Amtrak: A cost-effectiveness analysis

AMTRAK: A COST-EFFECTIVENESS

ANALYSISt

FRANCIS P. hfULVEY

Departmentof Economics, NortheasternUniversity, Boston, MA 02115,U.S.A. (Received2 March 1979) Abstract-Intercity rail passenger train services in the United States are provided over a basic national route system by a Congressionallycreated quasi-publiccorporationcalled Amtrak. AlthoughAmtrakhas succeeded in arrestingthe long-termdecline in passengertrain ridership,operatingdeficits have grown substantiallyin recent years, requiringincreasedpublic subsidy. The justificationfor on-goingpublic supportrests on the belief that rail passenger transportcontributes to fulfilling national transportpolicy objectives in the areas of safety, energy conservation,congestionalleviationand environmentalprotection.This paperexamines the Amtrakimpactin each of these goal areas and evaluates the organization’slongerterm potential.The evidence does not indicatethat rail passenger train services contributemeaningfullyto any of the national policy concerns outside the Northeast Corridor.Continuedsubsidizationof the existing system appearsunjust&d, and a majorrouterestructuringseems necessary By the late 1960s U.S. railroads were incurring sizable deficits on their passenger train operations, even if only solely related costs were charged to those services and overhead and capital expenses are ignored. At the same time, freight profit margins declined as competition from other modes increased. The industry’s ability to attract capital, especially for right-of-way improvements, was impaired. As the rail plant deteriorated, passenger service levels declined and trathc shifted to the air and highway modes. By the end of the 1960s the rail share of the intercity passenger travel market was insignificant outside of the Northeast Corridor, where federally sponsored Metroliner service kept rail competitive in this densely populated area. It was clear that if the privately owned and primarily freight-handling railroads were required to continue carrying passengers, the financial integrity of the industry would, in time, be seriously compromised. But many believed that rail passenger operations contribute to the national welfare and help achieve certain national transportation goals and objectives. Congress agreed that abandonment of the national network of intercity passenger trains was not in the public interest, and it responded by creating a quasi-public corporation, popularly caged Amtrak. The National Railroad Passenger Service Act of 1970 outlined the Congressional intent in, creating Amtrak. Intercity rail passenger service was deemed necessary to provide “a balanced transportation system”, to serve the public convenience and necessity by offering fast and comfortable train service, to help end highway and airport congestion, and to offer travelers maximum freedom of modal choice for intercity travel. But Congress also specified that Amtrak was not a government agency, and was a “for profit” corporation. The legislation did not

indicate that Amtrak would be entitled to on-going subsidization. The Corporation’s public character was manifested in the composition of its Board of Directors (the majority appointed by the President) and in its need to rely on government grants and federal loan guarantees. Although it is always difficult to discern Congressional intent, the Congress appears to have commissioned an experiment designed to ascertain the legitimate role of intercity passenger service in the modern transportation environment. The Act establishes Amtrak as a monopoly in the markets it serves, but the Corporation has little monopoly power. The usual bases for establishing a legal monopoly are absent‘ in the case of intercity rail passenger services. Rather, the grant of monopoly position traces to Amtrak’s essentially experimental nature. It was for this reason, also, that the Corporation was rendered relatively free from detailed regulation. Although the Congress specified several national transportation goals, no concrete objectives or standards were detailed to enable an observer to measure Amtrak’s progress. No goal priorities were established, nor were the stated Congressional purposes necessarily consistant. The goal that the Corporation eventually be profitable was seemingly inconsistent with the goal that it fuhills social goals such as congestion alleviation through maximixation of ridership. Amtrak did not take over the entire existing rail passenger train system, but instead, operated over a basic route network designated by the Secretary of Transportation. The Secretary set forth the criteria to be used in deciding which routes and endpoint cities would be included in the basic system. Among these criteria were the anticipated demand, cost of operations, projected profitability and expected capital requirements (Volpe, 1971). The Department of Transportation emphasixed that Amtrak be operated in an economitThis paper is based on a study undertakenby the authorfor cally efficient manner. Several route criteria laid down by the National TransportationPolicy Study Commission.A more completeversioncan be found in that organ&ion’s Amrr& An the Secretary speci6caUy precluded the Corporation from undertaking services that would generate large Experimmfin Rail Scmice, 1978. 329

330

F. P.

deficits. No mention was made of social objectives. Amtrak, because it owed its primary allegiance to the Congress, has tended to pursue courses of action designed to maximize ridership. Subsequent legislation attempted to clarify Congressional intent, provide more realistic funding, and narrow the authority of non-Congressional agencies over the activities of the Corporation. An examination of the amendments to the original legislation reveals a slow, but persistent shift toward increased emphasis on the “social” function of intercity rail passenger service. Over time the Congress relegated the goals of economic efficiency and financial viability to secondary status, and removed the “for profit” clause entirely in 1978. The Congress consistantly re-iterated the theme that Amtrak should, accelerate its efforts to revitalize intercity passenger train services. Over the years, Congress has required the Corporation to expand the route network by adding “experimental” routes and international services, and has repeatedly amended Section 403(b) of the Act to facilitate cooperation between Amtrak and individual states in establishing and operating intrastate passenger trains. Thus, the experimental nature of the Corporation had begun to disappear and Amtrak’s permanency seemed more certain. With the possible exception of the initial allocations, it is diicult to make the case that Congress has been niggardly toward Amtrak. Monies have been appropriated to allow Amtrak to rebuild or replace outdated, dilapidated stations and terminals; acquire repair and maintenance shops and commissary facilities; refurbish and purchase new rolling stock and locomotives; and develop and introduce a computerized reservation and information system. In the Northeast Corridor (NEC) Amtrak has been awarded complete control over rights-of-way, and $1.5 billion has been dedicated to upgrade the track to permit high-speed train services. Outside the NEC Amtrak must use the tracks of the operating railroads, but the railroads are legally bound to maintain the track at standards no worse than those prevailing in May 1971. At present Amtrak incurs operating losses in excess of $500 million annually, and there is little likelihood of this deficit abating. In fact, in its most recent five-year plan, Amtrak estimates that inflation alone will increase the Fy 1982 deficit to $750 million, if only current services are maintained (National Railroad Passenger Corporation, 1977). In the past, Amtrak has been overly optimistic in its forecasts of ridership growth and cost control, and, therefore, its projected losses are probably conservative. Intercity passenger rail has become the most heavily subsidized of all transport modes when measured on a per passenger-mile basis. The subsidy is large enough to purchase airline tickets for all Amtrak riders. Amtrak revenues fail to cover out-of-pocket costs, much less contribute to overhead, administration, and capital costs. The underlying rationale for any subsidy is that output levels would be below the socially desirable optimum in its absence. If users had to bear the full cost of the resources consumed, they would not demand enough of the service, or conversely, their demand for substitute

MULVEY

goods would be excessive, at least from society’s perspective. The latter argument is usually advanced to justify the Amtrak subsidy. Therefore, the public funds allocated to Amtrak should be weighed against its performance in accomplishing the tasks set for it by the Congress. Some benefits are difficult to quantify. Positive externalities or public goods aspects emanating from a service do not have a market price. In the absence of a common numeraire to contrast costs and benefits, a cost-effectiveness approach provides a second-best evaluative mechanism. The objective to be attained should be secured at the minimum cost. Therefore, the ultimate issue is whether Amtrak is cost-effective. Amtrak must be evaluated in light of the Congressional purposes revealed in the progress of the legislation. In a sense, the legislature has weighted the possible goals and decided that social ones are more important than economic ones. We can take this implicit hierarchy as given, and examine Amtrak’s cost-effectiveness. In addition, many who support Amtrak argue that while net benefits from current services might not be major, rail’s contribution will grow as the restoration proceeds and as energy and environmental problems worsen. Thus, Amtrak’s cost-effectiveness in contributing to the achievement of national goals in the areas of safety, environmental protection, energy conservation, and congestion alleviation is examined for both current and projected service levels. -5

l

CURRENT CoNTRmuTIoN

Amtrak provides three distinct types of train service. It’ offers long-distance train service complete with sleeping, dining and lounge cars; conventional coach service on its short-distance routes; and electrified, highspeed service in the Northeast Corridor. Short-distance routes are those whose termini are less than 500 miles distant. Most long-distance routes are served only by a single daily frequency, and outside the Northeast, even short-distance routes are served by fewer than a half dozen daily departures. Only in the Boston-Washington megalopolitan corridor does frequent intercity train service exist. The analysis which follows will rely on this subdivision of services, while recognizing that other route defining characteristics do exist. It should be noted at the outset that the calculations which follow rest on a number of assumptions and estimates. The purpose here is not to achieve the most refined estimates possible for each impact, but rather to identify those areas where the net benefits from Amtrak service are large in relation to the subsidy. To judge Amtrak’s impact it is necessary to estimate how its patrons would have traveled if rail service were not available. The alternative chosen, of course, varies with trip distance. For any given trip, the choice will depend on modal availability, relative transport costs and other objective and subjective determinants of modal preference. To reassign current Amtrak riders to other modes, the responses to queries on alternative modes of travel garnered in on-board passenger surveys were used, Ideally, disaggregated analysis on a route-by-route basis employing route-specific parameters to forecast

Amtrak:a cost-effectivenessanalysis alternative modal patronage would be used, but in the absence of such detail, diversion results from survey data can provide a good first approximation, and for the purposes of this analysis, a suthcientiy accurate decomposition (Harris, 1972; Wisconsis State Dept. of Transportation, 1975).Based on data from several surveys, the alternative travel modes for short- and long-distance train travelers are shown in Table 1. However, because not ah those riding longdistance trains are making long-distance trips, and because some travelers on short-distance trains are making connections for long-distance trips, some adjustments are necessary. Based on an examination of Amtrak’s on-off data and a study of Amtrak connectivity (Anderson, 1973), it is assumed that one-half of all long-distance train riders are making short-distance trips and that 5% of all travelers on short-distance trains are, in fact, long-distance connecting train passengers. Load factors on the alternative modes are assumed unaffected by the reassignment. Safety

It is widely accepted that rail is the safest form of travel. However, data from recent years demonstrate that rail is not substantially safer than either bus or air travel. All common carriers have impressive safety records and, therefore, only diversion from private auto can be expected to produce an unambiguous improvement in transport safety. The fatality rate for Amtrak diverted auto traffic might differ from the overall national rate. Intercity travelers are more often driving over less familiar terrain and at higher speeds than those to which the driver is accustomed. Further, intercity auto trips typically have a higher occupancy rate than local or commutation travel. These considerations would positively affect Amtrak’s impact. On the other hand, most Amtrak routes parallel Interstate highways, which are markedly safer than other roads, and rail riders are often traveling alone. These influences are assumed to be offsetting, and the national rate was applied to Amtrakdiverted auto traffic. Fatalities involving bicycles and pedestrians are excluded as these are typically due to local travel. The adjusted rate is 1.4 fatalities per hundred million passenger-miles, and the calculated Amtrak impact from traffic diversion is 33 lives saved annually. Although it is always difficult to place a value on human life, many cost-benefit studies use the Federal Highway Administration’s estimate based on expected lifetime earnings, i.e. about $380,008 per fatality. Others feel that

331

ifloss of services to family and friends were included, the loss would be closer to $1 million. Therefore, Amtrak’s annual contribution in terms of lives saved is between $10 million and $33 million. In addition to reducing fatalities, there are real benefits from reducing non-fatal injuries. Based on the diversion estimates above and the National Safety Council’s estimate of the cost of motor vehicle accidents, Amtrak contributes an additional $18 million in social benefits (National Safety Council, 1975). Amtrak makes a positive contribution to travel safety, ‘but it is not clear that providing rail passenger services is a cost-effective approach. Approximately the same benefits could be achieved if auto travelers were diverted to the equally safe air and bus modes. Alternatively, funds devoted to Amtrak could be dedicated toward improving highway safety or the crash-worthiness of automobiles. These programs might produce a much higher return per dollar spent than that gained from supplying Amtrak services. Amtrak’s contribution is positive, but small in comparison to the size of the safety problem. Its cost-effectiveness in this area is unclear. Energy It is widely believed that rail is a relatively efficient consumer of scarce energy resources. This intuitive feeling was supported by early studies of comparative modal energy intensiveness (Hirst, 1973). However, there are several factors which require a re-evaluation of relative modal performances. First, rail is usually a more circuitous form of travel than either air or auto, especially for Long-distance trips. Even if we confine our analysis to train trips requiring no connections, rail is often between 20 and 58% longer than the straight-line distance. In some cases it is more than twice as long (Boeing, 1975). Further, calculations of rail fuel efficiency were often made under idealized laboratory conditions. Yet if the theoretical and actual performances of Amtrak trains are compared, there is a considerable discrepancy. This is especially true for transcontinental trains. The differerence is largely due to the influence of grades (Mays et al., 1975; Schott and Leisher, 1975). As grades approach 2%, even rail freight trains lose their energy advantage over highway carriage (Morlok, 1976). Part of Amtrak’s failure to perform as efficiently as expected also traces to the age and condition of the locomotive fleet. As Amtrak replaces overaged power units, the system should become more energy efficient. The new

Table 1. Alternativemodes of transwrtation of intercityrail eassenaer train riders (per cent distribution) Mode

Long-Distance Train Riders

Short-Distance Train Riders

Air

48

15

BUS

30

11

Auto

Note:

22

74

100%

100%

These data were derived riders. Those travelers the trip in the absense

from several surveys of Amtrak who indicated they would not make of rail were excluded from the base.

F. P. MULVEY

332

3000 horsepower turbo-charged diesel locomotives can generate up to 360 seat-miles per gallon, although Amtrak intends to use them somewhat less intensively. Amtrak claims that the data in Table 2 are representative of relative modal energy efficiencies. Amtrak’s estimates, however, do not take into account either route circuity or the effect of grades, and they assume that all modes operate with the same load factor. While air and highway modes generally operate at load factors of 50% or better, this has not been true of short-distance intercity rail passenger operations. Thus, to calculate Amtrak’s impact on energy conservation efforts, the following assumptions were made: (1) the average bus seats 43, operates half full and .gets 5 mpg; (2) autos average ISmpg, carry 2 passengers on shortdistance trips and 2.5 on long-distance trips; (3) DC-&

dominate shortdistance air travel and 747s carry longdistance passengers. Both planes operate with 50% load factors. (4) Amtrak uses An&et cars in short-distance markets and conventional trains in long-distance ones. In the Northeast Corridor, Metroliner service is also offered. Metroliners and longdistance trains are assumed to be 50% full, while short-distance trains achieve 3WS load factors; (5) diversion factors are the same as for the safety impact estimates save that for Metroliner services 50% of riders come from air, 40% from auto and 10% from bus, reflecting the heavier concentration of business travelers on this premium corridor service; (6) to reflect route circuity and the effect of grades, the Amtrak energy performance estimate is reduced by 10% on short-distance markets, and 25% for long-distance trains. Table 3 provides a summary of the fuel savings from

Table 2. Energyefficienciesof the passengertransportmodes Mode

Seat-miles per gallon

Intercity Bus Short-Distance Long-Distance

215 Train Train

(6 Amfleet Coaches) (Conventional)

285 116

DC-8

40

Boeing - 747

60

Private Automobile

60

Source: National Railroad Passenger Corporation

Table 3. Energy savings attributableto Ambak services Type of Service

PassengerMiles (800)

and Diversion Metroliner Diverted from: Air Bus Auto

Short-distance Travelers on: Short-distance Long-distance

100

3,241,900

162,095 32,419 129,675

20 120 30

8.104.750

Net Savings

9,453,25a

97

1,127,273

44

356,678 237,782 1.783.368

20 120 30

Diverted from: Air Bus Auto

Fuel Consumed and SalEd (GaTlans,)

324,190

trains 1,150,545 trains

PaeeengerMiles/Gal.lon~

270,075 4.322.500

ii,a61,2aa 27,892,56a I 3. i7,833,900 i,9ai,517 MS+

Net Savings Long-distance Travelers on: Short-distance

trains

Long distance trains

60,561

97

624,340

1,227,273

44

27,892,568 28,516,9oa

643,914 321,957 321,957

30 120 38

21,463,800 2,682,975 8.472,553 32,619,328

Diverted from: Air Bus Auto

39,507,161

Net Savings Total Systemwide Savings

4,102,420

53,062,839

Amtrak: a cost-effectiveness analysis

tralhc diversion to intercity rail. The value of the net savings at final user prices for gasoline, diesel and aviation fuels is approximately $40 million. It should be noted that bus outperforms rail in every market. If tra5c diverted to Amtrak has been carried by intercity buses, an additional 38.3 million gallons of fuel would have been saved. Amtrak’s contribution rests heavily an the assumption that bus ridership is not as seriously affected as air and auto travel. Although Amtrak does have a positive impact, there are alternative, more cost-effective approaches to conserving energy. For example, 100% compliance with the 55mph speed limit would save 2500 million gallons annually (Polard et al. 1975). Finally, the results in Table 3 strongly suggest that the energy impact from long-distance train operations is effectively zero. In fact, if more appropriate equipment were provided to meet the needs of the short-distance riders currently using long-distance trains, the energy conservation impact could be considerably larger.

the environment, and some emissions such as carbon monoxide are primarily urban problems little a&ted by intercity transportation activity (U.S. Senate Committee on Commerce, 1977; U.S. DOT, 1976a). Although it is accepted that air pollution is a hazard to human health and causes damage to plant life and materials, there is no agreed upon technique for valuing emission reductions. Damage is really more a function of concentration than rate of output, and to estimate changes in concentration one needs a diffusion model. Finally, most modes emit pollutants at a constant rate, but aircraft generate most of their emission during the landing/take-off cycle. U.S. Environmental Protection Agency estimates of relative modal performance per passenger-mile were relied on to calculate the impact of tratlic diversion to Amtrak (U.S. EPA, 1975). For air trafhc, diverted passenger-miles were translated into reduced number of take-offs and landings (LTO), and this estimate was multiplied by the EPA’s estimate of emissions per LTO cycle. The results from these calculations are presented in Table 4. Short-haul passenger train services contribute to the reduction of four of the five pollutants examined. The relatively large reduction in CO, especially in the megalopolitan Northeast Corridor, may have a meaningful environmental impact. However, it appears that longdistance train services contribute little to air pollution abatement. In fact, at current performance levels, they appear to worsen, rather than ameliorate the air pollution problem. It is easy to overstate Amtrak’s impact. The reduction in carbon monoxide emissions is only 0.05% of the total amount produced in the U.S., and CO is primarily an urban problem, while much of rail’s impact occurs in

Environment Diversion of air and highway travelers to Amtrak is expected to reduce the level of harmful emissions into the atmosphere. The primary pollutants emitted by the transport sector are carbon monoxide (CO), oxides of nitrogen (NOx), sulphur oxides (SOx), unburned hydrocarbons (HC) and particulates. In addition, NOx and HC can interact synergistically when exposed to sunshine and produce photochemical oxidents such as ozone and peroxyacetyl nitrates (PAN). There are numerous difticulties with analyzing Amtrak’s impact on the pollution problem. Not all pollutants are equally deleterious to

Table 4. Air pollution abatement effects attributable to intercity rail passenger services Metroliner Type

Service

Diversion:

of Pollutant

Annual

Rmissions

in Pounds

Bus

Auto

Net Reduction

43.44

Air

Rail ---_ co

__

183,702

7,132,125

7,359,268

HC

__

52,949

7,132

912,912

972,993 706,724

NDx

175,063

110,221

72,618

698,948

sax

71,322

10,914

5,187

28,529

(26,692)

Particulates

12,968

4,430

2,594

82,992

77,048

Short-Distance

Traveler

Diversion:

Short-Distance Rail

Long-Distance Rail

Air

Bus

Net Reduction

Auto

co

2,140,013

5,019,547

340,000

318,628

98,045,240

HC

1,173,556

2,761,364

98,000

52,312

12,554,910

ND,

5,568,678

13,107,275

204,000

532,632

9,612,354

(8,326,967)

667,316 287,636

1.595.455

20,200

38,045

285,339

(1,919,187)

699,546

8,200

19,023

1,141,356

SDX Particulates Long-Distance

Traveler

91,544,308 8,770,302

181,397

Diversion:

Short-Distance Rail

Long-Distance Rail -- Air

Bus

Auto

Net Reduction 9,735,752

co

112,643

5,019,547

270,412

431,422

14,166,108

HC

61,772

2,761.364

194,318

70,831

1,812,618

(745,369)

293,115

13,107,275

78,817

721,184

1.355.439

(11,244,950)

35,178 15,162

1,595,455

9,300

51,513

57,952

(1,511,868)

699,546

7,058

25,757

164,198

(517,695)

ND, SD, Particulates

334

F. P. MULV~Y

rural areas. If we examine alternative strategies to achieve the same emissions reduction, Amtrak’s costeffectiveness becomes highly doubtful. For example, it has been estimated that to reduce auto NOx emissions from 2.0 grams per mile, the current standard, to 1.0gpm would cost $450 per ton. Hydrocarbon emissions could be reduced at a cost of $470 per ton. The same reduction in these two emissions can be achieved for considerably less than the An&k deficit. Also, there are even less costly non-transport alternatives. For example, improvements in utility boilers can reduce NOx emissions for about $100 per ton (U.S. DOT, 1976).

The number of diverted travelers must be translated into diverted flight operations. To accomplish this an average plane load of 60 passengers was assumed, and average trip lengths ranged from 150 miles for conventional train Corridor travelers to 740 miles for those using New York-Florida service. The number of flights eliminated were assigned to the affected airports based on each airport’s share of total Corridor air operations. The relationship between the number of operations and average delay is exponential. One estimate of this relationship developed by the Federal Aviation Administration for large hub airports is (Mulvey, 1975): D”,, = e-37.L867(Q)3.51885

Congestion

Alleviation of airport and highway congestion is another oft-cited rationale for continued subsidization of intercity rail passenger services. The travelers diverted to rail free up scarce highway, airway and airport space and reduce the possibility of delay. In order for rail traffic diversion to impact congestion, the existing facilities must already be congested, and the Amtrak diversion must involve a sticient number of travelers. These circumstances only prevail in the Northeast where Amtrak provides frequent train service. Given the frequency of Amtrak service, existing train scedules, and the fact that a single Amtrak train must serve many city-pair markets, rail can not be expected to have a measurable impact outside the already congested Northeast Corridor. Thus, this analysis is confined to Northeast Corridor airports and highways. In order to evaluate Amtrak’s contribution to alleviating NEC airport congestion, the following diversion estimates were employed: (a) 50% of all intra-corridor trtic from New York City and points south to Boston, and 50% of all in&a-corridor tral’lic from New York City and points north to Washington were assumed to have been diverted from air; (b) 25% of all other intra-corridor travel, and travel between NEC points and Florida are assumed diverted from air, save for New YorkPhiladelphia where only 10% of the tralIic is diverted from the airlines. These diversion estimates are fairly liberal and should be considered an upper bound.

& = e-3,.1%7(Q)3.51885el.5%76 R2 = 0.81

df=ll where 4,, = number of delayed aircraft, if not a N.Y. airport; D., = number of delayed aircraft, if a N.Y. airport; e-'7.l%7= constant in the regression equation; Q = number of operations: e’.“%“j = a scalar for N.Y. airports, included because interaction between N.Y. landing places raises delays above what would be expected if a city were served by a single airport. The increase in the number of delayed operations in the absence of Amtrak NEC service is shown in Table 5. Assuming that each delay averages 30min, that passengers value their time at $10 per hour, and that it costs the airlines $10 for each minute of delay, the total annual benefit from Amtrak air passenger diversion in the NEC is slightly in excess of $1.5 million. As with airport congestion, Amtrak can only be expected to impact congested roads in those markets where it provides frequent service and where highway congestion is already severe. Most auto traffic congestion is due to commutation rather than intercity travel, and therefore, is not Amtrak divertible. However, as long as Amtrak diverts some autos from the traflic flow, those who continue to drive will experience less congestion and will be able to attain faster operating speeds. One such diversion model was employed to estimate Amtrak’s impact on alleviating NEC highway congestion

Table 5. Difference in aircraft delayedat major corridor airports due to intercity rail passenger service traffic

diversion Annual Number of Operations (Actual)

Airport

Logan

(Boston)

LaGuardia

(NYC)

Newark

295,000

Number of Operations if Amtrak is Discontinued

Projected Projected Reduced Delayed Aircraft Delays Delays with Amtrak without Amtrak

299,765

1,252

1,324

72

339,000

352,518

10,081

11,566

1,485

220,000

227,441

2,185

2,475

290

Philadelphia

316,000

333,443

1,594

1,926

332

Friendship

125,000

131,561

61

73

12

326,000

341,265

1,779

2,090 -19,454

311

National

(Bait.)

(Wash.)

16,952 Sources:

Mulvey,1975;

National Transportation

Policy Study Comrnission,l978.

2,502

Amtrak:a cost-effectivenessanalysis

(Dinneman and Lago, 1%9). The Amtrak impact can be estimated by:

where: S = the average auto operating speed, if Amtrak diverted auto trallic were put back on the road; & = current average auto operating speeds; a = speed coefficient representing the relationship between speed r, = highway volume/capacity l&0; and the volume/capacity ratio without Amtrak; rz = highway volume/capacity ratio with Amtrak; Define:

t,_r2=Nt -_--=V

M+V c

c

N-M C

C=M+V,M r2

Kq

where: N = intercity auto average daily trafhc (ADT) if Amtrak did not exist; M = intercity ADT with Amtrak; V = urban auto ADT; C = design capacity; K = intercity portion of total trat8c. These equations must be solved for each route segment in the impacted corridor. The change in auto operating speed can be converted into travel time savings by: (1- U)D

UD

P,S,+(l-P,)S,+AS~t~l-P2~S, (1-

U)D

P,~s,~s~~~~1-P1~~s2+sd)

UD +P2(s~ts,)t(l-P2)(s4tsd)

>

and B=AT(N(L,,Y.))+AT(V(LmYw)) where: T =trip time reduction in hours; D= trip distance along highway segment; PI, P2 = per cent of intercity trallic at off-peak and peak conditions; St, SZ= average speed on intercity (rural) expressways at peaks and off-peak period; S3, S4 = average speed on urban expressways at peak and off-peak periods; Sd = average speed change due to Amtrak service provision; B = benefits of time saved in dollars per year; Y,, Y, = average value of time for intercity and urban travelers; L,,, L, = occupancy factor for intercity and urban autos; A = annualization factor. Application of this model using highway capacity and tralllc data for non-NEC roads produces an estimated time savings of roughly 8.5 min for a vehicle traversing the entire corridor. The total value of time saved due to trathc diversion to Amtrak is valued at somewhat less than $20 million annually. Both airport and highway congestion are affected by tratlic diversion to Amtrak, but in both cases the impacts

335

are small when compared to either the Amtrak deficit or the magnitude of the problem. It is very doubtful that Amtrak is a cost-effective approach to air or highway congestion. Non-capital alternatives such as peak period landing charges or general aircraft diversion policies are far more effective approaches to reducing aircraft delays. Likewise, approaches that deal directly with the heart of the highway congestion problem (i.e. intraurban commutation travel) are probably more efficient techniques.

Overall intercity passenger travel service quality

Finally, the argument is often advanced that Amtrak offers travelers a unique alternative and contributes to an improved overall transport environment. Components of transport quality include reliability, speed, accessibility, frequency and subjective evaluative factors. Accurate measurement of the qualitative factors is often dithcult, making crossmodal comparisons very imprecise. Notwithstanding, some general observations are possible. A reliable mode is one that minimizes unexpected delays in transit. The available data suggest that Amtrak’s on-time performance record is not as good as that of other modes. In spite of generous incentive payments to the railroads to coax them into operating Amtrak’s trains on schedule, the on-time performance record remains poor. Where performance has been improved, it has often been achieved by lengthening the schedules, redefining lateness, or ignoring lateness at intermediate points and examining only terminal arrivals. Meaningful improvement in Amtrak’s reliability requires large capital expenditures to repair and modernize deteriorating roadbeds. The railroads can not and will not undertake these expenditures merely to earn incentive payments from Amtrak. A traveler may also experience frequency or stochastic delays. The first occurs when the travelers preferred departure time does not coincide with the schedule, and the second results whenever a preferred departure is overbooked. Given existing Amtrak schedules and the tendency for rail travel demand to suffer seasonal peaks, it is likely that these two types of delay commonly plague rail riders. The available data suggest that both bus and air have better on-time performance records than intercity rail, and users of those modes are less likely to experience frequency or stochastic delays. There are few places served by Amtrak not also served by bus or air, and all are connected by the highway network. In fact, the number of city-pairs actually served by Amtrak is even fewer than a mere listing of stations would indicate. For example, Flagstaff and Phoenix, Arizona, both receive Amtrak service, but they are not connected by rail except via Los Angeles. In addition, most Amtrak stations in large cities are located in the Central Business District. This is convenient for business travelers, but outside the Northeast Corridor, most train travel is for personal reasons, and Amtrak has relatively few suburban stations. Because departures are infrequent, many cities on longdistance routes receive only middle of the night service. Given the downtown

336

F. P.

MULVEY

location of many rail passenger stations, this service is particularly unattractive. Yet, Amtrak has done little to correct this serious deficiency. Instead, it has responded to pressure by expanding the route network, rather than improving the existing system by adding more trains. But, as several studies have shown, frequency of service is a key determinant of modal market share (Mulvey, 1974; Bennett et al., 1973). With few exceptions outside the Northeast Corridor, Amtrak is also the slowest of the intercity passenger transport modes. Although Amtrak has begun to remove some of the padding that had crept into schedules over the years, its trains still average only 47 mph. The problem persists even where new equipment is in service. Deteriorating roadbeds are at the heart of the problem. Before the imposition of the 55 mph speed limit the highway modes had made steady gains in average operating speeds. By 1973 buses and autos were averaging 60.4 and 62mph respectively (U.S. Senate, Committee on Commerce, 1977). Even though bus and auto travelers must stop to take meals, these modes were trip time competitive with rail for all but the longest trips. Of course, air travel times are much below rail, even when terminal access and egress times are included, except for very short intercity trips (less than 100-150 miles). If factors to account for frequency, stochastic and operating delays are included, it is doubtful that rail travel is time competitive with any of the alternative modes in any distance market. The argument that traveler options be preserved is not a convincing one for continuing the national network of intercity passenger trains. Rail service is operationally different from other forms of transport, but diversity alone is not a sufBcient condition for concluding Amtrak represents a net addition to traveler welfare. Such an argument would demand that no form of transport ever be replaced, lest traveler options be reduced. Perceptible advantages over alternate modes must exist; diversity alone is an insufficient reason. Such advantages are not apparent outside the Northeast Corridor. Finally, some important aspects of travel are fundamentally nonquantitIable. These subjective factors include comfort, cleanliness of facilities, friendliness of personnel and other amenities that affect user satisfaction. Again, the evidence does not indicate that current Amtrak service has a positive impact. Extensive hearings by the Interstate Commerce Commission on the quality of Amtrak service produced a litany of complaints, although many agree that today’s rail service is an improvement over the nadir reached during the days immediately prior to Amtrak’s creation. The General Accounting office (GAO) has also monitored the quality of Amtrak operations (General Accounting OlBce, 1973a, 1973b. 1976) and it, too, has uncovered numerous deficiencies. Although the absence of data from continuous monitoring of the air and auto modes makes comparison diflicult, the results of attitudinal surveys suggest that air and auto offer a higher quality of service. Bus, on the the other hand, is often considered to be the least comfortable and the most unpleasant mode of intercity transport, but there are no objective studies to

contirm this widespread perception (Louis Harris, 1972; Wisconsin Dept. of Transportation, 1975). Further, while those who currently rely on Amtrak indicate overall satisfaction with service quality, the public-at-large tends to view intercity rail as an unattractive alternative. Roominess is the one area in which Amtrak has a measurable advantage over the alternative forms of intercity passenger transport, but new equipment is configured so as to greatly reduce the rail advantage. There is, therefore, little truly unique and virtually nothing superior about intercity rail travel that warrants special consideration. It can not be said that Amtrak is a vital component of the intercity transport network, or that it adds “balance” to the nation’s passenger transport system.

Economic considerations

In spite of the apparent absence of underlying social benefits to justify subsidization of intercity rail passenger services, support for the Amtrak program continues to be forthcoming. Some defenders point to the public aid given the air and highway modes over the years. Capital expenditures on the air and highway infrastructures never fully recaptured by user fees, combined with less direct subsidies, such as federally sponsored vehicle research and development, are in large part to blame for the shift of both freight and passenger t&If from rail to the publicly supported alternatives. It might be possible to construct a counterfactual hypothetical to attempt an estimate of rail’s relative position, if such subsidies had not taken place. But, such an academic exercise has little relevance for policy formation. It might not have been the best course of action to accelerate the development of the air and highway modes through public subsidies at the expense of rail, but no serious analyst suggests recapturing such past investment in the interest of “modal fairness”. Similarly, Amtrak subsidies can not be justified as compensation for past modal biases, but rather must rest on evidence that there is something to be gained from such support, other than simply preserving intercity rail passenger service for its own sake. Amtrak has failed to arrest the long-term growth in the passenger service deficit. Today, not a single Amtrak route covers operating expenses. Insufficient ridership and excess capacity are important causes on some routes, but even in the heavily traveled Northeast Corridor, expenses are more than twice revenues. In fact, if all trains operated with 100% load factors, the annual deficit would still be approximately $100 million. On several routes Amtrak has introduced service improvements which have increased ridership and reduced the per passenger-mile deficit. However, the absolute deficit from these operations continues to climb, suggesting that the added ridership was insufficient to offset the incremental expenses associated with the improvements (U.S. Congress, House Committee on Appropriations, 1!977). Amtrak’s deficit position has been worsened by the Congressionally imposed stipulation that it add experimental routes, and participate with the .states in est-

331

Amtrak:a cost-effectiveness analysis

Table 6. Twenty Amtrak routes ranked by decreasingavoidable loss and decreasingaw%dableloss per revenue dollar Avoidable Loss per Dollar of Revenue ($)

Route

New York - Florida

Avoidable Loss ($1 20,874,OOO

San Francisco - Bakersfield*

5.99

Chicago - San Francisco

15,315,ooo

Seattle - Vancouver*

5.88

Chicago - Seattle

14,891,OOO

Seattle - Portland

3.93

Chicago - Los Angeles

14,097,000

Washington

3.25

Chicago - Florida

13,514,ooo

St. Louis - Laredo*

12,857,OOO

Chicago - Washington/Norfolk

3.16

Chicago - Washington/Norfolk

10,859,000

Chicago - Dubuque*

2.97

New York - Philadelphia

10,477,000

Minneapolis

Boston - Washington

10,348,000

Chicago - Seattle

Route

(North)

Chicago - Seattle

(South)*

- Cumberland*

- Superior* (South)*

3.19

2.54 2.25 2.23

Chicago - New York/Washington

9,118,OOO

Chicago - Port Huron*

New York - Albany/Buffalo

8,431,OOO

Chicago - Florida

2.18

Kansas City - New York/Washington

7,423,OOO

New York - Montreal*

1.75

Washington

1.56

- Montreal*

6,820,OOO

Chicago - Milwuukee

Seattle - Los Angeles

6,769,OOO

Washington

- Montreal*

1.40

Chicago - Houston

5,850,OOO

Kansas City - New York/Washington

1.37

5,163,OOO

Chicago - Detroit

1;36

5,115,ooo

Chicago - Carbondale*

1.34

New York - Albany/Buffalo

1.32

New York - Philadelphia

1.30

Chicago - Quincy+

1.29

Chicago - Detroit Northeast Corridor

(Non-Metroliner)

Chicago - St. Louis

4,164,OOO

Chicago - Laredo

3,630,OOO

l

New Orleans - Los Angeles Note:

3,409,000

* added to designate a route not part of the original Amtrak system proposed by the Secretary of Transportation.

Source :

Congress, House, Committee on Appropriations, Hearings Before the House Appropriations Committee on Federal Grants to the National Railroad Passenger Corporation, March 7,1977, 95th Cong., 1st Sess. Washington D.C.:GPO, 1977.p.670.

U.S.

ablishing services of primarily local interest. Table 6 ranks 20 Amtrak routes by decreasing avoidable loss and decreasing avoidable loss per revenue dollar. Only two of the ten worst routes were part of the initial basic system. However, it is also clear that the routes which generate the largest deficits are long-haul basic system services. F&l has become the most expensive form of intercity passenger transportation. The subsidies received by the other modes are large, far larger than those received by Amtrak, but when judged on a performance basis it is the rail rider who receives the largest subsidy. Automobile operating costs in 1976 ranged between 12.6 and 1711per vehicle mile depending on car size (U.S. DOT Federal Highway Administration, 1976b). At an occupancy factor of 2.1, the per passenger-mile cost is between 5.75 and 8.17~ This amount includes all operating and ownership expenses and assumes a l&year, 100,000 mile vehicle life. In addition to these user-borne costs, some have argued that an imputed value of the driver’s own time should be included as this represents an uncompensated resource. One study employed a variable payment for driver compensation based on trip purpose. It assumed that business driving should be “compensated” at 100% of the average wage, while pleasure driving should be allocated 25% (Federal Energy Administration, 1974). This imputation adds 1 to 4 cents per passenger mile for intercity automobile travel. A final uncompensated cost emanates from public

expenditures on the highway and road network above and beyond receipts from user taxes. Unfortunately, assignment of these uncovered subsidies among the various users of the highway system is virtually impossible. There exists considerable cross-subsidy among commercial and non-commercial, rural and urban, and peak and off-peak users of the road system. The amount of subsidy received by the intercity auto traveler is not readily discernible. Nevertheless, even if the entire $30 billion spent annually on highways by all levels of government could be charged to the intercity tripmaker, the cost of auto use would increase only by 2-31~ per passenger-mile. This still leaves auto far less costly than rail. In 1976, Amtrak long-distance trains operated at an average cost of 18.38 per revenue passenger-mile @pm), while short-distance trains incurred operating expenses of 24.611per rpm. Air travel, too, has been subsidized. Many airports, especially smaller and medium sized ones, have been developed by local authorities through general obligation instruments. F’rincipal and interest payments were met out of the general fund. Although air carrier passengers now contribute to a trust fund for capital expenditures for airports and airway development, operation of the airways continues to be funded from the general fund. Yet, even if the unrecovered public expenditures were added to air travel costs, the average ticket price would increase by less than 25%, and would remain substantially below rail cost.

338

F. P. MULVEY AMTRAK% -AL

CONTRtBUTION

Many who press for continued support for Amtrak readily concede that current operations do not contibute in a meaningful fashion to the nation’s welfare but stress that as energy becomes more scarce, environmental pollution becomes more severe, and highways and airports become more congested, the need for rail passenger services will eventually become evident. To examine this contention, several assumptions about the future transport operating environment were developed. For the most part, these assumptions are very favorable toward Amtrak, and therefore, the projections which follow can be considered an upper bound on Amtrak’s longer term potential. The year 19!X1was chosen for analysis, since by that time Amtrak will have had 2d years to revitalize the service, and because most other projections necessary to the analysis do not go beyond this date. Finally, the transport technology extant is not expected to change radically over this forecast period. Most traflic forecasts project little change in modal market shares over the period. But forecasts derived from econometric models whose parameters are estimated from historical relationships can not be expected to evidence truly dramatic shifts unless either a large charge in a key mode-choice determining variable is hypothesized (e.g. the real price of gasoline quadruples) or the parameters are arbitrarily adjusted by the estimator based on his own judgment. In the first instance, the

applicability of the model is doubtful, while in the latter case the raison d’etre for modeling is removed. Yet, clearly, any extrapolation from existing trends will cast Amtrak into an insignificant role during the projeciion period. As the defense for Amtrak depends so heavily on its future contribution, the Corporation’s own highly optimistic ridership forecasts were used (National Railroad Passenger Corporation, 1976). Furthermore, the very large increase in NEC ridership projected by the Federal Railroad Administration was incorporated into the analysis (U.S. Congress, House Committee on Appropriations, 1977). Thus, total Amtrak travel by 1990 will be nearly 12 billion passenger-miles. Assuming that Amtrak continues to attract riders from the alternative modes in the same proportion as at present, and relying on the Corporation’s own projected differential traffic growth rates (7% for short-distance trains versus 4% for long-distance ones), the traffic diversion estimates presented in Table 7 were derived. These figures reflect some implicit assumptions about 1990 Amtrak service levels. New equipment, rehabilitated stations, and greatly improved rights-of-way comprise the sine quo non for the forecast. Yet, regardless of the ridership growth, Amtrak’s deficits will continue to mount. Amtrak projects that fare increases can not match cost increases, .if rail passenger service is to remain price competitive. Expected Amtrak revenues appear in Table 8. Expenses per passenger-mile of inter-

Table 7. Amtrakridershipand diversion estimatesfor the year1990(millions of passenger-miles) Type of Route

Projected Amtrak Ridership

Diverted from: Auto Air

BUS

Metroliner

4,500.o

1.800.0

2.250.0

450.0

Short-Distance Trains (5 percent of traffic is long-distance)

3,128.0

2,267.E

523.9

336.3

Long-Distance Trains (50 percent of traffic is short-distance)

4.250.0

2,125.0

1.381.3

743.7

11,878.0

6 192 8 I

4,155.2 ~___ --

1,530.o

Totals

Table 8. Amtrak’sfinancialsituation in the year 1990 Type of Service

Revenue Passenger-miles (millions)

Expenses per RPM

Expenses (millions)

Fares per RPM

Revenues Deficit Deficit (millions) per RPM (millions

Metroliner

4.500.0

$0.287

s1,291.5

$0.22

$990.0

$0.067

$301.5

Short-Distance Trains

3,128.0

0.392

1,226.2

0.16

500.0

0.232

726.2

Long-Distance Trains

4,250.O

0.291

1,236-E

0.128

544.0

0.163

692.8

Totals

$1,720.5

Amtrak: a cost-effectiveness analysis

city train service are more difficult to estimate. Replacement of aged rolling stock and locomotives should reduce both maintenance and operating expenses. Further, new cars will have higher seating density, enabling Amtrak to generate more passenger-miles of service without proportionate increases in train-miles. Again, extrapolations from Amtrak’s own estimates of increased operating costs were used for the estimate. Amtrak forecasts that the rate of cost increases will decline to 6% by 1982. This figure was used to estimate 1990 expenditures. It was also assumed that Amtrak trains could achieve load factors of 70% by 1990.To take into account denser seating densities and improved load factors, the projected increase in 1990per passenger-mile operating expenses were reduced 40%. Table 9 summarizes Amtrak’s 1990 operating picture under these assumptions. The projected 1990 operating deficit is large. This shortfall does not take into account either administrative costs or the capital grants and loan guarantees necessary to bring about the improved service. Those who believe that such deficits will be justified point to the expected social benefits from the service. Therefore, these intertemporal impacts must be examined before any conclusions about the Amtrak experiment can be drawn. Safety

Although the real benefit from auto traffic diversion to Amtrak will continue, the auto fatality rate will also continue its long-term decline. Demographic changes

339

alone should improve the auto safety performance as the number of drivers in the youngest age cohort declines. If improvements in highway design, crashworthiness of vehicles, and active and passive restraints also proceed as in the past, then extrapolating from the long-term trend produces a fatality rate for intercity auto travel of 1.35 per 100 million passenger-miles in 1990. Adjusting for long-t&m growth in worker productivity, and assuming a 6% annual inflation rate, then the benefit from reduced fatalities due to diverted auto tra6ic will be between $71 million and $242 million depending on the procedure for valuing loss of human life. If associated non-fatal accident costs rise proportionately, an additional $112.5 million in benefits will result from auto traffic diversion in 1990. Notwithstanding these calculations, it should be noted that, as before, diversion to the bus and air modes would prove equally beneficial. Energy The contribution of Amtrak in 1990 to energy conservation was developed under the assumption that all rolling stock is replaced with new, more densely configured equipment and that new P3OCh and P4OCH diesels and E6OCP diesel-electric locomotives replace old, worn-out power units. The new locomotives are expected to be efficient enough to offset the rail circuity disadvantage, and will not suffer the efficiency loss of older motive units when operating over undulating terrain. New Metroliner II equipment is expected to be 20% more fuel efficient than current train-sets, and all Amtrak

Table 9. Projected energy savings from Amtrak services in 1990 Type of Service

and Diversion Metroliner

Passenger-. Miles (000)

PassengerMiles/Gallon

Fuel Consumed and Saved (Gallons)

4,500,000

324

13.888.888

2,250,000 450,000 1,800,000

1107 56

83.333.333 2.812.500 22.142,857

Net Savings

104,399,802

Diverted from: Air BUS

Auto

Short-Distance Travelers on: Short-distance Long-distance

trains trains

2,971,600

292

2,125,OOO

233

9,120,172

1,508,240 828,410 2,759,950

27 160 56

55.860.740 5,177,563 49,284,821

10,176,712

Diverted from: Air Bus Auto

Net Savings

91,026,240

Long-Distance Travelers on: Short-distnace

trains

Long-distance trains Diverted from: Air BUS

Auto

156,400

292

2,125,OOO

233

1.085.960 546,890 648,550

41 160 70

535,616 9,120,272 26,486,829

3,418,063 9,265,OOO

Net Savings

29,514,104

Total Savings

224,936,146

340

F. P. MIJLVEY

trains are assumed to operate 70% full. The other modes, however, will also improve their energy utilization. Interpolation based on estimates prepared for the Department of Transportation (Jack Faucet& 1977) indicates that air energy intensity will decline to 74% of current levels. Assuming that a fuel economy standard of 27.5mpg for 1985 is put into effect, auto energy usage will fall to only 54% of current levels. Finally, a 25% improvement in fuel economy for intercity buses is projected based on higher load factors and other operating economies. Given these assumptions, Amtrak’s impact on energy conservation in 1990 is detailed in Table 10. If the price of all fuels escalates at 6% per annum, the value of these fuel savings will be $244 million. As was true for current Amtrak operations, fuel savings are greatest in the short-haul and NEC markets, and savings would be greater, if short-distance travelers riding longdistance trains were served with more appropriate equipment. Environtnent Although rail vehicle emission standards have yet to be established, performance estimates for hi speed Metroliner service are available, and rail diesel emissions can be derived from the energy efficiency data. If 50% of the electricity required to run high speed Metroliners is generated by nuclear power and the remainder by highly controlled fossil fuels, 1990 Metroliner emissions will be as shown in Table 10. If reductions in rail emissions are proportional to expected energy savings, then conventional powered trains will also enjoy a much improved performance. These changes imply that the emissions rate for long-distance trains will be only 29% of current levels, while short-distance trains will achieve a two-thirds reduction. The alternative modes are also expected to register dramatic reductions in emissions output by 1990. The 1979 EPA standards are used here to characterize 1990 auto fleet performance for NOx, CO and HC emissions. Because SOx and par&dates standards are still being debated, a 25% reduction was assumed. Diesel powered

vehicles are not expected to register improvements as large as those required of gasoline fueled vehicles, but from the available evidence, a 50% reduction in CO, HC and NOx and a 25% reduction in SOx and particulate emissions appear just&d; Although there are no firm plans for raising airplane emission standards, some observers have claimed that new “ultralow” emissions technology could reduce jet aircraft pollution by as much as 90% (U.S. DOT, 1977). Notwithstanding this optimistic evaluation, an overall improvement of 50% was assumed for 1990 air carrier operations. The net impact on 1990 air pollution emissions from traffic. diversion to Amtrak is presented in Table 2. Only Northeast Corridor Metroliner services are expected to make an unambiguous contribution to air pollution abatement, and even here the impact is not large. The data suggest that Amtrak’s overall impact in this area will be even smaller in 1990 than today. This result traces largely to the anticipated reduction in auto carbon monoxide emissions. Congestion Air travel is expected to increase 5.7% annually over the period under consideration. This implies 3.13 billion passenger-miles of intra-NEC air travel in 1990 compared with approximately 1.29 billion in 1976. However, the national growth estimate is not applicable to the Northeast Corridor. New high-speed rail service is expected to divert an additional 2 billion air passenger-miles, just offsetting the air traffic growth, if the national rate typified the NEC. In fact, existing Metroliner service has caused NEC air travel to decline in recent years. Amtrak’s impact on air tragic congestion can be estimated by examining what would occur in the absence of rail passenger service in the Northeast Corridor. To accomplish this, the following steps are necessary: (1) Convert diverted passenger-miles into reduced air carrier operations; (2) assign these diverted flights among the affected airports; (3) estimate total Corridor airport operations in 1990; (4) project Corridor airport capacities in 1990; (5) estimate the change in delays due

Table 10. Projectedemissionsfactors for the passengertransport modes in 1990(pounds per passenger-mile) co

Mode

HC

--St-

Particulates

Rail Metroliner

__

__

.00024

.00009

.00001

Short-Distance trains Long-Distance trains

.00063 .00082

.00035

.00165

.00020

.00009

.00045

.00214

.00026

.00012

Air DC-g-30

.00073

.00056

.00030

.00013

.00005

Jumbo Jet

.00072

.00017

.00119

.00615

.00006

Medium Range Jet

.00026

.00007

.00040

.00009

.00007

.00067

.OOOll

.00112

.00012

.00006

Short Distance

.00374

.00047

.00044

.00017

.00048

Long Distance

.00299

.00038

.00035

.00014

.00038

Intercity Bus Auto

Note: Estimates derived from data provided byUS Environmental Department of Transportation(l973).

Protection Agency

(1973, 1975).

341

Amtrak:a cost-effectivenessanalysis Table 11. Projectedair pollutionabatementimpactof Amtrakservices in MO Metroliner Type

Service

Diversion:

of Pollutant

Annual Rail

Emissions

in Pounds

__

HC

__

157,500

49,500

846,000

1,053,000

1,080,000

900,000

504,000

792,000

1,116,OOO

405,000

202,500

54,000

306,000

157,000

45,000

157,500

27,000

864,000

1,003,500

NGX 8% Particulates

Short-Distance

Traveler

Bus

Net Reduction

co

Air -585,000

Auto

301,500

6,732,OOO

7,618,500

Diversion: Long-Distance Rail

Short-Distance Rail

.

Net Reduction 7,654,782

co

1,872,108

1,742,500

Air -392,142

555,035

10,322,213

HC

1,040,060

956,250

105,577

91,126

1,297,177

(502,430)

NGx

4,903,140

4,547,500

603,296

927,819

1,214,378

(6,705,147)

SGX

594,320

552,500

135,742

99,409

469,192

(442,477)

Particulates

267,444

255,000

105,577

49,705

1,324,776

Bus

Auto

Net Reduction 1,251,870

Long-Distance

Traveler

Bus

Auto

957,611

Diversion:

Short-Distance Rail

Long-Distance Rail

co

98,532

1,742,500

Air -787,321

366,416

1,934,165

HC

54,740

956,250

396,375

60,168

246,449

(308,008)

258,060

4,547,500

809,040

612,517

226,993

(3,157,OlO)

SDX

31,280

552,500

152,034

65,629

90,797

(274,320)

Particulates

14,076

255,000

59,724

32,813

246,449

Nox

69,910

Table 12. Projected airportcongestion relief in the northeastcorridorfromAmtrakservice in 1990(numberof operationsaffected)

Airport

Diverted Operations Due to Amtrak

Aircraft Delayed assuming No Change in Capacity with Amtrak without Amtrak

Aircraft Delayed assuming Change in Capacity with Amtrak without Amtrak

Logan

30,000

9,626

7,846

1,457

1,016

LaGuardia

52,000

198,134

155,702

29,279

19,178

Newark

24,000

43,604

35,543

2,735

1,717

Philadelphia

69,000

15,764

10,302

881

308

Baltimore

28,000

739

490

121

59

National

63,000

23,523

16,699

3,622

1,979

Amtrak Note:

Only

delays

Impact

due to congestion

64,808

are included

to Amtrak air trathc diversion; and (6) evaluate the benefits from ,reducedcongestion. To calculate Amtrak’s expected impact, the following assumptions were made: (1) Average load per aircraft will be 70 passengers, representing a 16% improvement over that presumed for current operations; (2) average trip length of diverted air passengers is 250 miles; (3) each NEC airport will handle the same proportion of Corridor airport operations as it does today; (4) total operations at NEC airports increase 5% per annum; (5) airport capacities are increased in accordance with the Department of Transportation’srecommendations, ranging from 67% at Baltimore’s Friendship Airport to 1285 at Philadelphia International (U.S. Dept. of Transportation, 1971); and (6) the monetarized value of time

Amtrak in these

Impact

13,838

figures.

saved by passengers and airlines increases 6% per annum. The calibrated parametric relationships between delay and operations are only valid for existing large airports and a given technology. Thus, in absence of reliable estimates about the future relationship between operations and delay, the volume/capacity (V/C) ratio was taken as the relevant variable in determining the degree of air tratlic congestion. Therefore, 1990 airport operations at expanded capacities were reduced to comparable 1976 levels at the same V/C ratio. Through this procedure the results in Table 13 were generated. Th.e number of aircraft not delayed increases from 2500 under current diversion estimates to almost 14,000 in 1990. The total value of these savings, approximately $40

342

F. P.

MIJLVEY

Table 13. Sample of city-pairs that are candidates for more frequent rail passenger train service

Short-distance mutes Chicago-St.Louis Chicago-Detroit Los Angeles-San Diego Seattle-Portland Albany-Buffalo

Number of Round Trips per day Currently Offered 3 3 6 3 3

City-Pairs on Long-distance Routes

million divided almost evenly between passengers and the carriers, remains small relative to the projected Amtrak deficit from 1990 Corridor operations. Perhaps some additional benefit might result from reduced pressure on terminal subsystems, but this added contribution is probably minor. It is very unlikely that there are many airports outside the NEC where Amtrak could be expected to have an impact. The proportion of air travelers diverted is too small and their destinations too diverse for Amtrak to be effective. On the other hand, airport expansion is very costly. If no NEC airport expansion is undertaken, then the Amtrak impact rises almost fivefold to $190 million. Yet, even this amount is far smaller than expected 1990 deficits from Corridor operations. To measure Amtrak’s impact on highway congestion alleviation, the results of a previous application of the model described above the adjusted to reflect the 1990 tral?ic diversion estimates (Mulvey, 1975).The volume of intercity automobile traffic in the Corridor is projected to double by 1990, while i&a-Corridor traffic is assumed to increase by 50%. Calculation of Amtrak’s impact was derived under the following assumptions: (1) All tratlic is diverted from I-95; (2) the value of time for auto OCCUpants increases 6% per annum; (3) highway capacity remains unchanged. Under these assumptions, the total time savings from reduced congestion by intercity auto travelers in the NEC is $200 million in 1990. On average, a vehicle traveling the entire Corridor from Boston to Washington would save just over 17 minutes. This is an impressive contribution, though it must be recognized that the underlying assumptions make it an upper bound. It is interesting to note that if the diversion impact is examined by route segment, there is a very strong tendency for the benefits to cluster around urban areas. Most highway congestion results from intraurban travel which is not affected by Amtrak. Nevertheless, Amtrak’s potential contribution to congestion relief in the Northeast Corridor appears to be significant, although still not large in relation to the prospective deficit.

CONCLUSION

The examination of Amtrak in terms of the societal goals set for it by the Congress leads to the conclusion that even under highly optimistic assumptions, both current and potential benefits fall far short of current and projected deficits. Yet, it would be unfair to conclude that all interurban passenger trains should be relegated to museums. There are places where trains can attract a substantial ridership without reliance on public subsidy far in excess of the social contribution. The Northeast Corridor is, of course, the obvious example, but other, less densely populated corridors might also be able to support rail service. Given the limited resources available to Amtrak, it would seem the wiser course to actively search out such routes and concentrate the modernization and development programs where they might produce positive social benefits. The system, as currently designed and operated, is structured as to almost guarantee major losses and minimal societal benefits. The current policy of providing a national intercontinental network of intercity trains needs to be abandoned. Long-distance, transcontinental trains contribute little to the general welfare but much to the Amtrak deficit. At the same time, meaningful train service is not provided between city-pairs that lie on the long-distance routes. Route restructuring will mean that many small towns will lose all passenger train services and that the surviving system will be Balkanized and unconnected. But nearly all places served by Amtrak receive bus service, and, of course, all are accessible by the highway network. The majority are served by air carrier or air commuter service. Only a few places served by Amtrak are more than 50 miles from an airport receiving regularly scheduled service. In any case, Amtrak only connects these towns with others on its route. It is unlikely the train goes to the destinations of the majority of intercity tripmakers. Abandoning Amtrak long-distance routes might produce a net improvement in service to small com-

Amtrak: A cost-effectiveness analysis Bus companies and commuter airlines which may have hesitated to expand their schedules in the face of subsidized competition from Amtrak might increase service and till whatever vacuum is created by the loss of rail passenger service. Some have argued that Amtrak should be preserved in order to allow tripmakers maximum modal choice. The view ignores the fact that resources are limited. The transport services that travelers support should be provided; those not chosen should be eliminated. This is fundamental to our notion of economic efficiency. Others claim that rail passenger services might be required in the future as energy resources are depleted. But it should be stressed that the infrastructure will remain to meet rail freight requirements. The passenger-car fleet could be mothballed to meet future needs if and when they arise, although it would be more efficient to reassign the locomotives and cars to provide a viable alternative in those markets where rail passenger services can attract a reasonable number of riders. Secretary of Transportation Adams recently proposed an 11,000mile reduction in the Amtrak route system by eliminating much long-distance train service. Although the findings presented here generally support the case for abandonment, the specific recommendations diier. The Secretary proposes that Amtrak continue operating a national, interconnected route network. The findings presented here do not justify such a system. Instead, they support the concept of corridor-only service. On the other hand, there might be relatively proximate city-pairs on some Amtrak longdistance routes proposed by the Secretary for abandonment that might benefit from frequent, convenient services. Table 13 provides a brief list of city-pairs that are cand
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Frequent train service between relatively large cities less than 300 miles apart could be operated on schedules that better match traveler needs. Further, this strategy would also allow Amtrak to gain a degree of market identification as it has achieved in the Northeast Corridor. Frequent, all-coach service could provide a meaningful experiment to test the viability of intercity passenger rail. Rail should not be competing in those markets where either distance or the need for flexibility places it at a severe competitive disadvantage with respect to air or auto travel. Nevertheless, the rail service experiment must be carefully monitored. It might very well be the case that in those markets where it can attract a sizeable ridership, bus is the superior travel mode. Finally, the appropriate fare for rail passenger service is one which covers the cost of resources used up in supplying the service, less perhaps any identifiable contribution to social welfare. Clearly, such opport@ies for social benefits are confined to very few markets. However, which such benefits can be identified, as in the Northeast Corridor, then subsidization might produce net social savings. Long-distance cruise-type services could be offered to those travelers interested in indulging nostalgia, but these travelers should pay at least the direct costs associated with service provision. Until now, the Amtrak “experiment” has done little more than conclusively demonstrate to the public authorities what the railroads have known for decades: a complete network of intercity rail passenger service can not be operated in the United States on a for-profit basis. Mounting rail passenger deficits require major route restructuring to develop the economically efficient and socially justifiable system.

REFERENCFS

Anderson W. (1973) Amtruk Connectivity. Unpublished staff working paper, U.S. Federal Railroad Administration, Washington D.C. Bennett T. C., Prokopy J. C. and Ellis R. H. (1973)Analysis of Inter&y Modal Split Models. Peat Marwick and Mitchell, Washington D.C. Boeing Corporation (1975) Zntercity Pussenger Transportntion Data Volume 2, Energy Comparisons. Seattle, Washington. Deeneman P. and Laga A. M. (1969)External Costs and ken&s Analysis, NECTP. Resource Management Corporation, Bethesda, Md. Hirst E. (1972) Energy Consumption for Transportation in the United St&es, Oak Ridge National Laboratory, Oak Ridge, Tenn. Hirst E. (1973) Energy Intensiveness of Passenger and Frekht Tmnsporl Modes. Oak Ridge National Laboratory, Oak Ridge Tenn. Jack Faucett and Associates, Inc. (1977) Tmnsportution Projections 1%5, 1995,2OOOz Final Report. Chevy Chase, Md. Louis Harris and Associates (1972) A Sumey of the Public Mandate for the Current Passenger Market and the, Potential Market for Zntercity Rail Passenger Tmvd in the United States.

Washington D.C. Mays R. A., Miller M. P. and Schott G. J. (1976)Intercity freight fuel utilization at low package densities-airplanes, express trains and trucks. Paper presented at the annual meeting of the the Transportation Research Board. Washington, D.C. Mitre Corporation (1973) Comparison of Bus ond Rail Energy Intensiveness McLean, Va.

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Morlok E. V. (1976)Comparison of railroad and truck line haul work (energy) requirements under various shipment weight, speed and topogmphic conditions. Paper presented at the annual meeting of the Transportation Research Board, Washington D.C. Mulvey F. P. (1974) The Economic Future of Amtrak, PhD dissertation, Washington State University, Pullman, Washington. Mulvey F. P. (1975) The Northeast Corridor High Speed Rail System: Selected Impacts on Alternative Modes. Harbridge House, Boston, Ma. Mulvey F. P. (1978)Amtmk: An Experimentin Rail Se&cc The National Transportation Policy Study Commission, Washington D.C. National Railroad Passenger Corporation (1976)Five-Year Corporate Plan: Fiscal Year 1977-1981,Washington D.C. National Railroad Passenger Corporation (1977) Five-Year Corporate Plan: Fiscal Years 1978-1982,Washington D.C. Pollard J., Rubin D. and Hiatt D. (1975) Summary of Gpportunities to Conserue Transport Encrav.Department of Trans-_ _ portation, Washington, D.C. Schott J. G. and Leisher L. L. 11975)Common startina ooint for intercity passenger transportation. Astronau‘iiEs and Aeronautics, July/August. U.S. Congress, House Conrmittee on Appropriations (1977) Federal Gmnts to the National Railnwd Passenger Corporation: Hearings, March 7,1977,95th Congress, 1st Session, Washiion D.C. U.S. Congress, Senate Committee on Commerce, Science and Transportation (1977) Zntercitydomestic Passenger Transportation System for Passengers and Freight. Washington, D.C. U.S. Department of Energy, Federal Energy Administration (1974) Project Independence Blueprint-Final Task Force Report. Volume 2, Washington, D.C. U.S. Department of Transportation, National Highway Traffic Safety Administration (1972)Societal Costs of Motor Vehicle Accidents. Washington, D.C.

MIJLVEY

U.S. Department of Transportation (1973)EnuironmentalImpact Statement: Northeast Comdor Rail Zmpnwement Project. Washington D.C. U.S. Department of Transportation (1976a) Air Quality, Noise and Health: Report of a Panel of the ZntemgencyTask Force on Motor Vehicle Goals beyond 1980.Washington, D.C. U.S. Department of Transportation (1976b) The Cost of Owning and Gpetntbtgan Automobile. Washington, D.C U.S. Department of Transportation (1977) National Transportation Ttwtdsand Choices (to the Year 2000).Washington, D.C. U.S. Environmental Protection Agency (1973) Compilation of Air Pollution Emission Factors. Research Triangle Park, N.C. U.S. Environmental Protection Agency (1975)SupplementNo. 5 for Compilation of Air Pollution Emission Factors. Research Triangle Park, N.C. U.S. General Accounting G&e, G&e of the Controller General (1973a) Improvements Needed In Reservntions, Znformation and 77cketingSeruices. Washington, D.C. U.S. General Accounting Gtlice (1973b)Problems of Maintaining Trains in Good Gpemting Condition. Washington, D.C. U.S. General Accounting G&e (1976)Qualityof Amtrak Seruice Still Hampered by Inadequate Maintenance of Equipment. Washington, DC. U.S. Interstate Commerce Commission (1976) Ex Porte 277, Adequacy of ZntercityRail Passenger Service. Washington, D.C. U.S. Interstate Commerce Commission (1977) Report to the President and the Congtws, Effectiveness of the Act: Amtrak. Washington, D.C. U.S. National Safety Council (1975)Accident Facts. Washinaton D.C. Volpe J. (1971) Final Report on the Basic National Rail Passenger System. U.S. Deuartment of Transuortation, Washinaton; D.C: Wisconsin State. Department of Transportation (1975) Wisconsin State Rail Plan: The Future of Wisconsin Rail Passenger Service. Madison, WI.