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Since Amtrak chief executive Richard Anderson left his previous job as CEO of Delta Airlines to lead America’s railroad, he’s faced a new challenge — maintaining a relationship with Congress.
The U.S. government owns Amtrak, which is on track to break even on its passenger railroad service next year for the first time in the company’s nearly 50-year history.
Long-distance routes carried 4.5 million passengers in 2019, a less than 1% increase over last year. Operating these 15 routes takes over $1 billion in cash — money that comes from a congressional grant, Anderson says.
Maintaining the western overnight trains is important to the company, he says, but some of these routes run only three days per week.
“That could be put to better use serving more people,” he says. “Because what we're supposed to do is serve people in America in an efficient, safe way.”
Since Anderson joined the company in 2017, he’s clashed with Congress over the future of one particular long-distance route. A group of senators held up confirmation hearings for Amtrak board nominees over Anderson’s plan for the Southwest Chief, a route from Chicago to Los Angeles.
He wanted to break up the route and replace 500 miles with bus service, but Congress has forced Amtrak to continue operating along that existing route.
The route was previously maintained by the BNSF Railway Company until it rerouted its trains and left Amtrak responsible for the line. Amtrak invested over $100 million into this route, which Anderson calls an “antiquated piece of track,” to establish the same safety and quality standards. That’s a lot of money for a stretch of track where some stops see just a handful of daily passengers, he says.
The railroads were designed in the 1920s and don’t meet the needs of today’s commuters, he says.
“Americans live in a very different way and all the growth in our country has come in urban corridors like the corridor from Boston to New York,” Anderson says. “If we're going to deal with congestion, growing population and the carbon footprint of automobiles, Amtrak is the best answer for intercity transportation in a 200 to 300-mile market.”
He estimates 90% of Amtrak riders travel under 300 miles and only 170,000 people take a long-distance train end-to-end each year.
Despite the smaller ridership of long-distance routes, Anderson says the company is searching for ways to best serve rural communities and the vocal group of people who appreciate “the beauty of going 45 miles an hour on a train for a couple of days.”
Though he fondly recalls riding the long-distance rails with his father as a kid, Anderson acknowledges that air travel is faster and cheaper than taking a long-distance train in today’s economy. To combat the convenience and affordability of air travel, the company hopes to invest in the experiential aspect of taking a long-distance train.
One controversial change Amtrak has made under Anderson’s leadership is eliminating the traditional dining experience on some overnight routes.
The trains previously had both a cafe car and a dining car, which was only accessible for people staying in sleeping cars, according to Anderson. Now, some routes only serve food in one car with more modern and higher-quality food options available for all passengers, he says.
Amtrak has to balance meeting passenger needs with a $40 billion backlog on necessary repair investments, Anderson says.
When he took on the role of CEO, Anderson signed a three-year contract for no salary. Since then, he says his team has met “every goal” from operating earnings to safety to increasing ridership.
The board will decide if Anderson will continue to serve as chief executive, he says,
“We want to have continuity regardless of who's sitting in this chair against those goals,” he says, “ so that we are good stewards of the mission of Amtrak and the assets and funding we’re entrusted with by Congress.”
Editors's Note: The word "inner-city" was changed to "intercity" to better reflect the speaker's intended meaning. We also made changes to more accurately reflect Amtrak's changes to its dining cars and the Southwest Chief route's ridership.
This segment aired on December 2, 2019.
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