Seventh in a Series: Beyond Daily Operation – Proposals for Reform

Thus far in this series, we have focused on the narrow issue of Amtrak’s service reduction from daily to three-times-a-week on its entire long-distance train network. We discussed costs, ideology, Amtrak’s impossible demands for restoring daily service, and what Congress can do to prevent the harm that Amtrak management is inflicting on the riding public and their communities.

If Amtrak is to survive, prosper and serve the American public (and some visitors to our country), it must operate its trains at reasonable frequencies, at least once every day. In the short run, bringing the trains back to daily operation would at least minimize the duration of a catastrophe. In the long run, though, it will not be enough. There are systemic and structural deficiencies in Amtrak that must be reformed. If that is not done now, it should be done soon, before the harm from the current service reductions becomes permanent. Times have changed considerably in the past six months, and so have travel patterns. With appropriate reform, Amtrak can move forward, but that will not happen under management’s current plan to slash service. This article will explore several ideas for reform at Amtrak that Congress should consider.

Travel patterns are changing, and many business are scaling back their in-office operations. More employees are working remotely from home or going to the office less often than before the coronavirus hit, and more business interaction is taking place on line or by telephone, rather than in person.

Airlines are in trouble due this decline in business travel, which should provide an opening for long-distance (L-D) trains. That goes especially for sleeping car passengers, who travel in private rooms for most of their trips. Amtrak also acknowledges that many L-D passengers travel for non-business reasons, and the numbers show that the L-D trains have experienced less of a decrease in ridership than the state-supported trains and corridors.

The decline is even more pronounced on the Northeast Corridor (NEC), which Amtrak promotes heavily for business travel, especially on its extra-fare Acela service. Several advocates, including Jim Mathews, CEO of the Railroad Passengers’ Association (RPA), pointed this out, as we reported in Part 5 of this series.

Yet, while Amtrak orders new equipment to replace the 20-year-old Acela trainsets, it continues to operate a dwindling roster of 35-year-old Superliner cars on the few L-D trains running west of Chicago and New Orleans, and even older Amfleet II cars on L-D trains that serve New York. To a rational observer, it appears that something is drastically wrong with this picture. We explored the ideological aspects of the current threat to the L-D trains in Part 3 of this series (Is It Money, or Ideology?), and we examined how cutting service actually costs more than running the trains daily (Part 2: Cutting Trains Costs More).

Amtrak’s management knows that, too. It appears that Amtrak is using the COVID-19 pandemic as an excuse to begin the process of eliminating the trains that link the cities and smaller towns of much of the nation together. Because Amtrak is acting knowingly, it does not appear that any attempts to negotiate with Amtrak will prevent the plan that its management has already begun to implement. Instead, it seems that only Congress can intervene to remedy the damage, as we have said several times in this series.

If Amtrak is strapped for cash, as many government agencies, corporations and ordinary persons are, the request for supplemental funds may be legitimate. In that circumstance, Congress should verify that Amtrak actually needs that amount of money and honor the request if it is reasonable, for the good of the country. Congress should also impose some requirements on Amtrak as part of an overall deal. While the issue of preventing the threatened the service reductions is now moot, Congress should still step in early next year and restore daily operations to the network, so the recommendations in this article remain relevant into the future.

Section 201 of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA) defines Amtrak’s “national rail passenger transportation system” as comprising the NEC, designated high-speed corridors (there are none at this time), state-supported corridors and routes, and “long distance routes of more than 750 miles between endpoints operated by Amtrak as of the date of enactment of the Passenger Rail Investment and Improvement Act of 2008” (§201(a)(5)(C)). That is the current skeletal network. No L-D trains have been added to the Amtrak system since that time.

Would it constitute a violation of that provision for Amtrak to reduce service on all L-D trains from daily to only three frequencies per week? This writer believes so. The two historically tri-weekly trains, the Cardinal and the Sunset Limited, have not run daily for decades (the Cardinal since 1981 and the Sunset Limited since 1970), so it is reasonable to expect that Congress saw the “national rail passenger transportation system” as one where people could get from one place to another relatively frequently and without catastrophic consequences waiting two or three days for the next train, if they missed a connection, at least for all except two of Amtrak’s trains. We will have more to say about connections in a future article in this series.

Back in 2008, Congress had reason to believe that Amtrak had learned its lesson after the disastrous Mercer Management cuts during the 1990s, after which most of the trains were restored to daily operation in 1997. The next Amtrak President, George D. Warrington, had said that in 2000. One person who especially  would have had reason to believe that was PRIIA’s sponsor, the late Rep. James Oberstar (D-Minn). Oberstar, who died in 2014, was one of the strongest advocates for better transit and a strong Amtrak who ever served in Congress. It is inconceivable to anyone who followed the politics of transportation during that period that Oberstar could have sponsored a bill that would have provided for an Amtrak “national network” so weak that it could not provide reliable and consistent service to its riders, at least once a day.

Everyone knew that the network was skeletal. Still, it makes no sense to assume that Congress wanted a network with so few trains to provide unreliable and inconsistent service for the communities served by those trains.

In this writer’s opinion, under no circumstances should Congress just write a check to Amtrak and then forget about Amtrak and its management in the future. Congress has given emergency funding to lots of enterprises recently, and even authorized checks or deposits to most Americans to help tide us over during the current economic downturn, which appears to be one of the worst this country has ever experienced. Compared to “bailouts” for private-sector industries and corporations, enough money to keep Amtrak going with reasonable service has been described as “a rounding error,” a characterization that makes sense.

That said, part of Congress’ overall dealings with Amtrak should include sufficient reform to make sure that Amtrak acts toward its riders and other stakeholders in the “public interest, convenience and necessity,” the old Interstate Commerce Commission (ICC) standard for the privately owned railroads that no longer operate passenger trains. (There is now Brightline in Florida, which has suspended operations, and which did not exist when the ICC did.).

That standard no longer applies to private-sector railroads, since the Surface Transportation Board (STB) replaced the ICC. Nonetheless, Amtrak, along with railroads owned by state or local authorities that provide local rail transit, are public-sector railroads. The Supreme Court has held that Amtrak is a public entity, rather than a private entity, for regulatory purposes: Department of Transportation v. Association of American Railroads, 575 U.S. ___, 135 S.Ct. 153 (2015); see also Sheys & Nossman: Examining the DOT v. AAR Supreme Court decision regarding Amtrak. In that case, the Court held that Amtrak could participate in rulemaking under PRIIA §207. In Lebron v. National Railroad Passenger Corp., 513 U.S. 374 (1995), the Court held that Amtrak is considered a public entity for First Amendment purposes. In addition, Amtrak’s voting stock (the preferred stock) is owned by the United States. So, since Amtrak is that sort of public entity, Congress and the USDOT, which effectively owns it, can force it to act like one, in the public interest.

The first priority should be an overhaul of Amtrak’s accounting practices. Many advocates distrust Amtrak’s numbers, and many commentators have complained about Amtrak’s accounting over the years, including here in Railway Age. Using Generally Accepted Accounting Principles (GAAP) in compiling and reporting ridership, costs, revenue and other metrics would help to establish credibility for Amtrak, which is now sorely lacking.

Along with rationalizing its accounting, Amtrak should also be required to report regularly to Congress, the FRA and other transportation officials, and the riding public about its activities and plans. Any specific proposals are beyond the scope of this article, but we all have a right to know what Amtrak is doing, and to have reasonable input into Amtrak’s decision-making processes. Amtrak must have reasonable accounting, disclosure and reporting requirements to act properly as “America’s Railroad.” Those requirements must be strong enough to preclude the sort of threats and actual elimination of trains in which Amtrak is engaged at the present time.

Amtrak appears to act as either a private corporation or a public entity, whichever suits its convenience, but it is well known that Amtrak has a pubic-interest responsibility to operate a national network, in addition to its other components. Congress should make that clear to Amtrak and the nation, and should enact appropriate guidelines, with appropriate input from actual Amtrak customers.

Amtrak should be required to run all trains every day, and should be prohibited from cutting any train to less-than-daily operation. The riding public deserves to be allowed to choose their preferred date of travel, rather than being required to accept Amtrak’s limiting their choice of travel date. Amtrak should also be encouraged, perhaps with sufficient funding, to expand the Sunset Limited and the Cardinal to daily operation. There have been proposals for both, and they should be implemented.

Amtrak should be encouraged to enhance service in all three of its sectors: the national network, the state-supported trains and corridors, and the NEC and its branches. The national network should be enhanced, both in terms of routes and frequencies on each route, and there should be adequate funding for such expansion. Amtrak is not suffering because it runs too many trains, but because it runs too few. The more trains that run on each route, the more that route attracts riders, and the lower the allocation of fixed cost is for each rider, which means that it costs less to operate better service. That has been amply demonstrated on state-supported corridors in Illinois, California and other places.

To accomplish this expansion, Amtrak needs more funding for equipment. The Superliner and Amfleet II equipment on the L-D trains is almost 40 years old, and the Amfleet I equipment on the NEC is even older. Yet the only equipment Amtrak has ordered in recent years is a fleet of baggage cars (even though baggage service has been reduced) and Viewliner dining cars for the single-level L-D fleet; mostly trains operating from New York. With recent cuts in food service that began in 2018, not one of those cars is used for preparing and serving meals anymore. Amtrak needs equipment to remain a viable part of the nation’s transportation system. In conjunction with that reform, it would not hurt for Congress to encourage Amtrak to bring back the amenities it eliminated during the past few years, as well, including making full use of the new diners, as originally intended.

If Amtrak is to be managed competently, it is essential that relevant experience, rather than political considerations, determine the makeup of Amtrak’s Board and senior management cadre. All of them should be required to have experience that would qualify them to manage a passenger railroad competently. Amtrak’s best managers, as recognized today, had considerable experience managing railroads (preferably including passenger trains) and/or local rail transit.

To avoid conflicts of loyalties, no Amtrak Board member or senior manager should have a significant history of working for a competing mode of transportation, like the airline, highway or automobile industries. Not only could such a person’s experience prove ineffective as a predicate to competent governance or management at Amtrak, but that person could harbor loyalties to a competing mode that could damage Amtrak and Amtrak’s riders. It should also be required that some Amtrak Board members should be regular Amtrak riders (there are plenty with appropriate credentials) and/or advocates from established rider-advocacy organizations. It would help even more if it is required that some rider-representatives depend on public transportation for all mobility, a recommendation this writer also makes for local transit.

It is essential that Amtrak’s governance be reformed significantly. The process for selecting Board members and senior managers at Amtrak must be removed from politics, and there must be a secure firewall separating the two. Just because Amtrak is in the public sector does not mean that the interests of politicians should trump the interests of Amtrak’s riders and their communities. Congress must make it clear that the riders are Amtrak’s primary stakeholders and must be treated accordingly. It is not Amtrak’s function merely to create jobs (although management wants to eliminate thousands of them at this writing), but expanding the network (in terms of both routes and frequencies). Running the trains properly will ensure plenty of jobs, for the benefit of Amtrak’s riders and their communities.

Times are contentious in Congress these days, with different parties controlling each chamber and an election coming up very soon. It is noteworthy that the full effect of Amtrak’s proposed cuts cuts is now taking effect, less than one month before that election. Ironically, at this writing, there are only two trains operating daily in the states that polls expect the Trump-Pence ticket to carry: a single daily train between St. Louis and Kansas City (there had been two until the COVID-19 virus hit) and the Heartland Flyer between Oklahoma City and Fort Worth. All other trains in those states now run only three times per week. It is too early to tell what impact these proposed cuts might have on the upcoming vote. Still, Amtrak serves almost the entire nation, “blue” states and “red” states. Riders are not concerned with partisan politics when planning a trip, and it is reasonable to expect that they appreciate the support that Democrats and Republicans have shown for our trains throughout Amtrak’s history. They might not appreciate losing their trains, and they might demonstrate that with their votes.

If Congress is going to act in the public interest concerning Amtrak, though, reform should be part of the deal. We do not know enough about Amtrak and its accounting to be sure of Amtrak’s numbers. Does Amtrak truly need the money it seeks, or is Amtrak management holding a significant portion of the nation’s mobility hostage? If Amtrak truly needs the money and can prove it, Amtrak should have it, but Congress must exercise its authority and impose reform, too. Any improvements that Congress might order will not come in a vacuum. If the Amtrak network that Americans enjoy today continues to operate every day, it will require a massive effort by riders and the advocates who fight for an improved Amtrak and for better rail transit.

We will return to what Congress and advocates can do in the future to restore the trains we have lost, but in the meantime, it is time to look at what these cuts mean to people who want to ride on Amtrak’s long-distance network, which now only runs three times a week. We will explore the issues of reduced connectivity and newly increased travel time from origin to destination in the next article in this series.

David Peter Alan is Chair of the Lackawanna Coalition, an independent non-profit organization that advocates for better service on the Morris & Essex (M&E) and Montclair-Boonton rail lines operated by New Jersey Transit, and on connecting transportation. In New Jersey, Alan is a long-time member and/or board member of the NJ Transit Senior Citizens and Disabled Residents Transportation Advisory Committee and Essex County Transportation Advisory Board. Nationally, he belongs to the Rail Users’ Network (RUN). Admitted to the New Jersey and New York Bars in 1981, he is a member of the U.S. Supreme Court Bar and a Registered Patent Attorney specializing in intellectual property and business law. Alan holds a B.S. in Biology from Massachusetts Institute of Technology (1970); an M.S. in Management Science (M.B.A.) from M.I.T. Sloan School of Management (1971); an M.Phil. from Columbia University (1976); and a J.D. from Rutgers Law School (1981). The opinions expressed here are his own.