INTERSTATE COMMERCE COMMISSION'S I ~F INTERSTATE COMMERCE COMMISSION'S 77, I~ • rS7 REPORT TO0 THETEE PRESIDENT AND THE CONGRESSCONGRESS. 1coo. - EFFECTIVENESS OF TETflE ACT MARCH 15,IS, 1978978 AMTRAKTRAK DEPARTMENT OF TRANSPORTATION AUG 8 1~/~ L1BR,I\RY MarchMarch 115,S, 19781978 ToTo thethe PresidentPresident ofof thethe UnitedUnited StatesStates TheThe PresidentPresident ofof thethe SenateSenate andand thethe SpeakerSpeaker ofof thethe HouseHouse ofof RepresentativesRepresentatives Gentlemen:Gentlemen: WeWe areare pleasedpleased toto submitsubmit ourour reportreport onon thethe effectivenesseffectiveness ofof thethe RailRail PassengerPassenger ServiceService Act ofof 19701970 (Public(Public LawLaw 91-518).91-518). ThisThis report isis sub­sub- mitted inin accordanceaccordance with SectionSection 308(c)308(c) ofof thethe Act asas amended.amended. Daniel O'Neal Chairman For sale by the Superintendent of Documents, U.S. Government Printing OfficeOmce Washington, D.C. 20402 Stock No.NO.026-000-01098-5 CODleDlsContents HIGHLIGHTS INTRODUCTIONINTRODUCTION 2 PART II Commission Activities 3 The Adequacy Regulations 3 1.1. Ex Parte No. 277 (Sub-No.1)(Sub-No. 1) 3 a.a. Amendments 3 b. Exemptions 3 2. Ex Parte No. 277 (Sub-No.2)(Sub-No. 2) 6 Compliance 6 1.1. Complaints 6 2. InspectionsInspections 7 3. Formal Proceedings toto Enforce Compliance 8 a.a. I.C.C.I.C.C. v. N.R.P.C., TRRA, et at.al. 8 b. U.S. andand I.C.C.I.C.C. v. N.R.P.C. 9 Access andand Compensation Proceedings 9 Discontinuance Proceedings 11 PART III1 Analysis of Amtrak 13 duringduring 19771977 ServiceService 13 1.1. New RoutesRoutes andand ServiceService 13 2.2. StationStation ImprovementsImprovements 14 3.3. ServiceService VariationsVariations 14 4.4. CurtailmentCurtailment ofof ServiceService 14 5.5. ProblemProblem AreasAreas 15 a.a. TemperatureTemperature controlcontrol 15 b.b. ReservationsReservations andand ticketingticketing 16 c.c. EmployeeEmployee attitudesattitudes 16 d.d. OvertimeOvertime performanceperformance 17 e.e. AvailabilityAvailability ofof passengerpassenger equipmentequipment 17 SpecialSpecial StudiesStudies 18 1.1. TrackTrack StandardsStandards 18 2.2. Incentive/PenaltyIncentiveIPenalty AgreementsAgreements 20 3.3. National TransportationTransportation PolicyPolicy StudyStudy CommissionCommission 21 4.4. AmtrakAmtrak ThroughThrough RouteRoute andand JointJoint FaresFares StudyStudy 21 PARTPART III111 FinancialFinancial AnalysisAnalysis 23 Finances-GeneralFinances-General 24 CashCash andand WorkingWorking CapitalCapital 24 1.1. ChangesChanges inin Amtrak'sAmtrak's FinancialFinancial PositionPosition 25 2.2. FederalFederal Funding:Funding: GrantsGrants andand LoansLoans 25 Long-TermLong-Term DebtDebt 26 SourcesSources ofof ExpensesExpenses 26 1.l. ServicesServices BilledBilled toto AmtrakA mtrak byby RailroadsRailroads 26 2.2. DiningDining andand BuffetBuffet ServiceService 28 3.3. PayrollPayroll CostsCosts 28 4.4. PaymentsPayments forfor PassengerPassenger InconvenienceInconvenience 30 5.5. NortheastNortheast CorridorCorridor 31 6.6. OperatingOperating ResultsResults byby RouteRoute 32 PART IVIV Economic Analysis 33 Traffic Performance, Equipment Utilization andand Revenue 3333 1.I. Ridership 33 2. Express, Mail, and Baggage Revenues 37 Fares and Cost of Service 39 1.I. Fares 40 2. Cost of Service 40 3. Federal Government Investment in Amtrak 41 Subsidies 441 1 Marketing 414 1 Promotion 414 1 Intermodal Servic.eService 42 Market Outlook 43 l.1. Traveler Use of Public Transportation 43 2. The Economy 43 3.3. EnergyEnergy ResourcesResources 43 4.4. IntermodalIntermodal CompetitionCompetition 44 AppendixAppendix 45 igbligbl During Fiscal 1977 Amtrak's net loss per passenger various roles it has been assigned under the Rail mile and per passenger carried (ridership performance Services Planning Act. During FY 1977, the criteria) continued their trend upward. This Commission reexamined its Basic Adequacy of Service undoubtedly prompted the determination by Congress Regulations to determine whether sufficient attention to re-evaluate Amtrak's operations systemwide. But it is being paid to the needs of handicapped travelers. To is also noteworthy that during fiscal 1977 Amtrak avoid unnecessarily burdening the participants, and to carried more passengers than it has at any time in its 6­6- insure consistency in the resulting rules, the 1/2112 year history, including the energy crisis inflated Commission's effort will be coordinated with a years of 1973 and 1974. proceeding about to be initiated by the Department of It is equally significant that these gains were by no Transportation. The Commission increased its efforts means uniform systemwide. As discussed in Part IV, to mediate passenger complaints by adding a new regardless of which performance criterion is utilized, position in the Passenger Service Branch to deal short distance routes substantially out-performed long exclusively with complaints and other matters of distance routes. Indeed, ridership and utilization of consumer interest. In addition, the Commission equipment increased overall, despite their decrease continued its inspection efforts in an attempt to on virtually all long distance routes. In fact, as eliminate conditions which produce passenger I discussed in Part IV of this report, very few riders complaints. 1 travel the entire length of a long-distance trip. Most AlsoA Iso noteworthy is the fact that a number of major patronage over long-distance routes consists of compensation proceedings were concluded by the I "segment riders", i.e., those riders who travel between Commission with administrative finality during the intermediate points on long-distance routes. fiscal year just ended. AlthoughA lthough three of these Results by individual route may vary substantially, in decisions are pending in Court at year's end, I large measure due to performance variables discussed substantial progress has been made toward determining I in Part II.11. But it is clear by now that a relatively the compensation which railroads should be paid for 1 consistent pattern of performance in the short vs. long the use of their facilities by Amtrak. 1 distance routes is emerging. Unless more emphasis is focused on trip segments of long distance routes, continued service over some of these routes may be difficult to justify on purely economic grounds. 1 In analyzing the precipitous increase in Amtrak's net losses over thet he past several years, it is necessary to consider that during these years AAmtrakmtrak has taken over administrative and maintenance responsibilities which were originally performed by the participating railroads under contract with Amtrak. The most significant acquisition was, of course, the purchase of the Northeast Corridor in FY 1976, together with appurtenant rail properties and maintenance facilities. As discussed in Part Ill,111, each of these moves has increased Amtrak's overhead expense to a point where the direct cost of providing actual passenger transportation during FY 1977 was reduced to a mere 31.4% of Amtrak's expenses. It is too early to predict whether these acquisitions and assumptions of support I functions will ultimately result in cost savings to Amtrak. It is clear, however, that substantial savings could be realized by bringing overhead expenses into more appropriate alignment with direct operating expenses, and that efforts must be made in that I direction. Finally, a number of noteworthy developments have occurred at the Commission with respect to the Int..odaction Clearly, the most significant event of thethe past inin actuality, aa system-notsystem-not merelymerely aa fewfew trunklinestrunklines fiscal year, and perhaps of the brief 6 1/2 years of with.with· occasional flair-outs connectingconnecting majormajor Amtrak's existence, was the announced intention of population nodes. As Congress hashas envisionedenvisioned itit Congress to re-evaluate the entire Amtrak system. This (Section 101), thethe systemsystem mustmust linklink togethertogether thethe announcement naturally implies reconsideration of the various regions, providing serviceservice betweenbetween thethe role of intercity rail·railpassengerpassenger service in the national crowded urban areas and inin other areasareas ofof thethe transportation system. These matters have long been of country, so thatthat thethe travelertraveler inin America, willwill inin factfact concern to the Commission. be able toto choose railrail when mostmost convenientconvenient toto hishis The Commission has been warning of the needs. Short of that, the entire Federal expenditureexpenditure disappearance of the intercity rail passenger train since could turn out toto be a waste. its 79th Annual Report in 1965. By 1968 the situation had become so critical that the Commission's 82nd In itsits 85th Annual Report thethe Commission warnedwarned thatthat Annual Report stated that: "Without immediate action while "This year marked thethe beginningbeginning ofof aa newnew eraera inin on the part of the Federal Government, significant intercity rail passenger service.service.... InIn thethe finalfinal segments of the country will soon face the loss of their analysis, however, continuation of a meaningful railrail lastlast remaining rail [passenger] service." (p. 11).II). passenger system depends upon thethe public's support,support, Subsequently the Commission participated fully in the from both a patronage and financialfinancial standpoint."standpoint." (p.(p. process which led to creation of the so-called "Basic 55).