Sunday, October 09, 2011

Serious Business - Proposition 3

So far, I have suggested two propositions regarding a new direction for intercity Passenger Rail in America.

The first was that the freight railroads could absorb some of the losses it may take to get passenger service re-integrated with the rail system in general.  I think this is true, but only under certain conditions.

The second was that freight railroads do not have handling passengers in their business plans, which, I think, is false for the reasons stated.  (Go back and read!)

Proposition 3 is that freight rail will want some serious concessions from government in order to re-assume the burden of moving passengers in any form greater than their lackadaisical handling of Amtrak.  I think this is true, but I don't think these concessions will have to be as costly as one might think.

Go back to the airport/airway model again.  Making railroads copy this model wholesale is just not a good idea.  The railroad business has too much capital tied up in land, track, and other infrastructure.  This wouldn't be a concession to a profitable private enterprise, but a wholesale nationalization.  But I think freight railroads, the profitable ones that have experience in leveraging real estate to their advantage, would listen if government was ready to provide the land and pave the way for new kinds of passenger terminals.

Didn't railroads used to lose money on terminal operations before?  Why would they want to go back there?  These questions do not jive with historical perspective.  Railroads lost money on passenger services for many reasons, the chief among them being loss of revenue to cheaper and faster modes of transportation.  But hear me out.

I don't have a crystal ball, but I don't see anyone saying that air travel is going to get cheaper or easier.  I don't see anyone saying that highway congestion is going to go away, or that trucks are going to stop using the Interstates altogether.  I don't see any competition on the horizon for moderately fast, comfortable and efficient Passenger Rail.  Terminal services, from large stations to small, could be where the already well established sales departments of freight railroads could shine.  I'm not talking about service from the 1930s to the 1960s, but the kind of amenities that could be provided today.  Luxury hotels, amusement, shopping, short-term layover facilities, casinos, tours, and things that haven't been created yet, all integrated to a much greater degree than possible before our digitally connected era.

I think there are freight rail companies that would be willing to get things like this going for passenger rail, and make them profitable, given just the minor subsidy of real estate to build on, and the minor guarantee from government that the tax structure and regulations for this form of transport would remain predictable and stable for the better part of a half century.  Railroads aren't the staid old corporations run by grandfatherly old men that many people think of when they think of railroads.  In the new era, the average railroad executive is going to be just as connected as the rest of us.  And maybe just as creative.

Next time, Proposition 4.

©2011 - C. A. Turek -

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