First Conference on Rail Industry Structure, Competition and - PowerPoint PPT Presentation

First Conference on Rail Industry Structure, Competition and Investment New Rail Passenger Structures in the U.S . Louis S. Thompson Thompson, Galenson and Associates, LLC Lthompson@alum.mit.edu

Rail Passenger History in the U.S. Downhill slide after WWII Freight railways were heavily burdened Options in 1969: � Do nothing � Pay the freights � Create separate company Federally owned, “ as if for profit ” company (Amtrak) Has not succeeded, but hard to change

Rail Passenger-Miles in the U.S. 100,000 Commuter rail 90,000 Freight Era 80,000 Amtrak 70,000 Intercity total 60,000 50,000 40,000 30,000 20,000 10,000 0 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Financial Performance of U.S. Railroads: Net Railway Operating Income (NROI) and Solely Related Passenger Losses (SRL) (constant 2002 $ millions) 16000 Pass. "NROI" 14000 Pass. SRL 12000 Class I total NROI 10000 8000 6000 4000 2000 0 -2000 1940 1945 1950 1955 1960 1965 1970 -4000 -6000

Financial Performance of U.S. Railroads: Figure 3 Net Railway Operating Income and Solely Related Passenger Losses (constant 2002 $ millions) 16000 Pass. "NROI" 14000 Amtrak 12000 Class I total NROI 10000 Poly. (Class I total NROI) 8000 6000 4000 2000 0 -2000 1940 1950 1960 1970 1980 1990 2000 -4000 -6000 Amtrak Deregulation

Amtrak funding by year in constant 2002 dollars $ millions 3000 Ordinary NECIP 2500 TRA 2000 Other Total 1500 1000 500 0 1971 1976 1981 1986 1991 1996 2001 Total through FY2003: $38,273 million Note: in addition, Amtrak ’ s debt increased by over $3 billion between FY96 and FY2002.

Amtrak ’ s Role Long haul trains not major carrier Short haul trains have some share of the market NEC is significant (I/S and Operator) Relatively small by international stds Interesting interaction with State rail passenger operators (FTAA/FRA)

NEC Amtrak System Map

Amtrak’s Long Haul Network Empire Builder Coast Starlight Lakeshore Pennsylvanian Capitol Calif Zephyr Three Rivers Cardinal “Silver” Trains (3) City of Southwest Chief New Orleans Texas Eagle Crescent Autotrain Sunset Limited

Amtrak’s Short Haul Routes

Proposals on the Table Amtrak Reform Council (ARC) The Administration Bill CBO study American Rail Equity Act (AREA) American Railroad Revitalization, Investment and Enhancement Act (ARRIVE)

Change Issues Better interface: Congress/DOT/Amtrak Stable funding Transition short haul to State/Local Amtrak/DOT grant agreement Amtrak as contract commuter operator Better public information Change in private role Impact on labor Sins of the past

2000 1995 Passenger-Km Trends 1990 1985 Figure 9 Commuter Rail 1980 Highway Amtrak Air 1975 1980= 100 1970 290 240 190 140 90 40

Labor Productivity Trends (pm/employee or ton- mile/employee) 1980= 100 500 450 Air 400 Bus, Class I 350 Freight Railroads 300 Trucking 250 Amtrak 200 150 100 50 0 1970 1975 1980 1985 1990 1995 2000 Source: National Transportation Statistics 2002, Table 3-24 and AAR, Statistics of Class I railroads

Passenger-Miles/Employee (000) (2000) 1200 Amtrak only 973 1000 Amtrak (adj for commuters) Airlines 800 600 400 277 222 200 0 Amtrak adjustment for commuters uses average 22 mi/commuter trip. Probably overstates productivity slightly.

The “ Emerging Corridors ”