Can Private Railroads operate passenger service without government help?

[alanh]

So is Alaska RR the only one that continued passenger service? I'm not sure if it was even eligible for Amtrak.

 

[jis]

So is Alaska RR the only one that continued passenger service? I'm not sure if it was even eligible for Amtrak.

Alaska RR was owned by the Federal Government since the 1920s. IIRC it was originally under the Department of the Interior. In 1967 it was transferred to the FRA. Then it was purchased by the State Government in 1985. It was never really eligible to participate in Railpax.

 

[Brian Battuello]

For an excellent photo book and history of the orphan D&RGW "Zephyr", see "Never on Wednesday", well worth picking up a used copy on Amazon:

https://www.amazon.com/Never-Wednesday-Decade-Grande-Zephyr/dp/0937658006
Amusingly, the Amazon description of the book refers to the railroad as the "Denver & Rio Grande Southern", which is incorrect but accidentally links the Zephyr to the Crescent.

The book was published in 1980, 9 years after the creation of the Rio Grande Zephyr, and 3 years before the D&RGW gave up and the Amtrak CZ was more or less restored. Even in its last few pages, there is no indication that the RG Zephyr wouldn't struggle along indefinitely.

 

[railiner]

D&RGW was the third RR that did not join Amtrak. The reason was not that of the CRI&P (couldn't afford it) or the Southern (which as I recall had its doubts as well as resources to continue passenger service), but I forget D&RGW's reason or at least the one I did read at the time (perhaps in Trains magazine or the Passenger Train Journal).

Rio Grande CEO William Holtman was afraid of letting Amtrak having “carte blanche” to run much more trains over his road than the 3 weekly RGZ’s…afraid it would interfere with their “Fast, Frequent, Freight” train operations…

 

[Matthew H Fish]

One question about a rail company bringing back passenger trains is---what that even means in 2024, when companies both form alliances and spin off subsidiaries. If Union Pacific did have passenger trains, it probably wouldn't call them "Union Pacific", it would probably brand them and manage them as a separate company. It would also be a company that sold tickets that would be cross-ticketed with other means of transportation, including Amtrak. And a company that presumably would be leasing Amtrak stations (or stations that Amtrak also uses, since many of them are owned by other entities). Things like food service, cleaning, and customer support would be outsourced---and in many cases, probably to Amtrak's same contractors.
So the question isn't just whether it can be done---but what it would even mean.

 

[Bonser]

@jimdex is correct. There's no mandate. When Amtrak was created, two railroads OPTED to retain their passenger service for awhile: Southern Railway's Crescent, and D&RGW's Rio Grande Zephyr.

Passenger service is very labor intensive and runs liability risks, which is why the freight operators aren't clamoring to start up passenger service.

I know that RR's opted into Amtrak and not all did. My question was could they reverse that decision?

 

[railiner]

Some railroads that did not have to join the Amtrak initial system, due to the fact that they got rid of their last passenger trains prior to Amtrak, nevertheless later did carry some Amtrak trains by contract. One example was when they rerouted a portion of the Eagle's predecessor over the former MKT ("Katy") from Temple to Taylor, TX The Katy was not an Amtrak member. Their were a few similar examples in New England, and elsewhere.

I know that RR's opted into Amtrak and not all did. My question was could they reverse that decision?

The ones that chose not to, were obligated to run their existing trains for a few more years, before they could reapply for membership. And then that was extended.

 

[chadamfleetrailfan]

If it counts, Union Pacific has Metra passenger trains running on their tracks in Chicago that leave from Ogilvie.

 

[Metra Electric Rider]

If it counts, Union Pacific has Metra passenger trains running on their tracks in Chicago that leave from Ogilvie.

See Mike from Crete's post:

Union Pacific has absolutely no interest in running passenger trains.
Right now, they're in the process of turning over their Chicago commuter trains entirely over to Metra. Unlike BNSF, they have no other contracts to run commuter trains anywhere, they sure wouldn't want to get back into the long distance service they fought so hard to get rid of.

 

[Metra Electric Rider]

The question of what the contractual obligation of the RR's is to starting their own passenger service (Amtrak joiners that is) is, irrespective of whether they will or want to, a good question. I don't think we've gotten a concrete answer - if we did I missed it.

 

[railiner]

The question of what the contractual obligation of the RR's is to starting their own passenger service (Amtrak joiners that is) is, irrespective of whether they will or want to, a good question. I don't think we've gotten a concrete answer - if we did I missed it.

It is somewhat of a moot question, since I think we can pretty much agree that none of the original "member" roads would ever want to, but whether they "can" or not, may have changed through the years, as other aspects of the original agreement's have. There may have been a clause in the original agreement, that would make Amtrak the exclusive provider of intercity, non commuter passenger trains on member roads, but that may have disappeared from later revision's in the Amtrak legislation...not sure.
And what about the original Auto-Train Corporation? They started up on Amtrak member roads (SCL and RF&P) after Amtrak began. Although they would only accept passenger's with automobiles, so perhaps an exception for that?

 

[alanh]

From the original Act:

(c) No railroad or any other person may, without the consent of the Corporation, conduct intercity rail passenger service over any route over which the Corporation is performing scheduled intercity rail passenger service pursuant to a contract under this section.

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

 

[jis]

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.

 

[Willbridge]

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.

The requirement to permit private operations seems to have been a stock item for lawmakers who thought they were following Margaret Thatcher's path. In Colorado legislation that in effect mandated privatization of part of the Regional Transportation District's service the same type of open market clause was included. Small, innovative, nimble companies would provide better service than the huge public agency and would live by the free market -- or die by it. It was that last part that bothered potential investors.

A third of a century later, no one has taken up that opportunity. Bidders, however, have been eager to run parts of the public system as contractors with incomes guaranteed.

 

[CraigInNC]

The bottom line is that the potential customer base to carry multiple competitors for passenger rail travel is too small now for it to make any sense beyond Amtrak. The fact remains that, outside of the NEC, almost all people travel by rail because they WANT to rather than they have to. I am sure there is a percentage of passengers whose geographic circumstances are such that rail travel is practical on a need level especially where airline service is sporadic or non-existent. Here in North Carolina where I am most of the time the intra-state service does do a lot of convenience and need-based business. The trains that run from Raleigh to Charlotte are generally well-populated and patronized by people who are indeed using them because it is the best alternative. With all that being said just the volume of traffic on the roads and through the airports is exponentially larger than anything on the rails.

The freight lines have their hands full already with commercial traffic. PAX traffic would be almost an inconsequential percentage of revenue at this point without significant profit. In addition, as much as we may bemoan some things about Amtrak I for one prefer a consolidated approach to rail travel as consistency of the logistics is a factor for me.

 

[FrankL]

I don't think so. Freight Railroads seem to be more interested in cutting corners and UP is no exception.

 

[cirdan]

But Brightline is not operating under Amtrak, nor are dozens of commuter rail lines across the US. So the government definitely allows other operators.

The difference is that these non Amtrak operations either involve the train company owning the tracks directly, or having some mutual agreement with the railroads who own them.

What sets Amtrak apart is that the host railroads have to accept Amtrak under terms that the law sets out.

Amtrak thus does not have a monopoly on running trains but has a monopoly in exercising certain rights against railroad companies who might otherwise be non cooperative.

 

[cirdan]

Wouldn’t it be interesting if BOTH of these were true:
A. Demand for 100+ mph intermodal develops, AND…
B. The only way to run that fast remains with passenger trains.

It would be fascinating to see how the class 1 RRs would react if, for example, Brightline West were to develop a way to add containers to their trains. That may not be the best example but you probably get my point. Would UP want to get in the game if there actually were profit in passengers — roundabout though it may be.

There have been attempts to do this, for example France had a postal TGV service for many years until decreasing letter volumes put it out of service.

There have also been proposals to carry air-freight containers on high-speed trains. There is no technical reason this can't work. But I guess economically it's difficult to make it pay. Otherwise I am sure somebody would have done it by now.

One of the problems is that air freight has become increasingly affordable over the years. Furthermore it represents a worldwide distribution system whereas trains would always be specific to certain routes. You would furthermore be competing in a sector that is at the same time too price sensitive to use air freight but also too high value to use normal intermodal trains. I think that sector is probably fairly constrained.

 

[crescent-zephyr]

They can but it seems very unlikely they would want to. I mean if they wanted to they could run daily trips from Denver to Cheyenne with the Big Boy and 844! Probably wouldn't lose money, but I'm not sure if that's a business they want to get into.

 

[homersimpson101]

They can but it seems very unlikely they would want to. I mean if they wanted to they could run daily trips from Denver to Cheyenne with the Big Boy and 844! Probably wouldn't lose money, but I'm not sure if that's a business they want to get into.

That's a great idea! Is there a reason why they won't offer frequent Big Boy excursion rides?

 

[MikefromCrete]

That's a great idea! Is there a reason why they won't offer frequent Big Boy excursion rides?

UP has offered some public rides on Big Boy runs in the past few years, but the prices have been astronomical.

 

[railiner]

UP has offered some public rides on Big Boy runs in the past few years, but the prices have been astronomical.

Running that rolling historical icon is rather expensive, and maintaining it for frequent service, when parts have to be custom made, and there isn’t a large pool of qualified labor to run and maintain it, makes it too difficult.

I doubt running it “daily” in the market mentioned would be profitable. It is better left as it is… a fantastic tool for good publicity and public relations for the railroad with occasional use.

It’s use depends a lot on the whims of whoever is the current CEO…

 

[crescent-zephyr]

Running that rolling historical icon is rather expensive, and maintaining it for frequent service, when parts have to be custom made, and there isn’t a large pool of qualified labor to run and maintain it, makes it too difficult.

I doubt running it “daily” in the market mentioned would be profitable. It is better left as it is… a fantastic tool for good publicity and public relations for the railroad with occasional use.

It’s use depends a lot on the whims of whoever is the current CEO…

I was kinda joking but regular excursions out of Denver would most likely be profitable. It's way easier to run it back and forth from her home base rather than month-long excursions around the system.

 

[west point]

UP uses a lot of "volunteer persons " and support equipment that is costly

 

[lrh442]

UP's revenue in 2022 was $24.8 Billion. In the same year, total revenue for the Coast Starlight (which is 84% on UPRR tracks) was $43M. UP's "share" of that revenue based on mileage would have been $36M. $36M is equivalent to 0.15% of UP's total revenue. It's barely even a rounding error. Even if a freight could eke out a small profit running passenger trains (and history has proven that they usually cannot), the size of the market opportunity is miniscule. It would be tantamount to corporate malpractice to take on the capex, liability, logistics, and general headaches to try to re-enter the passenger business.