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Adam Smith
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Maryland, USA
Jan 1970
time: 00:29
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A couple years ago I helped write a study of Amtrak's long-term viability. I don't have a link handy, but here's what I can tell you off the top of my head.
First, some background. Unlike Europe, Oerdin,the vast majority of the US railroad system is privately owned and handles mostly freight. Something like 98 percent of revenue comes from freight, and these companies are able to turn a profit. There is no particular need to nationalize the system for the sake of the two percent of traffic involving passengers.
Second, Amtrak has much higher costs than it needs to. Some of these are the result of being forced to maintain unprofitable routes. On one particular long-distance route, the train picked up or dropped off an average of six (count 'em) passengers per day on the almost 600 miles between Denver and Salt Lake City. That's just plain nuts.
However, many of Amtrak's costs are much higher than they need to be. Part of this is due to absurd labor contracts. Under the infamous New York Dock conditions, anybody who is laid off gets six years severance pay.  This has obviously kept Amtrak from getting down to an efficient sized labor force. Another good example is the launch of the new Acela train between Washington and Boston. Amtrak insisted on a new technology when an acceptable off the shelf technology was available. This drove up costs and greatly delayed introduction. Moreover, while it is nice to have a shiny new toy that can run 150 miles per hour, Amtrak failed to consider all the other costs that go with introduction of the new train. For example, Amtrak failed to install new cross overs, so the faster trains can only pass slower ones about once every 20 miles. This greatly reduces the effective speed of the new trains. In sum, a consultant found that Amtrak could have gotten 80 percent of the speed gains for about 20 percent of the cost.
Third, Amtrak's financial position is much worse than it looks. This is because Amtrak gets several hidden subsidies which do not appear anywhere on its books. The US Department of Transportation pays Railroad Retirement (i.e. Social Security) for all Amtrak workers. This amounts to something like 16 percent of total labor costs. Second, states and localities pay for essentially all the stations and terminal improvements. Third, Kidicious, the rates Amtrak pays to freight railroads for the use of their tracks are effectively frozen at 1956 levels. Costs have obviously increased since then.
Lastly, splitting US railroads into maintenance and operating companies would be a bad idea. Its true that British Rail had substantial underinvestment, but they created a lot of new problems by splitting up. IIRC, Railtrak gets paid by the train, which led to incentives to run lots of trains with few passengers. There were also problems coordinating maintenance windows and operations between the track company and various operating entities.
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Adam Smith
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Maryland, USA
Jan 1970
time: 00:29
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So what to do?
First, automobile transportation does not pay its full social cost. (e.g., pollution, congestion, etc.). Resources for the Future recently calculated that a 58 cent per gallon increase in the gas tax was necessary to cover this shortfall. Politically I am not holding my breath, but this would be a good start for Amtrak and a lot of other issues.
Second, Amtrak needs to drop its long-distance routes. These are losers, plain and simple. Bus service should be an adequate replacement.
Third, poor cost control means that Amtrak wont make it even if they drop their long-distance routes. It therefore needs to be broken up into a number of regional entities which are a bit more accountable to the local states which provide money. The idea is to focus each entity on a set of commuter and short-distance routes which generally do not involve overnight trains. Examples include:
Northeast Corridor (Washington to Boston)
Southeast Region (Richmond to Atlanta)
Midwest Region (Chicago to Minneapolis, Milwaukee, St. Louis, Indianapolis, Cincinnati, Detroit, and Cleveland)
California (San Francisco, Sacramento, Los Angeles, and San Diego areas)
Pacific Northwest (Portland, Seattle, Vancouver BC)
Texas (Houston, Dallas, San Antonio, if they ever get their act together)
Florida (Miami, Tampa, Orlando, Jacksonville, if they ever get their act together)
By getting out of the existing legal structure, getting more accountability to funding entities, and cutting long-distance trains, this might actually have a shot at succeeding.
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CerberusIV
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Do US domestic airlines pay their actual costs? I ask because one of the current environmentalist issues in europe is that aviation fuel is not taxed on a comparable basis to diesel and gasoline. If aviation fuel was taxed the cost of air travel would rise substantially.
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chegitz guevara
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Ft. Lauderdale, FL Communist Party of Apolyton
Jun 2000
time: 00:29
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I wuld like to argue with one point made by AS.
Busses are NOT an adequate replacement for trains.  Busses suck, big time. They are overcrowded, with tiny bathrooms, and filled with questionable people. We were even forced to submit to police inspection of our bags in Macon, GA. The only advantage to busses is the extremely low cost of travel, but you pay a price in time and physical discomfort if not outright pain (though it wasn't as bad as driving a Geo Metro, which must be the most painful form of transportation I've ever experienced).
The seats in trains are bigger and have more room to recline. The aisles are bigger, the bathrooms are bigger, there are smoking cars (or were) for those who smoke, and you can purchase food and drink on the train (albeit exensive and of poor qualty).
I much prefer the train to the bus, and if it were not for the fact that train travel is more expensive from Jacksonville to Chicago than air travel, I'd happily use it. Sure, it takes an extra day, but you get to see and enjoy so much more of the country.
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30-07-2003 02:19
And didn't it work fantastically 
After that, we just started renting a car.
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