Amtrak

• 1. Introduction

  ›

  Amtrak began running trains on the 1st of May 1971, and almost nobody in Washington expected it to last. The Nixon administration and many insiders saw it as a final gesture toward a public that missed its passenger trains. The plan was to let it fade quietly once attention moved on. Instead, in fiscal year 2025, the company carried 34.5 million passengers, an all-time record. Its trains serve every contiguous state except Wyoming and South Dakota, and reach three Canadian provinces. Yet the company has never paid its own way, and it owns only a small fraction of the 21,400 miles of track it uses. Its board seats are filled by presidential nomination. How did a railroad built to disappear become a permanent fixture? Who pays for it, and why do its trains so often wait on a siding for someone else's freight?

  4823726

• 2. The Long Decline

  ›

  In 1916-98 percent of commercial intercity travelers in the United States went by rail, and the other 2 percent used inland waterways. Nearly 42 million people relied on trains as their main way to travel. The same private companies ran both the passenger trains and the freight trains. Then the slide began. Buses, air travel and the car drew riders away, and even popular diesel streamliners like the Pioneer Zephyr could not stop it. By 1940 railroads held 67 percent of commercial passenger-miles. In real terms, passenger-miles had fallen 40 percent since 1916, from 42 billion to 25 billion.

  The Second World War briefly reversed the trend. Troop movements and gasoline rationing pushed the railroads' share to 74 percent in 1945, with a huge 94 billion passenger-miles. After the war, the railroads replaced their overworked fleets with fast, luxurious streamliners. The relief was temporary. Rail's share of the market fell to 46 percent by 1950 and to 32 percent by 1957. Railroads had lost money on passengers since the Great Depression, and the deficit reached $723 million in 1957.

  The causes were argued over for years. Government-funded highways and airports competed directly with the railroads, which, unlike airlines, bus companies and trucking firms, paid for their own infrastructure. Rate regulation dating to the Progressive Era limited profits. Work rules were antiquated and union relationships were inflexible. Crews still earned a day's pay for 100 to 150 miles of work, a distance a streamliner covered in two hours.

  By the 1960s the crisis was plain. Passenger route-miles dropped from 107,000 in 1958 to 49,000 in 1970, the last full year of private operation. In late 1967, most mail moved off passenger trains to trucks, airplanes and freight trains, and the lost revenue hurt. The Atchison, Topeka and Santa Fe Railway responded by filing to discontinue 33 of its remaining 39 trains. The cars ordered after the war were now 20 years old, worn out and in need of replacement.

  6572612

• 3. A Last Hurrah

  ›

  On the 21st of June 1970, the Penn Central, the largest railroad in the Northeastern United States and close to bankruptcy, filed to discontinue 34 of its passenger trains. That filing forced the issue. Rescue ideas had circulated for years. The 1961 Doyle Report urged private railroads to pool their services into one body, and similar calls in 1965 and 1968 drew no support. A federal law in 1965 funded pilot programs in the Northeast Corridor but did nothing about passenger deficits. By late 1969, Congress was weighing equipment subsidies, route subsidies and a quasi-public corporation to run the trains.

  In October 1970, Congress passed the Rail Passenger Service Act, and President Richard Nixon signed it against the objections of most of his advisors. The National Association of Railroad Passengers led the campaign. The new National Railroad Passenger Corporation would be run as a for-profit business while taking taxpayer money. Many who drafted the bill doubted it would ever turn a profit. The for-profit label was the price of support from the White House and more conservative members of Congress.

  The deal worked like a buyout. Railroads that joined paid in with a formula based on their recent passenger losses, using cash or rolling stock, and received common stock in return. After the 1st of May 1971, they were freed from running intercity passenger trains, apart from services chosen for a basic national system. The Secretary of Transportation held all the preferred stock for the federal government. Railroads that stayed out had to keep their passenger trains running until 1975. Of the 26 railroads still offering intercity service in 1970, only six declined to join.

  Choosing the map turned into a fight. The law gave Secretary of Transportation John A. Volpe thirty days to propose endpoints for the required routes. On the 24th of November, he handed Nixon a draft of 27 routes, which he believed would earn a $24-million profit by 1975. The Office of Management and Budget thought that far too optimistic. Its director, George Shultz, argued for cutting the number roughly in half. Nixon agreed, and the draft Volpe made public on the 30th of November held only 16 routes.

  The public, the press and congressmen reacted with anger. The cut-back system made front-page headlines across the country, and word soon leaked that the Department of Transportation had wanted a far larger network. The Interstate Commerce Commission issued its own report on the 29th of December, calling for 15 more routes. More bargaining produced a final list on the 28th of January 1971, which added five routes to the November draft.

  Those routes came with only their endpoints specified. The new corporation had three months to decide how trains would travel between them. It hired consultants from McKinsey & Company, who announced their results on the 22nd of March. Meanwhile the firm Lippincott & Margulies was replacing the working name Railpax. On the 30th of March, the board of incorporators unanimously chose a headless arrow logo and the name Amtrak. The name blends America with trak, a sensational spelling of track. It was made public less than two weeks before the first trains ran.

  The low expectations were not idle. In 1974, Fortune magazine exposed manufactured mismanagement at the new railroad. Louis W. Menk, chairman of the Burlington Northern Railroad, remarked that the story was undermining the scheme to dismantle Amtrak.

  71415265

• 4. The Rainbow Era

  ›

  Amtrak started with no track at all. When it began on the 1st of May 1971, it received no rail lines or rights-of-way, and every route continued earlier service. Of the 366 train routes that had operated before, it kept 184. Several major corridors became freight-only, including the old New York Central Water Level Route from New York to Ohio. Shrunken schedules confused staff, and at some stations trains came only late at night or early in the morning. Disputes with freight railroads over track use led to reroutes, cancellations and replacement buses. One bright spot was the Coast Starlight between Los Angeles and Seattle. It was stitched together from three formerly separate routes, proved an immediate success, and gained daily service by 1973.

  To run half the old schedule, Amtrak leased about 1,200 of the best cars from the roughly 3,000 the private railroads owned. All were air-conditioned, and 90 percent were low-maintenance stainless steel. The cars and locomotives kept the paint and logos of their former owners, so trains ran in mismatched colors. That patchwork gave the period its name. In mid-1971, Amtrak began buying equipment it had leased, including 286 EMD E and F unit diesel locomotives, 30 GG1 electric locomotives and 1,290 passenger cars. By 1975, the official Amtrak color scheme covered most of the fleet.

  The stations told a similar story of inherited duplication. On the day before Amtrak began, intercity trains used five Chicago terminals: LaSalle, Dearborn, North Western Station, Central and Union. Trains at LaSalle stayed put, because their operator, Rock Island, could not afford to join. Of Dearborn's trains, Amtrak kept only a pair of Santa Fe trains, which moved to Union Station on the first day. Dearborn closed after the last pre-Amtrak Santa Fe arrival on the 2nd of May. North Western Station became commuter-only, and Central Station kept its trains until a new routing in March 1972.

  In New York City, Amtrak had to keep using both Penn Station and Grand Central. No track connection could carry trains from upstate New York into Penn Station until the Empire Connection was built in 1991. In 1978, Amtrak launched a Standard Stations Program to cut costs, speed construction and polish its image. The cash-strapped railroad built relatively few of them.

  1416182223

• 5. The Jewel Corridor

  ›

  On the 1st of April 1976, Amtrak acquired most of the Northeast Corridor, the line between Washington and Boston once owned by the bankrupt Penn Central. Congress made it possible through the Railroad Revitalization and Regulatory Reform Act of 1976, a law mostly about creating Conrail. Some sections stayed with others. Massachusetts owns its portion and Amtrak manages it. The stretch from New Haven to New Rochelle belongs to New York's Metropolitan Transportation Authority and the Connecticut Department of Transportation. Amtrak today owns 363 of the corridor's 457 miles. The line became Amtrak's jewel, bringing in more riders and revenue than any other segment. But the cost of maintaining it proved overwhelming, and the federal subsidy rose dramatically.

  Speed became the corridor's selling point. In the 1980s, Metroliner service between Washington and New York got new equipment, faster schedules and limited stops. The trip dropped to under three hours, and Amtrak's share of travel between the two cities grew. In the early 1990s, Amtrak borrowed ideas from Europe. A Swedish X 2000 train was leased for tests from October 1992 to January 1993, then carried paying passengers between Washington and New York in two stretches during 1993. Siemens showed Germany's ICE 1, and its North American tour began on the corridor on the 3rd of July 1993.

  On the 9th of March 1999, Amtrak unveiled its own answer, the Acela Express, a high-speed train between Washington and Boston. The Northend Electrification Project extended overhead wires from New Haven, Connecticut, all the way to Boston, and several grade crossings were improved or removed. When Acela began service in late 2000, it generated considerable publicity and major ridership gains. Speeds still vary widely across the network. Most track allows 79 mph or less, several lines were upgraded to 110 mph, and parts of the corridor support 160 mph. One example is the 104.2-mile Keystone Corridor from Philadelphia to Harrisburg, where improvements finished in October 2006 allowed all-electric service at 110 mph.

  The corridor's age is its burden. Amtrak owns 730 miles of track along the corridor and elsewhere, including 17 tunnels and 1,186 bridges. In 2010, Amtrak said its repair backlog included more than 200 bridges, most dating to the 19th century. It also listed tunnels under Baltimore from the Civil War era and obsolete track switches. Fixing everything would cost $5.2 billion, more than triple Amtrak's total annual budget.

  In 2011, Amtrak announced the Gateway Program, a plan for new tunnels under the Hudson River from New York's Penn Station and double track to Newark, New Jersey. Its first cost estimate was $13.5 billion. On the 17th of November 2016, New York, New Jersey and Amtrak formed the Gateway Program Development Corporation to oversee the work. It includes the Hudson Tunnel Project, which would build a new tunnel and rehabilitate the century-old one. The Portal North Bridge would replace a century-old movable bridge that is prone to failure. Later projects, including more track and platforms at Penn Station and the Bergen Loop, would roughly double capacity for Amtrak and NJ Transit trains.

  The corridor's trains, including the Acela and Northeast Regional, are Amtrak's busiest. In fiscal year 2021, they carried 4.4 million of the company's 12.2 million passengers. Four of the six busiest stations by boardings sit on the corridor: New York Penn Station first, Washington Union Station second, Philadelphia 30th Street Station third and Boston South Station fifth. Chicago Union Station ranks fourth, and Los Angeles Union Station sixth.

  3031324542

• 6. The Self-Sufficiency Promise

  ›

  Amtrak opened in 1971 with $40 million in direct federal aid, $100 million in federally insured loans and a somewhat larger private contribution. Officials expected it to break even by 1974. That hope failed, and direct federal aid peaked at $1.25 billion in 1981, a 17-year high. The Reagan administration then halved appropriations. By 1986, federal support had fallen to a decade low of $601 million, almost none of it for capital spending.

  William Graham Claytor Jr. took over in 1982, after retiring as head of Southern Railway. He had also served as Secretary of the Navy. At Southern, he had criticized Amtrak's earlier managers, none of whom came from railroading. Transportation Secretary Drew Lewis cited that criticism as a reason the Democrat was acceptable to the Reagan White House. Claytor still clashed with the administration over money, and limited funding pushed him toward short-term debt.

  By 1995, Amtrak was on the brink of a cash crisis and could not keep up payments on its debts. Thomas Downs, the fifth president, had succeeded Claytor in 1993 and kept the stated goal of operational self-sufficiency. Ridership sat at roughly 20 million a year through uncertain government aid from 1981 to about 2000. In 1997, Congress authorized $5.2 billion over five years, largely to finish the Acela project. The condition was an ultimatum: self-sufficiency by 2003 or liquidation. A provision in the Taxpayer Relief Act of 1997 also delivered a $2.3 billion tax refund that ended the immediate cash crisis.

  George Warrington became the sixth president in 1998, with orders to reach self-sufficiency. He tried express freight shipping, which put Amtrak in competition with the freight railroads that hosted its trains, and with the trucking industry. The new revenue fell short. By 2002, it was clear that self-sufficiency was out of reach, and Congress kept the money flowing while dropping the requirement.

  David L. Gunn replaced Warrington in early 2002 and broke with the promises of his predecessors. No form of passenger transportation in the United States was self-sufficient, he argued, given how the economy was structured. Highways, airports and air traffic control all needed large government spending, drawn from the Highway Trust Fund, the Aviation Trust Fund and general taxation. Gunn dropped most of the express freight business and worked to clear deferred maintenance.

  A Bush administration plan to privatize parts of the national passenger rail system and spin off others to partial state ownership split Amtrak's board. Gunn was fired late in 2005. His successor, Alexander Kummant, who led from 2006 to 2008, also opposed separate ownership of the Northeast Corridor. Shedding the long-distance routes, he said, would mean selling national assets on par with national parks, and the loss would be irreversible. In late 2006, Amtrak asked Congress for $1 billion a year for ten years and did not get it.

  Politico noted a key problem: "the rail system chronically operates in the red." Congress, it observed, overrides White House cutbacks and appropriates just enough to avoid insolvency, which advocates say does not fix the system's woes. Even so, in early 2007 Amtrak employed 20,000 people in 46 states and carried 25 million passengers a year, the most since its founding.

  1213374041

• 7. Guests on Freight Tracks

  ›

  BNSF hosts more Amtrak routes than any other railroad, with 6.3 million train-miles. Outside the Northeast Corridor and stretches in Southern California and Michigan, most Amtrak trains run on tracks owned and operated by private freight companies. Federal law requires those companies to give Amtrak trains dispatching preference. Amtrak has accused freight railroads of violating or skirting the rule, leaving passenger trains waiting for freight to clear the line.

  Measuring lateness is itself a choice. An airline flight is on time if it arrives within 15 minutes of schedule. Amtrak uses a sliding scale instead. Trips under 250 miles count as late after 10 minutes, and trips over 551 miles get up to 30 minutes.

  In 2008, regulators investigated the railroads' dispatching practices, and stricter laws on train priority followed. Amtrak's overall on-time performance rose from 74.7 percent in fiscal 2008 to 84.7 percent in 2009, with long-distance trains and other routes outside the corridor gaining most. The Missouri River Runner jumped from 11 percent to 95 percent. The Texas Eagle went from 22.4 percent to 96.7 percent. The California Zephyr, at a dismal 5 percent in 2008, reached 78.3 percent. The improvement also coincided with a general economic downturn, which cut freight-rail traffic to its lowest volume since at least 1988. Fewer freight trains meant fewer obstacles for passenger trains.

  In March 2018, Amtrak began issuing report cards to the host railroads, grading each on its effect on on-time performance. The first set gave one A, to Canadian Pacific, and two Fs, to Canadian National and Norfolk Southern. Amtrak's median on-time performance from 2018 to 2023 was 74.5 percent, peaking at 80 percent in 2020. The corridor did best, at 81.3 percent. On average, about 57.5 percent of all delay hours were caused by the host railroad.

  The grades moved over time. The 2020 card gave Canadian Pacific and Canadian National an A, BNSF and CSX a B, Union Pacific a C-plus and Norfolk Southern a D-minus. By the 2023 card, Canadian Pacific Kansas City held the only A, Norfolk Southern had climbed to a B-minus, and Union Pacific sat last with a C-minus.

  8687909392

• 8. Who Pays and Who Rides

  ›

  The Rail Passenger Service Act of 1970 states, "The Corporation will not be an agency or establishment of the United States Government." Ownership is split in an odd way. All 109.4 million preferred shares, at a par value of $100, belong to the federal government. Common stock went in 1971 to railroads that contributed capital and equipment. As of February 2015, 9.4 million common shares at $10 par were held by American Premier Underwriters with 53 percent, BNSF with 35 percent, Canadian Pacific with 7 percent and Canadian National with 5 percent. Those shares carry almost no benefits, and their holders turned down a buy-out offer from Amtrak in 2002.

  From the beginning in 1971, critics called Amtrak a bailout for corporate railroads and union railroaders rather than travelers. Some have branded it a "mobile money-burning machine." Many fiscal conservatives want subsidies ended and the Northeast Corridor handed to private interests. The U.S. Department of Energy, however, counts Amtrak among the most energy-efficient forms of transportation.

  Amtrak's farebox recovery in 2010 was 79 percent of operating costs, the highest reported for any U.S. passenger railroad. That rose to 94.9 percent in 2018. In 2019, its best year, Amtrak fell short of breaking even by only $29.4 million.

  California, Pennsylvania, Illinois, Michigan, Oregon, Missouri and Washington are among the states that have partnered with Amtrak to fill part of the gap left by federal cuts. So has the province of British Columbia, which provides some of the resources for the Cascades route. In March 2021, CEO Bill Flynn outlined a proposal called Amtrak Connects US, which would expand state-supported corridors to cities including Las Vegas, Phoenix, Nashville and Scranton. Also in 2021, the Infrastructure Investment and Jobs Act, signed by President Joe Biden, directly appropriated $66 billion for rail over five years. At least $18 billion was designated for new passenger corridors, and $36 billion more was authorized. Amtrak received $22 billion in advance appropriations and $19 billion in fully authorized funds.

  Amtrak carried 15.8 million passengers in 1972, its first full year. By fiscal year 2019 it carried a record 32 million, more than double. The COVID-19 pandemic cut the count to 16.8 million in fiscal 2020, and it fell lower the next year. Recovery followed with 22.9 million in fiscal 2022-28.6 million in 2023 and 32.8 million in 2024, which topped the 2019 record.

  Stephen Gardner, a former Amtrak intern who rose to longtime executive, became CEO in January 2022. He resigned abruptly on the 19th of March 2025, amid reports that the Trump administration had pressured him to step down. Earlier that month, presidential advisor Elon Musk had expressed an intention to privatize Amtrak.

  37478213