least daily. It is far too difficult to figure out travel dates where tri-weekly service is involved. Further, there are some gaps in the system that could enhance connecting riders. There needs to be a train between Texas and Colorado. Currently, one must go to Chicago or Los Angeles to travel between these two states. Additionally, such a train could connect with and feed four other trains. Further, trains need to be reinstated to fill gaps such as Los Angeles-Salt Lake City and Salt Lake City-Portland OR. Once that’s accomplished, they need additional trains on existing routes, say 12 hours apart, to serve all on-line cities in daylight. By the way, for passenger comfort, any station served in the middle of the night needs an agent. I hope Mr. Anderson and his team will consider my suggestions.

  24. I wish you had a thumbs up option. Joseph Markfelder is correct. I can’t personally attest to off-peak operations, but I was on a sold out Train 22 on Sunday. The crew was scrambling for empty seats for singles in order to accommodate families.

  25. One further note. Amtrak needs additional equipment and they need to cycle their current equipment to be refurbished. The goal should be to run trains as close to 100 percent occupied as possible, but also to have the ability to add capacity when necessary and never turn anybody away due to lack of space. No business ever became profitable by cutting back. They must expand.

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