‘Hope is Not a Plan, and No Plan is a Plan For Failure’

Amtrak City of New Orleans. Photo: Robert Kaufmann/FEMA

Editor’s Commentary: Jim Tilley on Feb. 13 wrote to Amtrak Board Chair Anthony Coscia regarding procurement of a new long-distance fleet. Railway Age reproduced the letter in its entirety and published a response from Amtrak CEO Stephen Gardner. The following is Tilley’s response to Gardner, albeit addressed to Coscia. We expect a response and will publish it, in the interests of facilitating productive dialogue. However, we are curious as to why Coscia’s signature does not appear on any responses. Perhaps Tilley needs to assume that Coscia is disinterested or doesn’t wish to get involved (which as Chairman he should, in our opinion), in which case Tilley needs to direct his correspondence to Gardner and cc: Coscia as a courtesy? – William C. Vantuono

Dear Mr. Coscia:

I write directly to you because, as Chairman, you have presided over all the key policy decisions that Amtrak has made in the past decade. Your recent confirmation for another five-year term also means that you will continue to have significant influence over future policy decisions. In my letter to you of Feb. 13, 2024, I warned of a rapidly approaching problem that, unless you act quickly to implement remedial action, will force Amtrak to shrink its long-distance service even further either by reducing capacity, cutting frequency and/or discontinuing entire portions of America’s national passenger train network. Your response of March 7, sent over CEO Gardner’s signature, rejected all the solutions we suggested, offered no alternatives, and failed to acknowledge that the problem even existed.

The Situation

There is a high probability that a shortage of long-distance cars will force Amtrak in the next several years to reduce service on its long-distance system. The shortage of bi-level Superliners will be most acute and will place the routes that use them—all seven in the West and two in the East—at greatest risk. Between FY19 and FY23, Amtrak scrapped ten of these cars and stored 35 more. Derailments since then—most caused by collisions with heavy trucks at grade crossings—have taken cars out of service faster than the Mechanical Department could repair them. As a result, Amtrak had 45 fewer Superliners in active service at the end of FY23 than it did before Covid and ten fewer than it had just two years ago.

Whether Amtrak can restore capacity to pre-COVID levels is questionable. In his letter to me dated June 29, 2023, Mr. Gardner said that he expected Amtrak to restore 12 Superliners to active service by the end of FY23 and another 27 by the end of FY24. When completed, that would grow the active fleet to 407 cars – a significant increase over FY21 but still 18 short of pre-Covid. With respect to the remaining 23 cars, he said, “[N]early all of the other out of service Superliner cars are so severely damaged that they are unrepairable or would require very expensive repairs whose cost would far exceed any economic justification.” Unless Amtrak can figure out how to restore any of these damaged cars to service, 407 is the maximum it will have in the future. Equally concerning is the probability that between now and the time Amtrak gets new equipment, future derailments will further reduce the number of serviceable cars.

When Amtrak will get this new equipment is uncertain. The current estimate—“early 2030s”—is both vague and years in the future. There is a good chance, also, that it will take much longer. Reflecting the complexity of Amtrak’s RFP, the manufacturers invited to submit bids have already indicated they will not be able to meet the May 2024 bid deadline. Nor have they confirmed that they can build the new equipment to Amtrak’s specifications. Nippon Sharyo’s failure to build a bi-level that meets American standards should raise a cautionary flag. In addition, the delays Amtrak has experienced with past equipment procurements make it prudent for management to anticipate—and plan for—the likelihood that delivery and commissioning of new equipment to take much longer than it currently expects.

I hope that this exchange of information and ideas will persuade you that Amtrak needs to develop and execute a plan that will restore, then maintain, long-distance capacity at pre-COVID levels until new equipment arrives.

Discussion

I’ve summarized below the key takeaways I’ve gleaned from our correspondence over the last year, the latest Five- Year Plan, the FY25 Congressional Grant Request, Amtrak OIG reports and other sources.

• The Five-Year Plan just released does not consider the reality of a permanently smaller long-distance fleet. Here are some examples:
• Achieving the goal of a 10% increase in long-distance seat miles in FY24 seems improbable. The Monthly Operating Report for January 2024 showed that the actual year-over-year increase in the first quarter was only 1.8%. That makes achieving a 10% increase for the year a bigger challenge–13% growth in each of the three remaining quarters.
• Achieving the goal of 4.44 million seat-miles in FY29 seems equally unrealistic. That’s 2% more than the 4.37 million seat-miles Amtrak operated FY19 but with 58 fewer cars (Superliner, Viewliner and Amfleet II).

The FY25 Grant and Legislative Request similarly shows a lack of awareness of the serious long-distance fleet issues that exist today. This quote from the Request illustrates how detached from reality management seems to be:

“The company is not planning any reductions in Long-Distance service and does not currently anticipate having to temporarily decrease service frequency because of factors beyond the company’s control (e.g., equipment and workforce limitations of the kind that temporarily affected service during FY22).”

Strangely absent from the request is any recognition, much less discussion, of the existing shortage of long-distance capacity that Mr. Gardner claims only additional federal funding can resolve. The silence is puzzling, deafening, actually. It should be as obvious to management as it is to those of us outside Amtrak that in order for Congress to approve such funding, Amtrak’s board and management must aggressively request it and dramatize the specific, positive benefits it will produce, and the negative consequences if it doesn’t.

Despite ongoing work to restore previously discontinued long-distance routes and to upgrade both the Sunset Limited and the Cardinal to daily operation, Amtrak fails to mention or publicize the fact that the lack of equipment will remain an insurmountable obstacle for many years. Curiously, Amtrak, in its RFP for new long-distance equipment, directed prospective bidders to assume “no increase in the scope of the existing long-distance network.” Mr. Gardner has made it very clear that once Amtrak takes delivery of the new equipment, he has no interest in using any of the existing Superliner equipment to expand consists, increase frequencies, restore routes, or accommodate surges in traffic. Where he expects to obtain the additional equipment needed for any expansion remains a mystery.

Although the Mechanical Department exceeded its goal for overhauls in FY23, production was insufficient to reverse the downward trend the number of long-distance cars in the active fleet. Further, the goal for Superliner overhauls in the Annual Operating Plan for FY24 is 19% lower than the number actually achieved in FY23. In addition, Amtrak has kept more than a dozen Viewliner I sleeping cars stored, inactive for several years.

The Amtrak Inspector General recently reported how deficiencies in the way Amtrak manages its parts inventory impairs productivity in the Mechanical Department. It found that parts catalogs were inadequately detailed or provided inaccurate information. It especially criticized the practice of robbing parts from active cars to avoid late departures of other outbound trains, explaining that it caused significant dysfunction downstream including, for example, inaccurate information about actual quantities used that in turn resulted in either oversupply or out-of-stocks. Because mechanics were not always diligent about reporting that they had “borrowed” a part, reports overstated the number of cars actually ready for service The adverse impact on morale in the Mechanical Department has been significant.

The OIG report confirmed many of the problems that I pointed out to Mr. Gardner when I met with him in New York nearly a year ago. Below is the recap of our discussion that I sent him in my letter of May 4, 2023:

• “Internal Amtrak sources report that field personnel are hamstrung, and that industry is slow delivering current and prospective railcar orders.
• “Work orders and internal approvals that are needed to get work into and out of the shops are profoundly delayed.”
• “Too many layers of managers and supervisors combined with a deeply broken set of processes for identifying problems and getting them fixed.”
• “Industry is telling Amtrak, in general terms, that they might be able to begin fielding a first batch of new long-distance equipment in eight to 10 years.”
• “Alstom is completely failing in delivering the new ACELA II trainsets.”

Allow me to share excerpts from a 2020 Trains interview with former Amtrak President David Gunn about the company’s announced plan to cut most long-distance trains to triweekly operation. He predicted, correctly, that it would lead to a permanent reduction in the amount of serviceable rolling stock and cost the company the employee expertise necessary to run the system in the future:

• “[W]ith the way they are running the place [emphasizing cost cutting], the equipment not in use will be cannibalized, and you’ll wind up with yards full of cars and locomotives full of missing parts.”
• “Mechanical people were being pushed to lower expenses. f, say, an air compressor goes out and there’s a piece of equipment parked there, you just grab something off it instead of buying a new part. Your bottom line looks great to your bosses—for the short term—until you need that car or locomotive you just cannibalized.”
• “Congress thinks they’re not subsidizing the Northeast Corridor except on capital, but the NEC is in more trouble than the long-distance trains. If you can’t give Congress a reason for keeping the long-distance network together, then you can’t give them a very good reason to subsidize that corridor.”

On a related note, former Congressman Dan Lipinski (D.-Ill.) summarized his views two weeks later: “Too often it feels like Amtrak is happy to take money from Congress and then ignore Congress’ directives.”

Conclusion

I think it is fair to conclude that Amtrak can achieve the long-distance capacity and revenue goals contained in its latest Five-Year Plan only if it finds a way to increase the number of serviceable long-distance cars during the years between today and that uncertain time in the future when it can put new cars go into service. It needs to add such a plan–and the resources to execute it‑to its planning documents and funding requests.

To paraphrase Benjamin Franklin, “Hope is not a plan, and no plan is a plan for failure.”