Can Private Railroads operate passenger service without government help?

[jis]

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.

There has been legislative changes in the recent past that would allow the likes of UP to participate in one of the various privatization efforts to apply to take over one or more of Amtrak's LD services. Of course there have been no takers since the freight railroads can make an order of magnitude or two more money using a slot to run a hot shot container train instead of a passenger train. So it is not the Amtrak enabling law that is the issue any more. It is the simple laws of economics.

 

[toddinde]

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

Railroads were completely free to join Amtrak or not as they wished. But once they joined, they gave up their obligation and right to operate regularly scheduled, inter-city passemger trains. They can still run commuter trains, specials and extras, but they cannot run regularly scheduled, inter-city passenger trains, nor could they contract with another private operator to provide that service. As a practical matter, I presume Amtrak would come to an understanding if some private operator wanted to provide a service that was not in competition with Amtrak. Brightline works because Florida East Coast discontinued their last passenger train before Amtrak, so Florida East Coast never joined Amtrak.

 

[toddinde]

There has been legislative changes in the recent past that would allow the likes of UP to participate in one of the various privatization efforts to apply to take over one or more of Amtrak's LD services. Of course there have been no takers since the freight railroads can make an order of magnitude or two more money using a slot to run a hot shot container train instead of a passenger train. So it is not the Amtrak enabling law that is the issue any more. It is the simple laws of economics.

There were changes to allow privatized operators and no takers. I don’t recall the details. I believe that Amtrak still had to franchise it. The dispatching issue is vastly overblown. It is interesting that the Sunset Limited has been running largely on time since the STB filing. There isn’t a point to the debate since it’s not like UP is bringing back the City of Los Angeles anytime soon.

 

[jis]

Railroads were completely free to join Amtrak or not as they wished. But once they joined, they gave up their obligation and right to operate regularly scheduled, inter-city passemger trains. They can still run commuter trains, specials and extras, but they cannot run regularly scheduled, inter-city passenger trains, nor could they contract with another private operator to provide that service. As a practical matter, I presume Amtrak would come to an understanding if some private operator wanted to provide a service that was not in competition with Amtrak. Brightline works because Florida East Coast discontinued their last passenger train before Amtrak, so Florida East Coast never joined Amtrak.

It is the FRA that can now permit anyone to operate wherever. Amtrak does not get to decide that though of course the FRA will probably consult with Amtrak. But the buck now stops at FRA. The original Railpax restrictions have been revised considerably in order to supposedly make it easier for privatization of intercity rail, but in a typical American ineffectual way. We are far away from the European Union Equal Access paradigm though many have said that is where we want to get to. So we will continue to suffer through a broken system which thwarts growth of passenger rail for the foreseeable future, notwithstanding IIJA and BIL and what not. None of those address setting up new rules for track access and distribution of subsidy. Absent seriously addressing those issue my guess is that we will produce volumes of plans and then execute very little of it.

 

[railiner]

From the original Act:

That implies that they can't directly compete with Amtrak without their permission.
"Corporation" is now Amtrak, and the "contract" is referring to taking over the passenger service.
https://www.govinfo.gov/content/pkg/STATUTE-84/pdf/STATUTE-84-Pg1327.pdf

That has since been rescinded by Congress in one of their frenzied attempt to get private operators of LD service, even freight railroads if possible. They require FRA’s blessing now. Not Amtrak’s IIRC.

Anyhow, the real problem is getting access to host railroad tracks and there Amtrak still is the only one that supposedly has special dispensation and we all know how well that works out

This incidentally gives the host railroads an upper hand should they wish to run passenger trains. But demonstrably they don’t since they can make much more money running freight trains.

There were changes to allow privatized operators and no takers. I don’t recall the details. I believe that Amtrak still had to franchise it. The dispatching issue is vastly overblown. It is interesting that the Sunset Limited has been running largely on time since the STB filing. There isn’t a point to the debate since it’s not like UP is bringing back the City of Los Angeles anytime soon.

It is the FRA that can now permit anyone to operate wherever. Amtrak does not get to decide that though of course the FRA will probably consult with Amtrak. But the buck now stops at FRA. The original Railpax restrictions have been revised considerably in order to supposedly make it easier for privatization of intercity rail, but in a typical American ineffectual way. We are far away from the European Union Equal Access paradigm though many have said that is where we want to get to. So we will continue to suffer through a broken system which thwarts growth of passenger rail for the foreseeable future, notwithstanding IIJA and BIL and what not. None of those address setting up new rules for track access and distribution of subsidy. Absent seriously addressing those issue my guess is that we will produce volumes of plans and then execute very little of it.

Okay...so it seems that anyone now can directly contract with freight railroads to run anywhere they want, with or without Amtrak's "blessings"?
That would seem to be the case for the Rocky Mountaineer, on their Moab train route, wouldn't it? Or does the fact that it is a tourist 'tour', and not regular intercity transportation, make it a different case, since I don't believe they are "competing" with Amtrak directly.

BTW, IIRC, the original Amtrak legislation required railroads joining it, to not only run Amtrak over routes served immediately prior to Amtrak cutover, but also any route on their system, even if previously 'freight only', if Amtrak wanted to...such as The Broadway Limited, Washington section rerouted onto the Penn Central's Port Road Branch...

 

[Metra Electric Rider]

It is the FRA that can now permit anyone to operate wherever. Amtrak does not get to decide that though of course the FRA will probably consult with Amtrak. But the buck now stops at FRA. The original Railpax restrictions have been revised considerably in order to supposedly make it easier for privatization of intercity rail, but in a typical American ineffectual way. We are far away from the European Union Equal Access paradigm though many have said that is where we want to get to. So we will continue to suffer through a broken system which thwarts growth of passenger rail for the foreseeable future, notwithstanding IIJA and BIL and what not. None of those address setting up new rules for track access and distribution of subsidy. Absent seriously addressing those issue my guess is that we will produce volumes of plans and then execute very little of it.

Of course, one could I suppose argue, that the open access for pax wouldn't really work here since our system is skewed to freight while Europe's is skewed to pax (plus the differences in ownership of the rails/tracks themselves is different in NA vs Europe...).

 

[jis]

Of course, one could I suppose argue, that the open access for pax wouldn't really work here since our system is skewed to freight while Europe's is skewed to pax (plus the differences in ownership of the rails/tracks themselves is different in NA vs Europe...).

That is why there needs to be attention paid to coming up with Railpax-2 if you will which defines the track access and subsidy rules that would enable significant addition of passenger service. Absent that I do not foresee all this FRA exercise etc. actually resulting in significant new passenger service since the freight hosts will be able to drag out negotiations until kingdom comes. Currently there is no well defined algorithm for adding any service and each will likely go through the New Orleans - Mobile like exercise. There may be exceptions where the host decides that it is in their interest to run passenger trains, but I suspect they will be few and far between absent adequate compensation to account for revenue lost by reserving a slot for passenger service.

 

[railiner]

BTW, IIRC, the original Amtrak legislation required railroads joining it, to not only run Amtrak over routes served immediately prior to Amtrak cutover, but also any route on their system, even if previously 'freight only', if Amtrak wanted to...such as The Broadway Limited, Washington section rerouted onto the Penn Central's Port Road Branch...

Conversely, I believe that may not have applied to subsequent merger's and acquisitions. For example, When the member-road Union Pacific, acquired the non-member Western Pacific, they may not have had to host Amtrak on the latter's territory (other than the usual paired SP trackage in NV). Not sure...

 

[crescent-zephyr]

Mainline railroads should be required to offer slots - they are part of this countries transportation infrastructure and should not have the right to deny a scheduled slot.

In theory, I should be able to start my own passenger rail company that operates on UP or NS tracks (provided I can pay up! haha.)

 

[cirdan]

There may be exceptions where the host decides that it is in their interest to run passenger trains, but I suspect they will be few and far between absent adequate compensation to account for revenue lost by reserving a slot for passenger service.

Just speculating here, but I believe a host railroad's acceptance of passenger service may be enhanced by two factors

1) routes with low or insignificant freight usage, but still enough value that total abandonment is not an option. In such cases external funding justified by passenger usage may contribute to upkeep of the route. For example Raton Pass. Or in which ownership can even be outright transferred to either Amtrak or a commuter rail agency, while maintaining the freight road's ability to use the track, thus saving costs for the freight railroad.
2) routes on which Amtrak (or other sources) step up with money to perform significant upgrades that also benefit freight (as has happened, i understand, on some Amtrak California routes)

 

[jis]

Just speculating here, but I believe a host railroad's acceptance of passenger service may be enhanced by two factors

1) routes with low or insignificant freight usage, but still enough value that total abandonment is not an option. In such cases external funding justified by passenger usage may contribute to upkeep of the route. For example Raton Pass. Or in which ownership can even be outright transferred to either Amtrak or a commuter rail agency, while maintaining the freight road's ability to use the track, thus saving costs for the freight railroad.
2) routes on which Amtrak (or other sources) step up with money to perform significant upgrades that also benefit freight (as has happened, i understand, on some Amtrak California routes)

There are many scenarios where an outfit other than the host railroad runs passenger service on the host railroad. A more interesting question which I thought this thread is about is whether a host freight railroad itself may decide to re-enter the passenger service business. Of course for enabling other outfits (including Amtrak) to add passenger service it is important to create a legal framework and environment for negotiating such as opposed to the case by case circus that exists at this time.

 

[railiner]

Mainline railroads should be required to offer slots - they are part of this countries transportation infrastructure and should not have the right to deny a scheduled slot.

In theory, I should be able to start my own passenger rail company that operates on UP or NS tracks (provided I can pay up! haha.)

I disagree. Except for those railroads that joined the Amtrak system, or have already had commuter trains on their road. The railroads are private property, and its owners should have the right to use it, as they wish. If the government deems it necessary to operate passenger trains on that road, and they cannot reach a fair agreement with the owners, then they do have the right to purchase the road at fair market value, through the “condemnation” laws, and go from there.

Suppose you owned a business, and someone told you that you have to give them some slot or space in it, to operate their own? How would you feel about that?

Of course, you always have the option to acquire land and build your own railroad, and do with it as you please…

 

[jis]

Suppose you owned a business, and someone told you that you have to give them some slot or space in it, to operate their own? How would you feel about that?

When you own a business the government generally tells you that you have to file a bunch of paperwork and pay taxes and a whole host of other things. So, as a hypothetical, I don't see why the legislature if they so wished, could not impose the requirement that in order to run a railroad you have to set aside some limited number of slots for use for public service passenger service by anyone that meets a bunch of requirements set by the legislature with the help of the DOT/FRA.

 

[crescent-zephyr]

Suppose you owned a business, and someone told you that you have to give them some slot or space in it, to operate their own? How would you feel about that?

It's an extreme hypothetical since nobody other than railroads owns an entire multi-state (and sometimes international) transportation infrastructure.

Are there even any private airports that serve commercial planes? Not sure but I would think they would have to be available to any airline that can afford a slot. Provided that slot was available of course.

 

[joelkfla]

Suppose you owned a business, and someone told you that you have to give them some slot or space in it, to operate their own? How would you feel about that?

Of course, you always have the option to acquire land and build your own railroad, and do with it as you please…

If the government had given me land for free to provide a public service and make a healthy profit on it, I don't think I would feel so put upon.

 

[Sullen Maximus]

Mainline railroads should be required to offer slots - they are part of this countries transportation infrastructure and should not have the right to deny a scheduled slot.

In theory, I should be able to start my own passenger rail company that operates on UP or NS tracks (provided I can pay up! haha.)

Better option, just take the main lines away from them and nationalize them. Companies can buy rights to use the national network, bit this concept of private entities literally holding a monopoly over the main lines is silly.

Private spurs cam be kept, but our situation will never improve so long as we allow UP to keep us stuck in the past.

 

[railiner]

So, as a hypothetical, I don't see why the legislature if they so wished, could not impose the requirement that in order to run a railroad you have to set aside some limited number of slots for use for public service passenger service by anyone that meets a bunch of requirements set by the legislature with the help of the DOT/FRA.

The government can do that, but I don’t agree that it is right…

 

[railiner]

If the government had given me land for free to provide a public service and make a healthy profit on it, I don't think I would feel so put upon.

Only some railroads were “land grant”, receiving free land, and they paid back much more than they received, by way of reduced rates to the government, as well as adding huge value to the adjacent government owned land.
I believe most of the land grant roads became Amtrak members, anyway…

 

[MARC Rider]

The freight railroads, with very few exceptions, are what are known as "common carriers," and thus they can be regulated in whatever way the government sees fit. They're chartered by the government and must run under government rules. Traditionally that meant that they had to carry passengers as well as freight. My understanding is that the original Amtrak law removed the requirement to carry passengers for the railroads that were still carrying passengers in 1971 if the railroads joined Amtrak. I would think Congress would have the power to change the law to require all railroads to join Amtrak or offer passenger service or require them to let some other entity offer passenger service.

By the way, from the Wikipedia article about "common carriers," I found out that Disneyland is a common carrier. FWIW
http://online.ceb.com/calcases/C4/35C4t1125.htm

 

[jis]

The freight railroads, with very few exceptions, are what are known as "common carriers," and thus they can be regulated in whatever way the government sees fit. They're chartered by the government and must run under government rules. Traditionally that meant that they had to carry passengers as well as freight. My understanding is that the original Amtrak law removed the requirement to carry passengers for the railroads that were still carrying passengers in 1971 if the railroads joined Amtrak. I would think Congress would have the power to change the law to require all railroads to join Amtrak or offer passenger service or require them to let some other entity offer passenger service.

By the way, from the Wikipedia article about "common carriers," I found out that Disneyland is a common carrier. FWIW
http://online.ceb.com/calcases/C4/35C4t1125.htm

Indeed, the government is able to define what "common carrier" obligations are, which they have changed from time to time.

 

[west point]

Indeed, the government is able to define what "common carrier" obligations are, which they have changed from time to time.

agree

 

[Sullen Maximus]

I disagree. Except for those railroads that joined the Amtrak system, or have already had commuter trains on their road. The railroads are private property, and its owners should have the right to use it, as they wish. If the government deems it necessary to operate passenger trains on that road, and they cannot reach a fair agreement with the owners, then they do have the right to purchase the road at fair market value, through the “condemnation” laws, and go from there.

Suppose you owned a business, and someone told you that you have to give them some slot or space in it, to operate their own? How would you feel about that?

Of course, you always have the option to acquire land and build your own railroad, and do with it as you please…

Wrong, the main lines were paid for with citizen tax money. They were heavily subsidized for upkeep with tax dollars. It's the equivalent of paying a contractor to build a house, and then telling them so long as they paid the utility bills and kept the house clean they could live in it BUT IT IS NOT THEIR HOUSE. There is federal statute that the government can at any moment take them away. They have done it twice during the world wars. Massive amounts of improvements to the infrastructure, routing and right of ways was done during this time as well. All improvements which the private companies are now profiting hand over fist with. UP operates at nearly a 50% profit ratio. Yes, nearly 50c of every dollar they spend is paid back to them. Yet they intentionally hold up passenger rail all of the time ,and constantly keep it stuck 40 years in the past.

The lines should be nationalized, and then allow the companies to pay to use them. Nobody is saying UP should be nationalized, but the main lines should because right now it's not capitalism, it's pure monopoly. All this shoehorning to force them to make room for passenger rail is silly work arounds for the fact that at it's core, the federal government owns the rails, as it should. They just refuse to act on this little fact like the rest of the modern world does.

 

[AmtrakMaineiac]

Wrong, the main lines were paid for with citizen tax money. They were heavily subsidized for upkeep with tax dollars. It's the equivalent of paying a contractor to build a house, and then telling them so long as they paid the utility bills and kept the house clean they could live in it BUT IT IS NOT THEIR HOUSE. There is federal statute that the government can at any moment take them away. They have done it twice during the world wars. Massive amounts of improvements to the infrastructure, routing and right of ways was done during this time as well. All improvements which the private companies are now profiting hand over fist with. UP operates at nearly a 50% profit ratio. Yes, nearly 50c of every dollar they spend is paid back to them. Yet they intentionally hold up passenger rail all of the time ,and constantly keep it stuck 40 years in the past.

The lines should be nationalized, and then allow the companies to pay to use them. Nobody is saying UP should be nationalized, but the main lines should because right now it's not capitalism, it's pure monopoly. All this shoehorning to force them to make room for passenger rail is silly work arounds for the fact that at it's core, the federal government owns the rails, as it should. They just refuse to act on this little fact like the rest of the modern world does.

Perhaps the way this could be done is that the government would lease the tracks from the host railroad, in lieu of lease payments the owning railroad would get free access whereas other railroads would have to pay access charges. The government would take over the management and costs of dispatching and maintenance, probably at least initially contracting with the owner railroad to provide this service. This would be attractive to the owning railroad as they would be relieved of the expenses of track maintenance and dispatching. The only downside to them is there would now be open access for passenger and other freight companies, although they would have to pay access charges.

 

[JamesWhitcombRiley]

The railroads seem to like big cash for making the improvements. Brightline and state-supported rail seem to work that way, though I suppose Brightline managed the work more directly?

 

[cirdan]

the freight railroads can make an order of magnitude or two more money using a slot to run a hot shot container train instead of a passenger train. So it is not the Amtrak enabling law that is the issue any more. It is the simple laws of economics.

This implies that the freight railroads can fill every available slot with a money-spinning hot intermodal.

I think this is only true on maybe a handful of lines. When there is free capacity, and additional trains can be accommodated without degrading overall performance, it may make more sense to settle for a small additional income rather than none at all.

I think the problem with passenger trains is that in many cases, all factors considered, they do not even marginally contribute to revenue positivity.