Bidding opens to outsource up to three Amtrak long distance trains

[MisterUptempo]

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.

 

[bretton88]

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.

 

[Skyline]

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

 

[dogbert617]

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.

 

[railiner]

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....

 

[Green Maned Lion]

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

 

[Skyline]

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.

 

[Green Maned Lion]

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.

 

[jis]

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.

 

[cirdan]

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.

 

[bretton88]

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.

 

[railiner]

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...

 

[Hotblack Desiato]

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.

 

[dlagrua]

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.

 

[neroden]

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.

 

[railiner]

The interesting point is, apparently all of the other freight roads across the country have been eager to get out of the direct running of commuter or passenger trains even over their own rail's, happy to let Amtrak or some other agency relieve them from that responsibility, but these two exception's hold on...

 

[cirdan]

The interesting point is, apparently all of the other freight roads across the country have been eager to get out of the direct running of commuter or passenger trains even over their own rail's, happy to let Amtrak or some other agency relieve them from that responsibility, but these two exception's hold on...

But I guess that being under the METRA umbrella, that Metra handles everything from marketing to passenger facing roles to ticket machines.

BNSF just handles the actually running of the trains, which is something that is much closer to the rest of their business.

Maybe if Amtrak could similarly devolve the actual operation of LD trains to freight railroads, while Amtrak still managed everything else including ticketing and food and stations etc, and the freight railroad was awarded a lump sump compensation for doing its part, with maybe some bonus malus agremment to encourage on time operation, they might actually be willing to discuss that

 

[ehbowen]

The interesting point is, apparently all of the other freight roads across the country have been eager to get out of the direct running of commuter or passenger trains even over their own rail's, happy to let Amtrak or some other agency relieve them from that responsibility, but these two exception's hold on...

But I guess that being under the METRA umbrella, that Metra handles everything from marketing to passenger facing roles to ticket machines.

BNSF just handles the actually running of the trains, which is something that is much closer to the rest of their business.

Maybe if Amtrak could similarly devolve the actual operation of LD trains to freight railroads, while Amtrak still managed everything else including ticketing and food and stations etc, and the freight railroad was awarded a lump sump compensation for doing its part, with maybe some bonus malus agremment to encourage on time operation, they might actually be willing to discuss that

To the best of my understanding, that's pretty much the way it was handled up through (about) the mid-1980s....

 

[railiner]

That's correct.... Amtrak at first had nothing to do with running the trains or anything supporting them, other than having their name placed on them...

As the company matured, they started taking over more and more of the jobs involved in running the company.

The big breakthrough came in 1976, when Conrail took over the bankrupt northeast railroads, and conveyed the bulk of the Northeast Corridor to Amtrak. In the eyes of many, that made Amtrak a "real" railroad.

It was several years later that Amtrak completed taking over the train and engine crews, nationally.

I don't see why they would ever want to give those jobs back to the freight railroads...

 

[MikefromCrete]

The interesting point is, apparently all of the other freight roads across the country have been eager to get out of the direct running of commuter or passenger trains even over their own rail's, happy to let Amtrak or some other agency relieve them from that responsibility, but these two exception's hold on...

But I guess that being under the METRA umbrella, that Metra handles everything from marketing to passenger facing roles to ticket machines.

BNSF just handles the actually running of the trains, which is something that is much closer to the rest of their business.

Maybe if Amtrak could similarly devolve the actual operation of LD trains to freight railroads, while Amtrak still managed everything else including ticketing and food and stations etc, and the freight railroad was awarded a lump sump compensation for doing its part, with maybe some bonus malus agremment to encourage on time operation, they might actually be willing to discuss that

I don't see the freight railroads wanting to actually want to operate the trains. They worked hard to get out of the passenger business and certainly don't want to get back into it. There is no advantage to them, and frankly, I don't see any improvements in the actually running of Amtrak trains.

As far as the Metra operations of BNSF and UP, those are based on historic operations. The main concern of BNSF and UP is to control their entry into Chicago. In fact, UP is probably only really concerned about the West Line operations. The Northwest and North lines have very little freight traffic.

 

[Hotblack Desiato]

The interesting point is, apparently all of the other freight roads across the country have been eager to get out of the direct running of commuter or passenger trains even over their own rail's, happy to let Amtrak or some other agency relieve them from that responsibility, but these two exception's hold on...

But I guess that being under the METRA umbrella, that Metra handles everything from marketing to passenger facing roles to ticket machines.

BNSF just handles the actually running of the trains, which is something that is much closer to the rest of their business.

Maybe if Amtrak could similarly devolve the actual operation of LD trains to freight railroads, while Amtrak still managed everything else including ticketing and food and stations etc, and the freight railroad was awarded a lump sump compensation for doing its part, with maybe some bonus malus agremment to encourage on time operation, they might actually be willing to discuss that

IIRC, the ticket agents on UP/BN-operated lines are (or at least were) UP/BN employees and not Metra employees. While I've never done so, I'm told that if passengers bought tickets/monthly passes with checks at those stations (probably not to common/if at all anymore, but was very common when Metra was stuck in the 60s and refused to accept credit cards before being forced to do so by state legislation a few years ago), the checks were written to the railroad and not to Metra.

 

[Bedford]

Here's a thought to make outsourcing something other than a joke. The basic problem is that the bidder assumes financial risk for something that never makes a profit. (Hoosier State Experiment). How about this: Tax credit to any Class I that operates a long distance train that is equal to all avoidable costs plus 5%. Advertising costs would be included in avoidable costs so railroad could market the train and create a national positive media image for the railroad as a side benefit. The tax treatment would be a guaranteed subsidy to the Class I- if that's bad so is air traffic control, TSA, general fund highway maintenance, inland waterways and all the other taxpayer subsidies that keep America moving.

Advantage to Class I Public Advantage

1. Costs covered just like commuter operations 1. Privatized operation with permanent funding source (like the highway)

2. Total control of "their flagship"-no open access slippery slope. 2. Since the train is the Class I 's mirror to the world the incentive is huge

3. Effective way to create visibility and positive image to general public on a to make the train look, feel and be equal to or better than all the other long

national level (like UP steam program). long distance operations.

4. Get a lot more corporate benefit out of a train that is and will be running on

your track anyway.

 

[cirdan]

Here's a thought to make outsourcing something other than a joke. The basic problem is that the bidder assumes financial risk for something that never makes a profit. (Hoosier State Experiment). How about this: Tax credit to any Class I that operates a long distance train that is equal to all avoidable costs plus 5%. Advertising costs would be included in avoidable costs so railroad could market the train and create a national positive media image for the railroad as a side benefit. The tax treatment would be a guaranteed subsidy to the Class I- if that's bad so is air traffic control, TSA, general fund highway maintenance, inland waterways and all the other taxpayer subsidies that keep America moving.

Advantage to Class I Public Advantage

1. Costs covered just like commuter operations 1. Privatized operation with permanent funding source (like the highway)

2. Total control of "their flagship"-no open access slippery slope. 2. Since the train is the Class I 's mirror to the world the incentive is huge

3. Effective way to create visibility and positive image to general public on a to make the train look, feel and be equal to or better than all the other long

national level (like UP steam program). long distance operations.

4. Get a lot more corporate benefit out of a train that is and will be running on

your track anyway.

I see what you're getting at.

The naysayer in me fears the reverse may be true.

In their heyday, passenger trains showcased the efficiency, smoothness and speed of a railroad. This had a kickback in the form of positive public perception and confidence.

If you travel by train today, you get to see a rather different picture. As long as people stay away from their actual assets, railroads can sell you glossy images of their fast and efficient engines pulling long intermodals at high speeds. But if you actualy travel on them you see the ugly warts on the beats's underbelly. You feel track is rough and not getting the maintennace it maybe should, You feel the ehhects of slow orders. You see industrial spurs overgrown with weeds and freight cars covered in graffiti rotting away. You see congestion and delays caused by insufficient capacity or maybe just poor despatching. This is the effect of railroads having been in survival mode rather than growth mode for the last 50 years or so. All this is thus not showing the railroad at its best and maybe the railroad is right not to want people to see that.

 

[Bedford]

I ride a lot of long distance trains this year and every year and on most trips the host railroad would have nothing to be ashamed of and several Class I s choose to run TV ads (you've seen them). NS is back in the steam program business. So there is some interest in and perceived advantage in good PR for the railroad or they wouldn't spend a dime on it.

 

[railiner]

Here's a thought to make outsourcing something other than a joke. The basic problem is that the bidder assumes financial risk for something that never makes a profit. (Hoosier State Experiment). How about this: Tax credit to any Class I that operates a long distance train that is equal to all avoidable costs plus 5%. Advertising costs would be included in avoidable costs so railroad could market the train and create a national positive media image for the railroad as a side benefit. The tax treatment would be a guaranteed subsidy to the Class I- if that's bad so is air traffic control, TSA, general fund highway maintenance, inland waterways and all the other taxpayer subsidies that keep America moving.

Advantage to Class I Public Advantage

1. Costs covered just like commuter operations 1. Privatized operation with permanent funding source (like the highway)

2. Total control of "their flagship"-no open access slippery slope. 2. Since the train is the Class I 's mirror to the world the incentive is huge

3. Effective way to create visibility and positive image to general public on a to make the train look, feel and be equal to or better than all the other long

national level (like UP steam program). long distance operations.

4. Get a lot more corporate benefit out of a train that is and will be running on

your track anyway.

Interesting proposal....nice to hear some fresh, positive idea's, here....

Kind of doubt it will ever happen, but still....sounds good....