Last month, a Wall Street Journal editorial hit the nail on the head recommending Amtrak focus its limited funds on shorter, more heavily traveled routes between Washington, D.C., and Boston.
The money is needed to prevent more derailments. The situation will only worsen unless Amtrak plows additional funds into rebuilding its dilapidated northeast railroad infrastructure.
It must quit subsidizing runs greater than 750 miles. One is the Empire Builder, the passenger train started in 1929 between Seattle and Chicago. It is bleeding red ink. At best, Amtrak recovers about two-thirds of its operating costs on this route.
Gone are the Great Northern Railway’s nostalgic Omaha orange and Pullman green passenger trains. Unless Amtrak’s silver Empire Builder pays for itself, it also needs to go.
The key issues today are travel time and costs.
Seattle to Chicago is a two-day ride under the best of circumstances. Most travelers now opt for a three-hour direct flight. In the Northeast, it is a different story. A three-hour rail commute between our nation’s capital and New York City beats navigating crowded airports.
“By contrast, Amtrak carries three times as many riders between Washington, D.C., and New York City as all the airlines combined. The annual ridership on the Northeast Corridor is more than three times the population of Connecticut,” according to the WSJ.
The Empire Builder’s economics don’t work either. For example, if someone has a week’s vacation and wants to spend time in Seattle or Chicago, the round-trip train ride takes four days. Round-trip, non-stop airline tickets are as low as $350; the same cost as a value seat on Amtrak.
If a rail passenger prefers a “roomette,” a private room with a bed, the fare jumps to $1,900 compared with a round-trip, non-stop, first-class flight costing as low as $800.
Here is the WSJ’s bottom line: “Amtrak’s $500 million operating profit along the Northeast Corridor was wiped out by losses on long-distance routes that can’t compete with airlines in cost or speed while offering equally miserable customer service.”
In the Northeast, Amtrak owns and is responsible for upkeep of its track; however, nearly three-quarters of the miles Amtrak trains travel are owned by other railroads. Amtrak pays railroads, such as BNSF Railway, to use their tracks and on which it competes with freight trains for track time.
In the past, Congress propped up Amtrak. For example, in 1997, federal lawmakers gave it money and told it to be self-supporting. However, by 2001, it was running a $1.1 billion deficit.
Congress also sent Amtrak inconsistent messages. For example, it wants the railroad to develop a high-speed system and appropriated $8.1 billion in 2015.
“But Amtrak doesn’t have enough money to upgrade the tracks, so speeds won’t exceed 160 miles per hour — about 25 mph faster than the current top speed between New York and Washington — and trip times will be about the same,” the WSJ editors point out.
The bottom line is, the federal government can’t afford additional subsidies to Amtrak, especially when our national debt will soon zoom beyond $20 trillion.
Congress can no longer take over a railroad and pump $2.8 billion into it like it did a half-century ago. At the time, Penn Central was losing $1 million daily and filed bankruptcy. The culprit: poorly maintained track and malfunctioning equipment.
President Trump suggests Amtrak “zero-out” money for long-distance rail service. WSJ goes further saying: “Congress should do him one better by spinning off the Northeast Corridor — private investors might be interested — and devolving shorter distances to states.”
Don Brunell, retired as president of the Association of Washington Business, is a business analyst, writer, and columnist. He lives in Vancouver and can be contacted at TheBrunells@msn.com.
