On Amtrak's 'Good Stewardship'
December 5, 2019
WBUR's 'Here and Now' program on Monday missed the point on whether Amtrak needs to make a profit -- and missed an opportunity for a better conversation
by Jim Mathews / President and CEO
No doubt by now you've heard Amtrak CEO Richard Anderson's interview on National Public Radio's 'Here and Now' program, produced by Boston NPR affiliate WBUR. If you haven't, go give it a listen. He says a lot of interesting things and does a great job explaining why rail is the best answer for congestion and climate change. But he also repeats a lot of true, but misleading or incomplete, assertions about long-distance routes.
The big takeaway for me after listening was that it's clear the voices of our advocates are making a difference, particularly in the way we've engaged the Congress to protect our collective investment in passenger rail nationwide. This exchange from the broadcast is especially interesting:
Interviewer: "Well, could you do what airlines do with unprofitable routes, which is basically tell the federal government or members of Congress, 'look, if you want to subsidize this particular route, go for it, but it's not part of our core business'?"
Anderson: "Well, no, that wouldn't be appropriate for Amtrak because we have a statutory responsibility to provide inter-city travel. We also have a statutory responsibility to minimize losses and run this like a business. So we're at an intersection of both a really important public-policy role and the responsibility to be very good stewards. So, we have to have good answers for rural communities. So we take that challenge. But the reality is that probably 90% of the people who get on an Amtrak train travel under 300 miles. There are only about 170,000 people a year that take a long-distance train end-to-end, but they're a very vocal group of people that have this sort of historic view of the beauty of going 45 miles an hour on a train for a couple of days."
I don't know about you, but I'm glad to hear him acknowledge some of the things we've been saying all along, both to Amtrak management and to Congress. I'm glad he agrees that the National Network plays "a really important public-policy role." I'm also glad to see him take the challenge of having "good answers for rural communities."
From there it goes sideways. For one thing, the 170,000-rider number is pretty misleading and implies that trains like the Southwest Chief operate like airliners do, between two cities. We all know it's more complex than that, but a casual radio listener hearing this exchange might conclude that we're running long trains that do nothing but connect two cities.
A few weeks ago I testified alongside Anderson before the House Transportation & Infrastructure Committee’s rail subcommittee, and I said then that our organization supports a lot of what he has done. His focus on safety is long overdue, he is fighting host railroads with fangs out on making passengers late, he's outlining ambitious fleet-replacement plans for both corridors and the National Network, and he is the first CEO in recent memory to talk openly about an ambitious growth program with new services and forward-thinking change. We all should support this, strongly
However, NPR starts with the assumption we hear a lot from the general press -- passing along as accepted fact the narrative that Amtrak’s problem is that it’s forced to run long-distance trains at a loss instead of short-corridor trains in densely populated areas at an operating profit. Not only is that a debatable idea, but when reporters do this a lot of other assumptions come along for the ride and go completely uninterrogated. One result is that the right conversation about rail in this country never really materialized during the broadcast.
Just as it did during Monday's radio program, the public conversation about Amtrak too often falls into the framing that Amtrak is supposed to behave like a private company, seeking profit. Amtrak is not required to make a profit, not in law nor in fact. And the pursuit of profit in this instance leads to the inevitable conversation about eliminating “unprofitable long-distance routes.”
This is a canard, and the 170,000-rider number is unhelpful. The point of a train like the Southwest Chief – running between Los Angeles and Chicago – or the Empire Builder between Chicago and Seattle is not to carry passengers between those two cities but to all of the places in-between. And far from Anderson’s characterization of these long-distance routes as bygone relics, they are crucial to rural mobility. For many small communities, Amtrak is the only form of public transportation available. And roughly a quarter of Amtrak’s long-distance ridership is elderly or disabled and physically unable to fly (have you tried bringing a powered wheelchair or medical oxygen aboard a United Airlines flight?)
We absolutely agree with Anderson that we have an opportunity during the next five-year surface transportation reauthorization to have a meaningful conversation about the future of passenger rail in the U.S. and the long-distance network. Despite his characterization, most of us are not romantic idealists pining for a bygone age. But we do think that the conversation needs to be driven by a clear-eyed appreciation of the role these trains play in rural America as economic engines.
This is not about 170,000 tourists who love riding 45 miles an hour. It’s about wounded veterans being able to travel from rural communities to VA hospitals…it’s about college students from America’s heartland being able to travel safely and affordably from school to home…it’s about the elderly living on farms and in small towns who would face isolation without service. And it’s about 5 million people using the long-distance network each year, traveling to and from 40 percent of the nation’s small and rural communities.
Let’s be clear: Amtrak exists, and collects public funds, expressly to provide service to places that need it and where the private sector cannot profitably provide it—where the “demand indicators” aren’t enough to satisfy private shareholders. Amtrak is one of the ways the U.S. government acts to support the common good, the “general welfare.” And Mr. Anderson acknowledged this in his WBUR appearance, which is good.
What I told House lawmakers a couple of weeks ago is that it’s not about whether the train makes money, but about who makes money from the route. Every Amtrak long-distance route creates return on equity for the communities that have invested in it over the past few decades. And thanks to rigorous economic modeling our Association has developed over the past year, we have been able to quantify that return in a way that hasn’t been done previously.
We found the Empire Builder is worth $327 million every year to the economies of the states it serves, and by extension the entire U.S. economy. American taxpayers pay roughly $57 million every year to run it. That’s a bargain. For small communities along the route, it’s a lifeline. Just to take one instance, Cut Bank, Montana, and its roughly 3,000 citizens derive nearly $400,000 worth of economic benefit from the existence of the train.
In response to an Amtrak proposal to discontinue train service along a segment of the Southwest Chief corridor, we took a closer look at the service and found that the Chief brings $180 million in annual economic benefits to New Mexico, Colorado and Kansas.
A study done by Transportation for America and the Southern Rail Commission found that restoring passenger rail between Mobile and New Orleans would produce $216 million in annual economic benefits for Mississippi, Louisiana and Alabama, despite costing the three states only about $7 million each year.
Focusing on profits – whether the profit of an individual route or the profit of Amtrak as a whole – misses the point. And WBUR's 'Here and Now' program on Monday not only missed the point, but missed an opportunity.
"The support from the Rail Passengers Association, and from all of you individually, has been incredibly important to Amtrak throughout our history and especially so during the last trying year."
Bill Flynn, Amtrak CEO
April 19, 2021, speaking to attendees at the Rail Passengers Virtual Spring Advocacy Conference