Tuesday, November 11, 2008

The Six Myths About Amtrak

First, a disclaimer: I can't remember who sent me this list. I once had the information, but either deleted it carelessly or it's misfiled somewhere in the bowels of my computer. If someone out there knows the original source, let me know and I'll gladly give credit. However, to the best of my knowledge, the information included in each of these myths is true and accurate.

Myth #1 - Amtrak can be profitable. No national rail passenger system in the world is profitable. Without public subsidy, there will be no passenger rail transportation systems in the United States.

Myth #2 - The private sector is ready to take over Amtrak routes. Remember why Amtrak was formed. Amtrak is what is left of a once privately run enterprise.

Myth #3 - Long-distance trains are the problem. This is perhaps the biggest myth. If you eliminate every long-distance train, avoidable costs would decrease about $70 million a year. On a fully allocated basis, after five years, annual savings might reach $300 million. This argument is a red herring.

Myth #4 - Amtrak is a featherbed for labor. Amtrak's wage rates are about 90% of the freight industry and are even lower when compared to transit. Wages are not the problem; generating a higher level of productivity is the challenge and Amtrak's management is working for such improvement.

Myth #5 - The Northeast Corridor is profitable. The NEC may cover most of its above-the-rail costs, but it is an extremely costly piece of railroad to maintain. The NEC is not profitable and never will be.

Myth #6 - There is a quick fix - reform. The word reform is like catnip to those interested in a quick fix for Amtrak. If the answer were quick and easy, the problem would have been solved long ago. What needs to be done is to tightly manage the company and its finances and begin to make incremental, but critical improvements to plant and equipment.

3 comments:

Abe said...

I think that those were from an interview with David L. Gunn a few years back...

JIM LOOMIS said...

That does ring a bell. Thanks.

mega said...

Hi there, these six myths about an Amtrak are seems interesting. I travel by Amtrak frequently, however, i do agree with almost all myths, but with 1, i think there need a little change, Amtrak are much affordable for long distance run if you are not in too hurry. Because you can enjoy spectacular scenic views on most of routes. By the way, its a great post.