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Bidding opens to outsource up to three Amtrak long distance trains


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#21 Thirdrail7

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Posted 08 July 2017 - 11:53 AM

What about other railroads in other parts of the country...don't the freight roads still run some of the Chicago RTA routes, and by choice?

 

Sure...and they are regional/commuter services with their costs covered. They aren't running trains through multiple states. If they were interested in running long distance service or additional services, you'd see them submitting bids for the various commuter contracts that have been up in recent years (such as C-DOT, Knowledge Corridor,MBTA/MBCR,VRE,MARC)...that have their costs covered.


Edited by Thirdrail7, 08 July 2017 - 12:26 PM.

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#22 Eric S

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Posted 08 July 2017 - 12:18 PM

What about other railroads in other parts of the country...don't the freight roads still run some of the Chicago RTA routes, and by choice?

 

BNSF and UP operate portions of the Metra system. BNSF also operates Seattle-area Sounder.



#23 neroden

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Posted 08 July 2017 - 12:38 PM

To be absolutely clear here, the provision of federal law which required this idiotic bidding scheme was inserted by the particular faction of "privatize everything" Republicans of whom I spoke.  Many, many years ago.  (If I remember correctly the legislation was actually passed under the G W Bush administration, but I'm bad with remembering timelines.)  (Edit: did some research: this particular provision came out of the Republican Congress of 2015.  I was remembering the previous attempt, by the same gang, to insert the same idiotic provision, back in 2008.)

 

I followed this nonsense down to the committee hearing level.  It was left in the legislation as a sop to this crazy Congressional faction, because everyone sane (which included both Congressional Democrats and some Congressional Republicans) knew there would be no bids anyway.  So all it does is waste some paper and some people's time.

 

Sorry I wasn't more specific before.


Edited by neroden, 08 July 2017 - 12:57 PM.

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#24 neroden

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Posted 08 July 2017 - 12:53 PM

So, for reference, the only cases in the US of "freight" railroads operating passenger trains are:

(1) a small number of class IIIs which are essentially running tourist trains for an extra buck or two

(2) UP operating three lines in Chicago (which are inherited from lines operated by their predecessor) and the occasional tourist train

(3) BNSF operating Sounder in Seattle, Northstar in Minneapolis, and the "BNSF Line" Metra line in Chicago

 

There's one extra example in Canada: CP operates one GO Transit line in Toronto.

 

Basically only BNSF has been willing to consider operating new commuter lines.  CSX, PanAm, CN, and others have aggressively worked their way out of all their commuter rail contracts.  Honestly I expect UP and CP will probably eventually figure out how to end their existing passenger operating contracts too.

Herzog Transit Services has been a willing contract operator of new commuter rail lines, as have Keolis and Bombardier.  But they don't take revenue risk.  They're we-get-paid-for-our-work contracts, with the commuter rail agency taking on all the risk of dropping ticket sales.  (This is the same with the BNSF, UP, and CP contracts.) 

 

This idiotic bidding concept entertains the idea that an operator will take on revenue risk.  It's simply not going to happen.

The restriction that the bidder must either own the track or have a contract with the track owner helps further guarantee that there won't be any bids.  The track owners (Class Is) don't want to do it themselves and will not contract with anyone.  All the long-distance routes actually have multiple track owners, making it even less possible to get a contract.  Most of them have multiple Class I track owners; I believe the Southwest Chief and Silver Meteor are the only exceptions, and even they run through multiple commuter rail agencies, and in the case of the Southwest Chief, the Kansas City Terminal.


Edited by neroden, 08 July 2017 - 01:07 PM.

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#25 Cho Cho Charlie

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Posted 08 July 2017 - 03:59 PM

This idiotic bidding concept entertains the idea that an operator will take on revenue risk.  It's simply not going to happen.


IMHO, this "idiotic bidding concept" reeks of Congress. I am sure that this isn't Amtrak's idea. Someone in Congress probably loudly proclaimed that several freight railroads have personally contacted him, begging to take over LD, intercity, passenger train service. And use this to backup their claim that any well-run passenger service can easily turn a major profit.

This bidding might be the only way to show that this Congressional genius is wrong, and move on.
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#26 MisterUptempo

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Posted 08 July 2017 - 04:35 PM

This whole "bidding process" is nothing but a stalking horse for the Amtrak haters to justify killing the system entirely.

 

In scenario A, no one (or at least no one of any credibility) bids. The proponents of this process will then declare, "If the Class I's and successful private rail operators, those who know railroading better than anyone else, don't see a path to financial success operating Amtrak's routes, why should taxpayers foot the bill for Amtrak any longer?"

 

In scenario B, an entity attempts to operate a route or routes and fails (see-Iowa Pacific/Hoosier State). The proponents of this process will then declare, "If a Class I or successful private rail operator, those who know railroading better than anyone else, tried and failed to find a path to financial success operating Amtrak's routes, why should taxpayers foot the bill for Amtrak any longer?"

 

It's a pre-determined conclusion that's just been furnished with a mechanism to prove that conclusion.



#27 bretton88

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Posted 08 July 2017 - 08:42 PM

So, for reference, the only cases in the US of "freight" railroads operating passenger trains are:
(1) a small number of class IIIs which are essentially running tourist trains for an extra buck or two
(2) UP operating three lines in Chicago (which are inherited from lines operated by their predecessor) and the occasional tourist train
(3) BNSF operating Sounder in Seattle, Northstar in Minneapolis, and the "BNSF Line" Metra line in Chicago
 
There's one extra example in Canada: CP operates one GO Transit line in Toronto.
 
Basically only BNSF has been willing to consider operating new commuter lines.  CSX, PanAm, CN, and others have aggressively worked their way out of all their commuter rail contracts.  Honestly I expect UP and CP will probably eventually figure out how to end their existing passenger operating contracts too.
Herzog Transit Services has been a willing contract operator of new commuter rail lines, as have Keolis and Bombardier.  But they don't take revenue risk.  They're we-get-paid-for-our-work contracts, with the commuter rail agency taking on all the risk of dropping ticket sales.  (This is the same with the BNSF, UP, and CP contracts.) 
 
This idiotic bidding concept entertains the idea that an operator will take on revenue risk.  It's simply not going to happen.

The restriction that the bidder must either own the track or have a contract with the track owner helps further guarantee that there won't be any bids.  The track owners (Class Is) don't want to do it themselves and will not contract with anyone.  All the long-distance routes actually have multiple track owners, making it even less possible to get a contract.  Most of them have multiple Class I track owners; I believe the Southwest Chief and Silver Meteor are the only exceptions, and even they run through multiple commuter rail agencies, and in the case of the Southwest Chief, the Kansas City Terminal.

I doubt UP is going to exit the Metra business. UP uses it as a point of pride and seems to have a much deeper respect for their passenger train heritage and has retained a lot of the institutional knowledge. I could see BNSF getting out before UP does. It's a cost covered operation, so there's very little risk in UP running the trains.

Edited by bretton88, 08 July 2017 - 08:43 PM.

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#28 Skyline

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Posted 09 July 2017 - 12:02 AM

It's only a bidding "opportunity." Don't hold your breath that any company will bid. Hasn't worked previously.



#29 dogbert617

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Posted 09 July 2017 - 05:05 PM

 

So, for reference, the only cases in the US of "freight" railroads operating passenger trains are:
(1) a small number of class IIIs which are essentially running tourist trains for an extra buck or two
(2) UP operating three lines in Chicago (which are inherited from lines operated by their predecessor) and the occasional tourist train
(3) BNSF operating Sounder in Seattle, Northstar in Minneapolis, and the "BNSF Line" Metra line in Chicago
 
There's one extra example in Canada: CP operates one GO Transit line in Toronto.
 
Basically only BNSF has been willing to consider operating new commuter lines.  CSX, PanAm, CN, and others have aggressively worked their way out of all their commuter rail contracts.  Honestly I expect UP and CP will probably eventually figure out how to end their existing passenger operating contracts too.
Herzog Transit Services has been a willing contract operator of new commuter rail lines, as have Keolis and Bombardier.  But they don't take revenue risk.  They're we-get-paid-for-our-work contracts, with the commuter rail agency taking on all the risk of dropping ticket sales.  (This is the same with the BNSF, UP, and CP contracts.) 
 
This idiotic bidding concept entertains the idea that an operator will take on revenue risk.  It's simply not going to happen.

The restriction that the bidder must either own the track or have a contract with the track owner helps further guarantee that there won't be any bids.  The track owners (Class Is) don't want to do it themselves and will not contract with anyone.  All the long-distance routes actually have multiple track owners, making it even less possible to get a contract.  Most of them have multiple Class I track owners; I believe the Southwest Chief and Silver Meteor are the only exceptions, and even they run through multiple commuter rail agencies, and in the case of the Southwest Chief, the Kansas City Terminal.

I doubt UP is going to exit the Metra business. UP uses it as a point of pride and seems to have a much deeper respect for their passenger train heritage and has retained a lot of the institutional knowledge. I could see BNSF getting out before UP does. It's a cost covered operation, so there's very little risk in UP running the trains.

 

 

Curious, why do you think BNSF would pull out of supporting the Chicago-Aurora BNSF commuter line service? It gets a lot of ridership, and is one of the higher ridden routes in the whole Metra system. I doubt this railroad would end support of the BNSF Metra line, in the future. Wouldn't that mean(if they were to pull support of the Metra BNSF line) their support of other services such as Sounder in Seattle, also be in jeopardy? There is talk also of possible expansion of Metra BNSF service to Kendall County, though it'd require this county to join the 6 county RTA as a new membership county. As of now, they aren't a member of that, and just the main 6 counties(Cook, Lake, DuPage, Kane, Will, and McHenry) on the IL side of the Chicago area are.

 

The 3 UP lines all have decent ridership, as well. The only thing I sometimes wonder about is if McHenry, IL will continue to have service on that branch off of the UP-Northwest Line to Crystal Lake(and Harvard), since it has only a handful of weekday only trains at most. That branch used to have 1-2 Saturday trains(but no Sunday trains) in each direction, but those were cut from the schedule in the 2000s.


Edited by dogbert617, 09 July 2017 - 05:06 PM.


#30 railiner

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Posted 09 July 2017 - 08:53 PM

If the remaining freight railroads have been willing to continue operating their heritage commuter routes for so long, why would they now try to rid themselves of it?  And if they are covered for their costs, and make a modest profit running them, why wouldn't they be willing to operate more, especially over their own routes?  Not to mention, they would not have to deal with third party contractor's operating over their railroad....


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#31 Green Maned Lion

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Posted 10 July 2017 - 10:32 AM

Making a modest profit is not always the most intelligent use of resources.
Travelled: Broadway Limited (1), Lake Shore Limited (6), Capitol Limited (7), Empire Builder (1), Southwest Chief (2), Sunset Limited (1), California Zephyr (3), Coast Starlight (2), Silver Meteor (5), Silver Star (5), Silver Palm (2), Crescent (1), Cardinal (4), Auto Train (4), Pennsylvanian (2), Palmetto (1), Acela Express (1), Empire Service (1), Northeast Regional (11), Keystone Service (1) --- Total Miles: 50,144 --- Total Trains: 61
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#32 Skyline

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Posted 10 July 2017 - 11:04 AM

Making a modest profit is not always the most intelligent use of resources.

True, board members and shareholders often expect to maximize short term profits at the expense of long term goals and even good citizenship. It's a major flaw in an otherwise mostly positive capitalist system.



#33 Green Maned Lion

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Posted 10 July 2017 - 12:26 PM

That's actually not what I meant. All profit is the result of investing. The function is measured not in dollars, but percentages, called Return On Investment. The operators of these commuter trains tie up investment capital in running these trains, in various ways.

Sometimes a modestly profitable operation is not the best place to invest your money, time, or management talent, all of which are limited resources.
Travelled: Broadway Limited (1), Lake Shore Limited (6), Capitol Limited (7), Empire Builder (1), Southwest Chief (2), Sunset Limited (1), California Zephyr (3), Coast Starlight (2), Silver Meteor (5), Silver Star (5), Silver Palm (2), Crescent (1), Cardinal (4), Auto Train (4), Pennsylvanian (2), Palmetto (1), Acela Express (1), Empire Service (1), Northeast Regional (11), Keystone Service (1) --- Total Miles: 50,144 --- Total Trains: 61
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#34 jis

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Posted 10 July 2017 - 12:43 PM

I have indeed wondered how these otherwise more or less marginal operations actually fit into their big strategy, unless the value comes from goodwill or keeping other operators off their property or some such intangible.



#35 cirdan

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Posted 10 July 2017 - 01:31 PM

I have indeed wondered how these otherwise more or less marginal operations actually fit into their big strategy, unless the value comes from goodwill or keeping other operators off their property or some such intangible.

 

Maybe as long as they don't bind senior management resources or attention or lose too much money, it's a case of these operations not really being a big enough a problem to require anything being done?

 

Many big corporstaions, especially of the type that have been around for a long time, have various oddball operations on the side. Strictly speaking they don't fit in the bigger picture or strategy but maybe seeking to spin oir sell them off would me more hassle than just leaving them ticking along.



#36 bretton88

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Posted 10 July 2017 - 02:09 PM

 

So, for reference, the only cases in the US of "freight" railroads operating passenger trains are:
(1) a small number of class IIIs which are essentially running tourist trains for an extra buck or two
(2) UP operating three lines in Chicago (which are inherited from lines operated by their predecessor) and the occasional tourist train
(3) BNSF operating Sounder in Seattle, Northstar in Minneapolis, and the "BNSF Line" Metra line in Chicago
 
There's one extra example in Canada: CP operates one GO Transit line in Toronto.
 
Basically only BNSF has been willing to consider operating new commuter lines.  CSX, PanAm, CN, and others have aggressively worked their way out of all their commuter rail contracts.  Honestly I expect UP and CP will probably eventually figure out how to end their existing passenger operating contracts too.
Herzog Transit Services has been a willing contract operator of new commuter rail lines, as have Keolis and Bombardier.  But they don't take revenue risk.  They're we-get-paid-for-our-work contracts, with the commuter rail agency taking on all the risk of dropping ticket sales.  (This is the same with the BNSF, UP, and CP contracts.) 
 
This idiotic bidding concept entertains the idea that an operator will take on revenue risk.  It's simply not going to happen.

The restriction that the bidder must either own the track or have a contract with the track owner helps further guarantee that there won't be any bids.  The track owners (Class Is) don't want to do it themselves and will not contract with anyone.  All the long-distance routes actually have multiple track owners, making it even less possible to get a contract.  Most of them have multiple Class I track owners; I believe the Southwest Chief and Silver Meteor are the only exceptions, and even they run through multiple commuter rail agencies, and in the case of the Southwest Chief, the Kansas City Terminal.

I doubt UP is going to exit the Metra business. UP uses it as a point of pride and seems to have a much deeper respect for their passenger train heritage and has retained a lot of the institutional knowledge. I could see BNSF getting out before UP does. It's a cost covered operation, so there's very little risk in UP running the trains.
 
 
Curious, why do you think BNSF would pull out of supporting the Chicago-Aurora BNSF commuter line service? It gets a lot of ridership, and is one of the higher ridden routes in the whole Metra system. I doubt this railroad would end support of the BNSF Metra line, in the future. Wouldn't that mean(if they were to pull support of the Metra BNSF line) their support of other services such as Sounder in Seattle, also be in jeopardy? There is talk also of possible expansion of Metra BNSF service to Kendall County, though it'd require this county to join the 6 county RTA as a new membership county. As of now, they aren't a member of that, and just the main 6 counties(Cook, Lake, DuPage, Kane, Will, and McHenry) on the IL side of the Chicago area are.
 
The 3 UP lines all have decent ridership, as well. The only thing I sometimes wonder about is if McHenry, IL will continue to have service on that branch off of the UP-Northwest Line to Crystal Lake(and Harvard), since it has only a handful of weekday only trains at most. That branch used to have 1-2 Saturday trains(but no Sunday trains) in each direction, but those were cut from the schedule in the 2000s.
This would not be an end of service at all. Just a different operator taking (probably metra in housing it) for what BNSF does currently, just like when CP got out of operations. To note, there's been no indication BNSF does want out of operations anyways.

Edited by bretton88, 10 July 2017 - 02:11 PM.

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#37 railiner

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Posted 10 July 2017 - 08:57 PM

I have indeed wondered how these otherwise more or less marginal operations actually fit into their big strategy, unless the value comes from goodwill or keeping other operators off their property or some such intangible.

That's what I was thinking....going all the way back to the CB&Q days, the BNSF always seemed to take pride in their operation along the 38 mile, triple-track raceway, and their pioneering use of the gallery type of commuter car, etc...

UP inherited C&NW's highly regarded commuter operation, as well...


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#38 Hotblack Desiato

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Posted 11 July 2017 - 03:11 PM

 

I have indeed wondered how these otherwise more or less marginal operations actually fit into their big strategy, unless the value comes from goodwill or keeping other operators off their property or some such intangible.

That's what I was thinking....going all the way back to the CB&Q days, the BNSF always seemed to take pride in their operation along the 38 mile, triple-track raceway, and their pioneering use of the gallery type of commuter car, etc...

UP inherited C&NW's highly regarded commuter operation, as well...

 

 

When it comes to taking pride in their operation, BNSF actually brands their commuter cars on the Chicago-Aurora corridor.



#39 dlagrua

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Posted 11 July 2017 - 05:05 PM

Don't know what to make of this "open for bids" announcement to take over long distance passenger routes. The freight railroads could do it but their profit from freight shipments would far outweigh anything that a passenger train could produce. On a freight train you can have 50 or more cars filled with oil,coal,grain, seeds,lumber, steel and general freight. It takes only two employees to staff an entire freight train. In contrast an LD passenger route can have a dozen or more employees aboard, have red cap baggage service, cleaning crews and people that deliver food and essentials to the train at stations along the line, all for a train only 7-10 cars in length.  Point is that LD passenger trains have high labor costs. That is a reason why the freight railroads wont touch them. I would venture to say that there might be interest from the private railroads for taking over the operation of some additional commuter lines.



#40 neroden

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Posted 11 July 2017 - 06:49 PM

Curious, why do you think BNSF would pull out of supporting the Chicago-Aurora BNSF commuter line service?

Maybe you're confused.

Currently BNSF *operates the trains* on the Chicago-Aurora corridor, in exchange for payment from Metra (Metra cuts them a check). BNSF employs the conductors and engineers. Similar for UP on those lines.

What might happen with BNSF or UP in Chicago is what already happened with all the other Metra lines -- where Metra operates the trains directly and employs the conductors and engineers. On the same routes as before. (Passengers wouldn't notice any difference.)

Basically UP has a tiny division which learns how to be passenger engineers and conductors, which is used only in Chicago. BNSF likewise has a tiny passenger division though they learn how to do it in Chicago, Minneapolis, and Seattle, so they seem a bit more interested.

Metra has a very large number of passenger engineers and conductors and might be able to operate these lines more efficiently.

The lines would certainly not be discontinued. Sorry if I gave the wrong impression.

Edited by neroden, 11 July 2017 - 06:52 PM.

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