October 28, 1999 Oversight of Amtrak

Thank you for this opportunity to testify. Our non-partisan Association -- whose members are individuals -- has worked since 1967 towards development of a modern rail passenger network in the U.S.

1. Amtrak Results

Fiscal Year 1998 saw passenger revenues increase and passenger-miles rise 3%. Ridership rose 4%. We understand that all three measures also rose in Fiscal 1999. [The FY 1999 numbers are +6%, +0.5% and +2%, respectively.]

2. Conrail Breakup Problems

As the committee is aware, the Conrail split-up is not going smoothly and has devastated the on-time performance of Amtrak’s Chicago-East Coast trains and the Chicago-Detroit and Chicago-Indianapolis corridors, with ripple effects to the West (connecting passengers and equipment run-throughs). We understand that Norfolk Southern management is extremely concerned about problems that its freight customers as well as Amtrak are experiencing on NS lines and is working diligently to improve things.

I experienced problems first-hand when I rode Amtrak from Chicago to Philadelphia on October 11-13, arriving Philadelphia eight hours late at 12:45 AM. On CSX, a mail car with a hot journal was removed from my train. This should not have taken two hours, but it did. With the added impact of signal failures, we were five and a quarter hours late at Akron.

The combined impact of such delays and the Hours-of-Service Law causes Amtrak to run short of crews, and the result is trains waiting for rested crews, often before leaving their originating terminal. On my trip, we lost another hour between Youngstown and Pittsburgh waiting for a replacement crew. We left Pittsburgh six and a half hours late, Altoona 7:27 late and arrived Philadelphia 7:52 late.

It is unfortunate that Amtrak service is being disrupted by the Conrail debacle so soon after the serious problems Union Pacific had following its takeover of Southern Pacific, but at least they didn’t happen simultaneously. It is worth noting that the recent Canadian National takeover of Illinois Central seems to be going smoothly.

Obviously it is important for Amtrak -- as well as for freight customers -- that NS make the progress it says it will in unclogging the system.

3. Opportunities for improvement

Amtrak seems to be giving unprecedented priority to the need for consistently friendly personnel -- and the need to support them adequately. Anyone who has followed Amtrak for a long time has got to be skeptical because promises have been made and broken before. We are optimistic that the present management is more serious and will get the job done right.

NARP has been working with Amtrak on issues regarding the sizing of long-distance trains where we believe that increasing the capacity available for sale would improve both the trains' economics and availability to the traveling public.

We understand that Amtrak and the United Transportation Union have reached a tentative, new agreement on crew sizes. This is long overdue. We are glad to see it.

Amtrak has reached important agreements with a number of outside business partners which should have positive financial implications going forward. The ones listed below are the ones with the most obvious direct benefits to passengers.

Hand-held fare collection devices for conductors will let Amtrak personnel on and off the trains promptly resell space held by "no-show" passengers. It will be easier for on-train personnel to issue accurately-priced tickets, and to deal with a customer who may already have paid for his or her travel (over the phone by credit card) but not received tickets (especially important for those boarding at unstaffed stations). Also, Amtrak will get revenue and ridership data promptly rather than after tickets go through a costly, up-to-six-week-long (!) mostly manual accounting process. This should help Amtrak do a better job of setting fares. Motorola is manufacturing the devices to Amtrak's specifications, and is providing marketing support for Acela based on this amenity. Amtrak holds the patent, so there is a potential for future additional revenues if other systems use this design.
 
Point of Sales (POS) computer system for food sales. Traditionally, snack bars on Amtrak trains open long after a train starts running and close long before it reaches its destination. This inconveniences customers (who must buy food and drink off the train or go without) and costs Amtrak revenues. Amtrak has begun introducing "point-of-sale" devices which, by simplifying the inventory process, should let food and beverage sales encompass the entire time a train is operating. As well, customers will automatically get receipts and correct conversion of Canadian cash. Also, credit cards will be honored universally. (Currently, they are honored only on the San Joaquin corridor and on dining cars on long-distance trains.)

Amtrak tells us that its recent agreement with Dobbs International Services should insure better, more consistent food quality across the system while reducing Amtrak's food procurement costs.

Rental cars. Through a new agreement with Hertz, Amtrak is addressing a problem which until now has discouraged people making trips of any length from using Amtrak: difficulty to get rental cars at Amtrak destinations. Typically, airport car-rental offices are open 24 hours and downtown locations which may or may not be near Amtrak have much more limited hours. Under the new agreement, at a growing list of stations, Hertz agrees to make reserved cars conveniently available. An important part of this deal, particularly in light of the on-time performance problems noted above, is that the Hertz commitment is good even when a train is running very late. Also, Hertz is establishing its own desks right in certain Amtrak stations, most recently at Whitefish, Montana, and Wilmington, Delaware.

(Under the Hertz deal, when an Amtrak customer reserves travel to any station that is on a growing "Amtrak/Hertz list," Amtrak asks the customer if he/she wants to rent a car. If the answer is yes, Amtrak bucks the call to Hertz.  Amtrak gets a flat payment for each such call, plus a commission on actual rental-car bookings that result.)

Air-Rail links. Much has been written on the ability of the train to replace airplanes for many people making shorter trips (like New York-Washington), but less has been said-at least on this side of the Atlantic -- about rail's ability to serve one leg of a long trip that also involves flying.  That's because the train/plane transfer is so difficult in most cases.  The most popular current example -- BWI -- involves a bus that runs on 15-minute headways and does not wait for (or meet) particular trains.  By contrast, many European airports are physically connected to intercity (not just local) passenger trains -- Geneva, Zurich, Paris, Lyon, Frankfurt, Manchester, to name a few.

We are excited by the business opportunities Amtrak (and New Jersey Transit) will enjoy when the Newark Airport station now well along in construction opens in 2001. Although the rail station will not be in the basement of the airport as in Geneva, it will be linked to the airport by an extension of the existing airport monorail. Continental Airlines Chairman and CEO Gordon Bethune also is excited by the prospects, including NJT commuter trains running to Manhattan every 15 minutes. A recent news report says Bethune "expects to capture a bigger share of O&D traffic" even before completion of his new concourse at Newark in 2002 because the rail link "means I can get to Newark in 30 minutes in peak traffic on a snowy day." He was talking about the NJT service to New York City's Pennsylvania Station, of course, but we think people will be surprised by the volume of people who make longer trips (on Amtrak) to and from the airport.

We see a similar opportunity in Chicago. With the right track capacity work, many Amtrak trains could be extended to the existing "O'Hare Transfer" Metra commuter-rail station (already served by five Metra round-trips per weekday between Chicago Union Station and Antioch). Meanwhile, a short extension would bring the O'Hare "Airport Transit" line to O'Hare Transfer. The Federal Railroad Administration's commercial feasibility study of rail passenger corridors found that a direct O'Hare link would greatly enhance the ridership and financial viability of Midwest rail corridor improvements.

Amtrak has an agreement with United Airlines that offers good fares to people on long trips with long segments both by train and by plane. Amtrak hopes to expand the visibility of this product. (Amtrak has other agreements with Alaska and Midwest Express Airlines.)

U.S. Customs. Our members have been intensely frustrated by border delays on Amtrak's New York-Toronto, Chicago-Toronto and New York-Montreal trains (the latter two supported partly by state funding). John Martin, the president of our association, and I personally experienced this traveling October 20 to our association's board meeting in Toronto (the board's first-ever meeting outside the U.S.). Almost two hours (1:56, to be exact) elapsed between our train's arrival at Niagara Falls, New York, and departure from Niagara Falls, Ontario, two miles away. We sat 67 minutes between the New York station and the international bridge for an export check by U.S. authorities, then sat at the Ontario station for 36 minutes. The present situation is unacceptable and obviously hurts business. An October 23 letter in a Toronto newspaper was headlined "Manhattan choo-choo? Forget it." The writer took the train to New York a few years ago and said "the train stopped for about two hours [at the border] while the American immigration authorities interviewed everyone and put a great many people off the train."

We understand that Amtrak and U.S. Customs are working hard to improve the situation, and that the solution will include greater effort by Amtrak to get relevant information from passengers in advance.

4. Federal funding-flexible and otherwise

While there are many things Amtrak itself can do -- and has been doing -- to improve its service and the economics thereof, there are two important things the federal government can do. First, we strongly believe that intercity passenger rail should be an eligible use of TEA-21 funds for those states that wish to make this choice. Under current law, federal policy discourages states from investing in rail. The ability to leverage federal funds heavily influences state investment decisions. We believe that the virtual or literal absence of federal matching funds for intercity passenger rail projects, in stark contrast with generous federal matches for rail, seriously distorts state decision-making against rail. Enactment of the relevant provision in S.1144 as passed by the Senate Committee on Environment and Public Works would help solve this problem.

We also support full funding of the $989 million authorized for FY 2001. We thank the committee for providing this authorization. [In his spoken testimony, Mr. Capon expressed concern that enactment of AIR-21, the House-passed aviation reauthorization bill, would make it impossible for appropriators to fund Amtrak.] 

We endorse the DOT Inspector General's statement that "in the long-term, Amtrak will require annual capital funding substantially greater than it currently receives in order to have the funds to rebuild the Northeast Corridor, maintain its capital assets in the rest of the system, and invest in new corridor development and other business growth opportunities.  We believe Congress, the Administration, and Amtrak should proceed with a sense of urgency to agree on an appropriate level of long-term capital funding necessary to sustain a commercially viable railroad and to identify the means by which this funding will be provided."

We believe that the network currently operated is smaller than acceptable. We would like to see several new routes added. We do not believe that the national system should be held hostage to delays of the high-speed train-sets, delays which are currently the responsibility of the private-sector manufacturers. With regard to the Northeast service, it is important to note that full electrification to Boston is not in doubt and will go ahead in January. It will substantially improve Amtrak's competitiveness.

At our just-concluded board meeting, we heard a presentation that the next decade or so will see the end of cheap oil. The International Energy Agency endorses this view. The superior energy efficiency of passenger rail and the ability of rail lines to be electrified (and thus use a variety of non-fossil fuel sources) means countries with well-developed passenger rail systems will be better positioned for the future. Using 1995 statistics (when Amtrak still operated a big fleet of obsolete and now-retired cars) and not taking into account the energy benefits of Amtrak's mail and express business, the Department of Energy's Transportation Energy Data Book reports that Amtrak was 1.8 times more energy efficient than certificated route airlines (2,315 btus per passenger-mile vs. 4,236). Amtrak's efficiency can improve as the results of more recent-and future-capital investments take hold.

We believe that what most legislators wanted from the 1997 reauthorization was an assurance that Amtrak is providing good value for money. We think most would agree with Senator Lott's statement in 1995 that "if they get 80% of the way there [operational self-sufficiency], we're not going to shut them down."

Thank you for considering our views.