Almost as a "given," we have repeatedly stated that Passenger Rail cannot break even or make a profit.
What about the proliferation of Tourist Railroads, Railroad Museums, and Dinner Trains? (And combinations of these three.) Some, like the Strasburg Railroad near Lancaster, PA, have been around and making money for a long time. And what about rail cruises?
This month's issue of Trains makes note of the rebirth of the White Pass & Yukon Route. This rebirth has been facilitated by the countless Alaskan cruise liners that call to the port of Skagway, Alaska, and send great numbers of passengers ashore to ride the trains up into the Alaskan wilderness. They are making money running passenger trains!
Dinner Trains, if run well, give the lie to those in government that would cut the heart out of Amtrak by cutting out food service. People flock to the dinner trains just for the fun of eating on rail and on the go. Some Tourist lines make money for their owners, others are subsidized. The same goes for museums. Strasburg is a synergy of Railroad Museum of Pennsylvania and the old line itself that seems to work well.
The rally cry of all these money makers is: If you've got the money, Honey, we've got the train. They all put their product out there on the market and price their product to make a profit. The target demographic is narrowly defined, and the level of product satisfaction within that demographic is high.
By contrast, scheduled passenger rail has to have a product to market. Many passenger rail agencies - we don't know of any privately operated, regularly scheduled, year 'round passenger rail routes - including Amtrak do not know what their product is supposed to be. Is their product transportation? Is it service? Is it speed or reliability? Is it just a string of cars that you can ride if you want to?
Amtrak thinks it is some of all of the above. Even railroad passenger routes before Amtrak had this kind of split personality. Some commuter routes still do. In part, it is because they do not have a narrowly defined demographic. Amtrak's demographic is anyone who wants to use a long-distance passenger train at any time for any reason, including transportation, recreation, or just plain nostalgia. Because these agencies are quasi-governmental, they must serve "all the people."
Being all things to all people necessarily means that the product satisfaction in any narrow demographic is going to be lower than it would be had the demographic been targeted.
So here's a proposal. Open up Amtrak's routes, and those of some of the commuter carriers, to bids from private "railroad event" operators. We are not proposing selling or leasing route structures. We think Amtrak should continue to operate a stable, coherent, and reliable passenger system. Just provide the trains and track (we know that the risk managers at the Class Ones are biting their nails at this), and let private enterprise pay as much as or more than it costs Amtrak to have the trains and track.
Boom! Suddenly Amtrak is breaking even, or making a profit. Let the private operators find something useful to do with the trains and track. Just lets be rail friendly. As we said in a previous blog (flag waving . . . just scroll down!) wave the right flag and make it so that the railroads and Amtrak have to bend in the right direction for the "something useful" to get done.
Something useful could be many things: Maybe just an express commute that's not being done now, but where the ridership would pay a premium for it. (Here in New Mexico that could be a train from El Paso to Denver. The Coyotes would pay a bundle. Ha, ha.) Perhaps new rail cruises, tours, historical outings, school field trips, etc., et. al.
Yes, we know it would take a little flexibility on the part of the operating railroads and a little know-how on the part of the contractor. (Rip Track, are you listening?) But it is not like they don't exist. And when was anyone with money and looking for a way to make more money on railroads afraid of running a railroad?
Just a thought.
© 2006 - C. A. Turek - mistertrains@gmail.com
3 comments:
I basically agree with your thesis that Amtrak would benifit from compitition. However I don't think tourist railroads are much of a model. Most are operating on a very marginal basis and wouldn't exist but for the presence of otherwise depreciated cast-off equipment that allows these operations to have a very low capital cost. I speak from experience as a former Marketing Director for one company.
One lesson from the White Pass & Yukon, Strasburg and Grand Canyon is that volume matters. Most tourest lines don't have it. They do. Most Amtrak routes don't have it. But could.
It's occurred to me before that tourest railroads could be the start point to new operations providing private long-distance passenger service. Indeed, the Cape Cod & Hyannis was doing that in the eighties, but they also had a subsidy. Perhaps the Grand Canyon railroad could expand to Pheonix, connecting with the airport and also provide a Phoenix section of the Southwest Chief. Seminal Gulf Railroad is another geographically advantaged operator this way.
From the horse's mouth . . . Chris Parker (welcome!) suggests one reason why tourist lines are an exception to the "no profit without subsidy" rule for Passenger Rail. We like his thinking and certainly his theories on who or what entities could be bidders to use the rails for private passenger services. But there is also no reason that one currently subsidized entity could not bid into a market outside their current service area and become more profitable (with subsidized entities that means less of a loss) by using their expertise where it will do the most good and earn the biggest bucks. And their are some very profitable operating companies out there that don't have their own railroads. They currently live off the "subsidized." But their expertise may just one day allow them to be profitable from scratch.
I write on this topic quit a bit over on http://www.transitsleuth.com and am FOR more competition in the market. Only problem is, cars & airlines need to be forced to actually be competitive and pay their share for their infrastructure. Without, we're not going to see improved service. We definitely won't see service as the nation had in the past.
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