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.

10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000

1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Commuter rail Freight Era Amtrak Intercity total

Financial Performance of U.S. Railroads:

Net Railway Operating Income (NROI) and Solely Related Passenger Losses (SRL) (constant 2002 $ millions)

• 6000
• 4000
• 2000

2000 4000 6000 8000 10000 12000 14000 16000 1940 1945 1950 1955 1960 1965 1970

• Pass. "NROI"
• Pass. SRL

Class I total NROI

Financial Performance of U.S. Railroads:

Net Railway Operating Income and Solely Related Passenger Losses

(constant 2002 $ millions)

Figure 3

• 6000
• 4000
• 2000

2000 4000 6000 8000 10000 12000 14000 16000 1940 1950 1960 1970 1980 1990 2000

• Pass. "NROI"

Amtrak Class I total NROI

• Poly. (Class I total NROI)

Deregulation Amtrak

Amtrak funding by year in constant 2002 dollars

500 1000 1500 2000 2500 3000 1971 1976 1981 1986 1991 1996 2001 Ordinary NECIP TRA Other Total

Total through FY2003: $38,273 million

$ millions

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)

Amtrak System Map

NEC

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

Amtrak’s Long Haul Network

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

Passenger-Km Trends

1980= 100

40 90 140 190 240 290 1970 1975 1980 1985 1990 1995 2000 Commuter Rail Amtrak Air Highway

Figure 9

Labor Productivity Trends (pm/employee or ton- mile/employee) 1980= 100

50 100 150 200 250 300 350 400 450 500 1970 1975 1980 1985 1990 1995 2000 Air Bus, Class I Freight Railroads Trucking Amtrak

Source: National Transportation Statistics 2002, Table 3-24 and AAR, Statistics of Class I railroads

Passenger-Miles/Employee (000) (2000)

277 973 222 200 400 600 800 1000 1200 Amtrak only Amtrak (adj for commuters) Airlines

Amtrak adjustment for commuters uses average 22 mi/commuter trip. Probably overstates productivity slightly.

The “Emerging Corridors”