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Amtrak, which is officially called The National Railroad Passenger Corporation, is a passenger railroad provider that runs short-distance under miles and long-distance trains between more than destinations in 46 states and in three Canadian provinces. It operates more than trains daily over 21, miles of track.
Amtrak only owns about miles of this track. Amtrak was founded in as a state-owned enterprise when the federal government stepped in to save an American rail industry that had been pushed to the brink of collapse by a host of macroeconomic forces.
By the s, the proliferation of air travel and highways increased competition in the civilian transportation industry to unsustainable levels for rail companies.
This, combined with rising labor costs and outdated regulation that deterred private expansion resulted in the U. The Nixon administration intervened and Amtrak was the result.
Amtrak receives considerable subsidies from both a state and federal governments, but is managed as a for-profit company. This is not unusual.
No country in the world operates a passenger rail system without public support. The train company has never been profitable since its founding nearly fifty years ago.
In , Amtrak customer took Amtrak also makes money by leveraging its infrastructural assets. Six of its 10 busiest stations are along the NEC. Relative to the NEC, all of Amtrak's other lines are small potatoes. Amtrak receives funding from 20 state agencies and 17 states to support its short-distance lines all except the NEC. In its annual report, however, the company does not consider these subsidies revenue. The amount of money Amtrak received from the federal government between and Amtrak owns miles of NEC track as well as station structures, platforms and parking facilities near some of the stations it serves.
Despite its heavy reliance on state subsidies and inability to turn a profit, Amtrak is growing, and it has big plans for the future. In the face of the changing economy and climate, Americans are increasingly eschewing cars and airplanes from more efficient and environmentally friendly modes of transportation.
In , Amtrak announced plans to build a new fleet of 28 Acelas by The top speed of Amtrak's Acela trains, the fastest trains in the western hemisphere. Many of the soon-to-be-replaced trains have over 25 years of service. There have been eight serious crashes or derailments in the past five years alone. The PTC is a communications network that combines GPS, radio signals, data centers and dispatchers to closely monitor the status of every Amtrak train, all the time. It is one of the largest plants of its kind on the continent, and also one of the most sustainable, using a 2.
Siemens Mobility designs and manufactures across the entire spectrum of rolling stock including passenger trains, light rail and streetcars, locomotives, and passenger coaches in Sacramento. Gavin Newsom. Alex Padilla. Ami Bera. Doris Matsui. With this announcement, their innovation will bring state-of-the-art and environmentally friendly fleet improvements to travelers across the nation. John Garamendi. These energy-efficient locomotives will be replacing aging trains throughout the country, ensuring reliable Amtrak services, and reducing carbon emissions.
Passenger rail makes sense in the Northeast corridor between Boston and Washington, D. Other routes may also make sense within a lower-cost privatized system. A privatized Amtrak could close the most uneconomic routes and shift investment and maintenance dollars to the core routes to improve service quality.
Reforms abroad show that privatizing passenger rail works. In his book, Vranich counted dozens of nations that had either partly or fully privatized their passenger rail systems. In Britain, state-owned British Rail was consuming large subsidies and experiencing a declining market share in transportation. In the government split up the company and privatized the track infrastructure separately from passenger service operating companies.
But ending vertical integration has created some problems, and track infrastructure has since been renationalized. However, British passenger services have thrived since privatization. Rail ridership has more than doubled in the past two decades, from million passenger trips to 1. Despite the increase in passengers, the on-time performance of British passenger rail is quite high and surveys find solid levels of customer satisfaction.
Rail privatization in Britain brought entrepreneurial innovation to the industry. Vranich noted that "private operators have demonstrated more initiative, imagination, and visionary planning than state-run British Rail did in its prime or Amtrak does today. Japanese rail privatization was also a success. In the s, Japanese National Railways JNR was stagnating as a result of bloated labor costs, labor strife, and political manipulation. The government-owned JNR was "conservative, indolent, and fearful of change.
The JNR companies reformed rigid union rules and slashed workforces by roughly one-third following the reforms. The study concluded, "The Japanese approach to rail restructuring has succeeded in many ways, by improving productivity, cutting operating deficits, decreasing fares, and providing better services. The privatized Japanese rail companies still receive subsidies, but they are more efficient than before and provide better service.
Vranich called the results of JNR's privatization "stunning. So while subsidies should be ultimately eliminated, the first job in the United States is to fix the rail system's institutional structure by privatization. A Canadian example also illustrates the power of privatization. In , the government-run passenger rail company, Via Rail, was losing money and canceling services.
Fortunately, an entrepreneur stepped in to run the routes through the Rocky Mountains. Today, the Rocky Mountaineer company operates four hugely successful routes in western Canada. Travel writers and international tourist organizations laud the services. The United States has its own positive experience with rail privatization—freight rail privatization. When the Penn Central Railroad collapsed in , it was the largest business failure in American history to that date. Other railroads followed it into bankruptcy.
Congress created Conrail in the mids to replace the failed private railroads. Deregulation allowed Conrail to become profitable, and it was privatized in Since then, U.
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