CA brings fight with Amtrak to Congress

[rickycourtney]

Some interesting reporting from the Trains magazine News Wire:
https://trn.trains.com/news/news-wi...on-with-operators-of-state-supported-services

The agencies overseeing state-sponsored Amtrak trains in California have asked Congress to address the national passenger railroad’s method of charging them for operations, focusing new attention on a long-simmering dispute.

A Nov. 30 letter by San Joaquin Regional Rail Commission Executive Director Stacey Mortenson, obtained by Trains News Wire, urges “that states only be charged their ‘direct’ cost of service by Amtrak on an avoidable cost basis, similar to what made for successful state partnerships in the past.”

The letter, also signed by directors of agencies that manage the state’s Pacific Surfliner and Capitol Corridor, was addressed to the Democratic chairmen and Republican ranking members of the House Transportation and Infrastructure Committee, as well as its rail subcommittee.

In a Dec. 3 response, Amtrak President Stephen Gardner agreed “that it is time to reconsider Amtrak and the federal government’s contributions to these corridor services.” But he claimed to be “caught off-guard by your correspondence and disappointed by the tone and misleading accusations.”

Trains also has copies of the letter to congress and Gardner's snippy response.

If you closely follow the California state-sponsored services, this fight over Amtrak's opaque accounting practices is nothing new.

What is interesting is the head of the San Joaquin has been less afraid to "say the quiet part out loud" (Amtrak employs questionable accounting when it comes to state-sponsored services) and this marks the second time she's been willing to air that grievance in public (she also testified to Congress about a year ago).

Also new is that the heads of the Pacific Surfliner and Capitol Corridor are going on the record in support of the complaint about Amtrak's accounting.

 

[me_little_me]

"Frankly, we were caught off guard by your correspondence..."
"I'm shocked, shocked to find out that gambling is going on..."

He paraphrased Casablanca.

Caught off guard? Hah!

 

[railiner]

The state agencies can always take over the operation of their trains themselves, or hire another contractor, if they don’t like the way Amtrak charges them, right?

 

[jebr]

The state agencies can always take over the operation of their trains themselves, or hire another contractor, if they don’t like the way Amtrak charges them, right?

They can, but they may lose a few things that only Amtrak has or can provide:

1. Access to the national network - will Amtrak allow other agencies to easily interline with them? If someone wants to go from Redding to Bakersfield, will Amtrak still sell them that ticket? Will the new agency be allowed to accept eTickets, or will it have to be a paper ticket situation? If a train is late, whose responsibility is it to make sure the passenger gets to their final destination?
2. Mixed in with #1 - access to Amtrak's ticketing and reservations system. Amtrak currently has a mobile app, a website to sell tickets, a 1-800 call center, and ticketing agents at many stations. There's certainly available options out there that could be white-labeled for online ticketing, but you'd still need to set up or contract out a call center, and figure out how to handle agent staffing. Agent staffing could be tricky at stations with both Amtrak and non-Amtrak service - would Amtrak agents still be able to sell tickets for the contracted service, or will California have to find additional staff for those?
3. Access to Amtrak's track agreements - this is likely less of an issue with California, where at least some of the agreements are directly with the state, but Amtrak still has track agreements and statutory ability to negotiate access and priority that isn't required by law currently when working directly with a state. Would the contracted service be able to use those agreements, or would that have to be renegotiated?

That all said, California's probably better positioned than most. Much of the rolling stock is theirs, they have at least some of their own trackage agreements, and they have pre-existing agencies handling a lot of the work for those lines already. At some point, it may be time for California to call Amtrak's bluff and bid out service.

 

[railiner]

At some point, it may be time for California to call Amtrak's bluff and bid out service.

That would be interesting. And if California does, perhaps New York and Illinois would follow....

 

[roadman3313]

The Capitol Corridor already uses its own Call Center (shared with BART). Every time I call 1-800-USA-RAIL I am reminded of that as I need to listen to the message regarding the different number for Capitol Corridor calls before reaching Julie. When I had a California Rail Pass and needed to book a Capitol Corridor ticket as part of it the Amtrak agent always had to call their help desk to issue it as they couldn't from their computer directly.

I will say there are the financial constraints of the pandemic to consider as some of the JPA's have pulled part of their funding for their portion of the Amtrak Agents hence some stations have reduced staffing to just one or two Agents. The most notable stations are San Jose (where Amtrak agents sell both Amtrak and Greyhound tickets) and Davis that have now gone to staffing Monday-Friday only leaving them unstaffed for many of the Capitol Corridor trains as well as Train 6 on Saturdays (Davis) and Train 11 on Sundays (San Jose). LOSSAN also pulled their funding out as well so San Luis Obispo no longer has an agent for the Surfliner departures. Only one or two agents who serve the Coast Starlight remain. Checked baggage was also eliminated on the Surfliner. Many stations statewide have had a reduction of up to 50% of the station staff in recent months as well. The three JPA's are certainly appearing to make some moves to cut the costs and are looking more critically at where their funding is going.

 

[railiner]

In this day of TVM’s and smartphones, unless checked baggage is offered, they can do without agents.

 

[jis]

They can, but they may lose a few things that only Amtrak has or can provide:

1. Access to the national network - will Amtrak allow other agencies to easily interline with them? If someone wants to go from Redding to Bakersfield, will Amtrak still sell them that ticket? Will the new agency be allowed to accept eTickets, or will it have to be a paper ticket situation? If a train is late, whose responsibility is it to make sure the passenger gets to their final destination?

Considering that Amtrak is falling over itself to strike a deal with the Texas HSR folks and grumbling about Brightline not dealing with them, I'd say if there is significant revenue to be had Amtrak will sell the ticket, and if they don't it should be made a requirement in its Authorization. Amtrak has been known to be anti-customer in such situations (e.g. its spat with VRE when VRE fired Amtrak) and it should not be allowed to be so.

2. Mixed in with #1 - access to Amtrak's ticketing and reservations system. Amtrak currently has a mobile app, a website to sell tickets, a 1-800 call center, and ticketing agents at many stations. There's certainly available options out there that could be white-labeled for online ticketing, but you'd still need to set up or contract out a call center, and figure out how to handle agent staffing. Agent staffing could be tricky at stations with both Amtrak and non-Amtrak service - would Amtrak agents still be able to sell tickets for the contracted service, or will California have to find additional staff for those?

The key word is "contracted service". Whoever gets the contract gets to do it. Amtrak's reservation system isn;t exactly something that anyone should be falling over themselves to use. Its only redeeming quality is that it is already in place, which admittedly is a positive at least for the short term.

BTW, if NJ is a valid example, there are stations with both Amtrak and NJT ticket staff, and there are stations where Amtrak contracts with NJT to provide ticketing service. It is not really a complex problem, and methods to handle such are well known and already in place elsewhere.

3. Access to Amtrak's track agreements - this is likely less of an issue with California, where at least some of the agreements are directly with the state, but Amtrak still has track agreements and statutory ability to negotiate access and priority that isn't required by law currently when working directly with a state. Would the contracted service be able to use those agreements, or would that have to be renegotiated?

California actually has a remarkable amount of leverage with both UP and BNSF to take care of those issues. California also goes to them with real money and lots of it (sometimes including a credible offer for eminent domain takeover), so the nature of the discussion is very different from a typical Amtrak-private railroad negotiation.

That all said, California's probably better positioned than most. Much of the rolling stock is theirs, they have at least some of their own trackage agreements, and they have pre-existing agencies handling a lot of the work for those lines already. At some point, it may be time for California to call Amtrak's bluff and bid out service.

Indeed!

 

[rickycourtney]

3. Access to Amtrak's track agreements - this is likely less of an issue with California, where at least some of the agreements are directly with the state, but Amtrak still has track agreements and statutory ability to negotiate access and priority that isn't required by law currently when working directly with a state. Would the contracted service be able to use those agreements, or would that have to be renegotiated?

I see this as largely a non-issue in California.

For the Pacific Surfliner, the local governments own the tracks from Oxnard to Los Angeles and Fullerton to San Diego, and Metrolink handles dispatching. The freight railroads are tenants just like Amtrak.

The Capitol Corridor JPA has a really strong relationship with Union Pacific after pouring massive amounts of money into improving the Martinez Subdivision (Richmond to Sacramento).

The San Joaquin JPA has a young but seemingly friendly relationship with BNSF. Considering they've been the biggest instigator in this fight with Amtrak, they must feel pretty confident about their position.

Building off what jis said, money talks and these JPA's are motivated.

1. Access to the national network
2. Access to Amtrak's ticketing and reservations system

In both of these cases, Amtrak would be harming itself just as badly if it pulls these things from independent state-operated routes.

Amtrak would lose revenue by not interlining... but the impact on the state-operated routes would be minor.

The loss of the ticketing and reservations system would be a pain, but there are white-label solutions out there, plus many of these regions already have regional fare payment systems with TVMs. On the other hand, Amtrak would lose out on their "synergy savings" of spreading the cost of these systems across the customers of their 3rd, 4th and 7th busiest services.

 

[rickycourtney]

I'll also point out that Amtrak plays by two rule-books when it comes to accounting.

The state-supported services are apparently using an opaque and questionable accounting method... the roots of which likely trace back to when these were Amtrak owned and operated services that the states pitched in to fund.

But when it comes to contracted services (like Metrolink) the accounting is pretty open. For example, Metrolink's FY21-22 contract is published at $47.2 million dollars at a 6.9% markup (profit) over direct costs. There are also provisions that allow for increases or decreases when trains are added or removed from the schedule. The contract was also subject to competitive bidding (Amtrak beat out Bombardier, Keolis, Deutsche Bahn, and TransitAmerica/Herzog).

I get the impression that the California JPA's want to have a similar contractor relationship with Amtrak. It seems like a reasonable request and Amtrak's resistance makes it seem like they have something they want to hide.

 

[neroden]

Well, Amtrak does have something to hide. I mean, the RPA white paper showed that their accounting is garbage.

 

[jis]

Well, Amtrak does have something to hide. I mean, the RPA white paper showed that their accounting is garbage.

It is actually the cabal of Amtrak, FRA and Volpe Center with the tacit approval of Congress. But the end result is the same.

 

[Seaboard92]

I honestly want to see the states call Amtrak's bluff on this. I would really love for in the first year of Mr. Gardner's reign to lose the California State supported trains due to his own actions. I think that would help us rid ourselves of this pest in the office.

California is one of the better positioned operators right now to remove themselves from Amtrak. They own the equipment, have a good working relationship with the hosts, and they have the money to run the service properly. Amtrak's reservation is really only a minor inconvenience especially in a state filled with the largest internet companies in history.

The next state I could see removing themselves from Amtrak is actually North Carolina. The Piedmont's have their own identity already, the equipment is remarkably better than Amtrak's, and on board it is really hard to tell you are on an Amtrak train without looking at the conductor's uniform or ticket. Add in the fact the state owns the RoW between CLT-Moorehead City they have the final say on operations.

I would think Illinois is the next state that could easily forgo Amtrak. They own the Chargers, and they own their own rolling stock now. If the state could work with the host railroads they would be able to replace Amtrak. Michigan also pulls from the Charger fleet so I could see them pulling from the new coaches too, so they could also leave. With Illinois leaving Amtrak you would likely pull Michigan, Missouri, and Wisconsin along for the ride.

Washington/Oregon before the withdrawal of the Talgo VI's would have been on my list.

The only states I see having trouble leaving Amtrak are Pennsylvania, Virginia, Oklahoma, New York, and the downeaster consortium.

If California could prove they can maintain ridership, and run the service at a reduced cost I think you will see the other dominos fall. I can only hope that this will happen.

 

[jis]

North Carolina may have to give up on the Carolinian though.

 

[railiner]

Any chance Virginia, thru VRE, might expand its trains to eventually link up with NC?

 

[jis]

Any chance Virginia, thru VRE, might expand its trains to eventually link up with NC?

VRE has to first reach Richmond and Charlottesville before even the thought of getting to NC comes up IMHO. VRE really is a Washington DC Commute service for all practical purposes. VRE and MARC will probably get trhough Washington DC collaborative service connecting VA to MD way before anything grows towards NC.

More likely would be the proposed non-NEC Virginia Regional Service (Dominion Service?) which would presumably be Norfolk and Richmond centric could some day rach out to Raleigh in collaboration with NC

 

[IndyLions]

I honestly want to see the states call Amtrak's bluff on this. I would really love for in the first year of Mr. Gardner's reign to lose the California State supported trains due to his own actions. I think that would help us rid ourselves of this pest in the office.

I agree that a “come to Jesus” moment is in order. However, having all the states dump Amtrak in my opinion is cutting off your nose to spite your face. I would think creative minds ought to be able to figure out a way to get the underlying issues fixed instead of just washing their hands of Amtrak.

This is just total speculation, I am not knowledgeable on these issues. But maybe the problem is that the current Amtrak accounting approach is designed to make them look better financially for Congress – due to all the baloney about having to turn a profit. If we get rid of that nonsense in the Amtrak legislation, I think a more transparent accounting practice might just happen.

 

[MARC Rider]

Has any state actually dumped Amtrak as a provider of intercity (not commuter) service and replaced them with another operator? (The deal with Indiana and the Hoosier State doesn't count, as the "privatized" operation was actually run by Amtrak on the rail operations side, and the whole thing went belly-up in the end.) What other operators would be available? It seems to me that most of the private sector passenger rail operators have experience for commuter service only. Maybe some foreign operators could come in, but I could see a political problem if a state contracts with a subsidiary of some foreign national rail carrier. Also, there's no guarantee that alternative operators will be any cheaper or better, regardless of whether their accounting is more transparent. I suppose Amtrak believes that there are no other real alternatives, and maybe that's why they are not so cooperative. Obviously, it's within the power of Congress to change that attitude, but good luck on getting Congress to do anything useful. (Thanks, Mitch!)

 

[Seaboard92]

North Carolina may have to give up on the Carolinian though.

Honestly the Carolinian would be a far better train if it ran with the Piedmont rolling stock. Convert two of the baggage/lounges into full service cars instead of an automat and you have a better train in an instant. Bigger windows, cleaner equipment, more comfortable seats, and a few other benefits.

 

[jis]

Honestly the Carolinian would be a far better train if it ran with the Piedmont rolling stock. Convert two of the baggage/lounges into full service cars instead of an automat and you have a better train in an instant. Bigger windows, cleaner equipment, more comfortable seats, and a few other benefits.

I was not talking about the rolling stock. I am sure NC could do that today even with Amtrak operating, if they had the cars.

 

[rickycourtney]

Has any state actually dumped Amtrak as a provider of intercity (not commuter) service and replaced them with another operator? (The deal with Indiana and the Hoosier State doesn't count, as the "privatized" operation was actually run by Amtrak on the rail operations side, and the whole thing went belly-up in the end.) What other operators would be available? It seems to me that most of the private sector passenger rail operators have experience for commuter service only. Maybe some foreign operators could come in, but I could see a political problem if a state contracts with a subsidiary of some foreign national rail carrier. Also, there's no guarantee that alternative operators will be any cheaper or better, regardless of whether their accounting is more transparent. I suppose Amtrak believes that there are no other real alternatives, and maybe that's why they are not so cooperative. Obviously, it's within the power of Congress to change that attitude, but good luck on getting Congress to do anything useful. (Thanks, Mitch!)

The big "private-sector passenger rail operators" are Keolis, TransitAmerica/Herzog, and Bombardier. I'll also point out that BNSF also runs several commuter rail lines under contract.

IMHO, there's not a huge difference in the "skill set" required to operate an intercity service as compared to a commuter service.

As the Metrolink contract proves, Amtrak is perfectly capable of being the cheapest and best bidder on these contracts.

I don't see this as a ploy by the California JPAs to "watch things burn" at Amtrak, but they do want to shake up how they do business. I think they want to shift to a more traditional contractor relationship with Amtrak where they can make demands, get open accounting, and seek competitive bids.

 

[railiner]

The big "private-sector passenger rail operators" are Keolis, TransitAmerica/Herzog, and Bombardier. I'll also point out that BNSF also runs several commuter rail lines under contract.

IIRC, BNSF only runs commuter train operation's that run on their railroad...I am not aware of any other, but that's not to say they couldn't if they thought it a good idea...
I wonder if they would like to take over the UP Metra trains, that UP doesn't want to run?

 

[MARC Rider]

Honestly the Carolinian would be a far better train if it ran with the Piedmont rolling stock. Convert two of the baggage/lounges into full service cars instead of an automat and you have a better train in an instant. Bigger windows, cleaner equipment, more comfortable seats, and a few other benefits.

If I remember correctly, the Piedmont coaches had legroom similar to the Amfleet 1 business class cars, plus I believe they have shades/curtains on the windows. Thus, to provide business class on the Carolinian, NC would need to set up some real business class cars, maybe with 2-1 seating. Maybe NC could take over the catering and provide real meals (even if only tray meals), too. With a train like that, I'd ride it on my NEC journeys, too.

 

[TRoberts]

Honestly the Carolinian would be a far better train if it ran with the Piedmont rolling stock. Convert two of the baggage/lounges into full service cars instead of an automat and you have a better train in an instant. Bigger windows, cleaner equipment, more comfortable seats, and a few other benefits.

Yes, I'm with you on that. I love the coaches on the Piedmont train. The seats are extremely comfortable and the larger windows are a bonus as well. Since the Carolinian doesn't offer anything exceptional in the cafe' anyways, I'd just assume keep the vending machines if it means we can keep the free bottled water and coffee as well.

 

[NES28]

Responses to a couple of points mentioned above.

NCDOT got a FRA grant earlier this year to replace their rebuilt, but old, cars.

Keolis and Bombardier are foreign (European) owned.