Amtrak has eye on cargo

Rail service needs income to break even

Amtrak, the nation’s passenger rail service, is delivering magazines, fresh cranberries and even tulip bulbs from Skagit County to reduce its reliance on the federal dollar.
That, along with passengers’ tickets, is where the money is, and the rail carrier needs that money to become self-sufficient by 2002, a deadline imposed by Congress. Otherwise, the future of passenger trains in the Pacific Northwest and elsewhere in the country becomes uncertain.

Members of the Amtrak Reform Council meeting in Seattle this week made it clear to executives of the passenger rail service that more could be done to build its express parcel business.

“Amtrak must have an aggressive approach,” said Gil Carmichael, chairman of the council and a former head of the Federal Railroad Administration during the Bush administration. “And the freight railroads don’t mind,” he added.

The council was told that talks are under way with Federal Express. Amtrak already carries some United Parcel Service packages.

About 80 percent of Amtrak cargo is U.S. mail.

Long-distance Amtrak trains, such as the Portland-Seattle-Chicago Empire Builder, have been big money losers and adding several baggage cars loaded with time-sensitive parcels could take these streamliners out of the red, Carmichael said.

Ed Ellis, Amtrak’s vice president for mail and express services, said the $100 million revenue the line expects from shipping parcels and goods this year should increase to $215 million by 2002, helping the system break even.

Under Congress’ current reauthorization bill for Amtrak, federal money for operations will cease at the end of 2002, leaving the public corporation to fend for itself.

At the same time, the 11-member Amtrak Reform Council created in 1997 is monitoring the carrier’s progress toward self-sufficiency and is making recommendations.

Should it appear that Amtrak will fail to break even by the end of 2002, the council is expected to recommend restructuring the country’s rail passenger service.

A local member of the council is Bruce Chapman, president of the Discovery Institute, a think tank that is looking at public and private ways to improve transportation linking British Columbia, Washington and Oregon.

Another member is Jolene Molitoris, head of the Federal Railroad Administration, who said in Seattle Tuesday that while Amtrak may eventually become self-sufficient, “I wish there was a little more time … I’ve heard people say 2003” is a mroe realistic deadline.

A U.S. Department of Transportation inspector general’s report on Amtrak progress, issued in July, shows revenue and ridership figures are growing but “operating and cash losses have been consistently high and will remain so in 1999 and 2000.”

Amtrak is banking on a new high-speed service in the Northeast aboard 20 new “Acela” trains to generate more passenger revenue and compete more favorably with shuttle airlines between New York and Washington, D.C.

Today, a second passenger train is being added in the popular corridor between Seattle and Bellingham with money from the state of Washington. The southbound Cascades leaves Bellingham at 10:15 a.m., arriving in Seattle’s King Street Station at 12:45 p.m.

A northbound train departs Seattle at 5:30 p.m., getting into Bellingham at 8 p.m.

The state is contributing $24 million during the current biennium toward the operation of Amtrak trains operating between Oregon and British Columbia.

“We’re not pinning our hopes on any one thing,” said Amtrak spokesman John Wolf in Washington, D.C., yesterday.

The movement of express cargo has become a bigger factor with Amtrak on the East Coast, where the Chicago-New York Lake Shore Unlimited can shave eight hours off the time of a competing freight railroad, Ellis said.

Truck trailers adapted for travel over tracks have enabled the shipment of refrigerated goods. “And if it is refrigerated we can get more money for it,” said Ellis.

“When you have trains covering the direct cost (of operations) we can add another one,” Ellis said. Amtrak’s Texas Eagle recently increased its run from three to four days a week between Chicago, San Antonio and Los Angeles as a result of an increase in revenue from express packages.

Ellis noted that in 1959, the last year the railroads reported a profit from passenger service, 46 percent of revenue from passenger trains came from mail and packages.

“If we were at the 46 percent level today,” added Ellis, “we’d have $1 billion in (annual) revenue, and Amtrak would be close to making money.”