By Andrew Selden, Railway Age Magazine; August 5, 2019
CEO Richard Anderson’s announced strategy to reposition Amtrak’s train operations is a puzzle. It appears incapable of working. He proposes to end most long-distance services in favor of higher frequency corridor services connecting nearby urban areas. Yet, much better opportunities exist that are easier to exploit and promise much higher returns on invested capital.
The short corridors Amtrak already operates, outside of California, are Amtrak’s smallest, commercially-weakest segments (with the lowest annual output, load factors and market shares in their respective corridors), and the segments least capable of organic growth. The long-distance segment that Amtrak disdains has the highest annual output, load factors and market shares of all of Amtrak’s trains. Because their load factors are at or near sold-out levels, and their routes weakly interconnected, they are the trains most susceptible of both organic and scale growth.