November 28, 2022

A blog published recently by Governing Magazine seemingly supported many of the fabricated claims Amtrak has been pushing regarding its pursuit of returning passenger rail service to the Gulf Coast. Amtrak – which used to run between New Orleans and Mobile but has not delivered passengers farther east than New Orleans along the Gulf since Hurricane Katrina, claims there is massive support for this project and that it would help the local economy.

Sadly, the facts support none of this.

First, let’s review the statement that Mr. Knox Ross, the secretary and treasurer for the Southern Rail Commission, put to the blog.  Mr. Ross said the SRC isn’t supporting this taxpayer boondoggle because they simply “like to watch a train go by.” He also said that SRC didn’t care if the line turned a profit or, basically if anyone used it – though they thought people would.

Amtrak thinks some people will use it, but whether the cost of servicing those riders is worth it, is another story.

According to Amtrak’s 2015 analysis, the line would lose about $4 million each year to shuttle 26 people, per trip, between New Orleans and Mobile.  In testimony before the Surface Transportation Board earlier this year, Amtrak’s Jim Blair recognized that the line’s 2022 projected ridership would reach less than 25,000 people in the year – and wouldn’t come anywhere close to being profitable.

Talk about putting your worst case forward. If that’s the rosiest assessment Amtrak can conjure for why this line is needed, then reality is going to be a rude awakening. Still, at its best case, Amtrak is point blank telling U.S. taxpayers that it intends to lose $4 million of their money, annually, for as long as this line operates. If this project is anything like most government projects, then Washington will be perfectly happy to keep losing money on this forever. This latter point is a problem Amtrak faces on almost all of its routes, outside of the popular Northeast Corridor.

Looking at the money further, at those anemic ridership projections, taxpayers would be supplementing this travel to the tune of about $336 per rider or nearly $17,500 for each round-trip run the train makes. That seems like an egregious waste of money – even for a government agency that seems to specialize in mismanaging taxpayer dollars. But let’s say for a minute that it is true, and that an untapped market exists for mass transportation options for people to travel between New Orleans to Mobile. Maybe a shuttle is what’s needed?

And so, we called a few charter bus companies in the Gulf and found several, cheaper alternatives, including one that would take all 26 people on the sojourn through the south for about $3,500 roundtrip – or a more affordable $130 or so per seat.

Second, it seems that the only thing this line will really guarantee – besides giving Mr. Ross and others the daily joy of seeing a train roll by – is to add more chaos to an already overtaxed supply chain.

Amtrak wants to add a service that almost no one will use to an extremely busy freight line already dealing with supply chain disruptions in the midst of an economy shaken by historic inflation in the aftermath of a once-in-a-lifetime pandemic. Yet, according to federal law, Amtrak has the right to operate on freight lines – even though the freight lines are privately owned, privately maintained, and privately paid for, or the exact opposite of how Amtrak operates.

The freight interests operating in the Gulf – which, if you look at their footprint across the country, aren’t opposed to passenger rail service – asked Amtrak to pay for some modest infrastructure improvements before starting service to ensure minimal – if any – disruptions to freight traffic.

Amtrak scoffed at this reasonable proposal and dropped out midway through an independent study to determine the extent of improvements needed; ultimately deciding litigation was the way to resolution. Litigation – which has been ongoing for months – is Amtrak’s tactic of choice, especially since they are not paying for it even though they are flush with nearly $70 billion in federal Infrastructure cash. So taxpayers are being forced to pick up the tab for Amtrak’s lawsuit as the company doles out millions of dollars in executive bonuses after suffering huge losses and – we can only imagine – diligently pushing for a rail line to take 26 people to New Orleans at the expense of goods and supplies getting to market.

The blogger claims that this new passenger line would somehow “help the economy,” citing claims of advocates for the restoration of Gulf Coast passenger service that as many as 700,000 foreign tourists who visit New Orleans every year might consider visiting Mississippi and Alabama if they had an option to take the train. But even Amtrak isn’t buying this, citing a maximum passenger load for a Gulf line of 38,000 annually.

What we do know is that an economy currently under the boot of persistent inflation and chronic supply chain issues is already providing plenty of stress and financial challenges for consumers and taxpayers. An additional 28 trains running per week – carrying very few people at a financial loss – would only exacerbate the situation. Maybe some of these trains could carry goods in the empty seats where passengers should be?