And then, the Feds blinked - Garl B. Latham - myProgressiveRailroading Blogs - MyProgressiveRailroading

And then, the Feds blinked

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Garl B. Latham

Ruminations of a foaming professional.

And then, the Feds blinked

  • Comments 30


Passenger trains? So much for the Obama administration's "sense of urgency."

The U.S. Department of Transportation has not only solidified its reputation for ineptitude when dealing with railroad matters; they've also proven incapable of playing a decent game of poker!

On the one hand, we had the Washington elite. On the other, a group of sober-minded and responsible businessmen.

And the bureaucrats blinked first.

I must admit that Ray LaHood's crawfishing has been fairly comical to watch. I only wish he hadn't left the F.R.A.'s Joe Szabo to fade most of the heat. It was LaHood and his badly planned and executed "guidelines" for new-and-improved passenger service which caused the problems.

Oh, well. I suppose the vision of Obama Speed Rail went to their collective heads. After all, with such a wondrous plan, what else would our Class Is want to do but hop on board?!

Perhaps bring a healthy dose of reality to the proceedings?

All the U.S. D.O.T. really needed was the willingness to treat our industry with respect. That would have enabled them to acknowledge the Big Three issues (capacity, taxation and liability) and understand why it's necessary to include a pot full of cash with any negotiations. Unfortunately, they did NONE of those things! If I was a gold-plated Brass Hat, I'd be telling our government to go jump in a lake, too!

According to various sources, the F.R.A. is now "working with states and the railroads to come up with guidelines in the next six weeks that better balance the need for passengers to know they will reach destinations on time and the need for freight railroads to avoid congestion with passenger trains."

Referring to our existing railroad system as "world-class," Szabo said he believes "it needs to be improved and preserved.”

Refreshing? Yes. Honest? That's a good question. After all, "working with railroads" - which should have been a major part of the process all along - sounds eerily similar to the calls for reason LaHood once passed off as trivial, "nitty-gritty details."

So which is it?

At least for now, we'll have no more talk of the railroads "sidetracking" Obama’s "signature transportation project." Szabo, eating a forced plate of crow, admitted the proposed guidelines were "poorly worded, poorly vetted." The F.R.A.'s public statement specifically mentioned how Szabo "accepted personal responsibility" for his agency's "failure to seek stakeholder input."

F.R.A. spokesman Warren Flatau and Associate Administrator Karen Rae, still smarting from their boss' dressing down, are remaining a bit more defensive. Regarding the original guidelines, Flatau said, "This isn't something we pulled out of thin air."

Maybe they should ask a railroad executive what he thinks, first.

One such executive, speaking to Fred Frailey (and requesting anonymity), remained skeptical that anything has changed. "The proof will be in the pudding," he said. "Let's see if they listen to the railroads."

As the F.R.A. busies itself drafting new guidelines, Szabo remains upbeat. "There's no question the right balance can be achieved," he said.

Insofar as yesterday's work is concerned, Szabo confessed that inadequate dialogue between his agency and the other players caused the initial rift, allowing "for potentially extreme interpretations" of what the federal government was trying to achieve.

"It's important in any partnership that you properly respect your partners. We know with that initial guidance that we put out, we didn't do a good job of respecting our partners."

Respect. Partner. Nice sounding words.

Now, let's see if they really mean them - and listen.

 

 

  • Remember the old crossboards "Stop, Look and Listen?" Seems to me that would be good advice for Ray La Hood, especially the "listen."

  • The worst kept secret in Washington is the identity of the Class 1 CEO who was so furious at the June 7 meeting on HSR guidelines that he was walking out of the meeting.  Cooler heads prevailed and kept him in the room.  I have no doubt that the railroads will remind LaHood and especially Szabo of the 5th Amendment to the Constitution.  That's the one th t says if you take private property for a public purpose you have to pay fair value for it.  FRA is going tohave to get serious and produce guidelines that the railroads can accept or watch HSR die right then and there, which, with the funding that has been offered so far, might happen anyway.  I disagree with Garl only on the assumption that LaHood was involved.  He doesn't really know enough about transportation or policy development to have been a player.  The HSR guidelines fiasco is FRA's all by itself and that buck stops at Szabo's desk.  I sometimes think Szabo hasn't moved very far from his UTU official days when poking railroads in the eye with a sharp verbal stick was consdidered serving his members.  I'm not sure the right balance can be achieved.  There are myriad reasons for a train, freight or passenger, being late. Any system of guidelines that includes arbitrary definitions and penalties should be and will be rejected out of hand.

    By the way, Garl, the comment about America's world class rail system specifically referred to freight.  The US freight rail system is the envy of most of the world, moving more ton-miles of freight more economically and more safely than that of any other country with the exception of Canada.  For those who do not see Argus Rail Business report, I recently had a column that basically said "No money = no program."  That's a Washington truth.  When DOT and the Obama Administration come up with the real money that HSR will require, please let me know.  Meanwhile, I think I'll take a nap.

  • I apologize for sending the same comment three times.  I was having a problem with this blogsite and it appeared that my comment wasn't going through.  Obviously, it did.  Sorry.

  • Mr. Kaufman, you are a RAIL professional and writer deserving a re-read at any time...Even though the stuff I send in is a bit over the edge...It's is just my way of countering the insane yoke that Biggie-Petro-Auto has over the US & Canada.

  • RAILWAYIST, it isn't the "bit over the edge" that gets to me.  It's the fundamental thesis that you espouse and that I reject.  Over the edge appears to be a matter of style for you, and that's OK.  On the substance, you may object to the automobile dominance of transportation and the subsequent U.S. reliance on imported oil, much of it from shall we say are less-than-stable sources.  The point is we have become an auto-driven society.  All the raving and ranting in the world will not change that.  Economics, however, may.  At some point, non-petroleum fuel may be competitive with oil.  At some point, Americans may decide they really kind of like smaller vehicles and the space freed up in their garages.  Haranguing readers only bothers them.  It certainly won'd drive behavior change.  Libertarians and others object to government subsidies for electric-propulsion cars.  Just about every new technology - including railroads - has required government support until it reached critical mass and could stand on its own economic feet.  Remember the land grants?  They weren't granted because the feds "liked" railroads.  They were granted as a stimulus to get capitalist to invest in building railroads into a wilderness where they couldn't survive without the stimulus.  Sorry for the political rant, but the Internet is full of obstinately stupid people who are more concerned with peddling ideology than with solving problems.  Thank you, by the way, for the kind words.

  • Airwaves, Airlines, pipelines, and public ROW are among some of the pathways that serve both private industry AND public interest.  I see no reason that our rail ROW's should be treated any different.

    In many cases it makes more sense to share ROW, with both freight and passenger trains, with both sharing in the cost as equal partners.  It shouldn't be about who can negotiate the highest price, but one of national predictability about cost sharing considerations and reimbursement.

    Another practice that has to stop is giving the class 1's a bonus for passenger trains arriving on time (within about 10 minutes).  Current practice rewards schedule padding, making trains predictably slower, rather than reducing trip revenue in proportion to tardiness.

    The FRA didn't play this hand very well, but I don't think folding our cards or going 'all in' is a good play for the Obama Administration.  This should be about fairness to both the Class 1's and the public interest.  

    American want more and faster passenger trains.

    Class 1 share holders want more money.

    Somewhere in the middle lies a good deal for both.

    Mike Skehan, BOD, All Aboard WA

  • I worry whenever I see a plea for "fairness."  Fairness is in the eye and judgment of the beholder.  One person's "fair" easily can be another person's appropriation of property without adequate compensation.

    There is a fundamental difference between rail rights-of-way and the rights-of-way used by airlines, trucks, and barges/ships.  That is, all but trains are using public rights-of-way.  They share and they pay a portion of the expense of maintaining or operating the shared use system.  Rail rights-of-way are private property (and don't tell me about the land grants; the railroads paid 10X their value for them).  The 5th Amendment to the Constitution maintains that private property cannot be taken for public purposes without adequate compensation.

    Where freight and passenger share a railroad right-of-way, they are not equal partners.  The passenger service is a lessee of the freight railroad's property and capacity.  The current system of compensation that Amtrak pays does not fully compensate the owning railroad for the use of its property. It covers only avoidable cost, with no allowance for capital cost or numerous other costs.  It has nothing to do with who can negotiate a better deal.  The system was embedded in the federal legislation NRPSA that created Amtrak in 1971.

    There is a story that I verified is not apocraphyl about the railroad operating head who decreed that his dispatchers deliver Amtrak trains within the contractual time to earn the bonus.  The cost of achieving that in delayed freight, recrewing, and other operating expenses was considerably greater than the bonus earned.  Schedule padding, if it occurs, is Amtrak's problem, not that of the host railroad. It would appear that you are advocating abrogating contracts without compensation.

    You refer to the FRA not playing its hand well.  I may have missed something, but I am unaware that FRA plays any role in the contracting of passenger use of freight railroad property.  I see nothing in your comment, Mr. Skehan, that recognizes economics of railroading.  Of course American want more and faster passenger trains.  They don't know what it costs and there is considerable evidence that they would want much less passenger service if they had to pay its full cost themselves.  As it is, Amtrak subsidies amount to rounding error in the federal budget.  As a matter of fact, we really do not know what Americans want; they haven't been asked.  If you have evidence to the contrary, please provide it.  My bottom line is to point out that the people who run America's railroads have a fiduciary responsibility to the people who own the railroad - their stockholders.  That responsibility may conflict with the desires of those who ride subsidized passenger trains.  Remember, please, Mr. Skehan, that people always want a whole lot more of anything they don't have to pay for.

  • mSkehan -

    To make a point only, I am going to move a homeless person into your home and they can live in a room, and use your water, furniture, and appliances to take care of themselves.

    They are not going to pay for rent, food, or even the utilities.  

    This is only fair since you have something they need.  And it's in the public interest to reduce the plight of the homeless.

    Crummy analogy maybe but just trying to show that although the railroads always face NIMBY's...the railroads should play that card as well.

  • On the contrary, great analogy, Back.  A bit blunt, if not crude, but the hubris of those who would take and use other people's property while refusing to recognize the rights of the owner deserves blunt and crude.  I obviously was too mild in my response to the screed.

  • BTTF:

    Problem is, part your original agreement when building the house was to care for the homeless.

    At first, it wasn't such a big deal. They helped you with the housework and did odd jobs to offset expenses. You were even admired by most of the other residents in town for taking that responsibility upon yourself.

    Later on, as your own family grew and the cost of maintaining space for those in need continued to escalate, it became increasingly difficult to keep your end of the bargain.

    So...you asked the taxpayers for help, taking a gamble that the problem would eventually go away.

    It didn't.

    In fact, for various societal reasons, the problem is beginning to show signs of becoming a major issue.

    Therefore, part of the cost of keeping your house entails making some space available for the homeless. They're required to pay something for the privilege of living with you, too...just nowhere near enough to fully compensate for the costs you incur, much less as much as another renter might pay who wasn't entitled to gain benefits through the government's homeless programme.

    Now, you have homeless people using your front door, hanging their laundry out to dry along your fence row, and keeping their junker of an automobile parked in your own driveway.

    I see two options being presented: either do what little you're required to do in order to obey the law, hoping that the taxpayers will eventually decide to build a completely separate house for the homeless, or take ownership of the matter, adopting the homeless folks into your own family and giving them all the rights and responsibilities contingent with that honour.

    Personally, I'd vote for the latter - especially since the taxpayer's stipend would (presumably) be the same either way.

    Garl

  • I'll leave it to BacktotheFuture to defend and/or explain himself.  He seems quite capable of doing so and is usually articulate when doing it.

    I really must ask that we return to talking about trains, passenger and freight, and get away from tortured analogies about the homeless.  Sorry, Garl, but I simply could not follow your comment.  This message thread took a turn when M. Skehan of All Aboard WA posted a comment advocating the virtually unlimited use of freight railroad tracks by passenger trains and talked of being "fair."  

    Here's a bit of a history lesson:  The U.S. railroads, when regulated by the ICC, made some very serious and expensive efforts to save passenger service.  They bought large numbers of new train sets for the premium trains.  Rail passenger service, no matter how good, and much of it was not good, simply could not compete with the airplane for business travelers or the private automobile for leisure travelers.  The ICC ordered the railroads to continue operating trains that were running virtually empty in many cases.  When the Northeast railroads went into bankruptcy, the passenger service subsidy burden finally drew the attention of government policy makers and legislators.  They were afraid that Penn Central and others would be shut down by order of bankruptcy courts (passenger trains were draining the bankrupts' estates, which were the property of creditors by this point.)  This not only would finish passenger service, it also would finish commuter service, most of which was in that region of the country.  So the National Rail Passenger Service Act was passed, creating Amtrak.  Railroads "joined" Amtrak by paying in the equivalent of two years passenger losses (roughly about $400 million) in cash or equipment.  That got them "stock" in a worthless company that was no more equipped to be profitable than had the previous providers of passenger service.  Congress required that Amtrak pay rent that didn't begin to cover full cost of service, and even at that, it was incapable of operating profitably.  It has been that way for 39 years now.  During the Reagan and Bush presidencies, there were budget proposals to cut the Amtrak subsidy all the way to $0.  This never happened because voters told Congress they wanted trains.  Voters, of course, never had to figure out how they would be paid for.  Remember, folks, people always want a whole lot more of anything that's free than they do if they have to pay for it. The Amtrak subsidy amount is unknown to the average person who thinks he or she might want to take a train trip.  It's lovely in the Rockies.  Fall in New England is wnderful.  We've all heard the might be, could be, should be version.  If Mr. Skehan, who began this digression from Garl's original blog, had his way, I predict the best 5th Amendment "takings" law suit you've ever seen.  It probably would be big enough that any lawyer who got a piece of the action would ensure the undergraduate and law school education of several generations of progeny.  I don't know who Mr. Skehan is, but he has a cavalier disregard for other people's property rights.  Disclosure: I own a few shares of stock in several railroads.  I resent the attitude that someone else should be able to appropriate my property just because it would be "fair."  Respecting my property rights would be fair.  Taking them without adequate compensation would be confiscation.  Confiscation is not fair.

  • Larry,

    As always, your history lessons are appreciated.

    No quibbles - and but one comment:

    You said that Amtrak is "a worthless company...no more equipped to be profitable than...the previous providers of passenger service."

    I think the same thing might have been said of Conrail, nee ConRail, had its ultimate success not been assured through passage of the Staggers Act (et al).

    It certainly wasn't placing CR blue over PC black which did the trick. In the same sense, Amtrak reupholstering passenger rolling stock with Peter Max-inspired fabrics did nothing to address various substantive issues raised during its formative years.

    The saddest thing of all? Many of those same issues remain unresolved , 39 1/2 years later.

    Garl

    P.S. Insofar as tomorrow's passenger train services are concerned, I still believe fair-minded ("win-win") negotiations are possible.

    GBL

  • GL>"I think the same thing might have been said of Conrail, nee ConRail, had its ultimate success not been assured through passage of the Staggers Act (et al)."

    A few major differences, I think.  First, the amount of deferred maintenance on rolling stock was pretty different, and the replacement /repair cost ratio was, too.  Inflation adjusted, freight cars have gotten cheaper over time, especially when allowance is given for improved capacity or performance.  The exact opposite seems to be true of passenger cars, and attracting passengers made more than re-upholstery needed.

    Next, although as LK correctly observes, the requirement for shipping tough, less time sensitive freight (which is what rail excelled at then) was way down in New England, there was still enough widespread need that there was equally widespread interest in forcing a solution,  Other businesses and workers wanted to see it happen.  Legislators knew something had to be done.  You had a coalition of people pre-mobilized to fix it.  The same was true on a lesser scale for commuter rail.  Long haul passengers?  In much of the country, not so much.

  • Garl (and anyone else reading this):  The Conrail - Amtrak analogy doesn't work.  First, Amtrak is completely dependent on the federal government for the subsidy tht keeps it alive.  The subsidy does only that; it certainly doesn't provide for good service.  One frequency a day is not a ticket for commercial success.  Nor does a "national route system" that has huge gaps in service.  Try to get from Denver to Atlanta or Florida?  You will grow a beard by the time you ride the Zephyr to Chicago, then transfer. No, Amtrak never was intended to prosper.

    Conrail on the other hand benefited greatly from Congress appropriating the necessary funds to effectively reduce its assets to match the business available.  Following Staggers, Conrail was fortunate that its CEO was L. Stanley Crane, who knew something about running a successful freight railroad and imposed his ways on Conrail. Conrail was losing $1 million a day in 1976 when it was activated.  It was under Crane that it became profitable.

    Conrail also had the benefit of having been planned by the aggressive young planners at USRA and was able to shed thousands of miles of light density line and thousands of employees for whom it simply didn't have enough work to need them.  Amtrak is almost the exact opposite.

  • I can't resist the opportunity to chime in with my own views on this somewhat heated debate.  It seems like we are always looking at the all or nothing extremes when discussing passenger trains on freight corridors.  "All" referring to relatively frequent passenger trains and "nothing" referring to one or fewer.  

    I appreciate and concur with GL's hope that there should be some middle ground.  Increasing the number of passenger trains on certain corridors should create win-win situations for both the gov't and the private owner.  Identifying corridors which currently operate at below-capacity should highlight investment and return opportunities.  The freight railroad should be in a position to leverage some of the gov't funding which has been tabled for "improving" passenger rail service.  I'll reiterate my position related to maintenance expenses assuming the added passenger service does not significantly reduce maintenance windows.  The incremental cost associated with running a modestly few passenger trains on a typical Class 1 railroad is extremely low.  Some of our readers may not know that the FRA typically allows passenger trains to run faster than freight trains on the same Class of track.  Typical impediments to increasing passenger speeds on freight lines are related to signal system inadequacies, older technology turnouts and track condition.  The freight systems would be wise to consider additional passenger train requests provided the government is willing to fund the required upgrades.  Infrastructure improvements can only improve average freight train velocities.  Higher average velocities increase available capacity.  Again, we're talking about only very modest increases to the number of passenger trains running on corridors with excess capacity.

    It's true that accommodating a few more passenger trains on existing lines may require greater train scheduling efforts on behalf of the railroad, but this should also lead to an increase in line capacity.  I would expect the transfer payments between the passenger train operator to be proportional to the number of trains and also based on on-time performance.  Improving and upgrading the infrastructure should result in greater payments to the owner.

    Those are my thoughts.