Moorman began his railway career with NS’ predecessor Southern, initially working in track maintenance during his college days, before rising from management trainee to become president and CEO of the Class 1 railway. At a time of considerable political and economic uncertainty for the United States, Moorman’s understanding of how the railway operates, how it makes money, and how to influence policymakers in Washington DC should help to give Amtrak stability and build a future based on growth.
Indeed, growth has been a defining feature of Amtrak’s recent history, and ridership has now exceeded 30 million passengers for six consecutive years. Unaudited ticket sales for the 2016 fiscal year, which ended on September 30 2016, reached a record $US 2.14bn, a $US 12m increase compared with 2015. This was driven by a 400,000 increase in passenger journeys, which rose to a record 31.3 million.
Amtrak covered 94% of its operating costs from ticket sales and other revenues, up from 92% in 2015. Unaudited total revenue in 2016 reached $US 3.2bn and as a result, Amtrak reduced its operating loss by $US 78m to $US 227m, its lowest since 1973.
As he begins his first full year at the helm, Moorman is seeking to build on these results by driving efficiency and making Amtrak more responsive to the needs of customers. A Government Accountability Office (GAO) report published in January 2016 recommended that Amtrak should extend the use of its strategic management system company-wide and improve its financial reporting, and Moorman is keen to follow this path in 2017.
“Amtrak needs organisation and budget work to bring it more in line with modern corporate practices,” he explains. “We need to ensure we are streamlined, we have an understanding of our strategy and we understand the business we are in. Our goal is to provide a great product while reducing operating costs. When Capitol Hill gives us a dollar, they know we’ll spend that dollar wisely. We have also started to do work to enhance our ability to deliver capital projects. Amtrak hasn’t always been as effective as it could be in this area.”
With his background in rail freight, it’s no surprise that Moorman sees “significant” potential to strengthen Amtrak’s relationship with the Class 1s, which is so crucial to the operation of most state-sponsored and long-distance passenger services outside the Washington DC - New York - Boston Northeast Corridor (NEC). “We rely on the freight carriers to operate our trains so it’s essential that we have the right relationships,” he says. “We want to be an ally and partner with the Class 1s. Amtrak can be a strong partner for the freight railways, because we have a lot of prominence in Washington and we bring a different constituency in terms of the people who support passenger rail. When regulators call for things that would damage the viability of the freight network, these things damage Amtrak as well. We are all one industry, and whether we’re freight people or passenger people we have a lot in common, so we need to work together.”
Moorman lauds his predecessor at Amtrak, Mr Joe Boardman, for working to build a political consensus behind passenger rail in Washington, and he stresses the importance of continuing this work in the formative months of the Trump presidency. “There is a need to maintain positive relations with Congress and continue the great work Joe did on Capitol Hill,” he says. “The Trump presidency is an unknown right now, but in terms of the discussion on infrastructure, it’s a great opportunity for us. I also think Elaine Chao will be a very fine secretary of state for transportation, so right now I feel encouraged.”
A priority for Amtrak is boosting capacity and performance on its flagship route, the NEC. Amtrak continues to grapple daily with severe capacity constraints on the NEC, which, after years of steady growth, is struggling to cope with demand. “We will look at ways to squeeze out more capacity and encourage people to use trains that are less busy, but I don’t see many ways to get more growth without new trains,” Moorman says. “We’re having a lot of conversations about how we can replace the Northeast Regional fleet and we continue to talk to the Federal Railroad Administration (FRA), Department of Transportation (DOT) and Capitol Hill about the issue.”
Replacement
Relief is on the way with the forthcoming replacement of the Acela fleet. In August 2016 Amtrak awarded Alstom two contracts with a total value of around $US 2bn to supply and maintain 28 Avelia Liberty high-speed trains to supersede the fleet of 20 Acela Express sets. The fleet will enter revenue service from 2021 onwards, enabling the withdrawal of the Acelas by 2022. With a 40% increase in high-speed fleet capacity, Amtrak says it will be able to offer half-hourly peak Acela Express services between Washington DC and New York as well as hourly New York - Boston services. Furthermore each train will offer 30% more passenger capacity than an Acela set with no reduction in seat pitch or luggage space. Passenger amenities will include improved Wi-Fi, power sockets, USB ports and adjustable reading lights at every seat.
The acquisition of new rolling stock is being funded through a $US 2.45bn loan from FRA’s Railroad Rehabilitation & Improvement Financing programme - billed as the largest investment in Amtrak’s 45-year history - which will be repaid through growth in NEC revenues. The loan will also fund modernisation of depot facilities in preparation for the arrival of the new trains as well as improvements at Washington Union Station and the new Moynihan station in New York. The latter will replace the cramped and inadequate passenger facilities at Penn Station with a new 23,700m2 passenger concourse in the former James A Farley post office by December 2020, finally giving Amtrak a modern station in the heart of Manhattan.
An issue of equal concern on the NEC is ageing infrastructure, which is limiting both capacity and reliability on North America’s busiest passenger railway. “The NEC is a great asset and essential to the region,” Moorman says. “The NEC carries around 2200 commuter services a day, compared with around 150 Amtrak services, so it is a key piece of commuter infrastructure. For Manhattan to work effectively it needs Amtrak and commuter services to operate well. The basic infrastructure, particularly the track, is in reasonably good condition. Maintenance spending is on an even keel and we’re working to make sure we have a long-term vision for what it takes to maintain the railway on a cyclical basis. Between New York and Washington electrification systems date back to the 1930s, we have ageing bridges, and there’s a lot of work to be done.”
Top of Amtrak’s to-do list is the Gateway Programme, which will address one of the biggest obstacles to performance and resilience on the NEC, eliminating a major bottleneck in New York and creating additional capacity on the most congested section of the route. Described by Moorman as “arguably the most important infrastructure project in America,” the Gateway Programme involves constructing a second double-track tunnel beneath the Hudson River between Newark in New Jersey and Penn Station in New York City, and rebuilding and replacing the damaged components of the existing North River Tunnel, which was inundated with seawater during Super Storm Sandy in 2012. The programme will also encompass the modernisation of infrastructure on this section of the NEC, including upgrading of electrification and power supplies. Amtrak says the result will be increased redundancy, improved reliability for shared operations, and the capacity to accommodate future growth in inter-city and commuter services.
“We believe that by rebuilding the 106 year-old Hudson River Tunnel and 110 year-old Portal Bridge, for example, we are making worthy investments that will preserve existing levels of NEC service, and allow for growth that will deliver economic benefits for the region and beyond far into the future,” Moorman says. “These are lifetime infrastructure investments like those made by the Pennsylvania Railroad in the 19th and early 20th centuries. We need to summon that spirit and that leadership to modernise and expand for the future. When you think about how much those century-old tunnels have contributed to the economy you realise what an extraordinarily good investment it is.”
The Gateway Programme is still at the planning stage and since 2012 Amtrak has spent more than $US 300m developing the project, with most of the funding coming from Federal sources. Amtrak says it has made the essential preliminary investments to preserve a feasible right-of-way into Penn Station.
There are still significant question marks over funding and the amount the Trump administration will be willing to commit to this scheme is open to conjecture, although Moorman believes the project is a good fit with the president-elect’s campaign pledges. There is also the question of whether private capital could play a role and if so, how prominent it will be. During his campaign, Trump pledged to “harness market forces to help attract new private infrastructure investments through a deficit-neutral system of infrastructure tax credits.”
“Both presidential campaigns talked a lot about infrastructure spending and I think there will be a lot of impetus in Congress to support that,” Moorman says. “There is a broad consensus, and you see this in the media, that new tunnels under the Hudson are essential. I think the Trump administration will be receptive to that. Predictable, dedicated funding to build new tracks, tunnels, bridges and other infrastructure, particularly on the NEC and in Chicago - is absolutely necessary.”
State-sponsored
Amtrak receives financial support from 18 states for the operation of 26 short-distance routes (less than 1200km). With bipartisan backing for passenger rail in many states and strong ridership growth, Moorman believes the prospects for this sector are good. “There has been a real resurgence of interest in passenger rail at a state level over the last 10 years,” he says. “The power of increasing demand for passenger rail is recognised through state investments to improve service, speed and safety. Where I live in Virginia, a couple of state-supported services have been introduced under a Republican administration and I think we see that there are corridors that just make sense from a passenger rail perspective, particularly around more congested urban centres where train travel has become more attractive.”
Moorman highlights the role of freight railways in the success of state-sponsored services, but he also points out that while many railways are supportive of passenger rail, they are unlikely to sanction mixed-traffic operation if it risks compromising the efficiency of their own services. “When I was at NS we were always happy to talk about this, but there has to be enough money to provide the necessary infrastructure,” he says.
Another priority for Amtrak is ensuring its services continue to evolve as passenger expectations change. Moorman says Amtrak is leveraging e-ticketing, which is seen as offering customers greater convenience while reducing costs in the fares system. Last year Amtrak introduced online booking for travel with pets and bicycles, and it has also invested in enhanced onboard Wi-Fi, with download speeds now six times faster on Acela Express. Wi-Fi upgrades are underway on the Northeast Regional fleet and Amtrak is rolling out trackside Wi-Fi infrastructure on the NEC to improve the quality of onboard service. “With passenger enhancements, you always need to step back and look at the costs, but our aim is to ensure that whoever rides our trains feels good about the product - that’s how you ensure customer retention,” Moorman says.
As in so many areas of policy, it’s difficult to predict what the Trump presidency could mean for passenger rail. In a speech last March, he lamented how far US passenger rail has fallen behind the Chinese network, which may indicate a willingness to break with tradition and embrace a more long-term approach to rail infrastructure, at least on the NEC. On the flip side, the Republicans have made numerous attempts to defund Amtrak since it was established in 1971 and there are still politicians on Capitol Hill who would happily withdraw all federal support for passenger rail. Yet Amtrak has staunch defenders against such attacks who are adept at playing this game, and with record ridership, a commitment to streamlining its organisation, and a clear vision for modernisation, the case for developing passenger rail in the US looks stronger than ever.
