Hotline #735 - December 2, 2011


NARP President Ross Capon will appear before the House Transportation & Infrastructure Subcommittee on Railroads next week, on Tuesday, December 6.  Convened by Subcommittee Chairman Bill Shuster (R-PA), the hearing is titled “The Federal Railroad Administration’s High Speed Intercity Passenger Rail Program: Mistakes and Lessons Learned.”  A partial list of other witnesses includes: Federal Railroad Administrator Joseph Szabo; Ohio DOT Commissioner Jerry Wray; and Kenneth Orski, editor and publisher of Innovation Newsbriefs. 

The hearing will be webcast live.

Although official numbers won’t be available until later this month, early returns indicate that Amtrak set a new ridership record for the Thanksgiving travel week, carrying an estimated 720,000 passengers.

“While retailers are reporting sales are up at stores and on the Internet, travel on Amtrak also exceeded expectations due, in part, to increased capacity and the recent introduction of free Wi-Fi service on several Amtrak routes,” explained Amtrak Vice President of Marketing and Product Management Emmett Fremaux.

Amtrak beat out the previous record of 704,446 passengers, set last year—a roughly 2.2 percent increase. The previous record was set in 2010.  The Thanksgiving holiday travel week begins the Tuesday before Thanksgiving and ends the following Monday (November 22-28 this year).

Amtrak could put more rail cars on the road thanks to rehabilitated and refurbished railcars and locomotives recently restored to service through fleet enhancement initiatives.

Labor unions and the major railroads reached an agreement to avert a railroad strike that would have crippled the U.S. economy during the holiday season’s peak travel and shipping volumes.

Besides intercity and commuter train passengers—Amtrak and many commuter rail agencies run their trains over tracks of the Class One railroads—automakers, electric utility providers reliant on coal, and countless other industries are dependent upon the work done by the workers in the freight rail industry.

“Freight rail touches nearly every sector of our economy, and we are committed to finalizing the remaining agreement so that we can continue to deliver for the tens of thousands of American businesses that rely on rail, and the hundreds of thousands of Americans who use passenger rail to commute to work every day,” said Edward Hamberger, president of the American Association of Railroads, which represents the Class I freight railroads.

The National Railway Labor Conference’s National Carriers’ Conference Committee (NCCC) and the American Train Dispatchers Association—representing 26,500 railroad employees—reached an agreement with management that was satisfactory for all parties.

“I said that a voluntary settlement was preferable because you control the outcome through the ratification process, instead of allowing a third party—in this case, a highly unpredictable Congress—to control the outcome,” said Brotherhood of Locomotive Engineers (BLE) President Dennis Pierce in explaining to member why taking a compromise deal was preferable to congressional intervention.

And congressional intervention seemed likely, with House Speaker John Boehner (R-Ohio) explicitly stating he would be open to moving legislation to prevent a strike.

The Brotherhood of Maintenance of Way Employes (BMWE) are now the lone holdout, but they agreed to further extend “cooling-off” period for another 60 days, allowing negotiations to continue.

The price of oil rose around $17 a barrel in the last two months, an increase of 21 percent.  That is part of a trend that has seen the price of gas rise 44 cents a gallon over the same Thanksgiving period in 2010.

Tom Kloza, chief oil analysts at Oil Price Information Service, told Business Week that Americans will spend as much as $488 billion on gasoline in 2011. That could surpass the record set the single year record of $448 billion, set in 2008. 

This increase in price comes at the same time as U.S. households make less, meaning the average percent of a household’s income spent on gas has risen to 8.4 percent.  That’s a significant increase from the 6.7 percent seen in 2010, and up half a point from 7.9 percent in 2008.

While gas prices have actually declined from highs in May, analysts warn that trend will be fleeting, with seasonal travel habits sending prices at the pump soaring again come spring.

An analysis released by a financial forecasting publication predicts that the U.S. passenger rail market will continue to see growth in the coming years, increasing to a value of $23.5 billion by the end of 2015.

Market & Research defines the passenger rail sector to include all ‘heavy rail’ services such as inter-city, regional, and commuter trains—but not light rail, streetcars, subways, or other forms of transit.  In 2010, passenger trains had a revenue of $19.3 billion (a figure that does not include government grants), representing a compound annual growth rate of 5 percent for the years 2006 through 2010.

Market & Research predicts the “performance of the market is forecast to decelerate, with an anticipated [compound annual growth rate] of 4.1% for the five-year period 2010-2015.”

The Federal Transit Administration announced a federal line of credit for as much as $280 million today, to advance construction on the Eagle P3 commuter rail project to enhance mobility for workers and businesses in Denver.  The project will create 4,700 construction related jobs for Coloradans.

“This loan brings Denver a step closer to completing this ambitious and far-reaching project that offers better transportation choices in one of the most densely populated regions of the country,” said Transportation Secretary Ray LaHood. “We’re proud to promote a solid foundation for the region’s economic growth, while creating thousands of good jobs in Colorado.”

The project will run 30 miles across two lines.  The western “Gold Line” will serve the suburbs of Arvada and Wheat Ridge.  The East Line will carry passengers from Denver International Airport to Denver Union Station, connecting with existing light rail and bus service.

The Denver Regional Transportation District (RTD) secured the loan through a Public Private Partnership (P3) with Denver Transit Partners, a consortium of private sector parties that will be responsible for financing roughly a quarter of the project through tax-exempt private-activity bonds.  This P3 cleared the way for today’s FTA loan.

The Capitol Corridor service began offering wireless internet this week—just in time for the busiest online shopping day of the year.

The service, managed by theCapitol Corridor Joint Powers Authority and operated by Amtrak, runs 32 weekday trains between the San Francisco Bay Area and Sacramento, with one train per day connecting east to Auburn, a suburb of California’s capitol city, and several trains extending south to San Jose.  The Capitol Corridor authority paid for the $3.75 million system with a windfall left over from a signal improvement project that came in under budget.  The authority has had difficulty finding a technology solution that provides reliable coverage and doesn’t interfere with Union Pacific Railroad’s communications system.

“This is the No. 1 amenity our riders have requested—over and over and over and over again,” Luna Salaver, spokeswoman for the Capitol Corridor, told the San Francisco Chronicle. “This is our holiday present to riders who’ve been clamoring for it.”

The Wi-Fi service will be a boon for workers traveling between Oakland and San Jose—regions heavily populated with tech companies.

“The days when people were satisfied with relaxing and staring out the window are long gone,” Salaver added. “People want to be productive.”

Many people will no doubt continue to enjoy the scenery on display.  But they, too, can now share their pictures of that scenery with friends online a little sooner.

The Kansas Department of Transportation’s (KDOT) rail division announced the two preferred alternatives for the passenger rail corridor that will connect Kansas City; Oklahoma City, Oklahoma; and Fort Worth, Texas.

KDOT has narrowed the routes from five to two: a daytime service between Kansas City and Fort Worth, or a nighttime service between Newton, Kansas and Fort Worth.  The ridership projections for the daytime train are the highest of the two alternatives, with an estimated 270,500 passengers annually.  The price tag for the daytime alternative would also be higher, with $245.5 million in initial capital costs and an annual operating grant of $10 million (which will be shared by Kansas, Oklahoma, and Texas).  The nighttime alternative, on the other hand, would carry around 200,500 passengers annually, cost $87.5 million in upgrades, and need a $4.4 million operating grant.

The analysis found that the economic benefits—which include ticket revenue, reductions in traffic accidents, easing congestion, and lower emission levels of harmful pollutants—would equal the cost of initial investment for the nighttime train.  The daytime train’s cost would exceed those benefits.

The plan will now go to state lawmakers in Topeka, who will decide the future of the project.

The Indiana High Speed Rail Association (INHSRA) unveiled an upgraded website this week, providing Midwest train riders better tools and information to enhance their advocacy efforts.

“[INHSRA’s new website] is more relevant and informative in defining the Midwest Regional Rail System, and the economic benefits it will bring to Indiana,” said INHSRA President Thom Davis.