Ground Transportation Amtrak turns 40 By Bill Poling / April 26, 2011 Share 1 -- Amtrak is riding a wave of sustained growth unlike anything it has experienced before. Like any entity that lives at the intersection of politics and market economics, its future may be uncertain, but after two decades of stagnant traffic growth and bruising political and budget battles, Amtrak has set ridership records in seven out of the last eight years. As it marks its 40th anniversary on May 1, Amtrak might be finally hitting its stride. Throughout its history, Amtrak has had to contend with a chorus of critics who regard its very existence as offensive and government-supported rail travel as an alien concept that the U.S. can't afford. (View a slideshow of Amtrak though the years here.)To Amtrak's defenders, the arguments are familiar and specious: All unprofitable routes should be dropped. Amtrak serves only a small percentage of travelers, most of whom have alternative means of transportation. The U.S. lacks the population density of places where rail flourishes, such as Europe or Japan. The per-passenger subsidy is too high, given other federal budget priorities. Subsidized rail travel amounts to unfair competition against airline and bus companies. Any savings in fuel consumption are illusory. Amtrak is a mismanaged boondoggle. Long-distance trains are the worst form of inefficient pork-barrel spending. The government is better off investing in highways and airports. The list goes on. Some of these arguments are as old as Amtrak; some are older. For every one of these claims, supporters of rail travel have answers to spare, but the debate over what to do about train travel never seems to be settled, even though Congress voted to settle it four decades ago. Amtrak was created in 1970 in what could be described as a panic-stricken political environment, when the entire passenger railroad industry seemed to be in free fall. For a nation that has watched the disappearance of Pan Am, TWA and Eastern, and numerous other financial and industrial giants, the demise of the Pullman Co. and the wreck of the Penn Central don't sound so horrible now. But in 1970 the railroads were still a revered presence, and America wasn't ready to give up on them. Something had to be done. The government's response was to create a federally supported entity that would take over the running of the passenger trains, but not ownership or control of the tracks. Thus was born the National Railroad Passenger Corp., or Amtrak. 'A lousy operation' Most passenger railroads ceded their passenger services to the new entity, but a few did not. Prominent among the latter was the Southern Railway, which proudly kept operating its Southern Crescent service from Washington to New Orleans via Atlanta. It didn't agree to transfer the route to Amtrak until 1978. The president of the Southern Railway in 1971 was Graham Claytor, who, as fate would have it, was the president of Amtrak on the occasion of Amtrak's 20th anniversary in 1991. Recalling his decision about the Crescent, Claytor said in a Travel Weekly interview at the time that he kept the Crescent out of Amtrak because "I thought it was going to be a lousy operation, at least for the first couple of years. And it sure was." He was not the only railroad man to hold that opinion. Yet, despite that rocky beginning, with hand-me-down rolling stock, steam-heated sleeping cars and employees who were "borrowed" from the railroads, Amtrak in its first full year attracted 16 million passengers. Although it needed an annual operating subsidy, it managed to bring some order to the nation's fragmented rail system, with a single brand, a single toll-free number and a systemwide reservations system. Ridership crossed the 20 million mark in 1979 but stagnated between 20 million and 22 million for the next two decades. It seemed that Amtrak had hit a wall. (Click on the image at right for a larger view of Amtrak's ridership levels.)Turning points Sometime in the last decade, however, a combination of forces led to a resumption of steady ridership growth. The introduction of the Acela Express service in the Northeast Corridor a decade ago was a big factor, as was the increasing frequency of spikes in gasoline prices. Amtrak spokesman Steve Kulm said a big jump in ridership occurred in fiscal 2008, when gas prices first approached $4 a gallon. Incremental service increases on short-haul routes in the East, Midwest and West, many with state support, also attracted new passengers. In addition, he said, "Traveler dissatisfaction with air service has grown during this period." Amtrak's marketing department can also claim some credit for keeping up with trends. Early on, Amtrak's marketers always had a knack for knowing where they needed to be. Within months of its launch, Amtrak put in place a flat 10% commission for travel agents and kept it longer than most airlines. In the 1980s, when the travel agency channel was clicking on all cylinders, Amtrak plugged in, developing links to the major GDS systems and becoming a full participant in ARC, the first non-airline to do so. Agency bookings in the 1980s peaked at something like 40% of sales, which was unheard of for an American railroad. Today, Amtrak gets 52% of its ticket sales through Amtrak.com, up from 5.2% in 2000. And if there's a "space" (in today's marketing jargon) where Amtrak needs to be, "we're there," said Chief Marketing Officer David Lim. In addition to developing microsites for numerous social groups, Amtrak is on Facebook, YouTube and Twitter, and it recently added a Twitter handle specifically to deliver service updates to Northeast Corridor travelers. Lim said an iPhone app is on the way, too. The Obama factor Another huge factor was the election of Barack Obama. Although the administration's long-term spending plans for high-speed rail development have been pinched by more recent deficit-reduction efforts, the Obama administration has already said more, done more and spent more on rail travel than any of its predecessors. Vice President Joe Biden, who commuted regularly between Washington and his home in Delaware when he was in the Senate, is an unabashed Amtrak booster. The cumulative effect of these developments has had a positive effect on the political atmosphere. Although the railroad still has its detractors, Amtrak's vice president for government affairs, Joe McHugh, said he believes the atmosphere today is "different." "We've spent a lot of time talking to the new members of Congress, trying to get them to think a little bit differently about Amtrak in terms of an organization that's doing pretty well," he said. "We have a pretty good positive story to tell them about the service." Though Amtrak has been making the case for rail travel since its inception, McHugh said, "I don't think the case is as hard to make as it was 10 years ago. I think most of these folks look at the Northeast Corridor, for instance, and see that as a balanced transportation system, and I think most people who think about the future of transportation think we're going to have to have balance." A decade ago, he said, Amtrak went through "really dark days" when policymakers "had the chance to upend it, but they chose not to. I think they realized then, for better or for worse, that over those 30 years, Amtrak had become an integral part of every rail operation in the country." After getting by "on a shoestring" some years, McHugh said, "we look and feel more like a long-distance runner. We're gaining ground. We are proving ourselves." Longtime advocate Ross Capon, executive director of the National Association of Railroad Passengers, said he, too, believes that interest in rail travel is becoming somewhat self-sustaining. "The more people that experience it, for the most part, the more people realize its importance," Capon said. "And it's growing in tandem with mass transit. One of the key things about trains is how you get to them, and the improvement in accessibility to trains is really quite striking. In Washington, D.C., the Metro didn't exist when Amtrak began, and now there's a huge transfer of passengers at Union Station between Amtrak and Metro." Similarly, he said one reason for a notable uptick in Chicago-St. Louis travel has been the completion of an intermodal station in St. Louis that "makes it really convenient to transfer between the light rail line there and Amtrak." State support The growing demand is manifested in the increasing number of short-haul routes that Amtrak is operating at the behest of state and local governments. The railroad now has agreements with 15 states that support specific services. (Click on the image at left to see a larger view of some of Amtrak's fast facts.)North Carolina is subsidizing rail service at Charlotte, an air service hub. Virginia asked Amtrak to extend some of its Northeast Corridor trains to Lynchburg, 170 miles southwest of Washington, and in the first full year of operations, passenger volume was nearly 2.5 times the projected target. Demand for rail travel is such that Amtrak is operating five trains a day from Boston to Portland, Maine, with state support, even though the 115-mile trip takes an unimpressive two-and-a-half hours. McHugh said Amtrak has "had really good success" with such services all over the country. Most agreements that have been put in place have stayed in place or expanded. Very few have been dropped. Overall, he said, the states "would do more if they had the resources." Resources Essentially, the debate about Amtrak has always been a debate about resources: where to get them and where to spend them. The Obama administration has said much about making resources available for high-speed rail development, but most people, including the administration's critics, have failed to understand that "high-speed rail" is the administration's umbrella term for a variety of initiatives. Capon calls it "a public interpretation problem." At the top end, on a far horizon, are supertrains like France's TGV, which operate on dedicated rights of way. That is true "high-speed rail," but that's hardly where all of the money is going. Capon notes that "a huge portion of the so-called high-speed rail funds" have been earmarked for incremental upgrades to existing tracks, bridges and other facilities. In the short term at least, these projects would represent significant improvements to the Amtrak product and could be important stepping stones for rail travel generally. One of the things the administration's plan calls for is the investment of funds in "emerging" corridors, to develop precisely the kind of momentum that would have passengers coming back for more. "There's a huge amount of value that can be added to the existing passenger train network by cleaning up places where trains are going 15, 20 or 30 mph and getting them up to decent speeds," Capon said. "On most routes, I suspect you save more time by cleaning up the slow orders [speed limits imposed by management] than you do by changing the top speed from 79 to 90." As for where to get the resources, that's a question Congress has never answered beyond the next year's appropriation. Twenty years ago, Claytor believed that Amtrak would have adequate capital for infrastructure development if Congress devoted a half-cent of the gasoline tax to a special fund for rail, but it never happened. More recently, the Obama administration has opened discussions about the prospect of a surface transportation fund that would be available for both highway and rail projects. Amtrak endorses the concept. As McHugh stated recently while testifying before Congress, demand for rail travel, and specifically for Amtrak's services, is growing "in spite of a national transportation policy framework that has historically treated intercity passenger rail as a separate and secondary component of our transportation network." In his testimony, he stated that what is needed now, and what Amtrak regards as the top priority for surface transportation policy, is a dedicated, multiyear source of funds for rail infrastructure. "The federal government established Amtrak as the foundation of the national intercity rail passenger transportation system," McHugh said. "And modernizing and maintaining that system is largely a federal responsibility." So it happens that on its 40th birthday, Amtrak is asking Congress to finish the job it started in 1971 and figure out, finally, a way to finance it. Because people seem to like it.