The National Railroad Passenger Corporation, doing business asAmtrak/ˈæmtræk/, is a partially government-funded American passenger railroad service. It is operated and managed as a for-profit corporation, and provides medium- and long-distance intercity service in the contiguous United States. Amtrak was founded in 1971 through the government-sponsored consolidation of most of the preexisting passenger rail companies in the United States.
Amtrak operates more than 300 trains each day on 21,300 miles (34,000 km) of track with select segments having civil operating speeds of 150 mph (240 km/h) and connecting more than 500 destinations in 46 states in addition to three Canadian provinces. In fiscal year 2015, Amtrak served 30.8 million passengers and had $2.185 billion in revenue, while employing more than 20,000 people. Nearly two-thirds of passengers come from the ten largest metropolitan areas and 83% of passengers travel on routes shorter than 400 miles. Its headquarters is at Union Station in Washington, D.C.
From the mid-19th century until about 1920, nearly all intercity travelers in the United States moved by rail.[page needed] Historically, passenger trains in the US were owned and operated by the same privately owned companies that operated freight trains. About 65,000 railroad passenger cars operated in 1929.
From 1920 into the later 20th century, passenger rail's popularity diminished and there was a series of pullbacks and tentative recoveries. Rail passenger revenues declined dramatically between 1920 and 1934 because of the rise of the automobile.[page needed] In the same period, many travelers were lost to interstate bus companies such as Greyhound Lines. However, in the mid-1930s, railroads reignited popular imagination with service improvements and new, diesel-powered streamliners, such as the gleaming silver Pioneer Zephyr and Flying Yankee.[page needed] Even with the improvements, on a relative basis, traffic continued to decline, and by 1940 railroads held 67 percent of passenger-miles in the United States.[page needed]
World War II broke the malaise; passenger traffic soared sixfold thanks to troop movements and restrictions on automobile fuel.[page needed] After the war, railroads rejuvenated overworked and neglected fleets with fast and often luxurious streamliners – epitomized by the Super Chief and California Zephyr – which inspired the last major resurgence in passenger rail travel.
The postwar resurgence was short-lived. In 1946, there remained 45 percent fewer passenger trains than in 1929,[page needed] and the decline quickened despite railroad optimism. Passengers disappeared and so did trains. Few trains generated profits; most produced losses. Broad-based passenger rail deficits appeared as early as 1948[page needed] and by the mid-1950s railroads claimed aggregate annual losses on passenger services of more than $700 million (almost $5 billion in 2005 dollars when adjusted for inflation).[page needed]
By 1965, only 10,000 rail passenger cars were in operation, 85 percent fewer than in 1929. Passenger service was provided on only 75,000 miles (120,000 km) of track, a stark decline. The 1960s also saw the end of railway post office revenues, which had helped some of the remaining trains break even.
Causes of the decline of privately operated passenger rail service
The causes of the decline of passenger rail in the United States were complex. Until 1920, rail was the only practical form of intercity transport, but the industry was subject to government regulation and labor inflexibility. By 1930, the railroad companies had constructed, with private funding, a vast and relatively efficient transportation network.
When the federal government began to construct the National Highway System, the railroads found themselves faced with unprecedented competition for passengers and freight with automobiles, buses, trucks, and aircraft, all of which were heavily subsidized by the government road and airport building programs. In 1916, the amount of track in the United States peaked at 254,251 miles (409,177 km), compared to 140,695 miles (226,427 km) in 2007 (although it remained the largest rail network of any country in the world).
Some routes had been built primarily to facilitate the sale of stock in the railroad companies; they were redundant from the beginning. These were the first to be abandoned as the railroads' financial positions deteriorated, and the rails were routinely removed to save money on taxes. Many rights-of-way were destroyed by being broken up and built over, but others remained the property of the railroad or were taken over by local or state authorities and turned into rail trails.
From approximately 1910 to 1921, the federal government introduced a populist rate-setting scheme. During World War I the railroads proved incapable of functioning as a cohesive network. This forced the United States Government to nationalize the rail industry temporarily. In the 1920s railroad profits stagnated, many redundant and unprofitable lines were abandoned, and many passenger facilities were allowed to fall into a cycle of deferred maintenance, all of which in small ways drove passengers away, either by higher fares or less appealing service. At the same time, the rise in popularity of the automobile and US Highways such as the Lincoln Highway began to eat away at local rail passenger traffic. Increases in labor costs also further hindered the railroads' ability to make profits on smaller and more sparsely populated lines.
The primary regulatory authority affecting railroads, beginning in the late 19th century, was the Interstate Commerce Commission (ICC). The ICC played a leading role in rate-setting which at times hindered railroads' ability to be profitable in the passenger market. In the 1930s, train speeds were ever increasing, but no advancements were being made in signalling and safety systems to prevent collisions. This led to the horrific Naperville train disaster of 1946 and other crashes in New York in 1950. In 1947 the ICC issued an order requiring US railroads, by the end of 1951, to install automatic train stop, automatic train control or cab signalling wherever any trains would travel at 80 mph (130 km/h) or faster.
Such technology was not widely implemented outside the Northeast, effectively placing a speed limit in other areas which is still in effect today, and why the 79 mph (127 km/h) maximum passenger train speed is common in the United States. In 1958, the ICC was granted authority to allow or reject modifications and eliminations of passenger routes (train-offs). Many routes required beneficial pruning, but the ICC delayed action by an average of eight months and when it did authorize modifications, the ICC insisted that unsuccessful routes be merged with profitable ones. Thus, fast, popular rail service was transformed into slow, unpopular service.
The ICC was even more critical of corporate mergers. Many combinations which railroads sought to complete were delayed for years and even decades, such as the merger of the New York Central Railroad and Pennsylvania Railroad, into what eventually became Penn Central, and the Delaware, Lackawanna and Western Railroad and Erie Railroad into the Erie Lackawanna Railway. By the time the ICC approved the mergers in the 1960s, slower trains, years of deteriorating equipment and station facilities, and the flight of passengers to air and automobile transportation had taken their toll and the mergers were unsuccessful at preserving these railroad's passenger train service. It is important to note the Erie Lackawanna was never a major hauler of passengers, nor its predecessor roads, and was mostly a freight railroad. The Penn Central merger was a failure because it merged two large struggling railroads on paper only, two separate management structures remained with little or no integration of assets or management of the former Pennsylvania Railroad and New York Central system. The massive overhead costs of this operating scheme played a far greater role in the Penn Central failure than any actions take by the ICC or any other US Government agency.
At the same time, railroads carried a substantial tax burden. A World War II–era excise tax of 15% on passenger rail travel survived until 1962. Local governments, far from providing needed support to passenger rail, viewed rail infrastructure as a ready source for property tax revenues. In one extreme example, in 1959, the Great Northern Railway, which owned about a third of one percent (0.34%) of the land in Lincoln County, Montana, was assessed more than 91% of all school taxes in the county. To this day, railroads are generally taxed at a higher rate than other industries, and the rates vary greatly from state to state.
Railroads also faced antiquated work rules and inflexible relationships with trade unions. Work rules did not adapt to technological change. Average train speeds had doubled from 1919 to 1959, but unions resisted efforts to modify their existing 100- to 150-mile work days. As a result, railroad workers' average work days were roughly cut in half, from 5–7½ hours in 1919 to 2½–3¾ hours in 1959. Labor rules also perpetuated positions that had been obviated by technology; for example, when steam locomotives were replaced with diesel locomotives the rules required a fireman or stoker aboard the engine at all times, even in switching yards. Between 1947 and 1957, passenger railroad financial efficiency dropped by 42% per mile.
While passenger rail faced internal and governmental pressures, new challenges appeared that undermined the dominance of passenger rail: highways and commercial aviation. The passenger rail industry declined as governments put money into the construction of highways and government-owned airports and the air traffic control system.
As automobiles became more attainable to most Americans, the freedom, increased convenience and individualization of automobile travel became the norm. Government actively began to respond with funds from its treasury and later with fuel-tax funds to build a non-profit network of roads not subject to property taxation. Highways then surpassed the for-profit rail network that the railroads had built in previous generations with corporate capital and government land grants. All told between 1921 and 1955 governmental entities, using taxpayer money and in response to taxpayer demand, financed more than $93 billion worth of pavement, construction, and maintenance.
In the 1950s affordable commercial aviation expanded as the Jet Age arrived. Governmental entities built urban and suburban airports, funded construction of highways to provide access to the airports, and provided air traffic control services.
Until 1966, most U.S. Postal Service mail was transported on passenger trains. The mail contracts kept many passenger trains economically viable. In 1966, the U.S. Postal Service switched to trucks and airplanes, subsidizing planes instead of trains, which no longer had mail as a source of revenue.
In the late 1960s, the end of passenger rail in the United States seemed near. First had come the requests for termination of services; then came the bankruptcy filings. The Pullman Company became insolvent in 1969,:147 followed, in 1970, by the dominant railroad in the Northeastern United States, the Penn Central.:234 It now seemed that passenger rail's financial problems might bring down the railroad industry as a whole, yet few in government wanted to be held responsible for the extinction of the passenger train.
In 1970, Congress passed, and President Richard Nixon signed into law, the Rail Passenger Service Act. Proponents of the bill, led by the National Association of Railroad Passengers (NARP), sought government funding to assure the continuation of passenger trains. They conceived the National Railroad Passenger Corporation (NRPC), a hybrid public-private entity that would receive taxpayer funding and assume operation of intercity passenger trains. The original working brand name for NRPC was Railpax, but shortly before the company started operating it was changed to Amtrak. There were several key provisions:
Any railroad operating intercity passenger service could contract with the NRPC, thereby joining the national system.
Participating railroads bought into the NRPC using a formula based on their recent intercity passenger losses. The purchase price could be satisfied either by cash or rolling stock; in exchange, the railroads received NRPC common stock.
Any participating railroad was freed of the obligation to operate intercity passenger service after May 1, 1971, except for those services chosen by the Department of Transportation (DOT) as part of a "basic system" of service and paid for by NRPC using its federal funds.
Railroads that chose not to join the NRPC system were required to continue operating their existing passenger service until 1975 and thenceforth had to pursue the customary ICC approval process for any discontinuance or alteration to the service.
Of the twenty-six railroads still offering intercity passenger service in 1970, only six declined to join Amtrak. Nearly everyone involved expected the experiment to be short-lived. The Nixon administration and many Washington insiders viewed the NRPC as a politically expedient way for the President and Congress to give passenger trains a "last hurrah" as demanded by the public. They expected Amtrak to quietly disappear as public interest waned. After Fortune magazine exposed the manufactured mismanagement in 1974, Louis W. Menk, chairman of the Burlington Northern Railroad, remarked that the story was undermining the scheme to dismantle Amtrak. Proponents also hoped that government intervention would be brief, but their view was that Amtrak would soon support itself. Neither view has proved correct. Popular support has allowed Amtrak to continue in operation longer than critics imagined, while financial results have made a return to private operation infeasible.
Amtrak's early years are often called the Rainbow Era, which refers to the ad hoc arrangement of the rolling stock and locomotives from a pool of equipment, acquired by Amtrak, at its formation, that consisted of a large mix of paint schemes from their former owners. This rolling stock, which for the most part still bore the pre-Amtrak colors and logos, formed the multi-colored consists of early Amtrak trains. By mid-1971, Amtrak began purchasing some of the equipment it had leased, including 286 second-hand locomotives, of the EMD E and F types, 30 GG1 electric locomotives, and 1290 passenger cars, and continued leasing even more motive power. By 1975 the official Amtrak color scheme was painted on most Amtrak equipment and newly purchased locomotives and rolling stock began appearing.
Amtrak soon had the opportunity to acquire rights-of-way. Following the bankruptcy of several northeastern railroads in the early 1970s, including Penn Central, which owned and operated the Northeast Corridor (NEC), Congress passed the Railroad Revitalization and Regulatory Reform Act of 1976. A large part of the legislation was directed to the creation of Conrail, but the law also enabled the transfer of the portions of the NEC not already owned by state authorities to Amtrak. Amtrak acquired the majority of the NEC on April 1, 1976. (The portion in Massachusetts is owned by the Commonwealth and managed by Amtrak. The route from New Haven to New Rochelle is owned by the Metropolitan Transportation Authority and the Connecticut Department of Transportation as the New Haven Line.) This main line became Amtrak's "jewel" asset, and helped the railroad generate significant revenues. While the NEC ridership and revenues were higher than any other segment of the system, the cost of operating and maintaining the corridor proved to be overwhelming. As a result, Amtrak's federal subsidy was increased dramatically. In subsequent years, other short route segments not needed for freight operations were transferred to Amtrak.
In its first decade, Amtrak fell far short of financial independence, which continues today, but it did find modest success rebuilding trade. Outside factors discouraged competing transport, such as fuel shortages which increased costs of automobile and airline travel, and strikes which disrupted airline operations. Investments in Amtrak's track, equipment and information also made Amtrak more relevant to America's transportation needs. Amtrak's ridership increased from 16.6 million in 1972 to 21 million in 1981.
Ridership stagnated at roughly 20 million passengers per year amid uncertain government aid from 1981 to about 2000. Thomas Downs succeeded Claytor in 1993. Amtrak's stated goal remained "operational self-sufficiency." By this time, however, Amtrak had a large overhang of debt from years of underfunding, and in the mid-1990s, Amtrak suffered through a serious cash crunch. Under Downs Congress included a provision in the Taxpayer Relief Act of 1997 that resulted in Amtrak receiving a $2.3 billion tax refund that resolved their cash crisis. However, Congress also instituted a "glide-path" to financial self-sufficiency, excluding railroad retirement tax act payments.
George Warrington became president in 1998 with a mandate to make Amtrak financially self-sufficient. Passengers became "guests" and there were expansions into express freight work, but the financial plans failed. Amtrak's inroads in express freight delivery created additional friction with competing freight operators, including the trucking industry. Delivery was delayed of much anticipated high-speed trainsets for the improved Acela Express service, which promised to be a strong source of income and favorable publicity along the Northeast Corridor between Boston and Washington, D.C.
Ridership increased during the first decade of the 21st century after implementation of capital improvements in the NEC and rises in automobile fuel costs. The inauguration of the high-speedAcela Express in late 2000 generated considerable publicity and led to major ridership gains. However, through the late 1990s and very early 21st century, Amtrak could not add sufficient express freight revenue or cut sufficient other expenditures to break even. By 2002, it was clear that Amtrak could not achieve self-sufficiency, but Congress continued to authorize funding and released Amtrak from the requirement. In early 2002 David L. Gunn replaced Warrington as president. In a departure from his predecessors' promises to make Amtrak self-sufficient in the short term, Gunn argued that no form of passenger transportation in the United States is self-sufficient as the economy is currently structured. Highways, airports, and air traffic control all require large government expenditures to build and operate, coming from the Highway Trust Fund and Aviation Trust Fund paid for by user fees, highway fuel and road taxes, and, in the case of the General Fund, from general taxation. Gunn dropped most freight express business and worked to eliminate deferred maintenance.
A plan by the Bush administration "to privatize parts of the national passenger rail system and spin off other parts to partial state ownership" provoked disagreement within Amtrak's board of directors. Late in 2005 Gunn was fired. Gunn's permanent replacement, Alexander Kummant (2006–2008), was committed to operating a national rail network, and, like Gunn, opposed the notion of putting the Northeast Corridor under separate ownership, He said that shedding the system's long distance routes would amount to selling national assets that are on par with national parks, and that Amtrak's abandonment of these routes would be irreversible. In late 2006 Amtrak unsuccessfully sought annual congressional funding of $1 billion for ten years. In early 2007 Amtrak employed 20,000 people in 46 states and served 25 million passengers a year, its highest amount since its founding in 1970. Politico noted problems, however, stating that "the rail system chronically operates in the red. A pattern has emerged: Congress overrides cutbacks demanded by the White House and appropriates enough funds to keep Amtrak from plunging into insolvency. But, Amtrak advocates say, that is not enough to fix the system's woes." 
Joseph H. Boardman replaced Kummant as President and CEO in late 2008. In 2011, Amtrak announced its intention to build a small segment of a high-speed rail corridor from Penn Station in NYC, under the Hudson River in new tunnels, and double-tracking the line to Newark, NJ called the Gateway Project, estimated to cost $13.5 billion. After years of almost revolving-door CEOs at Amtrak, in December 2013, Boardman was named "Railroader of the Year" by Railway Age magazine, which noted that with over five years in the job, he is the second-longest serving head of Amtrak since it was formed more than 40 years ago.
From May 2011 to May 2012, Amtrak celebrated its 40th anniversary with festivities across the country that started on National Train Day (May 7, 2011). A commemorative book entitled Amtrak: An American Story was published, and a documentary was created. Four commemorative locomotives and a 40th Anniversary Exhibit Train toured the country. The Exhibit Train visited 45 communities and welcomed more than 85,000 visitors. It was an entirely rebuilt train powered by GE Genesis locomotives and included three refurbished ex-Santa Fe baggage cars and a food service car. Four Genesis locomotives were painted into retired Amtrak paint schemes: No. 156 was in Phase 1 colors, No. 66 was in Phase 2 colors, No. 145 and No. 822 were in Phase 3 colors (822 pulled the Exhibit train), and No. 184 was in Phase 4 colors. In 2014 Amtrak began offering a "residency" program for writers.
Amtrak is no longer required by law, but is encouraged, to operate a national route system. Amtrak has presence in 46 of the 48 contiguous states (except Wyoming and South Dakota). Amtrak services fall into three groups: short-haul service on the Northeast Corridor, short-haul corridor service outside the Northeast Corridor, and long-distance service.
Service on the Northeast Corridor, between Boston, and Washington, D.C., as well as between Philadelphia and Harrisburg, is powered by overhead electric wires; for the rest of the system, diesel locomotives are used. Routes vary widely in frequency of service, from three-days-a-week trains on the Sunset Limited to weekday service several times per hour on the Northeast Corridor (NEC). Amtrak also operates a captive bus service, Thruway Motorcoach, which provides connections to train routes.
The most popular and heavily used services are those running on the NEC, including the Acela Express and Northeast Regional. The NEC runs from Boston to Washington, D.C. via New York City and Philadelphia. Some services continue into Virginia. The NEC services accounted for 11.4 million of Amtrak's 31.6 million passengers in fiscal year 2013. Outside the NEC the most popular services are the short-haul corridors in California. These include the Pacific Surfliner, Capitol Corridor, and San Joaquin, supplemented by an extensive network of connecting buses. Together the California corridor trains accounted for a combined 5,627,000 passengers in fiscal year 2013. Other popular corridors include New York State's Empire Service, NYC-Albany-Syracuse-Rochester-Buffalo-Niagara Falls-Toronto, with 1,488,000 passengers last year,[when?] and Pennsylvania's Keystone Service NYC-Philadelphia-Lancaster-Harrisburg with 1,467,000 passengers.
Per passenger mile, Amtrak is 30–40 percent more energy-efficient than commercial airlines and automobiles overall, though the exact figures for particular routes depend on load factor along with other variables. The electrified trains in the NEC are considerably more efficient than Amtrak's diesels and can feed energy captured from regenerative braking back to the electrical grid. Passenger rail is also very competitive with other modes in terms of safety per mile.
On-time performance is calculated differently for airlines than for Amtrak. A plane is considered on-time if it arrives within 15 minutes of the schedule. Amtrak uses a sliding scale, with trips under 250 miles (400 km) considered late if they're more than 10 minutes behind schedule, up to 30 minutes for trips over 551 miles (887 km) in length.
In 2005, Amtrak's carbon dioxide equivalent emissions per passenger kilometre were 0.116 kg. For comparison, this is similar to a car with two people, about twice as high as the UK rail average (where much more of the system is electrified), about four times the average US motorcoach, and about eight times a Finnish electric intercity train or fully loaded fifty-seat coach. It is, however, about two thirds of the raw CO2-equivalent emissions of a long-distance domestic flight. Amtrak is constantly working to improve its carbon emissions. New electric locomotives, the ACS-64s, coming into service on the Northeast Corridor will be much more efficient, lighter weight, and include regenerative braking. Other new cars on order will also be much more energy efficient.
Outside the Northeast Corridor and stretches of track in Southern California and Michigan, most Amtrak trains run on tracks owned and operated by privately owned freight railroads. Freight rail operators are required under federal law to give dispatching preference to Amtrak trains. Some freight railroads have been accused of violating or skirting these regulations, allegedly resulting in passenger trains waiting in sidings for an hour or longer while waiting for freight traffic to clear the track. The railroads' dispatching practices were investigated in 2008, resulting in stricter laws about train priority. Subsequently Amtrak's overall on-time performance went up from 74.7% in fiscal 2008 to 84.7% in 2009, with long-distance trains and others outside the NEC seeing the greatest benefit. The Missouri River Runner jumped from 11% to 95%, becoming one of Amtrak's best performers. The Texas Eagle went from 22.4% to 96.7%, and the California Zephyr, with a 5% on-time record in 2008, went up to 78.3%. This improved performance coincided with a general economic downturn, resulting in the lowest freight rail traffic volumes since at least 1988, meaning less freight traffic to impede passenger traffic.
Amtrak's loyalty program, Guest Rewards, is similar to the frequent-flyer programs of many airlines. Guest Rewards members accumulate points by riding Amtrak and through other activities, and can redeem these points for free or discounted Amtrak tickets and other rewards.
An electric Amtrak train with two AEM-7 locomotives running through New Jersey on the Northeast Corridor
Along the NEC and in several other areas, Amtrak owns 730 miles (1,170 km) including 17 tunnels consisting of 29.7 miles (47.8 km) of track, and 1,186 bridges (including the famous Hell Gate Bridge) consisting of 42.5 miles (68.4 km) of track. In several places, primarily in New England, Amtrak leases tracks, providing track maintenance and controlling train movements. Most often, these tracks are leased from state, regional, or local governments. Amtrak owns and operates the following lines:
Amtrak owns 2,142 railway cars and 425 locomotives for revenue runs and service. Examples include the GE P42DC, the EMD AEM-7, the Amfleet car and the Superliner car. Occasionally private cars, or loaned locomotives from other railroads can be found on Amtrak trains.
As of 2015[update] Amtrak offers four classes of service: First Class, Sleeper Service, Business Class, and Coach Class:
First Class: First Class service is currently offered on the Acela Express only. Previously First Class was offered on the Northeast Direct (predecessor to the Northeast Regional) as well as the Metroliner up until that service's discontinuation in 2006. Seats are larger than those of Business Class and come in a variety of seating modes (single, single with table, double, double with table and wheelchair accessible). First Class is located in separate cars from the other classes. First Class includes complimentary meal and beverage service along with free newspapers and hot towel service. First Class passengers have access to Amtrak ClubAcela lounges in Washington D.C., Philadelphia, New York, and Boston.
Sleeper Service: Sleeper Service comprises room accommodations on long-distance trains. Rooms are classified into roomettes, bedrooms, family bedrooms and accessible bedrooms. Included in the price of a room are full meals and attendant service. At night, attendants convert rooms into sleeping areas with fold-down beds and fresh linens. Complimentary juice, coffee and bottled water are included as well. Sleeper car passengers have access to all passenger facilities aboard the train. Sleeper passengers have access to the ClubAcela lounges along the Northeast Corridor, Metropolitan Lounges in Chicago, Los Angeles, and Portland (Oregon), and unattended First Class Lounges in New Orleans, Raleigh, St. Louis, and St. Paul/Minneapolis.
Business Class: Business Class is offered on the Acela Express, Northeast Regional, and many short-haul corridor trains. Business Class passengers receive complimentary non-alcoholic beverages and newspapers.
Coach Class: Coach Class is the standard class of service on all Amtrak trains except the Acela Express. Seats in coach recline and feature fold-down trays, lighting, and 120v power outlets. Coaches on long-distance trains are configured with fewer seats per car so that passengers have additional legroom. Most Amtrak trains are all-reserved; a limited number of short-haul corridor trains offer unreserved coach. There is no difference in equipment between reserved and unreserved.
Amtrak launched an e-ticketing system on the Downeaster in November 2011, and rolled it out nationwide on July 30, 2012. Amtrak officials said the system gives "more accurate knowledge in realtime of who is on the train which greatly improves the safety and security of passengers; en route reporting of onboard equipment problems to mechanical crews which may result in faster resolution of the issue; and more efficient financial reporting."
Food and beverage service and warehouse inventories are now managed in real time by electronic systems. The anticipated savings led CEO Boardman to predict that food service could break even within a few years.
Amtrak first offered free Wi-Fi service to passengers aboard the Downeaster in 2008, the Acela Express and the "Regionals" on the NEC in 2010, and the Amtrak Cascades in 2011. In February 2014, Amtrak rolled out Wi-Fi on corridor trains out of Chicago. When all the Midwest cars offer the AmtrakConnect service, about 85% of all Amtrak passengers nationwide will have Wi-Fi access. As of 2014[update], most Amtrak passengers have access to free Wi-Fi. The service has developed a reputation for being unreliable and slow.
Amtrak allows carry-on baggage on all routes; services with baggage cars allow checked baggage at select stations. With the passage of the Wicker Amendment in 2010 passengers are allowed to put lawfully-owned, unloaded firearms in checked Amtrak baggage, reversing a decade-long ban on such carriage.Amtrak Express (reporting marksAMTK, AMTZ) provides small-package and less-than-truckload shipping among more than 100 cities. Amtrak Express also offers station-to-station shipment of human remains to many express cities. At smaller stations, funeral directors must load and unload the shipment onto and off the train. Amtrak hauled mail for the United States Postal Service and time-sensitive freight, but canceled these services in October 2004 due to minuscule profits. On most parts of the few lines that Amtrak owns, trackage-rights agreements allow freight railroads to use its trackage.
In the modern era, Amtrak faces a number of important labor issues. In the area of pension funding, because of limitations originally imposed by Congress, most Amtrak workers were traditionally classified as "railroad employees" and contributions to the Railroad Retirement system have been made for those employees. However, because the size of the contributions is determined on an industry-wide basis rather than with reference to the employer for whom the employees work, some critics, such as the National Association of Railroad Passengers, maintain that Amtrak is subsidizing freight railroad pensions by as much as US$150 million/year.
In recent times, efforts at reforming passenger rail have addressed labor issues. In 1997 Congress released Amtrak from a prohibition on contracting for labor outside the corporation (and outside its unions), opening the door to privatization. Since that time, many of Amtrak's employees have been working without a contract. The most recent contract, signed in 1999, was mainly retroactive.
Because of the fragmentation of railroad unions by job, as of 2009[update] Amtrak has 14 separate unions to negotiate with. Plus, it has 24 separate contracts with those unions. This makes it difficult to make substantial changes, in contrast to a situation where one union negotiates with one employer. Former Amtrak president Kummant followed a cooperative posture with Amtrak's trade unions, ruling out plans to privatize large parts of Amtrak's unionized workforce.
In late 2007 and early 2008, however, major labor issues arose, a result of a dispute between Amtrak and 16 unions regarding which employees should receive healthcare benefits. The dispute was not resolved quickly, and the situation escalated to the point of President Bush declaring a Presidential Emergency Board to resolve the issues. It was not immediately successful, and a strike was threatened to begin on January 30, 2008. In the middle of that month, however, it was announced that Amtrak and the unions had come to terms and January 30 passed without a strike. In late February it was announced that three more unions had worked out their differences, and as of that time it seemed unlikely that any more issues would arise in the near future.
Amtrak commenced operations in 1971 with $40 million in direct federal aid, $100 million in federally insured loans, and a somewhat larger private contribution. Officials expected that Amtrak would break even by 1974, but those expectations proved unrealistic and annual direct Federal aid reached a 17-year high in 1981 of $1.25 billion. During the Reagan administration, appropriations were halved and by 1986, federal support fell to a decade low of $601 million, almost none of which were capital appropriations. In the late 1980s and early 1990s, Congress continued the reductionist trend even while Amtrak expenses held steady or rose. Amtrak was forced to borrow to meet short-term operating needs, and by 1995 Amtrak was on the brink of a cash crisis and was unable to continue to service its debts. In response, in 1997 Congress authorized $5.2 billion for Amtrak over the next five years – largely to complete the Acela capital project – on the condition that Amtrak submit to the ultimatum of self-sufficiency by 2003 or liquidation. While Amtrak made financial improvements during this period, it did not achieve self-sufficiency.
In 2004, a stalemate in federal support of Amtrak forced cutbacks in services and routes as well as resumption of deferred maintenance. In fiscal 2004 and 2005, Congress appropriated about $1.2 billion for Amtrak, $300 million more than President George W. Bush had requested. However, the company's board requested $1.8 billion through fiscal 2006, the majority of which (about $1.3 billion) would be used to bring infrastructure, rolling stock, and motive power back to a state of good repair. In Congressional testimony, the DOT Inspector General confirmed that Amtrak would need at least $1.4 billion to $1.5 billion in fiscal 2006 and $2 billion in fiscal 2007 just to maintain the status quo. In 2006, Amtrak received just under $1.4 billion, with the condition that Amtrak would reduce (but not eliminate) food and sleeper service losses. Thus, dining service was simplified and now requires two fewer on-board service workers. Only Auto Train and Empire Builder services continue regular made-on-board meal service. In 2010 the Senate approved a bill to provide $1.96 billion to Amtrak, but cut the approval for high-speed rail to a $1 billion appropriation.
State governments have partially filled the breach left by reductions in federal aid. Several states have entered into operating partnerships with Amtrak, notably California, Pennsylvania, Illinois, Michigan, Oregon, Missouri, Washington, North Carolina, Oklahoma, Texas, Wisconsin, Vermont, Maine, and New York, as well as the Canadian province of British Columbia, which provides some of the resources for the operation of the Cascades route.
With the dramatic rise in gasoline prices during 2007–2008, Amtrak has seen record ridership. Capping a steady five-year increase in ridership overall, regional lines saw 12% year-over-year growth in May 2008. In October 2007, the Senate passed S-294, Passenger Rail Improvement and Investment Act of 2007 (70–22) sponsored by Senators Frank Lautenberg and Trent Lott. Despite a veto threat by President Bush, a similar bill passed the House on June 11, 2008, with a veto-proof margin (311–104). The final bill, spurred on by the September 12 Metrolink collision in California and retitled Rail Safety Improvement Act of 2008, was signed into law by President Bush on October 16, 2008. The bill appropriates $2.6 billion a year in Amtrak funding through 2013.
Amtrak points out that in 2010, its farebox recovery (percentage of operating costs covered by revenues generated by passenger fares) was 79%, the highest reported for any U.S. passenger railroad.
Amtrak has argued that it needs to increase capital program costs in 2013 in order to replace old train equipment because the multi-year maintenance costs for those trains exceeds what it would cost to simply buy new equipment that would not need to be repaired for several years. However, despite an initial request for more than $2.1 billion in funding for the year, the company had to deal with a year-over-year cut in 2013 federal appropriations, dropping to under $1.4 billion for the first time in several years. Amtrak stated in 2010 that the backlog of needed repairs of the track it owns on the Northeast Corridor included over 200 bridges, most dating to the 19th century, tunnels under Baltimore dating to the American Civil War Era and functionally obsolete track switches which would cost $5.2 billion to repair (more than triple Amtrak's total annual budget). Amtrak's budget is only allocated on a yearly basis, and it has been argued by Joseph Vranich that multi-year development programs and long-term fiscal planning difficult if not impossible.[page needed]
In Fiscal Year 2011, the U.S. Congress granted Amtrak $563 million for operating and $922 million for capital programs.
Government aid to Amtrak was controversial from the beginning. The formation of Amtrak in 1971 was criticized as a bailout serving corporate rail interests and union railroaders, not the traveling public. Critics have asserted that Amtrak has proven incapable of operating as a business and that it does not provide valuable transportation services meriting public support,[page needed] a "mobile money-burning machine." Many argued that subsidies should be ended, national rail service terminated, and the NEC turned over to private interests. "To fund a Nostalgia Limited is not in the public interest." Critics also question Amtrak's energy efficiency, though the U.S. Department of Energy considers Amtrak among the most energy-efficient forms of transportation.
Proponents[who?] have pointed out that the government heavily subsidizes the Interstate Highway System, the Federal Aviation Administration, many airports, among many aspects of passenger aviation. Massive government aid to those forms of travel was a primary factor in the decline of passenger service on privately owned railroads in the 1950s and 1960s. In addition, Amtrak pays property taxes (through fees to host railroads) that highway users do not pay. Advocates have asserted that Amtrak should only be expected to be as self-sufficient as those competing modes of transit.
Along these lines, in a June 2008 interview with Reuters, Amtrak President Alex Kummant made specific observations: $10 billion per year is transferred from the general fund to the Highway Trust Fund; $2.7 billion is granted to the FAA; $8 billion goes to "security and life safety for cruise ships." Kummant makes a comparison of public subsidies: "it's like $40 a passenger for Amtrak and $500 to $700 per automobile." Moreover, Amtrak provides all of its own security, while airport security is a separate federal subsidy. Kummant added: "Let's not even get into airport construction which is a miasma of state, federal and local tax breaks and tax refinancing and God knows what."
The Rail Passenger Service Act of 1970, which established Amtrak, specifically states that "The Corporation will not be an agency or establishment of the United States Government,"common stock was issued in 1971 to railroads that contributed capital and equipment; these shares convey almost no benefits but their current holders declined a 2002 buy-out offer by Amtrak. There are currently 109,396,994 shares of preferred stock at a par value of $100 per share, all held by the US government. There are currently 9,385,694 shares of common stock with a par value of $10 per share held by four other railroad companies: APU (formerly Penn Central) 53%, BNSF (35%), Canadian Pacific (7%), and Canadian National (5%).
Supporters of Amtrak and transit systems also point out that as the first decade of the 21st century came to a close, the user fees from the Highway Trust Fund did not cover the cost of maintaining the national highway system. Transportation advocacy groups such as the American Association of State Highway and Transportation Officials note that since 2008, the U.S. Congress has authorized transfers of money from the General Fund to the Highway Trust Fund to keep it solvent. Transfers from the General Fund to the Highway Trust Fund include: $8 billion (FY 2008); $7 billion (FY 2009); and $19.5 billion (FY 2010).
^National Railroad Passenger Corporation. "Foreword"(PDF). Annual Report Fiscal Year 2011. National Railroad Passenger Corporation. Archived from the original(PDF) on 2012-08-12. Retrieved 30 July 2012.