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May 2010
by Angela Cotey, Associate Editor
This reporter isn't quite sure what to make of Joseph Boardman as he steps out of his fourth-floor Union Station office, sporting a business suit and Washington Nationals baseball cap less than a week before Opening Day. Amtrak's president and chief executive officer hands a document to his administrative assistant, cracks a joke and heads back into his office, where he removes his hat and jacket, and takes a seat at the conference table.
On this particular day, Boardman's wardrobe matches his personality — at times he's laid back, at other times he's serious and all-business. During the course of an hour-long interview, Boardman spends a good portion of the time sitting with his hands on his head, leaning so far back in his chair it looks as though he may tip over, and talking about Amtrak's strategies, challenges and goals. Every once in a while, Boardman pops up in his chair and leans forward, and speaks with such emphasis that he almost sounds angry. But he's not — he's simply making a point.
There are plenty he's trying to get across these days as Amtrak works to define its role in a new intercity passenger-rail era. Boardman's been at Amtrak's helm for the past year and a half — a time frame that's been pivotal for the intercity passenger railroad. Shortly before Boardman took the reins at Amtrak in November 2008, Congress passed the Passenger Rail Investment and Improvement Act of 2008 (PRIIA), which includes $13 billion for Amtrak between fiscal years 2009 and 2013. Shortly after Boardman took office at Amtrak, Congress passed the American Recovery and Reinvestment Act of 2009, which included $1.3 billion for the railroad.
Both pieces of legislation — coupled with a Congress and Administration that support the need for a national transportation network that includes intercity passenger rail as a critical component — have put Amtrak in a far better position than it's been in during recent years, when the railroad was struggling for survival.
"In the last year and a half, people have discovered that, hey, intercity rail is important," says Boardman, who previously served as Federal Railroad Administrator from 2005 to 2008. "And all of a sudden we had legislation that provided a sea change in what we needed to do."
The additional capital dollars and reauthorization have enabled Amtrak to begin tackling long back-burnered projects and plan for future improvements. But PRIIA also included several Amtrak reform initiatives and called for more competition by enabling states to choose operators other than Amtrak to operate intercity passenger-rail services.
As a result, Amtrak's had to alter its game plan. Where and how the railroad spends its money will be more scrutinized than ever. Developing better relationships with states is becoming more critical. Aging infrastructure and equipment can no longer be overlooked.
But Boardman & Co. are addressing the challenges head-on to position Amtrak for success in the evolving passenger-rail industry. Railroad officials have developed a fleet replacement program and launched a series of Northeast Corridor improvements. They're also competing for more operating contracts with states and transit agencies, declaring their interest in operating high-speed rail services, implementing positive train control and working with states to improve corridor service. Meanwhile, interest in U.S. passenger rail is arguably at an all-time high. Amtrak, Boardman says, is more than ready to get into the game. And not only that — the national intercity passenger railroad is playing to win.
"I don't think there's a whole lot of choice but for us to move forward or die. And hasn't that always been the case for Amtrak?" says Boardman. "Some people say that for too long, Amtrak has been thinking survival. Well, we don't have that mentality anymore and we shouldn't. We're here and we're competing and we're being aggressive."
That's because Amtrak now is better positioned to be competitive. The PRIIA legislation calls for providing the railroad with $2.9 billion in operating subsidies, $5.3 billion for capital projects and $1.9 billion to develop new state passenger-rail corridors during a five-year period. Amtrak also received $1.3 billion through the American Recovery and Reinvestment Act of 2009, which it will use to fund capital improvements throughout its network (for information on how Amtrak is spending that money, as well as how it's complying with PRIIA, see page 28).
In Boardman's view, the most significant — and most needed — PRIIA-related change was putting states in charge of corridor services. The legislation requires that states establish or designate a state rail transportation authority to develop a statewide rail plan, and establish priorities and implementation strategies to enhance rail service.
"Highways are built by the states. Airports are built by the states. Corridor services need to be built by the states," says Boardman. "Now, it's anticipated that Amtrak be the primary vehicle to provide that, because we need a national, interconnected, coast-to-coast, border-to-border intercity rail system in this country."
Amtrak already has partnerships with 15 states that have, or are working to expand and/or improve, intercity passenger-rail service in their respective state.
North Carolina is one of those states. The state always has had a good relationship with Amtrak, but has noticed an improvement during the past two years, says North Carolina Secretary of Transportation Eugene Conti, who also serves as chairman of the American Association of State Highway and Transportation Officials' (AASHTO) Standing Committee on Rail Transportation.
"It's become clear to everybody that the states are going to need to be a partner if we're going to be successful in revitalizing and rebuilding the passenger-rail program in the United States," he says. "And I think there's a new attitude of understanding at Amtrak that the states will be good partners if Amtrak treats them as partners."
Signs of more teamwork between Amtrak and the states are popping up. Last fall, Amtrak partnered with or assisted 25 states to fill out applications for federal high-speed stimulus funds for more than 100 individual projects.
Amtrak also is working with states to add new services. In September 2009, the railroad began a new service between Lynchburg, Va., and Washington, D.C. Amtrak and the commonwealth of Virginia also plan to launch a service between Richmond and points along the Northeast Corridor later this year, and Amtrak is working to expand services with North Carolina.
In addition, Amtrak is conducting studies for states to analyze future service potential. The railroad recently completed studies for Kansas and Ohio, and currently is working on one for the state of Michigan to determine the feasibility of operating 110-mph service.
The studies are nothing new — Amtrak historically has conducted service studies and the states pay them to do so. However, "the fact that they're using us as their vendor, so to speak, to produce these reports for them says a lot about the confidence they have in us to give them a quality product so they can move forward with their state planning efforts," says Amtrak spokesperson Steve Kulm.
The railroad also is taking a broader look at what it needs to do to serve as a critical component in the national transportation network. Passenger-rail service in the United States is evolving to include a mix of conventional train service, higher-speed intercity rail and high-speed rail, and Boardman sees Amtrak as a player in each segment.
"We're out there to compete," says Boardman matter of factly.
And he's instilling that attitude within Amtrak's management team, Kulm says.
"The new legislation really changed the playing field and Amtrak is in much more of a competitive situation than it has been before," he adds. "We need good relationships to maintain what we have, improve and seek new partners, so there's no question we're taking a more hands-on approach. There's interest and activity among higher-level staff and we're not taking our partners for granted."
In March, Amtrak signed a contract with the Southern California Regional Rail Authority, which oversees Metrolink commuter-rail service, to operate trains on all seven of the agency's lines, beginning June 26. The four-year contract includes options for two, three-year extensions.
The railroad also is competing to operate trains for the Maryland Transit Administration's MARC commuter-rail service, which currently is operated by CSX Transportation.
Boardman believes Amtrak's experience in U.S. passenger-rail operations sets it apart from competitors such as French rail operator Keolis (which now has an American division) and North American operator Veolia Transportation.
"You only have to look at those that try to come in and compete with us now. Where do they go for the people to operate? They go to Amtrak. Where do they go to find a training program to train their operators? They go to Amtrak. Where do they go for their safety program and rules? They go to Amtrak," Boardman says confidently. "This sea change has created new competitors that are out there looking at this market, but not really understanding the market as well as they might think."
But an Amtrak competitor has beat out the railroad for at least one operating contract as of late. In November 2009, Virginia Railway Express (VRE) officials announced they would award a new operating contract to Keolis. Amtrak has operated the agency's commuter-rail services since VRE launched operations in 1992. Keolis is expected to take over on July 1.
Keolis "outscored the other three proposers on every one of the evaluation criteria by a substantial margin, and offered a lower price than any of the other proposers," VRE said in a press release, adding that the agency's selection of Keolis "is in no way a reflection on Amtrak or their employees because they have been a loyal partner from the beginning."
However, newspaper reports issued since the new contract was announced have indicated a strained relationship between VRE and Amtrak. Last year, the agency pushed Amtrak to conduct more rigorous inspections after a series of service failures caused large-scale service delays, according to an October 2009 article in the Washington Examiner.
Now that the operational switch-over is imminent, Amtrak is questioning whether VRE will be ready to make the transition. In an April letter to Virginia Transportation Secretary Sean Connaughton, Boardman said that, to his knowledge, train operators plan to stay with Amtrak. Keolis officials say they believe many of the engineers and conductors will switch from Amtrak to their firm.
Expect to see more of Amtrak competing for contracts with states and transit agencies. Railroad execs also will be working to make sure they're in the lineup as states begin seeking operators for high-speed rail services.
Amtrak currently operates 95-mph service between Porter, Ind., and Kalamazoo, Mich., and hopefully will be approved by the FRA to run 110-mph trains along the segment by late this year, says Kulm. Amtrak could operate similar service in other parts of the country, says Boardman, citing the Chicago-St. Louis corridor and routes in New York state as examples.
Amtrak execs are eyeing emerging high-speed rail corridors, too, such as those in Wisconsin and Texas, as well as "greenfield" high-speed rail systems proposed for California and Florida that call for operating along new rights of way. The ultimate goal? To operate all the high-speed trains in the country, says Boardman.
He isn't kidding.
"Amtrak understands how to do it and can be competitive," says Boardman. "We know how to put a schedule together, we know how to make connections and we know how to make it safe."
That's because the railroad currently is operating the United States' only high-speed system: the Acela, between Washington, D.C., New York City and Boston — something that's often overlooked or dismissed by Amtrak and high-speed rail critics, says Boardman.
"We're already in the game of high-speed rail. We have a train that goes 240 kilometers per hour," he says, clearly aggravated over the notion that Acela doesn't qualify as a high-speed system. "Why do I use kilometers? It's so confusing for the American public to hear about trains in Europe going 300 miles per hour. Well, most of the numbers out of Europe are kilometers. We're not really going a lot slower."
In March, Amtrak announced it was creating a new position — vice president of high-speed rail. The job hadn't been filled as of press time, but the VP will focus on how Amtrak can work to become the operator for the California and Florida high-speed rail systems, as well as improve its own high-speed operations in the Northeast Corridor.
For states that are seeking to implement high-speed rail service on an incremental basis, Amtrak can serve as a good partner, says AASHTO's Conti.
"The fact that they've understood that there is a high-speed program beyond what they've done with Acela is a positive recognition," he says. "Very few of us are ready to go to European or Asian standards overnight. California and Florida are the first two states to really step out and commit to working on that type of system. The rest of us will get there incrementally, and having a partner like Amtrak will help us keep that focus."
But if Amtrak is serious about upping its game to become more competitive in the changing passenger-rail world, officials know there are some issues that need to be addressed — first and foremost, an old-and-getting-older fleet.
"We have the oldest fleet on average that we've ever had at Amtrak — 24 years. On average," Boardman stresses. "Some of them are my age, built in 1947-48."
In February, Amtrak released a fleet plan that outlines the railroad's long-term replacement strategy, which calls for ordering a base level of vehicles, then replacing them out to 2040.
"We tried to do two things: Not only do we need to replace the fleet, but we need to do it in a way that we support domestic manufacturing," says Boardman as he lays a copy of the fleet plan out in front of him. "The base will support the manufacturing industry and then the states can buy equipment for their corridor services on top of that."
Turning to a page that shows Amtrak's annual car miles vs. average miles operated at other commuter-rail agencies in the United States, Boardman points out that Amtrak's Superliner Is and IIs — the most heavily used cars in the fleet — each operate 187,000 miles annually.
"That's more than double what Tri-Rail operates its cars at," says Boardman.
A flip of the page shows Amtrak's annual locomotive mileage compared with Class Is.
"BNSF's annual mileage is 83,450. Our P-42s, the workhorse of the diesel fleet, operate 160,465 miles every year on average. Electric locomotives are at 128,000 miles," says Boardman.
The railroad is asking Congress to increase its previously submitted FY2011 budget request of $2.1 billion by $446 million so it can begin the fleet replacement program. The amount totals the annual cash flow requirement for the first two years of the plan. Amtrak would use the proceeds to purchase electric locomotives that operate on the Northeast Corridor, as well as 130 single-level baggage, dining and sleeping cars to replace the Heritage fleet. The railroad also would buy an additional 25 single-level sleeping cars to augment Viewliner cars currently in service on East Coast long-distance routes.
Is Amtrak going to get the funding? It better, says Boardman.
"This is America's railroad. Is this what America wants?" he asks, pointing to a photo of an Amtrak train currently operating on the Silver Star service. The train comprises a 1980s locomotive, 1950s Heritage cars and 1980s Amfleet coaches. "No, it's not. So how do we get there? Is this a difficult year? Probably. Isn't every year difficult? We've got to get started on replacing these."
The fleet replacement program is estimated to cost $11 billion over 14 years.
Amtrak also plans to invest in ADA improvements at stations and positive train control (PTC). Amtrak already has installed PTC throughout the Northeast Corridor using an Advanced Civil Speed Enforcement System and along a segment in Michigan using an Incremental Train Control System. Now, the railroad needs to ensure the systems are interoperable to comply with the FRA's mandate.
PTC is necessary for both freight and passenger railroads, Boardman believes — not just to improve safety, but to boost capacity.
"When you look at Japan running trains four minutes apart, it's not just about the control they have of the trains. They also have the ability to get off the mainlines and into the stations and other trains can pass them," he says. "We're going to have to have that technology to keep up with what we're going to demand from both our passenger and freight railroads for the future."
And when it comes to meeting future passenger-rail demand, Boardman believes Amtrak will be in a position to meet it. In addition to fostering relationships with states and implementing a fleet improvement program, Amtrak has been posting operational progress and continuing to gain riders despite tough economic conditions.
"This is the most efficient passenger railroad in the United States. Let me say that again: This is the most efficient passenger railroad in the United States," Boardman says, leaning in to make his point. "We cover 70 percent of our costs out of our farebox. There are no other passenger railroads that come close to covering those kinds of operating costs."
Amtrak doesn't cover its capital costs, Boardman adds, but "neither do airlines — they don't cover capital costs for airports. Bus companies don't cover capital costs for highways and transit systems don't really cover capital costs of the service they provide."
Amtrak's service is a worthy one, Boardman & Co. believe. After posting ridership records for several years straight, Amtrak in FY2009 registered a small dip, carrying 27.2 million passengers vs. FY2008's 28.7 million. Economy-related ridership declines, particularly on the Northeast Corridor, were to blame, according to Amtrak.
However, the railroad is back on record-breaking pace for FY2010. During the fiscal year's first six months between October and March, Amtrak carried 13.6 million passengers, a 4.3 percent increase compared with the same FY2009 period. With the busy summer travel months ahead, Amtrak officials are confident the railroad will set a new ridership record for the full fiscal year.
Other aspects of Amtrak's future are less certain: Will Congress approve a new surface transportation bill? Will Amtrak receive the funds it needs to launch its fleet replacement program? Will the Administration continue to support intercity and high-speed rail — and put its money where its mouth is?
Amtrak can count on at least one thing, says Boardman: a continued commitment from the management team to stay in the game.
"I was asked to come here and stabilize things, to figure out what kind of a team we need for the future," says Boardman. "I made a commitment I would stay here three to five years to do that."
It appears Amtrak board members are committed, too. In January, they extended Boardman's contract — originally signed as a one-year deal — indefinitely.
Boardman hopes to serve a longer tenure in order to provide some stabilization to the workforce. Since Graham Claytor left Amtrak in 1993 after a more than decade-long term as CEO, the railroad has had a string of leaders that have served terms of five years or fewer. The rest of the senior management team has changed nearly as frequently.
"One of the most serious problems the company's had is its turnover at the top," says Boardman. "Each time there's a change in management, there's a change in direction."
AASHTO's Conti, for one, is pleased with the direction the current management team is taking.
"Joe himself has a great deal of experience from the state level and transit level. He knows a lot of people in the industry and he's brought in a lot of good people," says Conti. "He's put together a team focused on reaching out to the other stakeholders, including the states, and being a good partner in building a national program."
For Amtrak, the game plan outlining the railroad's role in that national program is well under way. Now, they'll need an assist from Congress to carry it out. Amtrak has given members of Congress everything they need — and asked for — to better understand Amtrak's ongoing needs, Boardman says. Now, it's a matter of whether Congress will pony up.
It's something Boardman thinks about often. It would be hard not to, considering his office window provides a straight-on view of the U.S. Capitol. Reclining in his chair, hands back on his head, Boardman relays one of those usually silent conversations he has with those members of Congress who ultimately will decide how deep in the game Amtrak will be able to go.
"I often think to myself, 'You asked for it, now you got it. Here's the fleet plan. Here's the ADA plan. Here's what we need to implement positive train control. Here's the funding we need to maintain our services. Here's what we need to improve," he says. "Are we doing an effective job? Yes, yes we are."
Translation: Amtrak officials believe they have their bases covered. Now it's time to play ball.
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