(Bloomberg) -- It’s been a tough few months even by the standards of America’s beleaguered passenger railroad, Amtrak. Five people were killed and more than 160 injured in two major accidents -- a derailment and a collision with a freight locomotive -- since December. Within a three-week period in January, three Amtrak trains struck automobiles at train crossings, killing four in the automobiles; one of those trains, which struck a garbage truck, was carrying Republican members of the U.S. Congress to a retreat. Amtrak service has long been a target of slights and complaints, yet it soldiers on.
1. What explains the raft of accidents?
There’s no single explanation, but a common thread. The collisions with automobiles happened at three of the almost 130,000 public highway-rail crossings in the U.S., where train engineers can do little about cars that are on the tracks due to motorist error or recklessness. The Amtrak train that ran off the rails on a curve near Tacoma, Washington, on Dec. 18 was going more than twice the speed limit, a human error that could have been corrected by a costly technological upgrade that’s been delayed for years. The Feb. 4 collision of a New York-to-Miami Amtrak train with an empty freight locomotive in South Carolina -- tentatively blamed on a railroad switch that was set in the wrong position -- occurred on tracks owned and maintained by freight railway giant CSX Corp. Freight companies like CSX own most of the tracks Amtrak trains use.
2. What’s the common thread?
Amtrak has been revenue-challenged and reliant on other companies’ tracks since it was borne out of an industry-government compromise almost 50 years ago. While countries in Europe and Asia have built modern intercity networks of high-speed trains plying dedicated tracks, Amtrak still serves routes, and in many cases travels at speeds, that are vestiges of the past.
3. Why was Amtrak created this way?
By the 1960s, American railroads were losing money on transporting passengers and wanted out of that obligation so they could concentrate on freight delivery. In 1970, Congress created a part-public, part-private government corporation, the National Rail Passenger Corp. -- today’s Amtrak -- to take over the money-losing passenger routes. Its dual missions from Congress -- maintaining a national passenger system while functioning as a bottom-line business -- were in conflict from the start. When service began in 1971, President Richard Nixon’s transportation secretary, John Volpe, said Amtrak would begin to break even financially in about three years.
4. How long did it take for Amtrak to break even?
It never has. Net losses topped $1 billion per year from 2010 through 2016, before narrowing to $905 million last year. Adjusted earnings -- Amtrak’s preferred method, which excludes depreciation and other expenses -- are also in the red, with an operating loss of $194 million in the fiscal year that ended Sept. 30, 2017. That’s Amtrak’s best result on record. The steep loses have been bankrolled by federal funds, which as of 2015 totaled more than $45 billion, according to a U.S. government watchdog. In fairness, Amtrak’s financial condition is improving amid an uptick in ridership and ticket revenue, which the company expects to continue. Amtrak projects in its most recent five-year business plan that it will break even on an operating basis in its 2021 fiscal year and post its first operating profit the following year.
5. Why can’t it make money?
Amtrak operates at a surplus on its 457-mile (735-kilometer) Northeast Corridor, where its fastest train, the Acela, connects cities including Washington, Baltimore, Philadelphia, New York and Boston. That route was responsible for about 12 million of Amtrak’s 31.7 million riders last year. But Amtrak also continues to run long-distance routes -- some stretching 2,000 miles or more -- that collectively will lose $2.8 billion between now and 2023 on an operating basis, according to Amtrak projections. The Trump administration proposed eliminating federal funds for those costly routes, but they’ve survived similar threats many times before, in part because they pass through the districts of so many members of Congress.
6. How common are fatal accidents?
There were 178 fatalities involving Amtrak trains in 2017. The vast majority of Amtrak-related deaths are of pedestrians or drivers who trespass onto tracks, whether intentionally or accidentally, often at one of those highway-rail grade crossings that dot the U.S. landscape.
7. Is anything being done to make train travel safer?
Yes, but it’s taking longer than it was supposed to. In 2008, Congress ordered that passenger trains and critical sections of track be outfitted with Positive Train Control, a system based on global positioning satellites that can slow or stop a train automatically, without the involvement of the engineer. Congress’s deadline, 2015, was extended to the end of this year; an additional two-year extension was made available for railroads that made substantial progress. The Federal Railroad Administration recently reported that "few, if any, of the 41 railroads" subject to the law -- including the ones in charge of tracks used by Amtrak -- will fully implement PTC by year’s end. Amtrak says it will meet the deadline for its trains and the small amount of track it owns but might suspend service on tracks controlled by others that fail to activate PTC in time.
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