Rail 706: America is a very different place

It is difficult to exaggerate the difference in railways between the United States and Britain. I am in the USA for the third trip in three years, this time to promote my new book, The Great Railway Revolution, the history of American railroads in several cities across the country with, fortunately, some near enough to travel by rail.

Of course, in America, the book’s title is The Great Railroad Revolution, as if to emphasise the difference. However, the contrast goes much deeper than the difference in language but oddly in some respects the political debates are not dissimilar especially over high speed rail but also over the general issue of government support and subsidies. In other respects, however, American railway operations are possibly a generation behind those in Europe and the gap shows little sign of narrowing.

The theme of my talk on the book is that America had a love affair with the railways which developed into an acrimonious relationship and ultimately a divorce that has proved deeply damaging to the passenger rail network. Indeed, there isn’t really a passenger rail network, not one that affords any kind of expectation that it is possible to travel between any two cities in the country by rail.

There is a network of sorts in the North East linking the major cities of Washington, Baltimore, Philadelphia, New York and Boston. This is the only part of the country where rail rather than air is the dominant mode for those not travelling by car but services remain slow, averaging barely 50mph for the most part and Amtrak offers a clunky service. Bureaucracy prevails: you have to show ID before buying a ticket – and vastly overstaffed – there were at least 3 conductors on the eight car train I travelled on between Philadelphia and Lancaster. They have this odd system of checking your ticket, and then issuing another one which they put in a holder on the baggage rack.

On the train from Philadelphia airport to the elegantly refurbished 30th Street station in the centre of town, worth a visit even if your train is just passing through, I had to pay $7 in cash to a conductor who then issued the sort of ticket that I collected as a child in the sixties, clipping it quickly and incomprehensibly in various places’. Then, if you take the New York train through Philly and on to Pittsburgh, you have to wait in the semi darkness for 20 minutes as they change from electric to diesel. No one in England would put up with that sort of thing.

Amtrak is in desperate need of labour reform and modern management, and as a result gets mixed up in the sort of debates that raged in Britain before privatisation. Amtrak is, of course, a great anomaly in American society as it is a government owned company operating in a commercial environment – not what you would expect in the land of free enterprise, but then America is full of contradictions. It recently celebrated its 40th year of existence, which is an amazing achievement given that it was set up as a temporary stopgap to maintain a few passenger rail services at a time they were being closed down so fast by their owners who were primarily interested in freight that there would not have been any left by the mid 1970s had the government not intervened. Indeed, some passengers were simply dumped off trains half way through their journey when the companies got permission to close the service down.

In the rest of the country, Amtrak provides a series of daily or thrice weekly trains which trundle huge distances as a kind of railtour but not useful to anyone who does not have lots of time on their hands or is scared of flying. Most of Amtrak’s losses are made on these trains, but they cannot be either removed – as they have the support of politicians whose votes are needed to retain subsidy for the northeast corridor – or improved which would save money – because Amtrak is at the mercy of the big freight railroads who own the track. There is no independent regulator in the system to decide on disputes between the freight companies and Amtrak.

Amtrak, therefore, faces a constant struggle to survive, let alone thrive. It is permanently starved of funds and tends to respond by putting forward schemes that require billions of dollars of investment but without looking to tackle its cost problems by taking a harder line with the all-powerful rail unions. It was precisely this kind of situation which led to the privatisation of British Rail. Mitt Romney, the Republican contender for the presidency who, fortunately, as I write seems heading for a heavy defeat, wants to scrap all subsidies to Amtrak but has not really explained whether that would mean closing down existing services or hoping the private sector would maintain them. It is the same muddled thinking that dogs debate in this country. There is, in my view, nothing wrong with nationalised railways – it is the skills of the management that is crucial, not the ownership structure as British experience has shown..

Given all this it is no surprise that Americans simply don’t see rail as a form of transport that might provide an alternative to the car. And with good reason. Even in towns like Lancaster, Pennsylvania, from where I am writing this, which have a reasonable train service – about one train every 90 minutes to Philadelphia and thence New York about 150 miles away (a journey that takes 3 hours) – it is very difficult to rely on trains alone because there are no connections with bus services and it is difficult even to hire a car at the station. (When I arrived, the sole cab driver refused to take me because my hotel was too near to give him a decent fare, so I had to walk the mile and a half there carrying my luggage – fortunately I am fit.) Therefore to create a transit-oriented environment (Americans call public transport ‘transit’) would require far more than merely improving a few train services. It requires a long term change in culture which, frankly, I doubt can come about unless gasoline (petrol) prices soared. In one respect Amtrak is better than British operators – since I was here last year, internet use has become free on trains and when you log on it shows you where your train is on the map. Nice touch.

All this got me thinking about what makes rail so successful in the UK and what it needs to become even more popular. We have, in Britain, for the most part cracked the notion of providing a good train service. It is incomparably better than a couple of decades ago thanks to new trains, improved infrastructure and much greater frequencies. There are still issues over the high price of walk up fares and overcrowding, and certainly it is time that train operators realised that free internet pays for itself in terms of attracting customers from cars and should be part of the service.

Where we still fall down is what happens on the station forecourt. Yes, in some places there is a bus station outside or easy access to the town centre but in others the situation is not that different from Lancaster, Pennsylvania. There have been countless attempts to remedy this, but so often initiatives founder on the diversity of ‘stakeholders’ and their lack of desire to put their money where their mouth is. This is the next big area for improvement in Britain’s railways – connectivity.

The question that arises time and again at the lectures I have given in the States is why did the passenger railways survive relatively unscathed in Europe – Beeching notwithstanding – but all but die out in the States. This is an important question which goes to the root of the relationship between government and railways. In America, the Romney view finds resonance among a surprisingly wide range of people. So much so that plans for high speed rail have been scrapped in some states who have turned down federal funds for preliminary studies because they are so opposed to the very concept of passenger rail. Plans for high speed rail in the US strike me as an attempt to leap before learning to walk. Americans have lost the railway habit, and will need to get it back before consenting to spend, for example, nearly $100bn (£630m) on 500 miles of track in California.

And that’s the nub of the debate. In Europe, by and large, politicians understand that railways need subsidy because the benefits they create in terms of reduced congestion on the roads, easy access to facilities and lower environmental damage make them worthwhile even though they require government support. This is the concept that economists know as ‘externalities’ and are the justification for all kinds of public service. I say ‘by and large’ because I still come across British politicians who ask ‘why can’t the railways pay their own way?’ while blithely agreeing to billions being spent on roads – or, say, the army and the police – without asking the same question.

In America, the idea of railways as a social service, a public good in the economists’ term, has not ever taken root and that is the nub of its problem with railways. There was a period in the 1960s before the creation of Amtrak and the passing of the Staggers Act which deregulated and rescued the American railfreight industry when it seemed quite possible that the American rail network would be all but wiped out because of competition from cars and trucks using the subsidised and toll-free road network. Fortunately, the rail industry was rescued and now thrives, with railfreight having a 40 per cent market share, enough to make our freight companies green with envy, and earning strong profits, even throughout the recession. Some of these big private railroad companies routinely invest $1bn or more annually to maintain and improve their networks. It is big business but it exists thanks to a few enlightened politicians and public pressure. Given the success of the British rail industry, we will never have to go back to arguing for its very survival as was needed in the Beeching era and as Americans still have to do, but the criticism by some politicians of the level of subsidy in the industry and the constant refrain over excessive costs stimulated by the McNulty report still mean that the railways need defending. Over breakfast, I overhead some old ladies who had just been to Britain clucking about what a great time they had on trains and buses ‘you could take them anywhere’ one said ‘and they were so comfortable’. Sometimes we have to count our blessings.

  • RapidAssistant

    Oh no!! – Mystic has now tempted fate by saying that Romney is heading for “a heavy defeat” – remember Rail 703 when you said that ministers couldn’t have got their sums wrong with the WCML deal??? I have everything crossed now that Obama manages to survive….

  • Jack C

    Interesting read. One issue I do have is on this part:
    “I say ‘by and large’ because I still come across British politicians who
    ask ‘why can’t the railways pay their own way?’ while blithely agreeing
    to billions being spent on roads – or, say, the army and the police –
    without asking the same question.”
    Since trains cost money, and a fair bit of money at that, I think it seems quite annoying that they’re also receiving government funding. Especially as they are private businesses; making profit. The road network, and army and police, are not there to make a profit, and actually don’t have ways of covering their own costs, so obviously they need funding.

  • RapidAssistant

    But are the railways “private businesses; making profit”?? No they aren’t – take away all the government subsidies and the entire British rail industry runs at a thumping great loss. The fragmented structure of the industry we suffer at the moment is primarily because of the need to sweep this inconvenient truth under the carpet – and the reason why it can’t be properly “privatised” in the strictest sense of the word. Yes there are highly profitable parts of the rail industry don’t get me wrong – the freight business, and the long distance express routes (which is why there is such a bitter fight over the West Coast at the moment) – but the rest needs propped up by the taxpayer. And there is nothing new here – Dr Beeching came to this conclusion 50 years ago, which is why he wanted to scrap everything except the main lines if he had got his way. The reason why he didn’t get his way is because someone finally twigged that railways are a social service with non-monetised benefits to society. Just like the roads, the police, the NHS and the armed forces are. But it is this perrenial obsession with trying to monetise anything which is at the root of a lot of this nation’s problems IMHO.

  • christianwolmar

    I’m afraid you miss the point. Just because railways are in part a business, they still provide what economists call a public good, available to all. The fact that the industry requires subsidy is the result of various external factors such as the cost of rolling stock, the need to ensure safety, the high cost of maintaining the right of way. However, on the other hand, the railways provide huge benefits to society at large by reducing congestion – imagine if all those commuters had to drive to London – some of whose benefits fall to non-users. That’s what justifies the subsidy.

  • Keith

    Very interesting. I sometimes wonder if US train services suffer from the fact that most Americans have never seen the European model.
    On the other hand is keeping freight off the roads US-style an even greater social service than running some of our half empty off-peak passenger services?

  • Dennis Lytton

    Good analysis. Just a additional note: Outside of the North East Corridor (Washington, DC to Boston) there is significant intercity service between some California cities — Los Angeles to San Diego (1 hour headways during the day), Sacramento to the San Francisco area (hourly as well). Also several roundtrips between Seattle and Portland in the NW corner of the country via Spanish built talgo tilt trains.