Can Private Railroads operate passenger service without government help?

[allanorn]

Possibly talk of an efficient and fast facility to compete with or even replace airfreight might be something in Hyperloop territory. Fully size shipping containers would not fit in the hyperloop but palette-sized loads or airfreight containers (possibly) would.

A Hyperloop startup company (it might have been HyperloopTT) pivoted from passenger rail to containers in Hyperloop and found there was even less of a market for that than passenger rail. Most containers sit on boats for weeks before getting to the port, so constructing parallel infrastructure for getting very few containers to a customer was going to be hideously inexpensive for little gain.

 

[crescent-zephyr]

It's really close enough where it's competitive with driving and where flying is overkill - especially along corridors with heavy traffic congestion.

And that's alot of places these days! And of course ideally, those corridors overlap and allow longer rail travel if so desired.

 

[lordsigma]

And that's alot of places these days! And of course ideally, those corridors overlap and allow longer rail travel if so desired.

There absolutely is - though not all of them are likely compatible with Brightline’s business model. (Or would attract other private interest.)

 

[JamesWhitcombRiley]

Just as a clarification, at higher speeds the power needed to overcome aerodynamic resistance is proportional to the third power of velocity. The aerodynamic resistance is proportional to the second power of velocity.

I agree Hyperloop is just random nonsense. The things that have so far been constructed and mentioned as examples of Hyperloop are all basically Linear Motor driven Maglev variations. It is pointless to bring it into the discussion of real projects to build usable public transit.

Amazingly, the hyperloop has reappeared, this time between Rochester MN (Mayo Clinic) and the Twin Cities. I don't know how Mass Transit Magazine publishes all those copyrighted stories, so here is the original: https://www.startribune.com/a-700-m...om-met-council-for-hyperloop-study/600340794/

I was surprised enough to see Ohio still talking about hyperloops in 2019, from a deep dive on whatever documents that state was producing: https://www.amtraktrains.com/thread...ess-for-new-amtrak-service.82042/post-1031094 Thankfully Minnesota has a journalist on it.

 

[JamesWhitcombRiley]

One common thing about UP and Brightline is capital is limited, and goes towards profit. Assuming the directors aren't suffering under misconceptions. And short-term thinking, like what will it do to the stock price. Sometimes that is overstated, since a corporation can have a mission.

I've wondered if a hotel company could run a modern-day Pullman Company on Amtrak. The obstructions might be large. Unrelatedly, a signal fact about Pullman is its workers' place in civil rights and labor history.

 

[crescent-zephyr]

I've wondered if a hotel company could run a modern-day Pullman Company on Amtrak. The obstructions might be large. Unrelatedly, a signal fact about Pullman is its workers' place in civil rights and labor history.

That's what Ed Ellis tried to do with the Iowa Pacific / "Pullman Rail Journeys." Amtrak did not want to cooperate at all.

 

[Matthew H Fish]

That's a bit of a stretch. Yes, there would need to be a dedicated team specifically for the passenger operations, but that team could be pretty small at first. The pair of tracks already exists, stations can be as simple as a platform and trailer, all the frieght companies already employ a huge marketing team. "Close enough that it is quicker than flying but too far to drive" - isn't the math as Brightline is proving. You can fly from Orlando to Miami, or you can drive, or take several bus lines... or you can take Brightline. People choose all options when given the choice.

I was trying to be succinct and witty, but if needed, I can expand on what I meant.
One thing I am assuming about a freight railroad starting passenger service is that they wouldn't just take a freight route (either with or without Amtrak service) and put some stations out and start passenger service. I mean, technically, they could do that, but it doesn't make sense from a business point of view. There are freight tracks, for example, between Kansas City and Denver, and theoretically a freight railroad could put stations along them. But the distances between those cities, the populations involved, and the population in the cities between them, are all factors that would make it hard to turn a profit.
So if a freight railroad wanted to make a profitable business out of passenger rail, they would need to pick two cities that were close enough, and had a high demand, but weren't currently served by any type of commuter rail or regional rail. Probably one or both would also be a tourist destination. This is, after all, what Brightline (or rather, the Fortress Investment Group) did.
Forming a public serving company involves a lot of complications. For example, ADA and safety compliance for passenger trains is going to involve a lot of review. A ticketing system and customer support are also necessary. I imagine a lot of lawyers and insurance are also necessary. And finally, a company needs to market itself. The Florida East Coast Railway didn't call itself the Florida East Coast Railway,, or the Fortress Investment Group, it called itself Brightline.
Another thing about Brightline is it has very nice stations. Which also takes time and money and is part of creating a good passenger experience. And also requires architecture, engineering, and lots of thoughts about safety and accessibility. Stations also need to be close to population centers. Many older stations are located in places that are no longer population centers.
So my point was: Union Pacific could look at a route like San Jose-Monterrey and decide to start a train oriented towards tourists, and they could actually probably make money at it, but by the time they are done with it, it is going to be called "The Dolphin", have new stations and probably at least some new tracks (and probably cross-ticketing and cross-promotion with Amtrak or airlines). I can picture a freight railroad doing that, but I don't think a freight railroad is going to just put out a platform in Wilson, Kansas and try to turn a profit.

 

[crescent-zephyr]

One thing I am assuming about a freight railroad starting passenger service is that they wouldn't just take a freight route (either with or without Amtrak service) and put some stations out and start passenger service. I mean, technically, they could do that, but it doesn't make sense from a business point of view. There are freight tracks, for example, between Kansas City and Denver, and theoretically a freight railroad could put stations along them. But the distances between those cities, the populations involved, and the population in the cities between them, are all factors that would make it hard to turn a profit.

Why doesn't it make sense from a business point of view? It doesn't make sense to build new tracks... then you have no advantage! Kansas City to Denver is a strange example, Kansas City to Des Moines would probably make sense though.

 

[Matthew H Fish]

Why doesn't it make sense from a business point of view?

I am a bit unclear about whether this question is because the economics of passenger rail is something you don't know about, or whether this is some sort of Socratic or rhetorical question.

 

[crescent-zephyr]

I am a bit unclear about whether this question is because the economics of passenger rail is something you don't know about, or whether this is some sort of Socratic or rhetorical question.

to run passenger trains on existing right of way vs. build brand new? maybe I didn't fully understand.

 

[Matthew H Fish]

maybe I didn't fully understand.

You don't.
I was talking about building new tracks as one example of something.
Many freight railroads connect places that are important for freight, but might not currently be population centers. I don't know every freight railroad line in the country, but at least in some places, I imagine that it would be necessary to build tracks that make the passenger experience quicker and more comfortable and that will involve at least some reconstruction of tracks, or rerouting tracks towards population centers, not freight centers.
One obvious example of that is Brightline West, which involves building new tracks between Los Angeles and Las Vegas-- train tracks already exist, but they would not be adequate for passenger service.
All of this was part of a bigger point, which is that freight railroads can't just create a passenger service out of thin air, and that creating a passenger service would involve investing in tangible and intangible changes.

 

[crescent-zephyr]

All of this was part of a bigger point, which is that freight railroads can't just create a passenger service out of thin air, and that creating a passenger service would involve investing in tangible and intangible changes.

I disagree with that point though. All of the major freight railroads operate through large major cities and could start running passenger trains on some very sensible routes easily if there was a desire. Now that desire isn't there of course, but this thread was started with that knowledge I believe, and has certainly not been argued by anyone.

 

[Matthew H Fish]

I disagree with that point though. All of the major freight railroads operate through large major cities and could start running passenger trains on some very sensible routes easily if there was a desire.

Maybe we are talking about different things. Are you just saying this is something that freight railroads could do, or are you saying that they actually have a business model where they could make a profit?

 

[cirdan]

Most containers sit on boats for weeks before getting to the port, so constructing parallel infrastructure for getting very few containers to a customer was going to be hideously inexpensive for little gain.

It depends on what's inside the containers. More and more freight goes by air too and from my maybe limited perspective, this seems to be more about major airlines that have diversified into the freight sector rather than transportation companies that have diversified into the airline sector (although there are examples of both).

This shows, I guess, that it is easier for an airline to break into the freight market than it is for a freight company to start an airline. So the technology is more difficult than the product. Maybe something similar is true with railroads? Brightline grew out of FEC for example. Could an airline or bus company have done something similar? Even with a cooperative host railroad?

 

[crescent-zephyr]

Maybe we are talking about different things. Are you just saying this is something that freight railroads could do, or are you saying that they actually have a business model where they could make a profit?

I don't think any of them want to get in the business... Union Pacific would probably be the most likely because they are the only remaining heritage railroad so it could be good publicity.

I actually think daily trips with heritage equipment from Denver to Cheyenne would make the most sense for them. If they still have any E-9's run those during the week and then steam on the weekend. It would mostly be tourists but hey a few people from Wyoming could use it for weekend trips to Denver. They can charge whatever they want when its steam. It's great publicity. And it makes those guys in Cheyenne earn their keep haha.

 

[Matthew H Fish]

I don't think any of them want to get in the business... Union Pacific would probably be the most likely because they are the only remaining heritage railroad so it could be good publicity.

I actually think daily trips with heritage equipment from Denver to Cheyenne would make the most sense for them. If they still have any E-9's run those during the week and then steam on the weekend. It would mostly be tourists but hey a few people from Wyoming could use it for weekend trips to Denver. They can charge whatever they want when its steam. It's great publicity. And it makes those guys in Cheyenne earn their keep haha.

Okay, I apologize, we were talking about different things.
So basically you are saying that freight railroads could run heritage/excursion railroads for tourists, as publicity, even if it was at a loss?
I think they could, but I don't think there is a compelling reason for them to do so, and I also don't think that translates into them running any type of serious intercity passenger rail service. Unless, like I said, it is a spin-off company like Brightline.

 

[crescent-zephyr]

So basically you are saying that freight railroads could run heritage/excursion railroads for tourists, as publicity, even if it was at a loss?
I think they could, but I don't think there is a compelling reason for them to do so,

They wouldn't run at a loss, but they wouldn't make a crazy amount of money compared to a load of intermodals! haha.
The compelling reason for the UP is that it would be good publicity, and they could tie in the heritgage of the company. It would also help cover the costs of the Heritage fleet / steam program.

and I also don't think that translates into them running any type of serious intercity passenger rail service. Unless, like I said, it is a spin-off company like Brightline.

That's a completely different discussion - again I don't think any freight railroads want to, but nothing is stopping them from doing it. It probably wouldn't lose money, they already own the tracks and the majority of the infrustructure, but it wouldn't make much compared to freights so there isn't a huge financial win unless you look at a public relations or political angle.

 

[Matthew H Fish]

That's a completely different discussion - again I don't think any freight railroads want to, but nothing is stopping them from doing it. It probably wouldn't lose money, they already own the tracks and the majority of the infrustructure, but it wouldn't make much compared to freights so there isn't a huge financial win unless you look at a public relations or political angle.

Outside of the NEC, I don't believe any Amtrak routes make a profit, and I think that for many of them, 40-60% farebox recovery is a good rate. Of course, part of this is that as a public agency, Amtrak provides service in places where it provides a public good, even when it is not financially beneficial. But even on corridors like the Amtrak Cascades and Capitol Corridor, that farebox recovery rate is around 40-60%

So your argument is that somehow freight railroads have an easy way to double revenue?

If you know how to double passenger railroad revenue, could you please share what the secret is?

 

[crescent-zephyr]

So your argument is that somehow freight railroads have an easy way to double revenue?

Not double revenue, but cut expenses. They wouldn't be paying the host railroads and they could use lots of existing infrastructure (PR and Legal departments, insurance, etc.). It's a different ball game when you own the tracks... one of the reasons the NEC is profitable for Amtrak.

There are some corridors which sometimes make money. Downeaster in Maine, Kansas City - St. Louis, and the Illini, Illinois Zephyr, as well as Washington DC - Richmond VA.

 

[MIrailfan]

Is it because Union Pacific has no interest, or does the federal government mandate that all passenger rail service fall under only Amtrak?

Amtrak was founded because UP and other Class 1's wanted to dump their money losing passenger routes.

 

[cirdan]

Not double revenue, but cut expenses. They wouldn't be paying the host railroads and they could use lots of existing infrastructure (PR and Legal departments, insurance, etc.). It's a different ball game when you own the tracks... one of the reasons the NEC is profitable for Amtrak.

I believe the NEC is only profitable because

1) it runs through the most densely populated part of the country
2) electrification
3) line and equipment are generally in superior condition to that on most freight railroads, thanks in part to tax-funded upgrades
4) the corridor is shared by numerous commuter agencies, who also contribute to maintenance and share costs. These commuter agencies also rely on tax money.

These are conditions that are not easily replicated.

 

[MARC Rider]

I believe the NEC is only profitable because

1) it runs through the most densely populated part of the country
2) electrification
3) line and equipment are generally in superior condition to that on most freight railroads, thanks in part to tax-funded upgrades
4) the corridor is shared by numerous commuter agencies, who also contribute to maintenance and share costs. These commuter agencies also rely on tax money.

These are conditions that are not easily replicated.

It's not that he NEC is necessarily "profitable" (look up "Hollywood accounting" to see how slippery a term "profitable" is), it's that passenger rail is such an important part of the transportation mode mix in the Northeast that governments at all levels are willing to subsidize it. There are other parts of the country where the auto traffic load is similar to the NEC, and it would probably be a good idea to spend tax $$$ to develop a NEC-Like service, complete with commuter rail, transit connections, and development of transit oriented neighborhoods. However that requires the political will at all governmental levels, and a private railroad would probably only participate as a contractor with a guaranteed income greater than what they spend. This investment wouldn't provide the return that private investors are looking for. This is true of almost all transportation projects. Even back in the laissez-faire 19th century, a lot of railroads were built with government bonds (Hi there, Union Pacific and Credit Mobilier!).

 

[frequentflyer]

To answer the original post, UP run pax trains, why? Will it be more profitable than a 100 car double stack?

Some more reality, the UP bean counter is trying to run more three mile double stacks with DPUs to appease the Precision Scheduled Railroading gods, and one thinks there is room in that thinking for a 10 car pax train?

 

[toddinde]

A Hyperloop startup company (it might have been HyperloopTT) pivoted from passenger rail to containers in Hyperloop and found there was even less of a market for that than passenger rail. Most containers sit on boats for weeks before getting to the port, so constructing parallel infrastructure for getting very few containers to a customer was going to be hideously inexpensive for little gain.

There’s one fundamental problem with the Hyperloop; it doesn’t work and isn’t ever going to work. It was a pipe dream to suck funding away from workable transportation solutions like rail and rapid transit.

 

[toddinde]

There is no mechanism for a railroad to pull out of Amtrak. Even if UP said, for some bizarre reason, that they wanted out of Amtrak, they couldn’t get out without a federal, legislative fix. The Amtrak law says railroads can operate specials and extras, but cannot operate regularly scheduled, intercity passenger service. So, UP’s steam excursions are fine, but running a regularly scheduled train is a no go.