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MEMORANDUM
October 16, 1997
TO: All Interested Parties
RE: Request for Support - STB proceedings Regarding Amtrak's Right to Conduct Express Operations over Union Pacific/Southern Pacific.
On September 30, 1997, the Surface Transportation Board instituted a proceeding at Amtrak's request to determine the scope of Amtrak's right to transport express on passenger trains operated over lines of the recently merged Union Pacific and Southern Pacific Railroads ("UP/SP"). Despite Amtrak's broad statutory authority to transport express, UP/SP would have the STB sharply limit that right, a position to which Amtrak takes strong exception. The STB's ruling in the UP/SP proceeding is likely to govern Amtrak's express rights over other railroads as well.
The STB has invited all interested persons to participate in the Amtrak express proceeding, and Amtrak is seeking support for its position in that proceeding. Attachment A describes the STB proceeding and Amtrak's position. Any interested person may provide comments to Amtrak for inclusion in the corporation's November 10, 1997, filing with the STB.
Amtrak would be pleased to assist any person interested in supporting Amtrak's position. If you need assistance of have questions, please contact the following: George Miller (202-637-6575) or Ron Wiltsie (202-637-5629). Both men are lawyers with Amtrak's outside counsel, Hogan & Hartson, L.L.P., 555 Thirteenth Street NW, Washington DC 20009-1109. Because of the very tight time constraints governing the proceedings, we would appreciate your immediate attention to this request.
Thank you.
ATTACHMENT "A"
A key component of Amtrak's plan to assure its financial survival and continuation of its intercity passenger train service is to increase the revenues earned from the transportation of express. While Amtrak has always handled express, it has recently sought to expand this business, consistent with Congressional directive. Amtrak's objective in doing so is to make itself financially independent of federal operating subsidies, and to preserve its existing network of intercity passenger trains, including the Texas Eagle and the Boston to Albany segment of the Lake Shore Limited (neither of which would be in operation absent their current and potential express revenues).
On September 16, 1997, after a period of unsuccessful negotiations with the recently merged Union Pacific and Southern Pacific Railroads, in which UP/SP sought to place stringent limits on the scope of Amtrak's express operations. Amtrak filed an application with the Surface Transportation Board asking it to enter an order affirming and defining Amtrak's right to transport express over UP/SP lines.
The legislation giving Amtrak the right to transport express does not define the term "express" and places no limits on the amount of express that can be carried on an Amtrak passenger train. Congress does, however, direct Amtrak "to take necessary action to increase its revenues from the transportation of ... express." It is Amtrak's position that its statutory authority to handle express encompasses all shipments requiring more expedited transportation than is required for other rail shipments, scheduled service. And/or special handling, and for which the shipper is generally charged more than for other comparable rail shipments.
UP/SP claims that express has to be limited to the transport of small packages and that carload and truckload sized movements do not constitute express; it further asserts that express must be a small and ancillary part of the consist of an Amtrak passenger train. Amtrak's statutory authority to transport express implies no such limitations, and the history of railroad express operations is directly to the contrary. Prior to Amtrak's creation, the Railway Express Agency (the principal railroad express company from at least 1930 through the 1960s) regularly moved carload and truckload sized shipments of express, and passenger trains often carried more than 20 mail and express cars in addition to passenger cars.
The express traffic that Amtrak moves, and will seek in the future to move, is not traffic currently handled by the UP/SP (or the other freight railroads); UP/SP does not provide a service that can meet the necessary scheduling and other requirements of this traffic. Amtrak's principal competition for this traffic is team trucking, for which Amtrak's express service affords an important, attractive and environmentally preferable alternative.
Although Amtrak seeks to expand its express business, it appreciates that this must be done in a careful and well planned fashion. Amtrak understands the need to conduct its express operations so as not to degrade the quality of service to its passengers, and to be sensitive to the operating concerns and current problems of UP/SP (and other freight railroads). Similarly, Amtrak will ensure that trains carrying express cars, which will continue to be much shorter than freight trains, do not tie up grade crossings or otherwise adversely impact the communities Amtrak serves.
On September 30, 1997, the STB entered an order giving Amtrak the interim operating authority it had requested (the right to operate trains up to 18 cars in length and carrying up to 9 cars of express during the pendency of the STB proceeding, limits which should not apply over the long term), and requesting comments from all interested persons regarding the scope of Amtrak's right to transport express over UP/SP's lines. Specifically the STB solicited comments from "other railroads and railroad employees, potential users, and, particularly insofar as operational matters are concerned, cities and towns and the Secretary of Transportation."
The proceeding before the STB is entitled "Application of the National Railroad Passenger Corporation under 49 U.S.C. S 24308(a) - Union Pacific Railroad Company and Southern Pacific Transportation Company, STB Finance Docket No. 33469."
Support provided to Amtrak for inclusion in their filing with the STB might include some or all of the following information:
* If have been involved in efforts to preserve Amtrak service to a community or state, discuss that involvement and the importance of preservation of Amtrak service.
* Discuss the role of express revenues in supporting continuation of Amtrak's intercity passenger service, including the preservation of train service such as the Texas Eagle that would not be in operation but for its current and projected generation of express revenue.
* Explain that Amtrak trains do not create undue grade crossing problems or otherwise adversely impact the communities they serve, and the addition of express cars to those trains is not expected to result in such problems. Explain that Amtrak has a good record of working with communities to address any problems associated with Amtrak operations, citing specific instances if applicable.
* Explain why you oppose UP/SP's position regarding the scope of Amtrak's express rights and support Amtrak's position. Explain from your perspective the considerations which led to this conclusion. Specifically:
* UP/SP would restrict Amtrak's express rights to the carriage of small packages, and would sharply limit the number of express cars that could move on Amtrak's trains.
* Amtrak seeks to exercise the broad rights to transport express that Congress has given it, with the objective of eliminating its dependence on federal operating subsidies and preserving its network of intercity passenger service.
The following points might be useful arguments to include in a letter supporting Amtrak's position on express in proceedings before the Surface Transportation Board. From a strategic standpoint, it might be useful if each of the cities along the Eagle route offered support for Amtrak's express initiative.
The original copy of any letter supporting Amtrak should be sent to Amtrak's outside counsel, Hogan & Hartson, L.L.P., attention Ron Wiltsie, 555 Thirteenth Street NW, Washington DC, 20009-1109. Mr. Wiltsie advises that letters received by November 1 can still be incorporated in Amtrak's filing. It would be helpful for a copy of the letter to also be sent directly to Amtrak president Tom Downs (Washington Union Station, 60 Massachusetts Avenue NE, Washington, DC 20002) to reiterate support for the Texas Eagle.
Data supporting Amtrak's position on express operations, before Surface Transportation Board
* The City of Little Rock recognizes Amtrak passenger train service as an important part of the total transportation system which is available to this region, and strongly supports Amtrak's express initiative as a necessary ingredient to make long distance passenger trains more economically self-sufficient. During the past year, the City of Little Rock has actively worked for preservation of Amtrak's Texas Eagle service through Arkansas, through testimony in congressional hearings one year ago, and by taking steps to increase local awareness of Amtrak service.
* Express service has historically played a significant role in passenger train service through Arkansas. On both the Missouri Pacific (predecessor to Union Pacific) and Rock Island well into the late 1960s, passenger trains through Arkansas included a sizable volume of express and U.S. Mail traffic. While some of this traffic was handled on a less than carload basis, most of the traffic moved in carload lots or aboard piggyback truck trailers carried by the passenger trains. The revenue from this traffic made a significant contribution to the overall revenues generated by passenger trains in the pre-Amtrak era. For example, of the six Missouri Pacific mainline trains serving Little Rock in 1967, two trains (train numbers 1 and 2) carried primarily passenger cars with several mail and express cars. The remaining four trains (train numbers 3 and 4, and numbers 7 and 8) carried approximately fifteen to twenty Railway Express and U.S. Mail cars and one or two coaches. The Rock Island train serving Little Rock was similar, with 10-12 express and mail cars and one coach. This example illustrates the traditional mix of passenger, express, and mail traffic which was found on passenger trains throughout the country prior to Amtrak's assumption of train operations from the private railroads.
* Amtrak's decision to explore the traditional express function of passenger trains has been directly responsible for the Texas Eagle remaining in service, rather than being discontinued. Discontinuance of this train would have ended all passenger train service to Arkansas and much of Texas, including the Dallas-Fort Worth metroplex. As a direct result of express revenues supplementing passenger revenues, the now tri-weekly Eagle will begin operating four days/week in February, and may begin daily operation this summer, thus affording a much more convenient schedule for passengers.
* Addition of express cars to the Texas Eagle will have no impact whatsoever in terms of grade crossing problems in this region. Given the heavy volume of Union Pacific freight trains already present on these lines, neither a slightly longer passenger train nor the addition of additional frequencies would result in any significant impact. The addition of express cars will in fact provide a positive impact on highway traffic, by helping reduce truck traffic on already overcrowded highways.
* Union Pacific's opposition to Amtrak's express traffic initiative is unwarranted. The UP is presently unable to handle even its traditional freight traffic, currently resulting in great dissatisfaction among many shippers in Arkansas and Texas. Even under more normal operating conditions the Union Pacific's various freight services are not satisfactory for movement of high priority shipments requiring expedited transportation, and Union Pacific has not attempted to offer such service since exiting from private passenger train operation when Amtrak was created in 1971. The Union Pacific has no historical precedent upon which to base their extremely narrow and limited definition of Amtrak's express rights.
