The North American passenger rail market - Industry Overview

Railway Age, March, 2001

As unlikely as it might have seemed only a few decades ago, passenger rail moves into the 21st Century as a major growth segment of the North American rail transport industry. Beset by air quality and congestion problems that no amount of road building can solve, urban areas are turning in record numbers to light rail, metros, and regional/commuter rail. And crowded highways, as well as an air transport system in which service quality and reliability are crumbling in the face of record travel volumes, have brought a revival of intercity passenger trains.

Last year's U.S. transit ridership, 9.4 billion, reflected a growth of 20% over the last five years to reach the highest level in 40 years. For North America's urban and regional/commuter rail systems, capacity expansion and extension projects are the rule. Upwards of three dozen new starts or entirely new routes are in various stages of planning, design, or construction. Amtrak is setting new intercity ridership records as Acela Express and Acela Regional services begin to ramp up in the Northeast Corridor and state-supported services flourish from New York to California. In Canada, VIA Rail traffic is rising as new equipment and new services come on line.

Fueling passenger rail's growth is strong public support. The ISTEA legislation of 1991 represented a major public transportation investment and the U.S. Congress followed it up in 1998 with the even stronger commitment of TEA-21; the FY 2001 $6.3 billion public transit appropriation is the highest ever. Congress is debating a proposed $12 billion bond proposal for high speed rail projects. In Canada, the government provided $400 million in new capital funding last year for VIA Rail.

INTERCITY SYSTEMS

National Railroad Passenger Corporation (Amtrak) operates trains serving more than 500 stations in 45 states. Amtrak operates passenger and express services over more than 22,000 route-miles, of which 730 miles are owned, with the balance on freight rail or commuter authority lines. As many as 265 daily trains are operated with a fleet of 343 locomotives and 2,188 passenger, baggage, mail, and express cars. After four straight years of growth, Amtrak's FY 2000 ridership reached more than 22.5 million passengers and just under 5.5 billion passenger-miles, generating ticket revenues of just over $1.103 billion. This was followed by the best quarter in Amtrak's 30-year history in the first three months (October-December 2000) of FY 2001, when ridership was up 8.5% from the same period in the previous year.

Amtrak's goal of operating cost self-sufficiency by 2003 is riding heavily on its new Acela Express high speed trains in the Northeast Corridor, which had a delayed start-up Dec. 11.

Critical to the long-term success of the Acela Express and other high speed services will be long-range bond funding for Amtrak capital needs that would be provided by the proposed High Speed Rail Investment Act. Some $3 billion of the total funding of $12 billion would go to upgrade Northeast Corridor infrastructure; the balance would be available for up to nine other corridors.

More immediate expansion is coming through new state-supported services and Amtrak's Network Growth Strategy announced last year, under which it plans to expand service in 21 states and double the number of mail and express shipping lanes, adding $65 million in revenues by 2003. In addition to the Acela Express start-up, significant service improvements last year included all-electric Acela Regional service in the Northeast Corridor, new Pacific Surfliner equipment in the San Diego-Los Angeles-San Luis Obispo corridor, and daily operation of the Chicago-St. Louis-Dallas/Fort Worth-San Antonio Texas Eagle. Expansion included the introduction of Lake Country Limited service between Chicago and Janesville, Wis. Expansion planned for this year includes an October start-up of two daily trains between Jacksonville and Miami over the Florida East Coast, and a start for Crescent Star extension of the New York-New Orleans Crescent between Meridian, Miss., and Dallas.

Under an Amtrak-Pennsylvania DOT agreement, $140 million in state and Amtrak funds will be expended to develop a high speed service in the 104-mile Philadelphia-Harrisburg Keystone Corridor. The goal is to reduce running time for express services from two hours to 90 minutes.

Under a Midwest Regional Rail Initiative plan for a 3,000-mile network of high speed services adopted by nine midwestern states, Amtrak, and the FRA in 1998, Amtrak is procuring an initial fleet of 15 high speed trainsets for operation of services in corridors radiating from Chicago to Detroit, Milwaukee, and St. Louis.

California supports what is arguably the most successful state-supported intercity rail program in three corridors--Pacific Surfliner, Capitol, and San Joaquin. They carry more than 2.92 million passengers annually, nearly 15% of Amtrak's total. Passenger miles on the three routes totaled 302,474,000 last year, and revenue was $53,511,000. The state-owned fleet totals 66 coaches and 11 locomotives, with 20 more ears and five locomotives slated for delivery by late this year to replace units being leased from Amtrak. Caltrans plans to continue a gradual expansion of intercity rail.