18.6.18

REBUTTING STUART SAUNDERS.

The current management at Amtrak appears bent on turning the long-distance trains into something slightly roomier than an intercity bus, perhaps in order to focus on being a corridor-style operation.

That's not playing well with Passenger Rail advocate Jim Loomis.
The Amtrak brain trust refers to this new service as “contemporary dining”. Personally, I resent that. It’s nothing but a transparent attempt to make us feel better about continuing to pay top dollar for our overnight train travel experience, but getting less.

The Amtrak decision makers don’t understand that you can’t have ”the dining car experience” while eating a Cobb Salad sitting by yourself in a roomette. It’s having a glass of wine with your dinner, enjoying a decently prepared meal when you want to eat, not at 5:30 because that the most convenient time for the dining car crew. It can be done! In fact, it has been done!
That's typical business-speak, attempting to spin downgraded offerings as "serving customers better."  Perhaps, on the Lake Shore, there's a case for modifying the eastbound schedule so as to offer effectively an early-morning day train east of Cleveland and through the Northern Tier of New York, but the westbound schedule still calls for dinner alongside the Hudson.

When the house organ for the freight railroads gives space to a Passenger Rail advocate to identify Amtrak's false economy, you know something's wrong.  Once upon a time, in a galaxy far away, the Sunset Limited (!) had dining service available all day.
Sleeping car passengers felt more pampered, and received more value for their accommodation fares. Coach passengers also dropped into the diner during the overnight hours and spent money if they were restless in their coach seats. After the lounge car closed at the traditional time, many patrons not yet ready to retire for the evening would come into the 24-hour dining car and continue to purchase an evening drink, often accompanied by a purchased food choice.

Passengers entraining or detraining at major stations overnight, such as San Antonio, and, at the time, Houston, often patronized the diner for something to eat before detraining, or as a place to settle down a bit and enjoy a snack if they had just boarded. Either way, it was a winner for the dining car.

Amtrak often points a finger at dining car labor costs, and wants to find ways to cut labor expenses. After running the numbers on these 24-hour experiments, and then taking annual dining car numbers for the Crescent and City of New Orleans and crunching them to see what it would take to make the dining cars at least break even, the end result was, with some tweaking here and there, the dining cars could become a profit center instead of purely a cost center. In short, labor was not the problem. Lack of focus on best use of dining cars and improving them was the problem.
Further, if in cutting costs, you antagonize passengers and cut revenues further, you're not improving the business, although if you're on the road to liquidation, you're closer.  The editor of Railway Age devoted space to a Transport Workers Union statement -- note, not a formal grievance -- making precisely that point.
“We have been told by our members that passengers already are expressing their dissatisfaction with the upcoming service and meal plan changes,” the unions said. “Our members are on the frontlines, and they know that passengers view the current dining service as part of the experience of riding a train through the country along a long-distance route. Our members are proud to provide this service and care about its quality because they understand that it contributes to passengers’ experience. Maintaining the current high-quality service is important to attracting passengers to Amtrak, and it’s central to our members’ livelihoods.

“We demand Amtrak President Richard Anderson reverse his decision and stop these cuts. We pledge to do everything in our power to preserve these jobs and the unique Amtrak dining experience.”

Amtrak responded to Railway Age’s request for comment with the following statement:

“We are undertaking changes on the dining service to provide higher quality food with a modern service pattern that allows people to order what they want and have it provided when they want. People who want to dine in a communal way can keep that. People who want privacy or to work on their laptops while they’re dining, can dine in that way. We’re putting the decision-making into our customer’s hands, vs. dictating to our customers how they have to accept their food.

“Amtrak sleeping car customers have always had the ability to choose to be served in their bedrooms and roomettes, and this model makes that choice easier by offering a selection of meals that are made fresh and are readily enjoyed by customers in their sleeping compartments or at tables in a private area only for sleeping car customers. These food service cars were infrequently used by coach customers.

“A hot meal option will be coming at a future date as we are gathering feedback from our customers to understand preferences.”
Not necessarily in order:  what was I saying about sugar-coating a service reduction as "offering better service?"  If you like your doctor communal dining, you can keep your doctor communal dining.  You'll get your hot meal option when Hell freezes over.  The full dining cars gave way to those Diner Light and Cross Country Cafe cars with limited seating, and the paucity of reservations left to the coach passengers once the sleeper passengers made their reservations, along with the high prices on the full meals, probably discouraged the coach passengers.  Finally, Amtrak does not ban carry-on food, although only sleeper passengers can legally bring their own booze aboard.  (Pass the paper bag that holds the bottle, feel the wheels rumblin' 'neath the floor.)

In Trains, Malcolm Kenton lodges a protest.
If passenger rail is to survive and thrive in the USA, train operating companies need to find ways to pad the revenue column, and not just shrink the cost column. As evidenced in the other hospitality industries, firms have to spend money up front to create a more desirable product in order to increase revenues long-term. The way to address complaints about the limits of a product offering is to offer the customer more options, not fewer. Even if a change that substantially alters the quality of the overall product is made in response to customer requests, if a company’s most loyal existing customers see it as a cheapening of the product, then it is not, in sum, an improvement.

Which brings me back to the boxed meals. For what they are, they aren’t bad — a touch above what a similar cold meal would be on an international flight. The fruit in both the dinner and breakfast boxes was fresh, the muffin and banana bread had the right consistency, and quinoa and edamame salad and Kind and Kashi bars are welcome additions to Amtrak’s offerings. I would have applauded the introduction of some of these items in addition to traditional dining car fare — but not as a replacement.

When one has grown accustomed to cooked-to-order hot meals served in a comfy rolling restaurant setting, enjoyed with fellow passengers, this feels like a downgrade. Something of what gives American train travel its soul is missing. I realize that joining strangers for a meal on a train is not everyone’s cup of tea, which is why sleeping car passengers have always had the option of having their meal served in their rooms.

But now on the Capitol Limited and Lake Shore Limited, the former diner — now a sleeping car passenger lounge where passengers may choose to eat their boxed meals minus tablecloths, silverware and other accoutrements — feels sterile. Without the imposition of community seating, one feels awkward seeking to strike up a conversation with other passengers, so those traveling together tend to keep to themselves.
It appears that on the Capitol, the community dining area is the former cafe end of the Cross Country Cafe, with the snack service being returned to the lower level of the Sightseer Lounge.  But no French toast option for breakfast?  Sad.

Finally, Railway Age provides a platform to longtime Passenger Rail champion Andrew Selden to offer a different sort of rebuttal to Stuart Saunders, and his intellectual heirs in Amtrak.
Amtrak’s strongest single train, in market share, output and average trip length, is the one that serves the least populated, second-longest and most remote market in the entire system—the Empire Builder. This one route encompasses more origin/destination city pairs than some airlines’ entire networks.

Automobiles win the market share battle everywhere, for three reasons inherent in the technology: They are private, and comfortable up to a point; have “infinite” frequency and network (they go exactly when you want, and exactly where you want); and, to most users, the cost is measured subjectively only in incremental out-of-pocket cost, not fully-allocated costs that underlie some common-carrier pricing. These factors make it extremely difficult for any mode to compete with cars for any intercity travel. In any distance range under 1,500-2,000 miles, cars win 90% or greater market share.

Automobile dominance is not uniform, however, in all markets. Cars win higher market share in shorter distance travel. The greatest competitive challenge for rail occurs where the appeal of the car’s attributes (comfort, network, cost) is the strongest, in the 100-500 mile range.

Trips shorter than 100 miles statistically aren’t even “intercity” travel by standard definition. Trips longer than 400-500 miles are harder to do in one day, the car becomes less comfortable, and the value of the “infinite network” is diluted. The car’s advantage declines with distance, but not linearly; the advantage drops off abruptly after 400-500 miles. But cars own the short-to-intermediate market, even in the densest corridors.

Amtrak’s strongest single train, in market share, output and average trip length, is the one that serves the least populated, second-longest and most remote market in the entire system—the Empire Builder. This one route encompasses more origin/destination city pairs than some airlines’ entire networks.

Automobiles win the market share battle everywhere, for three reasons inherent in the technology: They are private, and comfortable up to a point; have “infinite” frequency and network (they go exactly when you want, and exactly where you want); and, to most users, the cost is measured subjectively only in incremental out-of-pocket cost, not fully-allocated costs that underlie some common-carrier pricing. These factors make it extremely difficult for any mode to compete with cars for any intercity travel. In any distance range under 1,500-2,000 miles, cars win 90% or greater market share.

Automobile dominance is not uniform, however, in all markets. Cars win higher market share in shorter distance travel. The greatest competitive challenge for rail occurs where the appeal of the car’s attributes (comfort, network, cost) is the strongest, in the 100-500 mile range.

Trips shorter than 100 miles statistically aren’t even “intercity” travel by standard definition. Trips longer than 400-500 miles are harder to do in one day, the car becomes less comfortable, and the value of the “infinite network” is diluted. The car’s advantage declines with distance, but not linearly; the advantage drops off abruptly after 400-500 miles. But cars own the short-to-intermediate market, even in the densest corridors.
Again, not necessarily in order: some years ago, a Passenger Rail advocate, might even have been Mr Selden, suggested that the passenger rail operators (thinking, broadly, of the Commuter Rail authorities as well as Amtrak), intercity bus operators (this was some years ago) and airlines might have more profitably gone after the 97% or so of passenger miles that people made in their own or as riders in their family car, rather than fighting over the other three percent.  The Builder is an overpurposed train that will take you to the middle of nowhere, and the interstates are pretty far away.  Those hundred mile trips?  On Long Island, that gets you to the Hamptons, a commuter operation.  In Chicago, that's an interurban ride to South Bend or a Hiawatha ride to Milwaukee.  The out-of-pocket costs include Chicago's parking charges: if you drive to Chicago and you don't know where to look, the parking charges for your jaunt will exceed the train fare, they'd even exceed the extra fare for a seat in a Skytop Lounge parlor car or Brightline Select, if we had those things here.

That 400 to 1500 mile range intrigues, though.
Empirically, rail does far better in a different segment, achieving much higher market share. This is the submarket where trip lengths exceed the comfort range of cars, and approach the range where air competes more effectively.

This submarket is in the range of 400- to 1,500-mile average trips. Here, rail competes best and always achieves its highest market share (in corridors where the service is offered). Rail’s market share in longer distance markets is often 5% to 6%, three times rail’s market share in any short distance corridor. A train that overlaps several such markets is inherently more efficient, productive and competitively successful than one that only overlaps several 100- to 300-mile markets. In longer-distance markets, rail’s average trip is twice the entire length of most short corridors.

Empirical demonstration of this phenomenon is abundant. The long-distance group is commercially and competitively much stronger than any short corridor, in market share, output and load factor. The long distance trains produce annually half-again the output of the entire [Acela corridor]. They recover their own capital and operating costs, and have by a very wide margin the lowest subsidy cost, per passenger, per passenger-mile and in the aggregate, in the entire national network. Amtrak told Congress these trains will contribute a positive operating margin this year of $423 million, reducing the corporate deficit and subsidy need by that amount.

Long distance trains also have average trip lengths that closely match the average trip length in domestic aviation (at about 750 miles), another proof that rail competes quite well with air and motor vehicles in longer-distance markets. These trains are also the country’s most undercapitalized, because their load factor is consistently so high that they are statistically nearly sold-out. They are incapable of organic growth for lack of added investment in capacity (inventory).
And yet, those are the trains Stuart Saunders wanted to be rid of, a half-century ago, and those are the trains the current management of Amtrak wishes to remove the amenities from.

1 comment:

Jeff said...

I've probably told you this before, but for several years in the '90s I took Amtrak semi-regularly between D.C. and central Jersey. One night I bought a sandwich at Union Station, got on the Metroliner, and spread out my grad-school work on a table in an otherwise completely empty cafe car, prepared for a pleasant and productive journey.

Once we got underway, an employee scolded me: No outside food was allowed in the cafe car. When I asked her if she really wanted me to take my messy sandwich and eat it on a nice fabric seat in a regular car, she told me that yes, I had to leave; she loomed over me and repeated this "rule" robotically and angrily until I left. Buying a soda and staying wasn't an option; I possessed forbidden outside food. It was 11 p.m. and I was the only soul in the cafe car, so no one else needed the table. I lost two hours of productive work time—and of course I got BBQ sauce on my seat in the coach car.

I later sent a polite letter to the Amtrak marketing director and cc'd their director of public affairs, asking them to clarify their policy, especially in light of advertisements that year promising "service that allows you to be more productive, to relax, dream or create." Nobody acknowledged my letter, so I bought a car, and Amtrak has been dead to me since. I'm occasionally tempted to wonder, though, how many other potential customers (on the pricey northeast corridor) have been deterred by inflexible policies, poor customer service, and a failure to send even token replies to disgruntled riders.