Amtrak is spending more on fuel, labor and even maintaining extra locomotives and rail cars than it needs as a result of poor on-time performance, according to the report.
The analysis identified potential short-term benefits of about $12 million from a slight improvement of 5 percent in on-time performance as well as a one-time $336 million in equipment savings and annual cost savings and revenue improvements of $41.9 million if there were more substantial and sustained improvements.
“There is a financial correlation between trains being on time and a railroad’s financial performance,” Jim Morrison, assistant inspector general for audits, said in the report sent to Congress earlier this week. “More reliable performance helps retain existing customers and attract new riders while reducing labor, fuel, and other operating costs.”
Chronically late service has frustrated passengers for years, with no significant relief in sight. Officials at Amtrak have acknowledged the problem, calling the on-time performance rate on its less reliable routes “abysmal.” Officials say they do what they can to minimize effects but that some problems are out of their control.
In a statement, Dennis Newman, Amtrak executive vice president for strategy and planning, said the problem is primarily driven by delays caused by railroads that own most of the rail lines Amtrak uses. This is particularly true for Amtrak’s 15 long-distance train lines, which take passengers cross-country mostly using tracks owned by other railroads.
Fewer than half (46 percent) of long-distance trains arrive on time. They have an average delay of about 49 minutes, according to the analysis. Delays can be much longer on some trains, according to Amtrak’s own data, which shows that one of every five long-distance trains arrives more than two hours late. Ridership on Amtrak’s long-distance routes is in decline, from 4.8 million at its peak in 2013 to 4.5 million in fiscal 2018.
“More than two thirds of our customers arrived at their destination late,” Amtrak’s most recent five-year service line plan concluded, referring to long-distance customers. “This creates a massive challenge to attract and retain customers when Amtrak is unable to deliver the advertised service."
Four long-distance routes are particularly problematic in its arrival targets, according to Amtrak. The Crescent trains between New York and New Orleans get to their destination late nearly 75 percent of the time. It isn’t much better on the Capitol Limited (Washington to Chicago), the Silver Star (New York to Miami) or the Lake Shore Limited (New York to Chicago), where about seven in 10 trains are late.
Amtrak owns only 3 percent of the 21,400 route-miles traveled by its trains, which means many of its trains are on tracks owned by six other railroads: BNSF Railway, Canadian National, Canadian Pacific, CSX, Norfolk Southern and Union Pacific.
Federal law requires those railroads to give passenger trains preference over freight trains, but Amtrak said the railroads routinely disregard these laws, resulting in delays. According to the inspector general analysis, Amtrak pays an average of about $32.8 million each year in incentive payments to host railroads, yet in recent months the freight railroads were responsible for about 59 percent of the train delays.
But the inspector general analysis also points to factors that Amtrak has more control of, including cases where trains are delayed because of late-arriving crews and mechanical problems. Others factors are weather and traffic congestion.
Amtrak’s best-performing service is on state-supported and Northeast Corridor lines, which arrived on time 81 percent and 78 percent of the time, respectively, according to the analysis.
Amtrak owns most of the track in the Northeast, which gives the company more control over its operations in the corridor that carries about 12.1 million passenger trips annually on trains from Washington to Boston. Delays in the corridor are often attributed to work zones, mechanical problems or heavy traffic volumes. The Northeast is America’s busiest rail corridor, serving more than 2,100 passenger trains and 60 freight trains daily. Amtrak shares the tracks with nine commuter and four freight systems.
The Amtrak inspector general analysis said reducing Amtrak’s operating losses depends on improving its on-time performance. It urges Amtrak to take some steps to better understand the budgetary effects of the chronic delays.
“Knowing the costs and revenues associated with delayed trains would help the company make decisions about where to focus attention and resources,” the report said. “Further, data on these impacts would likely help Congress and other external decision makers weigh the need for legislation or other solutions to address delays outside the company’s control.”
The inspector general found that Amtrak owns and maintains more equipment than it needs and keeps more conductors and engineers on call, primarily because of poor on-time performance. By sustaining improvements to on-time performance, Amtrak could reduce the number of on-call conductors and engineers and save the company $11.5 million annually. It could also avoid approximately $336 million in equipment replacement costs, according to the analysis.
According to the report, a 5 percent improvement in on-time performance rate on routes systemwide could yield the company $12.1 million in financial benefits in the first year, including up to $3.9 million in additional revenue and $8.2 million in operational savings. A shorter train run would reduce fuel and labor costs and eliminate the cost of hotel and food vouchers Amtrak provides to passengers who miss connections because of delays.
Additional improvements, including raising to 75 percent the on-time performance rate on the long-distance trains, could lead to an additional $41.9 million per year in cost savings, the report said.
Newman said Amtrak management agrees and will implement the inspector general’s recommendations. In a statement, he also pointed to a separate report by the U.S. Department of Transportation Office of Inspector General that estimated annual gains to Amtrak of $136.6 million if trains off the Northeast Corridor achieved on-time performance levels of 85 percent.
“The findings from these two important reports illustrate the real financial impacts of late trains,” he said.