Rail Passenger Funding, Running Amtrak on Time, New NS President Didn’t Impress Some Workers

Bit and pieces of insights into the workings of railroad world . . .

I recently received in my email inbox a message quoting Evan Stair of the Friends of the Southwest Chief group in which he suggested that the promise of new and expanded service contained in the Amtrak Connects US plan is largely a mirage.

Stair, whose group has been promoting additional Amtrak service along Colorado’s Front Range and extending the Heartland Flyer north of Oklahoma City to connect with the Chief in Kansas, was commenting on a Bloomberg News story in which Amtrak President Stephen Gardner said the plan to add 39 new routes will require state financial support.

Amtrak has estimated the plan will cost $75 billion to implement.

In his interview, Gardner characterized the federal government as the capital partner but the ongoing operating expenses are the responsibility of the states and Amtrak.

And Amtrak has made clear that it’s responsibility to pay operating expenses will only last at best for five years. After that states will be on the hook to pay operating expenses as is the case now with state-supported corridors on the West Coast, in the Midwest and along the East Coast.

“I frankly believe the Amtrak Connects US program will result in few, if any new routes,” Stair wrote. “States are unlikely to commit to long-term operational dollars without some federal operational matches.”

Stair is probably right about that but could have gone even farther. It may not be realistic to think that states that are not now and/or have never paid Amtrak for corridor service will do so in the future even with a short-term Amtrak funding match for operational expenses.

Yes, I’m talking about you, Ohio.

Speaking of Amtrak, Canadian Pacific CEO Keith Creel told a Midwest shippers conference in Chicago last week that he was “proud” of having reached an agreement with the passenger carrier to allow for the prospect of additional passenger service on routes operated by CP and it merger partner Kansas City Southern.

As reported by Trains magazine, Creel also talked about how CP has become one of Amtrak’s best host railroads in dispatching its trains on time. It wasn’t always that way.

“Five years ago, six years ago, we didn’t lead the industry in Amtrak service,” Creel said.

He went on to say that his 30 years as an operating officer taught him that it’s not easy for a freight railroad to coexist with passenger service.

“I understand the conflicts sometimes and the tradeoffs sometimes when you mix high speed passenger rail with what is, in comparative terms, low-speed freight rail,” Creel said. “I understand the track geometry challenges, I understand the speed challenges. But I also understand that if you prioritize right, and there’s tradeoffs, and balance in a partnership, you can succeed. And that’s the approach we’ve taken at CP.”

Creel’s comments suggest that having the right attitude is key to running passenger trains on time and if CP can do it so could the other Class 1 Amtrak host railroads.

Yet CP doesn’t host as many Amtrak trains as its Class 1 brethren and doesn’t host any long-distance trains over thousands of miles.

Perhaps the best that can be expected is that the host railroads could do better than they do, but dispatching is a balancing act and there will be times when a host railroad puts its own interests ahead of avoiding delaying Amtrak for what the host sees as a relatively short period of time.

Speaking at the same shipper’s conference, new Norfolk Southern President Alan Shaw told a story of how on his first day in his new post he decided to go out into the field and meet and greet NS operating employees in Toledo, which is the largest NS crew change point on the system.

 “I wanted to thank [the employees] for their dedication to Norfolk Southern and our customers, and I wanted to get their input into how we fix service and how we continue to improve our productivity,” Shaw said.

As reported by Trains magazine on its website, Shaw said he approached some workers sitting outside the crew room.

He was wearing khakis, boots and a collared shirt and the workers thought he was an operations supervisor.

 “So I walk up and introduce myself. They told me their names, and one of the guys said, ‘Well, what do you do?’ I said, ‘Well, I’m the president’. And he looks at me, and I’m like, ‘Not Joe Biden president, but president of Norfolk Southern.’ And the other dude pulls out his phone, and he’s like, ‘Oh, yeah, yeah, yeah, I see the announcement. Congratulations!

“So that made me feel good. And then the one guy looks at me and says, ‘What craft did you come from?  . . . Were you mechanical, or engineering, or a conductor, or an engineer?’

“And I was like, ‘No, I started in finance.’ He was really not impressed with that. He goes, ‘Man, at some point, we’re going to have a craft employee running the railroad.’

“It is somewhat humbling when you go out there and talk to them, because they’ve got their own expectations.”

Shaw is right about that, but expectations are not reality. It’s possible that a future railroad president might have worked as a craft employee at an early point in his or her railroad career, but it is not realistic to think that C suite executives will be pulled from the ranks of operating or maintenance employees.

If you want to be a railroad president you need to have spent extensive time in such areas as finance, law or marketing and moved up the ranks in those departments.

Operating employees are not the only railroad stakeholders who have expectations and the expectations of some stakeholders carry more weight than those of others.

Shaw told another story about his first conversation with members of the railroad’s board of directors.

 “Their primary message to me was, ‘Don’t mess up,’” Shaw said. “Now, it was a little more forceful than that. I’ll let you use your imagination what the real verb was that they used.”

I think we can easily figure that one out.

Charting the Obstacles to Passenger Rail Expansion

Last in a three-part series

During the week that leaders in the House of Representatives were struggling to push approval of the Infrastructure Investment and Jobs Act over the finish line, CSX and Norfolk Southern fired another shot across Amtrak’s bow.

The two Class 1 passenger carriers asked the U.S. Surface Transportation Board to dismiss a case brought by Amtrak last spring seeking to have regulators compel the freight carriers to host a new rail passenger service between New Orleans and Mobile, Alabama.

The Gulf Coast corridor proposal is a harbinger of what lies ahead for other proposed new Amtrak services that could be funded by the IIJA. It is a sobering cautionary tale.

Funding for operating and capital expenses is already in place for the 150-mile New Orleans-Mobile route that until August 2005 hosted Amtrak’s tri-weekly Sunset Limited between Los Angeles and Orlando, Florida.

CSX, which owns most of the route, has been dragging its feet on the proposed New Orleans-Mobile service for more than five years. At one point it demanded $2 billion in route infrastructure work.

In their STB filing, CSX and NS said they would withdraw their opposition to the new service if Amtrak pays for 14 capacity improvement projects the carriers say are needed.

In a fit of hyperbole, the Class 1 carriers said Amtrak service without these improvements would cause “systematic failure” to their freight service, most notably adversely affecting first mile, last mile freight service to shippers. These assertions would be comical were they not so serious.

For years Amtrak’s host railroads have demanded expensive infrastructure improvements as the price of agreeing to service expansion, including daily service for the Sunset Limited and Cardinal, or new service on a now freight-only route.

Many a service expansion has been stymied due to these demands for capital improvements, which Amtrak usually cannot afford.

The underlying conflict before the STB is about more than whether passenger trains are going to operate between New Orleans and Mobile and how much Amtrak and its state partners will have to pony up for infrastructure improvement projects.

Ultimately, it is about rules and whose interests those rules favor.

Amtrak and rail passenger advocates want rules that provide an easier path to service expansion in the face of host railroad resistance.

The host railroads want to maintain the status quo of being able to dictate the terms of access. They dislike having to deal with political pressure seeking to force them to accept passenger trains that they view as having the potential to interfere with their freight operations. They dislike having foisted upon them something they view as contributing nothing to their primary reason for being, namely providing transportation of freight.

I’ve written about this issue before and you can follow this link to read more: https://wordpress.com/post/akronrrclub.wordpress.com/61853

If Amtrak loses the STB Gulf case or gets a mixed decision that could curtail how much service expansion it is able to achieve.

But even a favorable decision for Amtrak may not be enough. NS and CSX and/or the Association of American Railroads are likely to go to court to seek to overturn that ruling or get it modified. They have the resources to litigate for as long as it takes to get the rules that they want.

From a rail passenger advocate perspective, the STB case is about serving the public interest. Rail passenger advocates make the assumption that additional intercity rail passenger service by definition does that.

From a host railroad perspective, the STB case is about maintaining control of its own property and protecting its competitive position in the transportation industry.

This is not to say host railroad resistance can’t be overcome. It is matter of on whose terms these disputes will be settled and how much that will cost. It is why the STB case could be critical to the success of the Amtrak ConnectsUS plan.

There are other potential obstacles standing in the way of passenger rail expansion.

The Amtrak ConnectsUS plan is predicated on state and/or local governments taking over the operating expenses of the new corridors described in the plan.

Amtrak has proposed paying up to 90 percent of those costs initially and fronting money for capital projects to establish stations and do host railroad-demanded infrastructure work.

The Amtrak share of operating costs will eventually reach zero over a six-year period.

A key question is whether Amtrak or the FRA will move ahead on projects in which the state(s) to be served by a new route fail to commit to picking up their share of a route’s operating costs.

The Amtrak ConnectsUS plan seems built on the belief that once the new services are up and running the states served will recognize their value and provide funding. Amtrak seems to be hoping that public pressure will lead to continued state funding of the service by the states served.

But what if they don’t? Many of the proposed new corridors are in states that have never funded Amtrak service. Why would they want to do so now?

The American Recovery and Investment Act of 2009 contained $8 billion in grants for high-speed rail projects that did not require a state match.

In January 2010 Ohio received a $400 million grant to launch the 3-C Quick Start project.

In that year’s gubernatorial election, Republican John Kasich actively campaigned against the 3C project and Republicans who controlled the Ohio General Assembly expressed concerns about Ohio having to pay $17 million for operating costs.

After defeating incumbent Ted Strickland, a Democrat, Kasich killed the 3-C project. Ohio Republican legislative leaders in a move that was not well publicized at the time created rules that made it highly unlikely that Ohio would be able to use the federal grant to establish the 3-C Quick Start project.

The U.S. Department of Transportation took back the grant minus the $2 million Ohio had already spent. That money was disbursed elsewhere, primarily to California.

Ohio was not alone in spurning ARIA funding for rail passenger service. Projects in Florida and Wisconsin also were killed by incoming Republican governors.

The rules for grants the FRA will be awarding from IIJA funds have yet to be written although the IIJA enabling legislation establishes some criteria as described earlier in this series.

It is not difficult, though, to image that what happened in Ohio in 2010 could happen again when it comes to developing new passenger service envisioned by the Amtrak ConnectsUS plan.

Some new passenger services may result from IIJA funding, but the scope of expansion might be more modest than what rail advocates are envisioning.

Another obstacle could arise in 2023 when the 118^th Congress is seated.

Just as what happened in Ohio in 2010, the 2022 election season is likely to feature candidates pledging to repeal or restrict how funds from the IIJA are used. Passenger rail could find itself in the cross hairs of those attacks.

Historically, the party that holds the White House in a president’s first term loses seats in Congress in the next mid-term election.

With Democrats holding paper-thin margins in the House and Senate, it would not take much for Republicans to gain control of one or both chambers in the 2022 elections.

If that happens, the environment for passenger rail in the 118^th Congress likely will be quite different than it has been in the 117^th Congress.

As pointed out in the first installment of this series, realizing the full potential of the IIJA on passenger rail service expansion will require appropriation of funds by Congress.

It is difficult to imagine a GOP-Controlled Congress being receptive to spending billions on new rail passenger service.

Republicans tend not to favor expansive and expensive government programs. Many GOP members of Congress identify as fiscal conservatives and they often oppose government-funded passenger rail of any kind.

Some of Amtrak’s fiercest and most persistent critics are conservative think tanks and many GOP members of Congress align with their views when it comes to transportation policy.

President Joseph R. Biden will still be sending appropriation proposals to Congress in January 2023 and 2024 and his administration probably can be counted on to recommend friendly budgets for passenger rail.

Yet Congress will have the final say on how much money passenger rail receives. A Republican-controlled Congress will not be inclined to give Biden any victories he can point to if he seeks re-election in 2024.

It’s not that all Republicans are opposed to intercity passenger rail. Amtrak’s national network has survived as long as it has because enough GOP representatives and senators have voted in favor of continued funding for it. Some of them have advocated for maintaining the existing Amtrak service in their states.

Republicans and Democrats have philosophical differences when it comes to how to spend public money and what to spend it on. There is nothing sinister about that. It is just a divergence of viewpoints about the role of government at the federal, state and local levels.

This includes differing views on the role government has to play in transportation policy and what modes of transportation should benefit the most from government investment.

But even putting that aside, there are limitations as to how much either party is willing to spend on rail passenger service.

In the 50 years of Amtrak’s existence, many Democratic administrations and Democratic-controlled chambers of Congress have failed to provide the type of reliable dedicated funding of rail passenger service that advocates and Amtrak have sought.

It is one thing to marshal political support to maintain the status quo of the existing intercity rail network and quite another to build support for the type of expansive additions to the network that rail passenger advocates favor.

There just seems to be too many forces that have kept intercity rail passenger service from developing into something more than a boutique form of transportation. The IIJA has not vanquished those forces.

The passage of the IIJA and its historic levels of passenger rail funding may thus turn out to be an aberration rather than a transformation to a new world order in which the nation’s rail passenger network undergoes a substantial expansion to resemble something from the 1950s.

There is too much entrenched opposition from interests who fear passenger rail’s gains will come at their expense.

This dynamic be can be seen at the state level where lawmakers must approve a balanced budget every year and passenger rail funding is weighed against the importance of other needs.

Those competing interests were on vivid display in Ohio in 2010 in the controversy over the 3-C Quick Start project.

Aside from a potentially hostile political environment and host railroad intransigence, the success of passenger rail programs funded by IIJA are linked to how well or how poorly the law is implemented.

The potential of the IIJA to influence rail passenger service is a long game and over the course of it there are bound to be changes in priorities among Amtrak managers, members of key congressional committees, and state and local transportation agencies.

Those changes will affect what does and doesn’t get done.

At this point there is much anticipation and expectation among rail passenger advocates about what could happen now that the IIJA is in place.

But expectations are not reality. It is a lesson passenger advocates know all too well. For once there is reason to be optimistic that good things are going to happen. From a passenger rail perspective, some good things will happen with IIJA funding.

It is just that what IIJA is able to achieve may not be as far-reaching as many passenger rail advocates want to believe.

It is far from a sure thing that we are on the cusp of a new era or a second rail revolution.

How IIJA’s Rail Funding is Being Allocated

Second in a three-part series

If you’ve ridden an Amtrak long-distance train lately, you know why the passenger carrier could use some new equipment.

As you sit in your Superliner sleeper room you’ll hear squeaks and rattles. Savvy travelers have learned to bring duct tape with them to help muffle the noise.

It will take awhile but new equipment to replace the Superliners, the first of which entered revenue service in 1979, may be on the way thanks to the Infrastructure Investment and Jobs Act.

IIJA is a way for Amtrak to capture capital funding it has coveted for years but been unable to get approved by Congress.

Much of the $66 billion for rail in the IIJA will be used to rebuild existing infrastructure and buy new equipment to replace passenger cars and locomotives that are long in the tooth.

As for how the money in the IIJA for rail will be divided, the Northeast Corridor gets $30 billion with $6 billion going directly to Amtrak and $24 billion being funneled through the Federal Railroad Administration for federal-state partnership grants.

Amtrak’s priorities for this funding include replacement of the Portal Bridge over the Hackensack River in New Jersey; construction of new tunnels under the Hudson River between New Jersey and New York City; rehabilitating a tunnel under the East River in New York City; replacing the B&P Tunnel in Baltimore; and planning to rebuild or replace bridges over the Susquehanna and Connecticut rivers.

The national network gets $28 billion of which $16 billion goes directly to Amtrak and $12 billion to FRA federal-state partnership grants.

Aside from buying new equipment, this funding will be used for infrastructure work on select national network routes, including Amtrak maintenance facilities and passenger stations.

Much of the latter involves bringing stations up to date in meeting standards of the Americans With Disabilities Act.

The federal Consolidated Rail Infrastructure and Safety Improvements grant program gets $5 billion but this money is not restricted solely to passenger rail projects.

The FRA’s grade crossing elimination program gets $3 billion, which can be used for Amtrak-owned lines, such as the one in Michigan, or for freight and commuter rail lines.

The bill reserves $50 million for an FRA Restoration and Enhancement Grants program, which is the funding mechanism for new service on routes Amtrak does not now serve.

There is also $15 million set aside for the FRA to conduct a study of routes operated “less often” – think the Cardinal and Sunset Limited – as well as restoration of previously discontinued long-distance routes or new long-distance routes.

All that is guaranteed to happen is the FRA will conduct a study that might recommend changing tri-weekly trains to daily operation,

The FRA study might recommend adding new long-distance routes or restoring trains that vanished decades ago such as the North Coast Hiawatha, Lone Star or Broadway Limited.

It will be up to Congress to appropriate the money to pay for those trains and Amtrak would need to negotiate operating agreements with the host railroads.

It will be years before the potential of the IIJA is fully realized.

Amtrak is in the very early stages of designing new cars to replace the Superliner fleet.

Even when new cars and locomotives roll off the factory floor it can be months before they begin revenue service.

The new Siemens Venture cars to be used in Midwest corridor services have yet to begin revenue service despite having been on the property for months.

The first new Siemens ALC-42 Charger locomotives are still undergoing testing. For that matter Amtrak has yet to put into revenue service all of the Viewliner II equipment it has.

Many of the improvements the money from the IIJA is expected to pay for will occur behind the scenes, such as modernizing the reservation system.

As has been demonstrated many times during Amtrak’s 50-year history, the wheels of change turn slowly and sometimes they don’t turn at all.

A host of obstacles lie in the path of new and improved rail service over which Amtrak and the Biden administration little to no control.

These have the potential to thwart new services and even reduce the effectiveness of the IIJA.

Next: The challenges facing passenger rail will dictate how transformative the IIJA turns out to be.

Analyzing Amtrak’s Revamped Dining Service

Amtrak returned full-service dining to five long-distance trains a month ago, all of them operating in the West and parts of the Midwest.

I haven’t had an opportunity to sample the revived full-service dining, but a two-part report written by Bob Johnston, the passenger correspondent for  Trains magazine was published last week on the magazine’s website and offers some insight into the service.

Johnston generally gave Amtrak high marks for its revamped dining car menus and service.

One key take away from his report is the food has improved in quality over that served in dining cars before full-service dining was removed in late spring 2020 in response to the COVID-19 pandemic that sent Amtrak ridership plummeting.

A chef working the Chicago-Los Angeles Southwest Chief gave as an example the flat iron steak which he said is “the same cut, but these (served now) have more marbling and are a lot more dense.”

Other changes have included the addition of colorful garnishes, more seasoning and multiple sauces. Vegetables served with entrees were described as fresher.

The steak still comes with a baked potato but patrons can request a creamy polenta, which the chef said compliments the Bordelaise sauce served with the steak.

Before the pandemic, dinners came with a lettuce salad but that has been replaced with a choice among three appetizers: A tossed-to-order salad of baby greens and tomatoes topped with a brie cheese; a lobster cake, or a green cheese tamale.

As before, dinners come with a desert. Unlike before, dinners now come with one complimentary alcoholic beverage.

Yet in some ways full-service dining is little changed from what it was before the pandemic. Entrée staples still include the flat iron steak, chicken breast, and salmon. There is also a tri-color cheese tortellini pasta dish.

Not everything is prepared fresh on board. The lobster cake comes precooked and frozen so the kitchen staff merely heats it onboard.

The Trains analysis, which was based on sampling meals aboard the Southwest Chief, said the changes to breakfast and lunch have been a little more subtle.

Back is French toast, which can be ordered with whipped cream. There are made-to-order omelets.

However, passengers still can’t order eggs over easy or get toast at breakfast. Both were eliminated in the 1990s.

Full-service dining is available only to sleeping class passengers. Coach passengers are confined to the snack-heavy café car.

At the time that Amtrak announced the return of full-service dining to the western trains it also said it planned to add fresh selections to café cars. Those additions have yet to be made.

And it remains unclear when or if full-service dining will return to eastern long-distance trains or the Texas Eagle.

The Trains analysis aptly noted that some passengers aboard those trains are onboard for more than four meal periods.

Amtrak has hinted that full-service dining might return to eastern long distance trains late this year or in 2022. Officials said the carrier wanted to gauge passenger response to the new menus on the western trains before looking to implement them elsewhere.

As for when or even if coach passengers will be able to dine in the diner, Amtrak has been noncommittal. Officials said they were studying that but suggested it might take the form of allowing coach passengers to buy meals on a take-out basis and/or have them delivered to their coach seat.

The Trains analysis offered a glimpse of two conundrums posing a challenge to allowing coach passengers back in the dining car. It would require additional staff in the kitchen and dining room in order to create faster table turnover.

Another factor is pricing. Before Amtrak instituted flexible dining in June 2018 on the Lake Shore Limited and Capitol Limited, dining car menus had prices. The current dining car menus on the western trains do not show prices because the clientele already paid for their meals in their sleeping car fare.

As I’ve written in previous posts, most of those dining car prices were quite high with some entrees costing more than $20. Even breakfast was quite pricey for what you got.

The Trains analysis suggested some less labor intensive food selections would have to be added to the menu that could be sold at lower cost.

Many, if not most, coach passengers are unwilling to pay or unable to afford the prices Amtrak charged in dining cars in the past.

There will always be coach passengers willing to pay those prices to have the dining car experience. But they are not necessarily a majority of the coach clientele.

Amtrak’s food and beverage service is an evolving process that isn’t moving as fast or necessarily toward the destination that many rail passenger advocates want it to see.

The dining car experience is still not the same as it was before the pandemic or, in the case of eastern long-distance trains, since the onset of flexible dining with its limited choices.

Amtrak management has not talked about the prospect of doing what the passenger carrier did in the 1990s when dining car menus featured regional offerings associated with a region of the country the train served.

That lasted a few years then fell by the wayside as Amtrak management went to a standard dining car menu for all trains with diners.

For now, the dining car experience is available only in the West and only to those with the means to afford sleeping car fares.

Dining service is an emotional subject for some passengers and passenger train advocates, particularly those above a certain age, who wax nostalgic about all of the people they enjoyed conversing with over a meal and lament having lost that.

Some remember a time when railroads used their dining service as a marketing tool and offered meals that rivaled in quality what was served in the better hotel restaurants.

They tend to believe as an article of faith that full-service dining is critical to drawing more people aboard the train and boosting Amtrak’s revenue.

Johnston, the Trains passenger correspondent, falls into that camp. In his piece he argued that reviving full-service dining on such trains as the Lake Shore Limited, Capitol Limited, Cardinal, and City of New Orleans would give “travelers in some of the country’s top population centers more incentive to ride.”

That in turn would generate more cash for Amtrak, Johnston asserted. How much more? He didn’t say because he doesn’t know.

There is much Amtrak knows about its finances and passengers that it doesn’t share with the public, arguing that that information is proprietary.

It probably is true that the upgraded dining service has boosted the morale of Amtrak food and beverage workers as the article suggested and resulted in happier passengers.

Yet as the pandemic and the politically-motivated attacks on Amtrak food and beverage service of past years have shown, all of that can change virtually overnight and probably will.

Oberman Continues to Assert Himself

Martin Oberman was at it again last week. This time he was prodding Class 1 railroads to provide more information about congestion at intermodal terminals.

The chairman of the U.S. Surface Transportation Board was acting after some railroads embargoed containers in an effort to clear out backlogs in intermodal terminals on the West Coast and in the nation’s heartland.

The temporary embargoes in particular were affecting international shipments. Containers are stacking up faster at terminals than railroads can move them and customers can receive them.

“I am particularly concerned about significant increases in container congestion at key U.S. terminals, and substantial charges being levied by the railroads for container storage at these terminals,” Oberman wrote in letter to the CEOs of North American Class 1 carriers.

Industry observers have said the supply chain congestion has been triggered by strong consumer demand that has led retailers to seek to restock their warehouses and store shelves.

Other factors are labor shortages and COVID 19-related protocols

Shippers have been slow to return containers to intermodal terminals, which resulted in a chassis supply shortage and diminished drayage capacity.

For their part, the Class 1 railroads contend that the intermodal congestion is not their fault because it has been caused by matters that are largely been beyond their control.

Railroads argue they are working with ports, steamship lines, shippers, and drayage companies to ease congestion.

Yet shippers point fingers back at railroads, saying they are charging excessive demurrage fees for containers stuck in intermodal terminals.

Oberman cited the latter charge in his letter to the railroad chiefs.

“The Board has received numerous reports related to the length of time that containers are being held in rail yards, and the sizeable storage fees (“demurrage”) some customers have been required to pay in order to obtain release of containers bearing their shipments,” he wrote. “These reports have come from shippers, both large and small, in addition to third-party logistics providers. I am particularly troubled about reports that Class I railroads are continuing to impose these charges even in circumstances when the receivers, as a practical matter, have no means to facilitate the release of their containers. Under these circumstances, demurrage fails to provide any constructive incentives, and perversely results in massive charges that can exceed the commercial value of the shipment.”

The STB head wants railroads to provide information on their demurrage policies, whether receivers are permitted to use their own chassis to retrieve their boxes, a description of any efforts made to reduce storage charges when the delay is beyond a shipper’s control, and the average daily volume of stored containers.

The STB’s authority over intermodal is limited due to exemptions that prevent regulators from seeking to apply its  demurrage policies and rules would apply to containers and trailers.

Some shippers are pressuring the STB to lift those exemptions, although Oberman underscored in his letter that the STB is not seeking at this time to do that. Nor did Oberman threaten to do that, at least not just yet.

“Because I recognize the significance of any such potential Board action, I am requesting the above information to facilitate careful consideration of this difficult situation and to assist the Board in determining whether any action may be warranted.”

In response the Association of American Railroads issued its own letter warning Oberman and regulators to stay out of the matter.

“​​Railroads are engaging with their customers, supply chain partners, and other stakeholders to do their part to meet demand to support the recovery of the national economy,” AAR attorney Timothy Stafford wrote.

“Particularly at this critical time in the nation’s recovery, regulatory action by the STB that interfered with that effort or that hindered railroads’ ability to serve their customers could be very damaging.”

Earlier this month, Oberman spoke out about what he termed questions about whether railroads are shirking their common carrier obligations under pressure from Wall Street investors seeking higher railroad industry profits and stock prices.

Oberman has also said regulators will take a look at such matters as reciprocal switching, lifting exemptions on the regulation of certain commodities, and ways to more easily settle rate disputes.

None of those probes is likely to please the AAR and its members. Yet an analysis published on the website of Trains magazine last week suggested that the STB interest in taking a more hands-on approach to regulation may be a consequence of what railroads have been doing in the past several years in the wake of their adoption of the precision scheduled railroading operating model.

After switching to PSR, carriers have reduced service, ceased pursuing or carrying certain types of traffic, and emphasized traffic that provides higher profits.

The Trains analysis cited a warning cited in January 2019 by former BNSF Executive Chairman Matt Rose warned that Class I railroads were courting regulatory risk.

“We have this common-carrier obligation to provide freight service to all customers in all markets,” Rose said. “And what we’re doing in PSR is we’re redefining what we’re willing to accept in the freight railroad industry on certain lanes. And I really do believe we’re going to get in a lot of trouble by doing that.”

“When you start redefining markets I think then the federal policymakers will look at this, and quite frankly, they will not be happy with us,” he said.

Oberman has signaled on multiple occasions that he intends to do just that. He recognizes that doing so will invite railroad industry resistance.

“I am frequently reminded by my friends in the railroad industry that we should butt out and the market should regulate rates and service. And I agree. I think the market should regulate rates and service,” Oberman said. “But . . . for that to happen there has to be a market. And so to me, it is far better if we have more competition in the shipping and freight industry so we don’t have to get involved.”

Aside from such issues as reciprocal switching, which allows captive shippers to seek access to another nearby railroad via interchange, the more activist approach espoused by Oberman may affect how regulators view the CSX acquisition of Pan Am Railways and the efforts of Canadian National to acquire Kansas City Southern.

Some of the increased attention being paid to railroad operations can be tied to a change of administrations in Washington, but even before that the STB had begun giving transactions more scrutiny.

An example of that were the conditions regulators imposed on the sale by CSX to CN of the former’s line from Syracuse, New York, to Montreal.

The STB approved the sale, but imposed conditions that both class 1 carriers found unacceptable. The sale has yet to be consummated.

In that case, the STB sought to require short line railroad connections with CN that CSX opposed.

It remains to be seen how far Oberman and his fellow regulators will go with their renewed interest in being more active.

Regulators may approve the CN-KCS merger and the CSX acquisition of Pan Am, but with strings attached that the parties might not like.

Looming in the background is the political balance of power at the federal level. It currently favors a more activist approach to regulation but that could change if control of Congress changes hands in the 2022 elections.

The Trains analysis concluded by saying that Oberman’s comments should serve as a wakeup call that there’s a new sheriff in town.

For now that sheriff is more interested in asking questions and raising concerns about issues that railroads would prefer regulators stay away from. But the carriers ultimately have little choice for now but to endure what Oberman and others are dishing out and work with it.

Infrastructure Agreement Cuts Money for Amtrak Expansion

As details about the $978 billion compromise infrastructure plan that President Joseph Biden and a bi-partisan group of senators announced last week, the future for Amtrak service is looking less rosy than it was last March when the passenger carrier released its Amtrak Connect US plan.

Nonetheless, it’s still a promising future albeit one that is less grand in scope.

Back in the spring, the Biden administration was talking about Amtrak getting $80 billion, much of which would be used to expand its network and increase service.

But the plan announced last week contains $66 billion for passenger and freight rail to share, which means that although Amtrak will be getting a funding boost, it won’t be nearly as much as some had hoped for.

The bi-partisan plan calls for allocating over the next five years $579 billion in new spending of which $312 billion will go toward transportation.

Of the new transportation spending, public transit would receive $49 billion; ports and waterways, $16 billion; roads, bridges and major projects, $109 billion; and airports, $25 billion.

Other spending includes $266 billion for infrastructure spending on water, broadband and power.

Although the plan has bi-partisan support in the Senate, it will not necessarily have smooth sailing through Congress.

Some Republican opposition is inevitable and it remains to be seen if the bi-partisan coalition will hold and if senators in both parties in the coalition can get their colleagues to go along with it.

Already there has been one dust up in which Republicans were reported to have been angered by

Biden’s remarks that the infrastructure deal was tied to Congressional approval of a separate Democrats-only $4 trillion plan to spend trillions more on health care, child care, higher education access and climate change programs.

That plan is contingent on changing the U.S. tax code, something Republicans have strongly opposed.

During his remarks last week, Biden said he would not sign the bi-partisan infrastructure plan without also signing legislation for his American Jobs Plan and American Families Plan.

After GOP discontent about that spilled into the news media, the White House backpedaled, insisting that Biden had misspoken.

“I gave my word to support the infrastructure plan, and that’s what I intend to do,” Biden said. “I intend to pursue the passage of that plan, which Democrats and Republicans agreed to on Thursday, with vigor. It would be good for the economy, good for our country, good for our people. I fully stand behind it without reservation or hesitation.”

To win the support of some moderate Republicans and Democrats, Biden had to give up some of the funding for transportation that he initially had sought in his infrastructure plan.

 Nonetheless, a White House fact sheet about the revised infrastructure plan contends the infrastructure plan contains funding that would modernize and expand transit and rail networks across the country.

 “The Plan is the largest federal investment in public transit in history and is the largest federal investment in passenger rail since the creation of Amtrak,” the White House said.

All of that may be accurate, yet it is becoming clear that the ambitious route expansions envisioned in Amtrak Connect US will be scaled back.

Even when the plan was announced earlier Amtrak had indicated it was a goal of what its network would look like by 2035.

Some commentators suggested the plan was more something to aspire to than a set of realistic objectives.

For its part, Amtrak was supportive of the bi-partisan infrastructure plan. “Amtrak is ready to support this vision for greater public transit,” an Amtrak spokesperson said.

Amtrak spokesperson Marc Magliari said the passenger carrier is excited to be on the offensive instead of having to constantly defend itself and its spending. 

Amtrak’s chief marketing and revenue officer, Roger Harris, had told Business Insider in mid June that the $80 billion plan was “extremely ambitious.”

However, even getting a portion of that would be “revolutionary,” he said.

That sounds like what you say when your pie in the sky dream collides with reality.

If things work out with the bi-partisan infrastructure plan then Amtrak will have additional money to expand some of its network.

It may be that the expansions that actually come about will occur in those states that have expressed a willingness to put up money to pay for new service.

Expansion is less likely to occur in states where state officials and legislators are apathetic, indifferent or even hostile toward spending money on supporting new Amtrak service.

Aside from money, what Amtrak also wants out of Congress is better leverage against its host railroads.

That would play out in two ways. First, it would give Amtrak more power to go after host railroads that consistently delay its trains or fail to give them preference over freight traffic.

Second, Amtrak wants more legal tools to force host railroads into hosting new service.

Rep. Peter DeFazio, chairman of the House Transportation Committee, is leading the effort to give Amtrak a right to have federal courts settle disputes with host railroads. 

“Right now they’ve got it the way they want it,” DeFazio said of Amtrak’s host railroads.

“So we’re going to change the law and give Amtrak better access.”

It remains to be seen how successful DeFarzio will be in doing this and whether those changes will withstand a court challenge that would likely be brought by the Association of American Railroads.

DeFazio is correct in saying host railroads like the balance of power they have with Amtrak and are not going to give that up willingly.

The legislative fight will play out this summer and fall, but the larger battles will take years to resolve if they ever are.

Senate Committee Puts Brakes on Amtrak’s Expansive Vision

Last week the Senate Commerce Committee approved its own version of a new surface transportation authorization act.

The bill, known as the Surface Transportation Investment Act of 2021, would replace the FAST Act, which is set to expire on Sept. 30.

What is noteworthy about the Senate bill is how it differs in one key area from a House surface transportation bill approved two weeks ago by a House transportation committee.

Although it boosts transportation funding generally and Amtrak funding in particular, the Senate bill would authorize far less money for both areas than the House bill.

That’s a critical point because much of the much ballyhooed Amtrak service expansion plans are premised on Congress approving a dedicated funding program to pay for that expansion.

The House bill does that but not so the Senate bill.

Before getting into the details about that, let’s get straight that both bills authorize spending but do not appropriate it. Those are separate processes and although they are related.

Think of the surface transportation bill as setting spending priorities that Congress will, presumably, follow.

As for those spending priorities, the Senate bill would authorize just 36 percent of what the House bill would authorize.

The Senate bill increased transportation funding for freight and passenger rail, but not as much as the House bill.

Over the five-year life of the Senate bill, transportation funding would be authorized at $34.2 billion. The current FAST Act level is $14.3 billion.

Missing from the Senate bill is the funding authorization for the grant program that Amtrak plans to use to develop its new corridor services.

The House bill would provide $25 billion for that while the Senate bill provides nothing.

Also in the House bill is $25 billion for grants for bridges, tunnels and stations. The Senate bill has no authorized funding for that grant program.

Senate authorizations for Amtrak funding in Senate bill are lower than in the House bill.

The Senate would authorize $6.6 billion for Amtrak’s Northeast Corridor and $10.7 billion for the passenger carrier’s national network.

The House bill figures are $13.5 billion for the Northeast Corridor and $18.5 billion for the national network.

The Rail Passengers Association asserted on its website that the authorizations in the Senate bill will be “inadequate to meaningfully add or upgrade new service beyond a handful of routes.”

That, though, may be the point of the Senate bill. It may be a statement from the Senate Commerce Committee that support for a massive spending spree to expand intercity rail passenger service lacks political support in that chamber.

It remains to be seen what will happen once both bills reach the floor of their respective chambers.

There may be amendments offered in both chambers to increase or lower individual line item authorizations.

It seems likely that a conference committee will need to work out the differences between the two competing surface transportation authorization bills.

If the two chambers are unable to resolve their differences, that might lead to yet another one year extension of the FAST Act as happened last year. Some congressional observers believe it might happen this year, too.

Spending authorizations can be highly contentious and subject to partisan differences.

That brings up another noteworthy difference between the House and Senate surface transportation authorization bills.

The Senate bill passed out of committee with bi-partisan, although not unanimous support. The House bill was more of a partisan creation.

The Senate bill does contain a number of clauses that can be interpreted as pro-passenger rail.

These include mandates, for example, that Amtrak maintain a ticket agent at stations averaging 40 or more passengers a day.

Amtrak is also being directed by the Senate bill to provide a host of additional information about a variety of issues including any plans to change the operations of long-distance or other routes.

There is also language in the bill describing the importance of Amtrak service to rural America.

These mandates appear to reflect a likelihood of Congressional support for continuing funding of Amtrak service as it exists today with, perhaps, some modest service increases and enhancements.

The Senate committee, though, did not support the type of far-reaching and expansive additions to the Amtrak network envisioned by the carrier’s Amtrak Connect US plan.

What it all means is that despite the happy talk emanating from rail passenger advocacy groups about how intercity passenger rail service is on the verge of a transformational moment that is not a sure thing.

A lot of things are going to have fall into place and what happened last week in the Senate does not necessarily bode well for that process playing out the way some want to see it develop.

More Than Likely the Rails Will Become a Trail

It doesn’t have to be an either or situation although it probably will wind up being that.

For several years, the former Akron Branch of Pennsylvania Railroad between Hudson and Cuyahoga Falls via Stow and Silver Lake has been fallow, its rails rusting away and the right of way overgrown with weeds and brush.

Now there are competing plans for use of that right of way.

A company called Hudson & Southern Railway wants to revive rail service on the line.

But a group known as Trail Advocates of Summit County instead wants to see it transformed into a hike and bike trail.

In addressing the Hudson City Council late last year, the trail group, which also goes by the name TASCForce, made it clear it adamantly opposed allowing the trail line to be reactivated.

Among other things the group said trains are noisy, dangerous and interfere with traffic.

Trying to sound like populists, the group said a multipurpose trail would be a “higher and better” use of the right of way even though it was built as a railroad.

Allowing the right of way to revert to rail operations would allow “a very few railroad employees and some unpopular businesses entities to benefit,” the trail advocates said.

Some of the rhetoric that TASCForce has espoused is political posturing and yet it also reflects how upper middle class homeowners typically think about railroads.

A railroad is fine so long as it operates somewhere else. It is classic NIMBY thinking.

Lest you think that TASCForce members have a special dislike of trains, they also took aim at “heavy industries that require rail service,” which it called inappropriate for a suburban setting.

H&S has talked about providing service to a bulk transfer station but TASCForce dismisses this as unsuitable for “the office/warehouse/light manufacturing business parks that people expect to find in a residential area.”

Not only does TASCForce dislike the idea of trains in the neighborhood it doesn’t like heavy trucks, either.

Nor does TASCForce like the idea of the rail line being used for rail car storage as H&S has suggested.

TASCForce said suburban homeowners don’t want rail cars sitting in their backyards for months at a time.

What TASCForce is seeking to do is to pressure Akron Metro Regional Transit Authority, which owns much of the rail line, into renouncing the proposal to revive rail service and to instead seek authority from the Federal Transit Administration to allow immediate construction of the hike and bike trail.

Presumably, TASCForce would be opposed to any plan in which there would be a rail line and a trail.

It can be done and has been done in the Akron region. There is a trail alongside an unused former Erie Railroad line in Talmadage.

The Portage Hike and Bike Trail shares space with an active former Erie Rail line between Kent and Brady Lake that has rail service provided by the Akron Barberton Cluster Railway.

The Portage trail is instructive because it is an example of what could be possible with the Hudson-Cuyahoga Falls line.

Rail traffic on the Kent-Brady Lake line is minimal, typically only operating on weekdays.

The situation with the Hudson-Cuyahoga Falls line is complicated. Akron Metro bought the rail line several years ago for potential commuter train use.

That prospect is unlikely to happen which is why the rail line has been inactive all this time.

Although the rail line has been abandoned, it has been railbanked meaning it is being preserved for potential future rail use.

The transit agency apparently has considered ideas in the past about reviving the line for rail use with the H&S proposal the latest proposal.

At one point a dinner train company proposed using the line but it never materialized. At the time, there was fierce opposition to that idea in Silver Lake.

Using the Hudson-Cuyahoga Falls rail line for anything other than rail service would require Akron Metro to get FTA approval.

Valerie Shea, director of planning and strategic development for Akron Metro, told a local newspaper the agency is planning to seek the FTA’s concurrence to use the rail line land and its surrounding right-of-way as a trail.

Trail advocates want to speed up that process and kill the H&S proposal ASAP.

Whether the backers of the H&S would be able to launch freight rail service is uncertain, something TASCForce has noted when it told the Hudson City Council the success of H&S is “far from certain.”

On this point TASForce showed its cards when it said allowing rail service could potentially delay for several years the development of trail on the right of way.

Some Hudson City Council members have spoken in favor of the rail to trail process.

Councilman Skylar Sutton said he wants to “keep a focus on rail-to-trail conversion.”

The city of Stow has won approval for $700,000 in funding to develop a trail.

It is not difficult to see why trail advocates covet converting inactive or lightly used rail line into trails.

They offer a liner piece of land well suited for a trail. You don’t have to mess with the expensive, sometimes difficult, and time-consuming process of land acquisition.

Not every homeowner along an inactive rail line is necessarily onboard with the idea of converting the property into a trail.

Some of those homeowners dislike having a trail in their backyard and have spoken against the idea of passing hikers, joggers and bikers being able to look into their homes.

But hiking and biking trails have become a sort of status symbol for upper middle class suburbs with affluent and well-educated homeowners who are politically connected and know how to manipulate government and regulatory processes.

For that reason alone I’d bet that more likely than not, the land hosting what was Akron’s first rail line is going to wind up being a trail rather than an active railroad.

Few Memorials for Transportation Pipe Dreams

I spend a fair amount of time writing stories for this blog about pipe dreams. Many of these are proposals for new or additional rail passenger service, but some involve restoring to operating condition a piece of historic railroad equipment, often a steam locomotive.

By one definition, a pipe dream is an unattainable or fanciful hope or plan. The Merriam-Webster dictionary defines a pipe dream as an illusory or fantastic plan, hope or story.

By fantastic it doesn’t mean great or extraordinary but imaginative or fanciful yet remote from reality.

In short, a pipe dream is something unlikely to happen as described if it happens at all.

Some of these pipe dreams are flights of fancy even if on the surface they appear to be plausible ideas.

Most of the pipe dreams I’ve written about have been the subject of a formal study and/or pushed by an organized group with the ability to amplify its dream beyond a handful of its members.

For example, a downtown Cleveland advocacy group recently proposed reviving the idea of connecting the end of the Waterfront rail line on the Lake Erie shore with the Red Line to the south thus creating a rail loop around downtown Cleveland.

Somewhere in a filing cabinet in the offices of the Greater Cleveland Regional Transit Authority is a blueprint for doing just that.

It was proposed in 2000 but never advanced beyond being a plan on paper.

When asked about the idea recently, a Cleveland RTA official didn’t reject it outright but said the transit agency is more focused on replacing its aging rail car fleet, a task that will require millions of dollars that RTA has had to scrap and claw to find.

Lack of money and political support usually are the reasons why so many bold proposals fail to get very far.

A lot has to go right for any proposal to become reality and that involves forces beyond the control of the originator of the idea.

It is not difficult to find the money for a feasibility study. But virtually every one of those studies I’ve read had one thing in common. They lacked a viable funding source.

Sometimes pipe dreams do come true. There was a time when it seemed like a pipe dream that the moribund East Broad Top narrow gauge railroad and its fleet of steam locomotives would operate again.

Then seemingly out of nowhere funding materialized and the historic Pennsylvania-based railroad is coming back to life.

Similar stories have surrounded Norfolk & Western J Class No. 611, a Union Pacific Big Boy steam locomotive and Chesapeake & Ohio No. 1309.

At one time the idea that any of those locomotives would operate again under steam seemed like a pipe dream. And yet all of them have.

There are some success stories about intercity rail service restoration and development in Virginia, Maine, California and North Carolina.

But for every one of these stories there are many more pipe dreams that haven’t made it out of the talking and planning stages.

Reviving intercity rail passenger service between Cleveland and Cincinnati has been talked about and studied for five decades with little to no progress to show for it.

Various proposals to create a Midwest network of rail passenger corridors has met the same fate.

Even some projects on which substantial sums of money have been spent have yet to evolve as envisioned.

Amtrak and the State of Michigan have sunk millions of dollars into buying and rebuilding track between Chicago and Detroit.

Yet service between the two cities has yet to increase beyond the three daily roundtrips that became the norm in the mid 1970s because the State of Michigan has yet to fund that service expansion.

Likewise, some historical restoration efforts continue to lag for lack of money and it is far from clear when or if that funding will materialize.

While many pipe dreams eventually fade away others continue to persist even in the face of repeated failures and disappointments.

Pipe dreams are the glue that hold some organizations together, particularly rail passenger advocacy groups.

Keeping the dream going becomes as important as getting anything done about it because it keeps the organization in business.

For some people, pipe dreams are a form of identity, a way of showing the world this is what I believe in and I’ll fight for my dreams so long as I’m able.

There is a sport-oriented bromide that you will miss 100 percent of the shots you don’t take.

Success doesn’t come without trying and having the persistence to work to overcome failures.

True enough. Yet what do we say about those who miss 100 percent of the shots they take and/or make less than 10 percent of them?

There is some admiration for that type of persistence but few memorials to it. These efforts might have been more successful had they sought to achieve objectives that had a more realistic chance to be attained with the resources the pipe dreamers actually had.

Generational Change Underway at Amtrak

Several weeks ago I conducted an online search to determine the age of Amtrak president Stephen J. Gardner.

Some believe you can find anything on the Internet. Well, almost anything.

Maybe I didn’t look hard enough but I never did find Gardner’s birth date.

But extrapolating from the years that he attended Hampshire College as an undergraduate, which are listed in the resume posted on his Linked In page, I concluded Gardner probably was born in 1976. That makes him fortyish.

He wasn’t around when the original California Zephyr made its last trips in March 1970, when South Dakota lost its last passenger train in September 1969 or when the Twentieth Century Limited succumbed in December 1967.

If his parents took him on a trip by train during his childhood, it likely would have been aboard Amtrak.

By the time Gardner was old enough to begin remember much about the world around him Amtrak was well into the transition from streamliner era equipment to Amfleet and Superliners.

He is not old enough to remember a time when the intercity rail passenger service network was far broader than it is today.

As far as Gardner is concerned there always have been between 15 plus long-distance trains in America, not dozens of them.

Likewise, Gardner’s conception of intercity rail passenger service is that it has always been funded with public money, most of it coming from the federal government.

In many ways, Gardner’s career arc seems ideally suited for working at Amtrak because much of his career has been in the public policy making arena.

He worked for a short time in his early adult years for two railroads, but much of his time has been spent working on Capitol Hill as a congressional staffer.

That gives him insights into the politics of Amtrak funding that many rail passenger advocates don’t understand or don’t want to understand.

Gardner’s vision of the future of intercity rail passenger service is something more akin to Brightline, the privately-owned Florida service that developed in a public-private partnership in a densely populated urban corridor.

Until it suspended operations during the COVID-19 pandemic, Brightlight offered frequent, fast service between Miami and West Palm Beach with modernistic equipment that looks like it has been transplanted from Europe.

In his public comments, Gardner has paid lip service to long-distance passenger trains, saying they will always be a key part of Amtrak’s business.

But he also describes a world of corridor services focused on short-distance travel.

In Gardner’s mind the market for long-distance trains is shrinking and those trains create a mismatch among population density, transportation demand and Amtrak’s existing network.

“We are trading route miles for passenger trips by serving a lot of route miles but not a lot of people,” he said in one presentation.

This doesn’t sound like someone who expects today’s long-distance trains to be around in perpetuity as many baby boomer rail passenger advocates would like.

Top executives at Amtrak come and go. Gardner is the fourth person to sit in the Amtrak president’s chair in the past five years.

How long he will continue at the helm of the intercity passenger carrier remains to be seen.

However, Gardner is part of a wave of younger managers overseeing the passenger carrier who do not have the memories of past generations who lived through the last years of the streamliner era.

When Gardner says long-distance trains will continue to be a key part of Amtrak’s business he is making a political statement.

He knows senators and congressmen from largely rural states look out for those trains and so long as that is the case they will continue to operate at some level.

But that doesn’t mean those running Amtrak are fully vested in those trains or believe they should bear a resemblance of the great streamliners of the past other than their names.

One common theme I see in the writings of some rail passenger advocates is a disenchantment with Amtrak behaving as a sort of generic transportation provider rather than acting like a railroad.

This type of change seems inevitable as those who oversaw Amtrak in the 1970s, 1980s and 1990s leave.

What we have seen in the past couple years in regards to Amtrak’s national network is reflective of this transformation.

Whether you like him or not, agree with him or not, the life experiences and vision of rail transportation of people such as Stephen Gardner are the future of Amtrak.