IT was fitting that United States president, Mr Joe Biden, was front and centre at the celebration held to mark the 50th anniversary of Amtrak at 30th Street Station in Philadelphia on April 30.
Biden has been a vocal supporter of the federally owned passenger operator for almost the entirety of its existence: from his days as a US senator when he would regularly ride the train from Wilmington, Delaware, to Washington, DC; to his time as the US vice-president when he presented the Obama administration’s plans for several short-lived high-speed passenger projects as part of the 2009 economic stimulus package. Now as the 46th president, Biden has made rebuilding and reviving the country’s infrastructure, including its passenger rail operator, the signature policy of his first term.
The American Jobs Plan was announced by Biden on March 31 and has since moved to Congress for debate and negotiation. The administration hopes the legislation that emerges will satisfy Biden’s objectives so he can sign it into law this autumn.
Inevitably, given the variety of views on the scale and ambition of the proposal on both sides of the political spectrum, there have been several compromises. From a $US 2.3 trillion plan when Biden presented it, the Senate scaled it back to a $US 1 trillion initiative, including
$US 550bn of new spending. However, the legislation took a significant step forward on August 10 when 19 Republican senators joined with their 50 Democratic colleagues to pass a bi-partisan Infrastructure Bill, a move praised by Biden.
As it stands, the bill includes $US 66bn for inter-city passenger rail, with $US 22bn of this figure set to go directly to Amtrak. This includes $US 6bn for the North East Corridor - the 735km, 201-241km/h railway connecting Washington, DC, New York and Boston - and $US 16bn for the national network including state-supported services.
In addition, public transit will net a $US 39.2bn investment windfall and the Federal Railroad Administration (FRA) will receive $US 36bn. This is divided into $US 24bn for FRA grants for NEC modernisation and $US 12bn in grants for new and expanded inter-city rail, which could include high-speed. The remaining $US 8bn will go towards freight and safety improvements, including the elimination of level crossings.
The bill will now pass to the House of Representatives, which is expected to start debating it this month. However, while the Democrats hold a majority in the house, the infrastructure bill is far from home and hosed.
Progressive House Democrats are seeking to align their support for the Infrastructure Bill with the passage of a $US 3.5 trillion budget plan, another priority for the Biden administration, which includes an abundance of social programmes. Naturally this is proving more bothersome for Republicans. None joined the Democrats in a senate vote to proceed with the package in the early hours of August 11. With debates over the deal set to take place over the next few weeks, political brinkmanship from both sides will no doubt continue, potentially placing the entire spending package in jeopardy.
Political football
Amtrak of course is all too familiar with the bear baiting that goes on in Capitol Hill. So often a political football, its leaders have regularly had to scrap with Congressional committees with varying degrees of sympathy to secure annual operating budgets over the years. Demands for capital dollars have been equally tempestuous. However, this time things feel a little different. With politicians from both sides determined to show their constituents that they can get things done in Washington, a significant infrastructure package which has been promised for many decades might yet get over the line.
Amtrak’s CEO, Mr Bill Flynn, certainly hopes so. Indeed, Flynn who was speaking to IRJ shortly before the bill was approved by the Senate, remains optimistic that the promised capital funding will find its way to the railway.
“It’s more money than has ever been directed Amtrak’s way in our 50-year history,” Flynn says. “We’re not celebrating yet, there’s a way to go. But I think a month ago, we would have been more cautious.”
In practice the $US 6bn of funding for the NEC will provide the opportunity to deliver much-needed updates to rolling stock, rehabilitation, upgrades and expansion of maintenance facilities, and to bring stations into compliance with Americans with Disabilities Act (ADA) requirements.
It’s a similar story on the national network where the $US 16bn will support projects to acquire new rolling stock to replace ageing equipment, update maintenance facilities and meet ADA requirements at stations. “This will eliminate a backlog of what I would say is deferred capital work on Amtrak assets outside of the NEC,” Flynn says. “It will also eliminate the backlog of assets in our system. That’s our reservation system, security, training and technology centres more broadly.”
“It’s more money than has ever been directed Amtrak’s way in our 50-year history.”
William Flynn, Amtrak's president and CEO
The FRA grant funding will provide federal dollars to support major big ticket infrastructure upgrades and state-of-good-repair projects.
For the NEC, this includes schemes identified by the North East Corridor Commission in its C35 plan announced in July, a 15-year outline for redeveloping the corridor, which before the pandemic was used by up to 2200 trains per day.
Among the priorities are the Gateway Project to deliver a long-awaited new tunnel to supplement the 111-year-old North River Tunnels in New York City, and a replacement for the Baltimore & Potomac Tunnels, which came into service in 1873. Upgrades to the East River Tunnel in New York are equally as pressing as are replacements for several key bridges in New Jersey and Connecticut, which are 110-120 years old.
However, with these projects costed at many billions of dollars - the complete Gateway programme tops $US 30bn - the $US 24bn funding is unlikely to meet the entire need by itself.
For the national network, the guiding policy is the Amtrak Connects US strategy, which was released on March 31 to coincide with Biden’s infrastructure announcement. Amtrak describes Connects US as a 15-year plan to connect up to 160 communities in 25 states by building new or improving existing rail corridors. 59 corridors are identified and Amtrak plans to open new stations in over half of US states, increase rail service to 47 of the top 50 metropolitan areas, and create over half a million new, well-paying jobs. The total net economic impact from operations is estimated to reach $US 8bn per year by 2035 and generate $US 195bn in additional economic activity. Amtrak will also benefit from $US 800m in total annual revenue growth compared with 2019, attracting 20 million more passengers annually.
The plan itself calls for a $US 75bn investment over 15 years, so the Infrastructure Bill will not meet all demands in one hit. Yet it will provide funding to get a significant number of priority projects up and running.
Connect US identifies specific city pairs that could be well served by an enhanced inter-city passenger rail service in America’s “megaregions:” networks of metropolitan areas over distances of 640-720km connected by travel patterns, economic links, shared natural resources and social and historical commonalities. Among the existing corridors identified for improvement are Chicago - St Louis, New York to Albany and Montreal, San Diego - Los Angeles - Santa Barbara - San Luis Obispo, and Chicago to Milwaukee and Minneapolis, where improvement plans are already taking shape.
Flynn says this route is currently served by the daily Empire Builder, one of Amtrak’s traditional long-distance trains which runs from Chicago all the way to Portland and Seattle on the West Coast, and the seven trips per day Chicago - Milwaukee Hiawatha. The corridor served 900,000 annual passengers pre-Covid, and plans are already taking shape for Amtrak in cooperation with the states of Illinois, Wisconsin, and Minnesota to introduce two more round trips between Chicago and Minneapolis- St Paul in addition to the daily Empire Builder. “The last piece of that was securing the necessary funding from Minnesota, which the governor signed up to just a few weeks ago,” Flynn says.
The Infrastructure Bill will not meet all demands in one hit. Yet it will provide funding to get a significant number of priority projects up and running.
Others are new lines in areas of the country which have experienced rapid population growth in recent decades but where Amtrak connectivity has not kept up.
This includes the Front Range corridor, running north-south from Cheyenne in Wyoming to the cities of Fort Collins, Denver, Colorado Springs and Pueblo in Colorado. The area is home to around 5 million people and Flynn says it is ripe for the introduction of a competitive passenger rail service due to regular congestion on the arterial Interstate 25 highway. Amtrak plans to offer three return services between Fort Collins and Pueblo, with one extending north to Cheyenne. The operator expects to attract 196,000 annual passengers by 2035 and Flynn says there is very strong support in the communities to build the corridor.
The “3C+D” corridor in Ohio is another priority. This would connect Cincinnati, Dayton, Columbus, and Cleveland, four significant cities separated by just 420km but with no current passenger rail service. The plan is to offer three daily round trips with an initial trip time of 5h 30min. There is also a plan to extend the existing Fort Worth - Oklahoma City Heartland Flyer north to Wichita and Newton, Kansas, to connect with the Chicago - Los Angeles Southwest Chief as well as improve access to the Texas Triangle with new services linking Dallas, Houston, Austin and San Antonio, and the daily Chicago - San Antonio Texas Eagle.
Excitement
Introducing a new service from Los Angeles and Riverside, California, to Phoenix and Tucson, Arizona, is another priority for Amtrak. Phoenix is the fifth largest city in the United States. And despite good light rail and transit services, it is not currently served by inter-city passenger rail.
Flynn says there is a lot of excitement in the city to develop such a service, but crucial to the Arizona scheme and all the other possible projects identified in Connecting US, is for Amtrak to secure cooperation from the states. “It’s not Amtrak unilaterally saying, ‘let’s do this service,’ we have to have willing partners and the willing partners are the states,” Flynn says.
He adds that this collaborative work involves identifying the core characteristics of what will make the corridors successful. Factors include access to high population centres, competitive transit times, and the fact there is little or no existing service. He says it is also important to consider how the service could combat challenges such as traffic congestion and contribute to climate change mitigation.
Another upcoming project that tackles these elements and is making headway is the plan to double Amtrak’s operation in Virginia over the next 10 years to provide an hourly service. The $US 3.7bn “Transforming Rail in Virginia” initiative aims to offer a new double-track railway from Washington, DC, to Ridgeway, North Carolina, that will be used by both Amtrak and Virginia Rail Express (VRE) trains.
Amtrak will invest $US 944m in exchange for the introduction of six new daily round trips and exclusivity to provide inter-city services for 30 years. VRE will also provide $US 200m as the operator increases its offer by 60% on the corridor. Crucially the state has agreed to acquire 618km of right of way and 358.8km of existing track in rail corridors paralleling the I-95, I-64 and I-85 highways for $US 525m from CSX.
The CSX infrastructure includes half of the rail corridor right-of-way on the 164km section from Washington, DC, to Petersburg, Virginia, which includes 62km of existing track; passenger train rights on the S-Line between Richmond and Petersburg; the entire abandoned 120km corridor from Petersburg to Ridgeway, North Carolina; and the entire 278km of right of way and 299km of track west from Doswell north of Richmond to Clifton Forge, Virginia.
The initiative also includes the construction of a $US 1.9bn dedicated double-track passenger railway bridge over the Potomac River that will be built adjacent to the CSX-owned Long Bridge, the only current railway bridge connecting Virginia and Washington, DC, along with a further $US 1bn of infrastructure investment across the state to deliver the new corridor. This includes the construction of 60km of new track which will be completed in stages up to 2030, and apart from in Ashland, Virginia, will offer a four-track railway with two dedicated tracks for passenger services.
Flynn says this infrastructure expansion effectively means that Amtrak could offer through services from the NEC into Virginia and North Carolina, potentially supplementing its Raleigh - Charlotte Piedmont service, which has experienced significant growth in recent years, as well as the long-distance New York - Charlotte Carolinian service. He adds that this offers major opportunities for integrated ticketing and services that could potentially redefine the NEC. Preliminary plans to develop a Charlotte - Atlanta high-speed line are also taking shape with a preferred alignment for the line identified in July and the Georgia Department of Transportation (GDOT) and the United States Federal Railroad Administration (FRA) releasing a Tier 1 Environmental Impact Statement (EIS) and Record of Decision (ROD) for the as yet unfunded project.
“If you just step back and say, well, wait a minute, you know, the second largest financial centre in the United States is Charlotte, after New York; the Research Triangle of Raleigh, Durham, and Cary, is kind of the East Coast high tech centre; and then you come through to the capital, and then on through all the way to New York and Boston, I think it’s just a great example of what can be achieved,” he says.
Cooperation
Agreeing cooperation with CSX was critical to make this future expansion of service possible. A similar $US 257.2m agreement was also reached by the state with Norfolk Southern earlier this year to expand Amtrak’s service to Roanoke in 2022 and NEC services to the state’s New River Valley from 2025. However, the two Class 1s have been less willing to cooperate with Amtrak on its plans to introduce a twice-daily Gulf Coast service between New Orleans and Mobile, Alabama, in 2022.
The Class 1s argue that a study over the impact on freight operations posed by passenger trains has yet to be completed, and until it is, no Amtrak service can be introduced. Amtrak counters this by saying that the route has been studied on numerous occasions but that the Class 1s keep moving the goal posts. Its spokesman said the study should have taken seven months to complete and that the parties had been in discussion about the proposal for five years. “We safely and successfully operate together elsewhere in the United States, with dependable freight service coexisting with reliable and relevant Amtrak service,” the spokesman told IRJ’ sister publication Railway Age. “That’s what the Gulf Coast deserves, too.”
The two parties have since clashed in multiple filings to the Surface Transportation Board (STB), culminating in the STB throwing out efforts by the Class 1s to dismiss the case on August 6 based on Amtrak’s application for an STB order requiring CSX and NS to allow Amtrak to operate the new service. The STB has set a December 16 deadline for the railways to provide proposals on a hearing format. However, Amtrak says the case could still end up in court, further delaying introduction of the train.
Thus, if increased capital funding becomes available for new passenger trains, the greatest challenge for Amtrak looks likely to be securing the track access it needs to offer a competitive and efficient service. Indeed, the Gulf Coast outcome could prove a litmus test for similar contests over the coming years.
“The issue for us is that we, the company, have not enjoyed the benefit of that bargain in the national network.”
William Flynn
President Biden’s executive order issued on July 9 to address competition in the US economy seemingly ups the ante and adds weight to Amtrak’s cause. It specifically calls for the introduction of some open-access rail operations - such as reciprocal switching - a demand that was slammed by the Association of American Railroads (AAR) as “misguided.” AAR says this will result in interference with functioning freight markets and undermine the railways’ ability to reliably serve customers.
When responding to a question about the possible impact of the executive order on Amtrak’s ability to secure the access it requires, Flynn refers to the creation of Amtrak in 1971. Specifically, the “essential bargain” made with the federal government by the rail freight industry, which for many companies at the time, particularly those in the Northeast, lacked sufficient funds to invest in even basic track maintenance. The freight railways agreed to transfer their financially draining passenger operations to the government in exchange for allowing Amtrak to access track infrastructure under a pre-agreed avoidable cost formula, and for passenger trains to have priority over freight.
“That’s the law,” Flynn says. “The issue for us is that we, the company, have not enjoyed the benefit of that bargain in the national network.”
Flynn was quick to emphasise that Amtrak does and is prepared to pay “over and above” for a level of service above the baseline. And while he is encouraged by Biden’s executive order and the appointment of a fully staffed STB, which as part of their remit, oversees the bargain, he feels more is needed, particularly with the likelihood that the Gulf Coast application to the STB will be followed by other similar cases in the future. “Of course we have the law but we need some additional legislation that we believe needs to put more focus on enforcement of that law,” Flynn says.
He also points out that Amtrak is not likely to be alone in fighting for the law to be upheld. The states it is partnering with to grow service are also likely to support its cause to secure the necessary access, as emphasised by Virginia’s commitment to purchase the infrastructure outright from CSX.
The desire of Midwest states to enhance connections is mirrored by states in the south and the southwest. This could potentially transform Amtrak’s offer and the landscape of US rail operations in regions where freight is the only show in town. Creation of the Amtrak network in 1971 mirrored the distribution of the country’s population of 220 million at that time. 50 years later it is 330 million. And while the population of the northeast and Midwest is roughly the same, the south, southwest and west coast has experienced an influx of 110 million new people. Flynn believes the time is right for the operator to catch up.
“Our service today looks very much like it did in 1971,” he says. “There’s a large under-served population, and that is really the underlying logic of Amtrak Connects US. That’s an exciting opportunity if we can get this level of funding to invest in infrastructure, rolling stock and stations, and service expansion.”
Covid checks Amtrak’s charge to profitability
MR William Flynn took over as Amtrak CEO in April 2020 in the midst of arguably the biggest crisis to hit the United States since the Second World War.
As the first wave of the Covid-19 pandemic took hold, the passenger operator had already reduced its daily offer from around 330 daily trains to just 160-165 in mid-March. Daily passenger numbers had plummeted to 53% of the usual 90,000, and again to 3.33% or 3000 riders in the first week of April.
Flynn explains that Amtrak felt that it needed to continue to provide a certain level of service during the crisis. “We see ourselves as essential,” he says. “And my belief is that the 3000 people that were riding with us in April needed to get somewhere otherwise they would not have been on that train.”
With Amtrak continuing to operate, Flynn says the focus was on keeping passengers and its staff as safe as possible. The wearing of masks was mandated - a condition that remains in place today - and the railway’s efforts were bolstered through partnerships with academics at the Bloomberg School of Public Health from Johns Hopkins University, in Maryland, and the Milken School of Public Health at George Washington University.
Among the work was providing Amtrak with a better understanding of the airflow and filtration in its passenger coaches and the steps it could take to improve the safety of that environment. “It was really valuable,” Flynn says. “Because unlike the airline industry, where there’s a lot of information about airflow in a plane, there is less information about rail cars.”
Amtrak also worked with foreign railways to learn how they were responding and to share information from the medical professionals it was working with.
By July 2020, ridership had recovered to 20-25,000 daily passengers, where it remained until April. As vaccines became more prevalent, this has since grown to around two-thirds of pre-pandemic ridership as Amtrak eased capacity limitations, which were set at 50% during the height of the pandemic. In addition, almost all of the 28 state-supported services that Amtrak runs have been restored with notable reintroductions in New England to attract tourists in recent weeks.
Indeed, Flynn reports that with many offices remaining closed, Amtrak passengers tend to be leisure rather than business travellers. This is evident in the fact that the operator’s long-distance trains have virtually fully recovered. Flynn says the strength of these services is the sleepers and roomettes where passengers can “close the door.” He says these passengers are also benefitting from the restoration of the train’s traditional dining service. “We’re essentially sold out on our sleepers and roomettes until October-November,” he says.
Amtrak has also noted a change in the age demographic of its passengers; the number of 55 and over riders has fallen while 18-34-year-olds have increased. “There is a whole new demographic segment of folks who hadn’t for whatever reason thought about riding the train,” Flynn says. “And they like it. That’s a growth opportunity. Our job now is to make lifelong riders from those customers and to really understand them.”
Inevitably the return of passengers will translate into improvements in Amtrak’s financial performance. The railway was the beneficiary of
$US 1.7bn of recovery funding from the $US 1.9 trillion American Rescue Plan, which was signed into law by president Biden on March 11, and enabled Amtrak to restore full service to its long-distance trains as well as call back furloughed employees. Amtrak had also benefitted from payments of $US 3bn from earlier pandemic bail out packages.
Set back
The pandemic had checked Amtrak’s pursuit of its first ever operating profit, which Flynn says on February 29 2020, at the half way point of its financial year, the railway was on course to secure. Flynn’s predecessor, Mr Richard Anderson, had made it his mission to improve Amtrak’s operational performance, often the ire of critical senators overseeing its budget each year.
The railway had made significant progress, reducing its operating loss to $US 29.8m in fiscal 2019, an improvement of 82.6% over the $US 170.6m loss reported in 2018, and its best-ever operating result. Controversial cutbacks to loss-making long-distance services were carried out - including scaling back onboard catering, which has been heavily criticised. The restoration of some at-seating dining has been praised, but Flynn is keen to continue this trend towards profitability.
When Amtrak might get close to this level of performance again is though difficult to predict. The operator reported a $US 801.1m deficit in its Covid-ravaged 2020 results. However, Flynn says the work undertaken in the past five years to improve operational performance and introduce “solid disciplines” meant Amtrak was in a much stronger position to respond when the pandemic hit.
Reflecting on where the operator might be by the end of the year, Flynn says he thinks ridership can remain in the high 70% compared with pre-Covid levels. However, with the Delta variant taking hold and Covid cases surging in the United States, he is understandably cautious.
“It’s hard to say what the effect of that is going to be,” Flynn says. “In some parts of the country, we have high vaccination rates generally in the population, and in other parts we don’t.
“If you asked me six weeks ago, I would have been a bit more enthusiastic about the ridership. But looking forward, I think we have to temper it a bit, because it’s a new level of uncertainty that unfortunately we have to deal with.”
