One industry, one agenda

Railway Age, Nov, 2007 by William C. Vantuono

There was a single recurring theme at Railway Age's 14th Passenger Trains on Freight Railroads Conference last month: Passenger rail and freight rail interests share common goals, and each understands that the health and long-term growth of both are interdependent.

Freight railroads are facing some tough challenges, and we all know what they are: strained capacity stemming from record volume growth, a need for public investment capital to supplement private funds, and the emergence of various interests with shortsighted self-interest--hostile legislators and disaffected shippers, among others--that have banded together in an attempt to impose re-regulation and other sanctions that will ultimately cripple the entire industry. At our conference, passenger rail interests agreed that re-regulation and other sanctions will ultimately hurt everyone, and they know that they must be willing to do their part in ensuring the railroads' future.

Indeed, they have taken up a banner that declares, "This is one industry."

Amtrak President and CEO Alex Kummant said as much in his keynote address, which referred to Amtrak's strategic focus developing passenger corridors of up to 400 miles. "We can't grow corridor services if we can't provide frequent service, reliable performance, and inter-corridor, long distance, and commuter rail connections," he said.

Stressing that future corridor services will operate primarily on freight railroads, the former Union Pacific executive said that Amtrak is "very interested in the condition of those systems. Traffic on freight railroads is growing. Capacity is growing, toot--but not fast enough. The freights invest large sums in their infrastructure, but projected traffic growth will outstrip investment. Traffic increases are great news--if we have the infrastructure to handle them. Without adequate investment, we will see widespread congestion throughout the system."

Such congestion, and the resulting lack of fluidity, "is not the sole cause of poor Amtrak ontime performance on freight railroads, but it's a contributing factor," he said.

"System fluidity is not a railroad-only problem," Kummant said. "It's a transportation industry problem. The railroads have reestablished themselves as part of the national transportation economy, so the spotlight now shines on both their problems and their opportunities."

Kummant called for a national investment strategy to keep the rail system fluid. He called the AAR's capacity study (RA, October, p. 23) "a remarkable statement from the freight rail industry."

"America needs significant investment in national transportation infrastructure, and [railroad] capital improvements take time," Kummant noted. However, "railroads are not rewarded by Wall Street for capital investment. Between 1996 and 2005, U.S. freight railroads invested 17.2% of revenue in recapitalization--five times the national industrial average. This is still not enough, so we need to take some bold steps."

One bold step, Kummant said, is "a coalition of freight and passenger rail supporters [from across] the political spectrum. Such a coalition would include chambers of commerce, environmental groups, labor, manufacturers, airlines, shippers, and the construction and real estate industries. To do this, Amtrak and the freight railroads will need a federal rail capacity policy. Congressional reauthorization of Amtrak could be part of the solution. Amtrak needs a dedicated funding source, so states and the federal government must partner to establish a matching funding program for state investment in passenger rail. This proposal must come from within the industry, and we must work together. Private property interests must be protected, but we must work with government to address the national mobility crisis."

When Alex Kummant was hired to run Amtrak last year, some in this industry were skeptical. Among various concerns, the biggest question asked was, does he have an agenda, and if so, what is it?

Based on his comments at our conference, I think his priorities are pretty clear.

Remember: One industry, one agenda. Let that drive everything we do.