The Great Railroad Revolution

by Christian Wolmar

  The railroad industry deserves credit for its ability to have exploited deregulation successfully. Other industries that have been deregulated, such as telecoms and aviation, have not enjoyed similar success, as unfettered competition and tearing up the rule book do not necessarily lead to profitability. The airlines, for example, had to be bailed out to the tune of $15 billion following 9/11 and have consistently needed to resort to Chapter 11 of the US Bankruptcy Code, which protects ailing companies from their creditors during economic downturns. The railroads, on the other hand, have consistently prospered since the Staggers Act. The current profitability of the US freight railroads has, however, come at a price for passenger rail. The freight railroads control the system, with the exception of the sections of track owned by Amtrak in the Northeast, and they are reluctant—to put it mildly—to accept more passenger services on their tracks. Moreover, freight trains generally have priority over passenger services. (America is one of the few countries in the world where this is the case.) Sitting in sidings while freight trains trundle by is not an attractive proposition for most passengers. The extent of freight’s dominance is well illustrated by the refusal of CSX to allow the local commuter service extra trains to serve the Baltimore Orioles baseball stadium because it claimed there were not enough train paths. Yet the proximity to the railroad had precisely been one of the reasons for the location of the Orioles stadium when it was built in 1992. This is just a microcosm of the tension between the freight railroads, on the one hand, and the various local transit authorities and Amtrak, on the other. Each time a state or a transit authority seeks to boost train services, there are fierce negotiations over the extra cost and the capacity of the line. On several occasions, local authorities have had to fund improvements to the track in order to obtain train paths for their services. In truth, as already stated, for most of their history, most railroads have primarily been freight carriers, and it is that history that dictates the situation today.

  Amtrak’s decision to focus so much on long-distance, low-frequency trains was a mistake, although understandable because of political pressures from members of Congress who did not wish to lose their local trains. In fact, railroads function best in three markets—heavy freight, commuter networks, and passenger services between large cities spaced a couple or so hours apart—and there are many city pairs in the United States that would benefit enormously from a regular European-type train connection. Yet meeting such demand is very difficult for Amtrak. It is a government agency, and therefore not able to operate with commercial freedom. Worse, any new service requires subsidy at least in the short term—and perhaps forever—and therefore there is a great reluctance by both state and federal governments to sanction any such initiative. Moreover, in the present structure, there is no way for private investors who might be willing to part-fund a scheme to be involved in passenger rail.

  In the 1990s, ambitious plans to connect the country with a network of high-speed trains were announced, and as a result Amtrak launched its Acela Express service between Washington and New York in December 2000. However, these ambitions have largely foundered under the twin difficulties of cost and the hostility of the freight railroads, although the Acela services, operated with new high-speed trains, have proved popular and profitable. While the Acela is sometimes referred to as America’s only high-speed service, it does not really qualify as such since by European or Asian standards it actually runs quite slowly. Although the trains are capable of running as fast as 165 mph, well above the normally accepted high-speed definition of 125 mph, the fastest services average only about 80 mph, because they have to share tracks with conventional trains and there is not enough money to upgrade much of the nineteenth-century infrastructure. Moreover, the cost of buying the equipment was greatly inflated because of the particularly onerous safety rules, which require far higher crashworthiness standards than elsewhere. This is because American railroad safety has continued to be governed by the idea of reducing the damage resulting from accidents rather than trying to prevent them completely, the philosophy that prevails in Europe.

  Moreover, Amtrak, always losing money on its long-distance trains, and forever starved of sufficient funds, has never had the resources or the political backing to develop a truly efficient railroad on its key northeastern network. The fact that in 2010 domestic aviation carried 677 million people whereas Amtrak proudly announced it had passed the 30 million mark for the first time reveals the size of the task facing the railroads in their efforts to claim a share of the intercity business, but is also evidence of their potential for growth. There are many lost opportunities even where there is a railroad. For example, the 128-mile route between San Diego and Los Angeles has more than twenty round-trip flights a day because the dozen daily trains take just under three hours, an average speed of not much over 40 mph. A faster and more frequent rail service would undoubtedly take the planes out of the air, given the hassle of air travel, just as in England, where, for example, there are no direct flights between London and Birmingham, the same distance apart, but which benefit from more than one hundred trains per day in each direction.

  Barack Obama’s $9 billion stimulus package for what was rather misleadingly called “high-speed rail” in 2009 was designed to address this issue by stimulating train travel on various routes, either with improvements to existing lines or in other cases the construction of new high-speed lines. It has had a rocky ride, a reflection yet again of American ambivalence toward the railroads. Originally intended to create ten high-speed corridors and fund a variety of other rail projects, nearly all the money has now been focused on improving services on a half-dozen existing links, such as Seattle–Portland and Chicago–St. Louis, but the biggest chunk of money has been allocated to the development of the controversial nearly $100 billion California high-speed rail scheme linking Los Angeles and San Francisco and eventually intended to connect several other major cities. Strong initial support for California’s ambitious high-speed plans turned into a strong majority against the scheme once the local media started highlighting the proposed cost (originally quoted at $35 billion), the timetable (completion will now not be until midcentury), and the need to demolish hundreds of homes on the route.

  Hostility toward the very idea of rail, often presented as an alien socialist concept by right-wing politicians oblivious to the history of their own country and the railroads’ role in creating it, is never far below the surface. This is evidenced by the fact that Republican administrations in Florida, Wisconsin, and Ohio have rejected being involved in the stimulus package, sending back $2 billion in funding to the federal government because they did not want to be burdened by the long-term costs of running railroads. Partly, this response was inevitable. The Obama plan was a hodgepodge of schemes and ideas with the understandable but misconceived aim of stimulating the economy with a classic Keynesian package of measures rather than as a way of reviving passenger rail in the United States.

  Commuter rail and indeed streetcars, now called “light rail,” have enjoyed a revival, as public money has paid for much-needed investment in new trains and improved infrastructure. In many cities, it soon became obvious that allowing suburban services, often well patronized, to die was a mistake, given the congestion on the roads, and large-scale closures essentially ended by the early 1970s. Already, more-enlightened cities were expanding or coordinating their systems. Northern Illinois, centered on Chicago, is illustrative of the way that commuter rail and public transportation services have generally enjoyed a revival in several forward- looking cities. The creation of the Regional Transportation Authority in 1973, which was approved in a highly controversial and narrow vote, enabled a wide variety of local commuter services to be coordinated under a new brand name, Metra. The authority took over the commuter services of the bankrupt Rock Island in 1980 and subsequently the local routes of the Milwaukee Road when it went bust and the Illinois Central’s electric line. Add in services run on a contract basis by the Burl
ington Northern and the Union Pacific, as well as the Chicago L and several other lines, and the result has been the creation of a busy commuter network carrying more than three hundred thousand people on an average weekday. This type of initiative was replicated across the country, and as George Douglas, writing in 1992, suggested, “with this infusion of public aid, suburban train service in the major cities where it once flourished— New York, Boston, Chicago and Philadelphia—is probably a good deal better than it was thirty years ago.”11 Investment has continued in suburban rail, and several unlikely cities such as Dallas and Albuquerque have modest rail systems; many more are under construction in a host of major cities, often reusing long-abandoned lines.

  The opening of the BART (Bay Area Rapid Transit) system in the San Francisco area in 1972 marked a renewal of interest in metro lines in the United States. Although it has been riven with funding problems and technical difficulties, it has built up into a system with more than one hundred route miles and nearly four hundred thousand daily users. Other cities such as Washington, Los Angeles, and Miami have followed suit with new heavy-rail rapid-transit systems. Streetcars have made a comeback, too. The first modern light-rail system in the United States was opened in 1981 in San Diego, and several cities followed in the 1980s, including Sacramento, Denver, and Portland. As well as its heritage cable system, San Francisco boasts modern streetcars, too. Increasing numbers of cities started looking at reviving streetcars, and in the first decade of the 2000s, more than a dozen new systems began operation. Despite the success of most schemes, new projects invariably arouse opposition, both on grounds of cost and, surprisingly, sometimes even environmental concerns.

  These concerns demonstrate the way that rail remains ever controversial. Even when there is support for rail initiatives, obstacles seem to be placed in its way almost casually and with little regard for the consequences. When a 2008 collision in Los Angeles—caused by a commuter train driver being distracted by his cell phone—killed twenty-five people, the government moved swiftly to mandate that all trains should have “positive train control,” an electronic signaling system that will automatically stop or slow down a train to prevent a crash if the engineer misses a red signal. Although the system may ultimately benefit the railroads marginally by making it possible to run extra trains, effectively they are being asked to pay several billion dollars—the final bill is expected to total $10 billion—to improve the safety of an industry that is already far less dangerous than any other form of land transportation. Commuter railroads, funded largely by local authorities, will in particular struggle to find the sums to pay for the installation of the equipment, for which a comprehensive risk analysis has not been produced. There have been in fact few accidents in the past that would have been prevented by this technology, yet again it appears that the government has been prepared to burden the railroads with an unfunded mandate because most politicians do not seem to understand railroads.

  It is not only the government that hampers progress for the railroads. Many schemes to increase the use of some routes, or indeed reinstate working on lines, have been opposed by well-organized local interests. Ed Burkhardt, the president of Rail World, a company that owns several short lines, suggests it is a lack of historical understanding that results in the breadth of opposition: “It’s a completely spoiled population that has no concept of how this country got rich. If you want to build a new railroad line anywhere in this country, you will be up against huge opposition.”12

  The ferocity with which Americans have turned against their trains can only be explained by the depth of their original love affair with them. The railroads were initially bound up deeply with the American psyche, as they were seen as the cradle of enterprise and the harbinger of progress. The relationship, though, quickly soured when the railroad barons created a climate of antipathy that seemed to gel with a suspicion that mass collective travel was not right for Americans (except, oddly, in planes!). Sarah H. Gordon probably best encapsulates the way that the affection for railroads was, so easily and so finally, transferred to the automobile. Although, in part, it was the policies of the railroad companies that raised the hackles of Americans, in truth it was their very collective nature, something that could not be remedied, that was at the root of the disenchantment:

  As railroads centralized their services, focusing on major routes between cities, the automobile provided transport that could potentially go anywhere. . . . [T]he automobile met the needs of all those fairgoers, picnickers, politicians, and others who found it more difficult to arrange for special fares and excursion trains. The train required more conformity of behavior than ever before. Sitting quietly with arms and legs inside the car, no stopping en route, no rowdiness, no drinking, for many added up to no fun and precious little individuality. The car, if nothing else, held out the promise of adventure that the railroad had offered about a hundred years before.13

  The car remains, for most Americans, the default form of transportation. Rail is seen as a poor man’s option that needs support from taxpayers, always an unpopular notion. It is easy to criticize the railroads as subsidy junkies that are a drain on government finances. However, that is more a result of presentation than substance. The modern big freight railroads have none of the self-promotion skills of their forebears and their Phoebe Snow–type publicity antics. On the contrary, the amazing boost in efficiency since the 1980s and the important role they play in carrying freight are little known to the average American, who imagines that roads are the dominant mode even for long-distance traffic, which is far from the case. Indeed, the $1.4 billion in taxpayer subsidies that Amtrak received in 2011 has to be viewed in the context of support for roads. Depending on what factors are included, it is even possible to suggest that the cost of roads in terms of infrastructure, pollution, climate change, maintenance, road accidents, policing, and so on is greater per mile than the support given to Amtrak. Yet road spending, as in the UK, is generally viewed as investment, while spending on rail is considered subsidy. This is a long-standing gripe of rail supporters. In 1959, the Interstate Commerce Commission calculated that between 1921 and 1959, $140 billion of public money had been provided for streets and highways. Yet between 1950 and 1956, at a time when the railroads were struggling, railroads paid $1.1 billion in federal, state, and local government taxes, amounting to 11 percent of their revenue. However, the railroads themselves invest far more in their own businesses than other industries, typically around 18 percent of revenue.14

  The paradox is that, in many respects, there is a residual affection for the railroads. On a visit to the Lancaster Quilt & Textile Museum, in Pennsylvania, I was struck by an exhibition dedicated to how Christmas had been celebrated throughout the twentieth century. There was a room for each decade, and whereas everything from the style of the trees and the baubles hung on them to the wrapping paper on the presents and the style of the greetings cards changed as time wore on, there was one ever- present gift that seemed to delight the children over the whole period: a train set. Translating that nostalgia into support for railroads in the twenty-first century is a challenge.

  Although it may seem hard to be optimistic for America’s passenger railroads in the face of such widespread ignorance and, at times, sheer hostility, there is in fact plenty of potential. The railroads need to be seen as modern. Amtrak’s long-distance trains, evoking the nostalgia of a long-gone era, are not, in fact, a good advertisement for the railroads. They require subsidy and are effectively a tourist attraction rather than an integral part of the nation’s infrastructure. Few, apart from rail fans and those with a flying phobia, would notice their abandonment. As mentioned above, the railroads are strong in three major markets, and transporting people thousands of miles slowly across a continent by rail is neither cost-effective nor particularly environmentally sustainable.

  Running frequent fast services between city pairs such as New York and Washington, or Dallas and Houston, is precisely where the railroads have a
key advantage and can operate on a commercial basis, although probably not if they have to bear the full costs of providing the infrastructure that their rivals on the roads do not. There is plenty of scope to exploit these opportunities, but that requires strong political direction backed by not inconsiderable sums of money. While the high cost estimates for improvements—a feature of railroads in the UK, too— understandably give ammunition to rail’s opponents, there is no doubt that America would benefit enormously from a better passenger rail network. One suggestion would be to allow private companies to develop property around new rail facilities, the basis of how much rail construction is funded in Japan.

  It is very likely that as the oil starts to run out and becomes very much more expensive, Americans will rue the day that they allowed their passenger rail services to decline to the point of near extinction. All that money begrudged over the years to Amtrak will not be seen as canny business but rather as a missed opportunity. Rail’s energy efficiency and its comfortable travel are advantages that no other mode offers. Railroads are enjoying a revival across the world in the form of metros, light rail, suburban services, and high-speed lines for intercity travel, as well as retaining a large share of the market for freight in several countries. Perhaps nothing better illustrates the reinvention of rail in the twenty-first century than the fact that Saudi Arabia, the world’s biggest oil producer, is building major new lines for both freight and people across the country. Nearby Dubai, that town built in the desert on the basis of the ubiquity of the car, has opened two metro lines stretching forty miles and has plans for two more.