I think Mr. Fostik’s argument has some problems. He underestimates the dire lack of equipment and the hostility of “host railroads” toward what Union Pacific has termed “novelty transportation.” Nonetheless, I think the author does make an important underlying point. Amtrak has little vision and a disastrously poor self-image. The latter is to be expected in any company that is constantly ridiculed and derided, while simultaneously denied the tools to complete its mission. Rather than dwell upon the technical shortcomings of this essay, I hope the reactions will approach ways in which Amtrak might better approach its role as America’s inter-city passenger rail provider.
Move Forward or Get Out of the WayBy: Jon A. Fostik, MBA
In business, and indeed life, if you encounter roadblocks you devise strategies to get beyond the impediment. So too with the great national debate about what shape and form we’d like to see for American passenger rail travel. From coast to coast the populace is up in arms, the Badger state of Wisconsin is seeing attacks on its visionary Milwaukee to Madison project and likewise the Buckeye state of Ohio’s planned 3 C corridor. In California, where they should be proud of their lion’s share award of the $8billion in high speed rail funds, Bay area municipalities are now threatening litigation over the right away the trains should take; not in my backyard has again surfaced as a battle cry in the west. Florida has been subject to criticism, rightfully so, about the lack of connecting light rail or suburban rail at the terminal cities of Tampa and Orlando.
Amtrak has now become “concerned” about overseas interlopers becoming involved in potential franchises to operate high speed trains and recently announced the formation of a department to plan for development of high speed coordinators. The proverbial Amtrak studies of how to increase speed to 220 mph on the Northeast corridor has been mentioned-call me when the soup is ready I say. However goaded into a sense of urgency for high speed trains, Amtrak still remains tepid at best about long distance trains, or those routes over 700 miles in length. My suggestion to Amtrak in terms of that market is “move forward or get out of the way.”
In all impartiality, Amtrak was an “unwanted child” so to speak from the federal perspective. Under funded and dealing with numerous detractors over the years, including some of the “host railroads” themselves it lived in a “dangerous neighborhood” to say the least. On the other hand, very little creativity was ever shown by the organization and the best example I can offer is that we still only have one Auto Train route in the entire country. Through a number of gas crises we saw Amtrak do little in the way of adding regular service, and the one experiment of a Louisville to Florida Auto Train was doomed to failure on account of poor rail infrastructure.
Certainly a Chicago based Auto Train to the Wisconsin Dells or out to Arizona and California, on “host railroads” with better track could have been considered. The silence from Amtrak was stunning, and very telling. Even today you will not hear a “peep” about the potential for such services. In my travels on different Amtrak routes, at last year’s National Train Day and at travel shows hosted by AAA, I raised the point with several Amtrak staff including those who interact with the public. The near uniform reply was “don’t expect to see any additional Auto Train’s”.
When gas was $4 a gallon there were platitudes and “soft marketing” of the existing anorexic network by Amtrak. It has taken at least 2 years to get a second Piedmont train ready for service, many more years passed before the second Cascades and only now with support from Virginia a second Lynchburg train. When the equipment of the defunct American Orient Express was on the market, I don’t recall reading or hearing that Amtrak was interested in any acquisition. A missed opportunity for a firm that says they are short of equipment.
Once again on the side of fairness there were some factors that contributed to these delays, but Amtrak never operated from the perspective of “if you build it they will come”. It was more of the “mountain must come to Mohammed”. Having noted all of the above, and in a desire to live to see some major improvements in “steel wheel on steel rail” its time again to seriously consider some alternatives that I outline below:
Private Investors & Venture Capitalists Autorail USA & American Special Trains Co.
We raise money and interest every day in this country with private investors and venture capitalists. The advocacy groups and “true believers” should once again look to this segment for assistance in the development of two distinct business firms that I creatively call “Autorail USA” and “American Special Trains.” If need be, foreign firms could have minority investment and ownership just as they can in US flag airlines. Perhaps, are you sitting down, a US freight railroad might also be a minority investor and “host”. Having “skin in the game” from a US freight railroad would be a motivational factor to have such a train move expeditiously over its right of way.
As it name would imply, Auto Rail USA would be charged with the development of additional domestic Auto Train type routes where there is sufficient market and potential for a reasonable return on investment. Midwest to Florida or the Southwest comes to mind, and from the LA basin to the southwest and Las Vegas are just a few thoughts. Better serving some of the national parks from the heartland likely has some good business prospects as well. The point is that if Amtrak is go to give a “ punt” to this market then the American public should be more demanding of finding an operator who will not only enter this specialized travel market but give it their best “ shot” at succeeding.
American Special Trains, simply put, could be an additional player for longer haul inter-city domestic passenger rail. It could partner with Amtrak and/or states or regions where Amtrak has in essence “thumbed their noses” at offering new services. I can envision a Carolina Special from Asheville to New York through Washington DC. A flagship service with the Florida Special would offer Boston to Miami service via the Florida East Coast Railway. A Yellow Rose Special would be a great way to travel from Dallas to Denver, where connections with Amtrak might be possible.
A Gulf Coast Special could potentially link Atlanta with New Orleans; the Bar Harbor Special could be a seasonal train from Washington to Bar Harbor via New York. Rounding out the services could include an Arizona Special from Chicago to Tucson via Phoenix, Yellowstone Special from Chicago and/or San Francisco to Yellowstone National Park, California Special from Chicago to San Diego and Chicago Special from New York to Chicago via Philadelphia. You get the idea now, the question is does Amtrak?
Carnival Cruise Line Fun Trains: The Best of Both Worlds
Among the iconic transportation giants of North America was Canadian Pacific, with rail, hotels, ships and eventually airplanes marketed their services in a “holistic approach”. While what follows below would not fall under the basis of pure inter city passenger rail, it does exposure potential travelers to the joys of passenger train travel.
Call it a “surf and turf” model but there are examples of this concept today with the American based cruise industry serving Alaska. Take a cruise ship, then transfer to a cruise line operated “luxury train” and wind up at a cruise line owned hotel. True the cruise lines are operated under foreign flags but in the case of a few of them they actually own their rail equipment operated on a “host railroad” such as the Alaska Railroad. Other than the Alaska market, there hasn’t been even an experiment by the cruise lines to emulate this successful practice of combining rail and cruise.
Oh, Amtrak has “partnered” with Carnival Cruises but that’s not exactly what I am advocating. I’m thinking a bit bigger in suggesting that Carnival, as the largest cruise line in the world and having set the industry on “ its keel” years ago with their “Fun Ship “concept. I’ve thought of Carnival also since they seem to have “deep pockets”, but of course aren’t foolish in how they spend, and have “credibility with the traveling/cruising public. With that in mind I can envision Carnival Fun Trains (yeah I know there was a Reno Fun Train in the past and a short lived Florida Fun Train) that are owned and staffed by them, but operated over host railroads.
What doomed the previously mentioned Fun Trains was that they were irregular in frequency and didn’t have the management experience or creature comforts that you find in the Alaska cruise/rail offerings or on Canadian trains like the Rocky Mountain or Whistler Explorer. Carnival can offer Carnival Fun Trains from any host of east coast and west coast ports to its cruise ship passengers on a pre-post cruise basis. Think, if you will, a 4 day Fun Train package tour from New York to the Finger Lakes district, a destination not unlike Napa Valley in appeal to passengers. Another Carnival Fun Train could be based in Charleston and offer a 2 or 3 night package to Savannah and historic Saint Augustine. Miami based Carnival Fun Train could offer a superior package to West Palm Beach and Orlando. On the Gulf Coast a Carnival Fun Train could offer short packages from New Orleans up to antebellum Vicksburg; Galveston might host a Carnival Fun Train to Corpus Christi or Galveston; there could be alternating packages serving San Antonio and the scenic Texas Hill Country. Los Angeles cruise passengers could enjoy a Carnival Fun Train to Monterey and Carmel.
A final compelling reason to consider Carnival Fun Trains is that the cruise industry needs to keep “repeat” passengers coming back by offering new things. There are only so many ports or tropical islands that are available, at least until Cuba is opened up. A polished operation, offering defined pricing with value (read less expensive that the defunct American Orient Express) to interesting places can work. It means taking the best of what is working today and expanding that to other markets beyond Alaska. A small initiative may be needed at first, but I am confident it can be profitably done. Let’s give it a try, that is the American spirit of know how and can do! You get the idea, Carnival are you listening?
Filed under: Amtrak
Trains For America 
There are some holes in your assumptions:
“When the equipment of the defunct American Orient Express was on the market, I don’t recall reading or hearing that Amtrak was interested in any acquisition.”
The equipment from the AOE was not, under any circumstance, something appropriate for Amtrak operations. First, this trainset was very low capacity, 17 cars 120 pax. Second the equipment was OLD nearly every one of these cars had been in Amtrak ownership at one time or another and had been sold as antiquated. It took huge sums of cash to keep it rolling. Third, the cars were not “public transportation” grade. The fine wood interiors would not last a month in Amtrak service. Placing this equipment in Amtrak service would be the same as using antique Bentleys in place of NYC buses.
Many people on many blogs have, in the same sentence, mourned the bankruptcy of the AOE and derided the high cost. Profitable companies don’t go out in bankruptcy. Apparently the cost was not high enough!
As far a Amtrak’s business acumen: They have none. This is a unionized railroad operated by the government. Can a business model possibly be worse? YES, it can! Congress is the Board of Directors. Combine lack of business sense with the hostility it breeds with the professional management of the profitable business models of the “host” railroad and you have a genuine train wreck on your hands. The private, for profit railroad companies measure their profits in terms of dollars per ton per minute of track time. They make their money moving large trains long distances.
A recent example of this combination of Amtrak’s lack of skill and the industry’s hostility toward passenger service bringing new ventures to a grinding halt it the Ski Train linking Denver to the Winter Park Ski Area. Amtrak wanted $15,000 PER TRIP and the UP wanted $400,000,000 in insurance ABOVE the insurance provided by Amtrak. Transportation plus insurance would have brought the ticket price to $25 per person without fuel, locomotives, cars, personnel, maintenance or profit. The new venture would have to charge over $70 a ticket. The drive on public highways in a Hummer at 9 MPG diesel SUV for a single PAX would cost only $50! Add two more PAX to the Hummer and you would have the equivalent ticket price of $17. If the Hummer driver wanted to add vehicle ownership, fuel and a profit he could charge $40 buck to each passenger and still save them money!
Until the Federal government steps in and forces the carrier railroads to play nice AND gets some competent leadership in charge of Amtrak AND generates some real lawsuit torte reform nothing will ever happen to make Amtrak anything more than the punch line of a very expensive railroad joke. Amtrak could be fully funded for three decades on the amount of money waisted in Iraq over the course of three days.
Yeah, the reason that there are no new autotrain routes in the country are because the host RRs are hostile to that idea. Amtrak has in the past proposed autotrain expansions from Denver, and through Kentucky. Both where shot down by the RRs. And not all autotrains are profitable. The original private company went bankrupt because they over expanded.
The Auto Rail USA and American Special Trains idea closely resemble my ideas of a rail consortium (http://myrailmusings.blogspot.com/2010/01/its-not-post-amtrak-just-something.html) and should be heavily considered.
For any of the aforementioned ideas though, the feds will need to give some kind of dough to these new agencies–I recommend grants instead of subsidies–so they can profit. After all, rail travel is a business first and needs to be treated as such. The friendlier host RRs could use a new Auto Rail USA as business plans once gas returns to $4/gallon.
When it comes to AST, I like the idea of it picking up in places where Amtrak has abandoned or ignored because the latter has been complacent for a long time. However, it should be a competitor to Amtrak and instead partner up with the foreign agencies trying get HSR routes. Maybe, the Sunset Limited should be its first route it operates. At least, American Special Trains wouldn’t threaten LA, AL, MS and FL to support NOL-ORL service restoration or else.
For cruises, it would be AN ABSOLUTE WIN-WIN for the host railroads and the cruises. A BOS-NY-FL service with limited or no stops between Northeastern cities and Florida ports could lead to a new era of cooperation that results in the two industries finding a new moneymaker and passengers being offered yet another travel alternative. Obviously, it would apply to other ports nationwide.
@Brett: What didn’t work in 3+ decades ago may work this decade. It’s a different era. If gas returns to the levels we saw over 1 1/2 years ago–or worse–don’t be surprised to see someone like Buffett recommend Auto Train-related service as a standalone company to other markets.
Thanks to all who took the time to review my article and provide their perspective. By way of additional follow up to Paul you are on point that the AOE equipment wasn’t conducive to just operating in regular Amtrak operations. My original thought is that it could have given Amtrak an opportunity to run seasonal services in the style of the old Florida Special for the winter and perhaps a Colorado Eagle in the summer. Obviously that is not a market they were interested in. Brett you are correct that the original Auto Train eventually encountered financial problems, including derailments, ultimately leading to end of service; I went several times on that original Auto Train in the past with my family and it was a great time; last year I was on Amtrak’s Auto Train and it was a great trip. So let’s hope some other routes eventual see the light of day. Kdub1 points out that nothing can be accomplished with out seed money, or alternatively some type of business tax credit or other creative methods. Perhaps the day may yet come where there is a convergence of benefit for the cruise and rail industry. Disney Cruise Line too would not be remiss at putting this on their radar as well.