[Net-Gold] This Week at Amtrak; March 11, 2009
David P. Dillard
Date: Wed, 11 Mar 2009 15:13:36 -0400
From: J Bruce Richardson <bruceri...@juno.com>
Reply-To: Net-...@yahoogroups.com
To: Net-...@yahoogroups.com
Subject: [Net-Gold] This Week at Amtrak; March 11, 2009
.
This Week at Amtrak; March 11, 2009
A weekly digest of events, opinions,
and forecasts from
United Rail Passenger Alliance, Inc.
America’s foremost passenger rail policy
institute
1526 University Boulevard, West, PMB 203 •
Jacksonville, Florida
32217-2006 USA
Telephone 904-636-7739, Electronic Mail
in...@unitedrail.org •
http://www.unitedrail.org
Volume 6, Number 8
Founded over three decades ago in 1976,
URPA is a nationally known policy
institute that focuses on solutions
and plans for passenger rail systems
in North America. Headquartered in
Jacksonville, Florida, URPA has
professional associates in Minnesota,
California, Arizona, New Mexico,
the District of Columbia, Texas, and
New York. For more detailed
information, along with a variety of
position papers and other documents,
visit the URPA web site at
URPA is not a membership organization,
and does not accept funding from
any outside sources.
1) The combined arrogance and hubris
of these people is incredible; maybe
some enterprising staffer on Capitol
Hill will start looking into this
and have someone in the House or Senate
start demanding some answers.
It’s a good thing former Amtrak President
and CEO Alex Kummant is gone,
but that doesn’t take the Amtrak Board
of Directors off the hook for not
doing their lawful duty and asking more
questions and demanding better of
Amtrak.
Brandweek.com has reported
Amtrak spent $15.3 million on U.S.
media in 2008, not including online
expenditures, up from $14.8 million
in 2007, according to Nielsen Monitor-Plus.
If you think that’s a lot of
money in today’s world of paid
media, you’re very wrong. It’s more
like a half a drop in the bucket.
Last year, Amtrak spent $98.1
million on what it categorizes as
advertising and sales according to
its year end figures. That $98.1
million generated ticket revenue of
$1,699,300,000. Most successful
companies the size of Amtrak spend
about 10% of revenues on advertising
and marketing costs; Amtrak spent just
slightly less than six percent.
Even worse, on actual media the public
sees, Amtrak spent only .009 –
less than a single percent –
on advertising.
No wonder Amtrak perpetually
remains America’s Best Kept Secret.
To no one’s surprise, the biggest
slice of the advertising and
sales money was spent on the Northeast
Corridor, instead of the long
distance national network where the
most good for total transportation
output could be achieved.
At this point you may be
wondering, what’s all the fuss about?
All the fuss is about how Amtrak
positions itself with its
customers, which, obviously is not
its passengers in the minds of Amtrak
executives. Amtrak’s true customers,
where all of its efforts are spent,
are the various public treasuries of
the federal and state governments
which constantly have to feed the
voracious Amtrak bottomless financial
pit.
Amtrak’s decision to spend
so very little money on national or
local media clearly demonstrates how
little it cares about being a
successful company.
Is Amtrak afraid of success?
Good heavens, what would Amtrak actually
do if a lot of people showed up and
wanted to ride its trains?
As always, this isn’t an argument
about how much free federal
monies Amtrak receives as a result
of its annual begfest on Capitol Hill,
it’s an argument over unsound management
decisions and mis-allocation of
resources and poor priorities.
During the same year Amtrak spent
less than one percent of its
ticket revenues on paid advertising,
it received about $1.2 billion in
free federal monies, of which less
than $500 million was for
nationwide/systemwide operating
assistance.
Let’s be radical and say
Amtrak suddenly saw the light and
reoriented its priorities and (Gasp!)
tripled its annual expenditures on
advertising to less than three percent
(Still woefully below any national
averages for companies in the real world.)
What would happen? Amtrak’s
load factors would soar, wiping out at
least half, if not more, of the
annual operating subsidy requirement.
This also directly goes to the
debunked lie no passenger railroad
system in the world makes money, when
we know factually systems in Japan,
Germany, The Netherlands and elsewhere
do, in fact, make money.
If, like Amtrak, you run a
passenger railroad and don’t bother to
tell anyone you’re running trains,
well, yes, it’s not going to make
money, or even come close to breaking
even because no one knows there are
trains to ride.
2) Let’s revisit some familiar
territory, Amtrak’s load factors. We know
a load factor of 65% technically
makes a long distance train sold out,
because allowances have to be made
for entraining/detraining passengers
at intermediate station stops.
When a passenger on the Silver Meteor
boards in Miami at the train’s
originating terminal, and detrains in
Palatka, leaving a vacant seat, that
seat may not be filled again until
Savannah, 206 route miles to the
north. However, that Savannah passenger
stays in that seat all the way to
Philadelphia, just 101 miles short of
the Meteor’s final terminal in
New York City. So, that coach seat on the
Meteor (which probably needed new
upholstery) was occupied for 1,082
miles out of the total route length
of 1,389 miles. The magic of trains
is when one passenger detrains, most
of the time another passenger
entrains.
Those with endpoint mentalities or
airline mentalities where
there are no intermediate stops on
a route, often have difficulty
grasping this concept. It’s true,
once an airplane pushes out from the
gate at its originating terminal,
any vacant seat on the plane has no
other opportunity to be sold/filled.
However, once the Silver Meteor
departs Miami on its northward
journey, that are still 25 more
opportunities for passengers to
board the train before it reaches the
silly "discharge only" territory of
the Northeast Corridor, where long
distance trains are banned from
picking up passengers between Alexandria,
Virginia and New York City so Amtrak
can falsely prop up NEC numbers
without interference from those pesky,
money-making long distance trains.
Look at Amtrak’s load factors for last year:
Long Distance Routes
Silver Star – 58.9%
Cardinal – 55.5%
Silver Meteor – 62.5%
Empire Builder – 63.4%
Capitol Limited – 66.9%
California Zephyr – 52.3%
Southwest Chief – 63.8%
City of New Orleans – 63.8%
Texas Eagle – 53.4%
Sunset Limited – 56.7%
Coast Starlight – 62.4%
Lake Shore Limited – 64.1%
Palmetto – 51.3%
Crescent – 51.6%
Auto Train – 63.6%
Average Long Distance Routes Load Factor – 59.7%
State Corridors and Short Distance Routes
Ethan Allen – 40.8%
Vermonter – 45.8%
Maple Leaf – 54.0%
Downeaster – 31.8%
New Haven-Springfield – 47.1%
Keystone – 35.5%
Empire Service – 35.0%
Chicago-St. Louis – 46.6%
Hiawathas – 40.4%
Wolverines – 54.9%
Illini – 50.0%
Illinois Zephyr – 43.1%
Heartland Flyer – 43.0%
Surfliners – 36.5%
Cascades – 56.6%
Capitols – 29.1%
San Joaquins – 39.1%
Adirondack – 69.4%
Blue Water – 78.7%
Washington, D.C.-Newport News – 60.2%
Hoosier State – 35.4%
Kansas City-St. Louis – 37.4%
Pennsylvanian – 74.3%
Pere Marquette – 67.3%
Carolinian – 77.9%
Piedmont – 44.6%
Average State Corridors and Short Distance
Routes Load Factor – 43.5%
Northeast Corridor Routes
Acela – 62.6%
Northeast Regional – 48.1%
Average Northeast Corridor Routes
Load Factor – 52.9%
These figures show Amtrak has plenty
of room for more passengers
without adding a single piece of
equipment to its far-too-short existing
consists.
Look at the numbers above, realizing
the sad state of Amtrak’s
skeletal national system, lack of
operable locomotives and passenger
cars, and lack of rational business
plan, and think what a combination of
advertising, getting bad-ordered and
wrecked cars back on trains, and
lengthening consists could accomplish.
Close your eyes and start thinking
about second and third frequencies,
and, suddenly you have the beginnings
of a robust, healthy system. Go one
step further and start implementing
Gil Carmichael’s Interstate II vision,
and, astonishingly, you have a
real railroad, not a shadow of a ghost
of railroads past.
2) We’re talking chump change here
in the overall Amtrak universe to
begin to get Amtrak up to acceptable
levels of advertising expenditures.
One cannot help but question Emmet
Fremaux, Amtrak’s Vice President who
handles marketing, as to why he has
allowed these advertising numbers to
be so low. Has this been intentional,
or a result of more senior managers
only allocating so little for his
total budget?
Where was the board of directors on
this? Oh, wait, they were
here, but, consider that of the five
board members who constituted the
Amtrak board last year, not a single
one has corporate background
experience; each and every one is
either a creature of government
service, or a Washington lobbyist
or Washington attorney. After David
Laney, Enrique Sosa, and Floyd Hall
all left the board, not a single
member replacing them or remaining
has any real world, corporate
experience, and would automatically
know Amtrak’s abysmally low
advertising expenditures amount to
corporate malfeasance, and, at best,
poor stewardship of public funds when
the company willingly asks for
billions in government subsidies,
and then does nothing to promote the
company and try and actually attract
paying passengers who would replace
the need for government subsidies.
3) Well-respected Washington Post
Writers Group syndicated columnist Neal
Peirce has been writing about Washington
for decades, and often strays to
the subject of Amtrak. Mr. Peirce
again recently wrote about Amtrak and
our new President Obama’s spending on
passenger rail. One quote from
Mr. Peirce’s column bears repeating,
for it demonstrates how Amtrak has
gotten away for so long with being
America’s Best Kept Secret and nobody
seems to care.
[Begin quote]
Asserts James RePass, founder-leader of
the 20-year-old National Corridors
Initiative; "Suddenly, by the grace
of God, we have a president
who absolutely, positively gets it."
This signifies, he adds, an end of
the reign of "the ideological
libertarians out to destroy the
transportation system by saying
‘the market’ will take care of it, that
Amtrak should make a profit – which is
nuts!"
[End quote]
It’s this type of clearly wrong thinking
that has been pervasive throughout America,
bolstered by Amtrak’s bad behavior and not
spending near enough on advertising to the
public that makes Amtrak such a mess today.
Only when this type of wrong opinion is
no longer considered gospel will Amtrak
stop being enabled and start working
towards being more self-sufficient.
There’s nothing in our national government
constitution that says every government
entity has to lose money. There is nothing
unpatriotic about Amtrak being
self-sufficient. This is something grossly
unpatriotic about Amtrak being such a poor
steward of the public’s money and doing such
disagreeable and arrogant things like taking
public money and then not spending it wisely
or in such a way which creates more business,
more revenue, and more self-sufficiency.
Joe Boardman, as Amtrak’s Interim President
and CEO, what steps are you taking to solve
this problem and stop keeping Amtrak as
America’s Best Kept Secret?
If you are reading someone else’s copy of
This Week at Amtrak, you can receive your
own free copy each week by sending your
e-mail address to
You MUST include your name, preferred e-mail
address, and city and state where you live.
If you have filters or firewalls placed on
your Internet connection, set your e-mail to
receive incoming mail from
we are unable to go through any individual
approvals processes for individuals.
This mailing list is kept strictly
confidential and is not shared or used for
any purposes other than the distribution of
This Week at Amtrak or related URPA materials.
All other correspondence, including requests to
unsubscribe, should be addressed to
Copies of This Week at Amtrak are archived on
URPA’s web site,
and also on
<http://www.todaywithjb.blogspot.com>
where other rail-related writings of Bruce Richardson
may also be found. URPA leadership members are
available for speaking engagements.
J. Bruce Richardson
President
United Rail Passenger Alliance, Inc.
1526 University Boulevard, West, PMB 203
Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739
bruceri...@unitedrail.org
http://www.unitedrail.org
.