Senate Committee Looks at Legislative Considerations for Freight and Passenger Rail Amid Pandemic
The Senate Committee on Commerce, Science, and Transportation held a hearing Wednesday, October 21 to discuss the effects and status of the nation’s rail industry as the country continues to grapple with the coronavirus pandemic.Leaders from Amtrak, private railroads, labor unions, and shippers shared their thoughts and concerns to the Committee hoping that new legislation can curb workforce furloughs and funding shortages affecting the industry.
Amtrak broke ridership records last year with over 32 million passengers – a 2.5 percent increase from 2018 – and was on track to set another record in 2020 before the pandemic hit. But with an 80 percent decline in revenue in 2020, Amtrak was forced to make difficult decisions – such as cutting daily long distance service to three days per week. Freight rail companies and shippers also cited challenges with network changes during the pandemic.
Witnesses included the following (written testimony linked):
Witness Panel 1:
- Mr. William Flynn, President and Chief Executive Officer, Amtrak
- Mr. Paul Tuss, Executive Director, Bear Paw Developing Corporation and Member, Montana Economic Developers Association
Witness Panel 2:
- Mr. Frank Chirumbole, Vice President Global Supply Chain, Olin Corporation on behalf of American Chemistry Council
- Mr. Randy Gordon, President and Chief Executive Officer, National Grain and Feed Association
- Mr. Kent Fountain, Chairman, National Cotton Council
- Mr. Ian Jefferies, President and Chief Executive Officer, Association of American Railroads
- Mr. Dennis Pierce, President, Teamsters Rail Conference
Chairman Roger Wicker (R-MS) emphasized the importance of the nation’s rail industry, and the need to invest to keep the rail network stable and efficient moving forward. This includes making sure Amtrak can effectively re-establish service to the Gulf Coast, stating that members of Congress have been working to reinvigorate the New Orleans, LA to Mobile, AL line, deeming it essential for the region. Ranking minority member Maria Cantwell (D-WA) said she felt strongly about Amtrak’s vital ability to connect people across the country, but more so in rural America: “Workers in rural communities will suffer if more funding and resources are not given. Restructuring is imminent, and Amtrak is often times the only means of transportation in some of these rural communities.” Cantwell also said that investing in heavily rail and rail safety is another key priority, stating that positive train control and increasing personal protective equipment is necessary to be safe and create a stronger safety program.
The need for immediate funding and relief was made very clear by Amtrak’s Flynn, who highlighted just how stark Amtrak’s numbers have been since the height of the pandemic. “Ridership has plummeted 90 percent with Amtrak receiving just 120,000 passengers in the month of April compared to the typical 2.5 to 2.7 million we usually get each month” Flynn told the committee.
Per Amtrak’s monthly performance reports, ticket revenue, which was around $200 million per month in the spring and summer of last year, dropped to just $9 million in April 2020 and had only recovered to the $40 million per month range in August 2020.
Amtrak Ticket Revenue
|Millions of Dollars|
|FY 2019||FY 2020|
Flynn added, “At this rate of cash depletion, Amtrak will be forced to reapportion service that will impact communities.” Flynn was keen on reassuring the panel that Amtrak’s current reductions in service and frequency are temporary and will not be permanent, as long as sufficient federal funding can be allocated to offset the dramatic loss of revenue.
While the Coronavirus Aid, Relief, and Economic Security (CARES) Act has helped keep Amtrak afloat momentarily by allocating $1 billion in federal emergency assistance, Mr. Flynn made it clear that current funding has not been enough. “Virtually all of the CARES money has been spent, and we would need at least an additional $4.9 billion dollars to remain sustainable,” Flynn told the Committee. (This $4.9 billion figure includes the regular $2 billion per year in operating and capital subsidies that Amtrak receives through the regular appropriations process.) The House has made some effort to address this matter by passing a revised version of the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act on October 1 to allocate an additional $2.4 billion for Amtrak, but the final amount of any additional relief depends on the negotiations between Speaker Pelosi and Treasury Secretary Mnuchin, as well as whatever can pass the Senate.
While concerns over legislation and funding are forefront for the rail industry, there exists some faint remains of optimism by some for the rail industry. Senators Richard Blumenthal (D-CT) and Tom Udall (D-NM), and Representative Danny Davis (D-IL) have introduced bicameral legislation titled the Intercity Passenger Rail Trust Fund bill which seeks to give Amtrak its long-sought permanent revenue stream, making them less reliant on the (uncertain) annual appropriations process. (Ed. Note: The closest Amtrak ever got to this goal was the Senate version of the 1997 tax reconciliation bill, section 702 of which would set aside one-half of one cent per gallon of federal motor fuel taxes for an Intercity Passenger Rail Fund for Amtrak. Had that provision been enacted into law (instead of being traded away in House-Senate conference), Amtrak would be receiving about $900 million per year from that fund outside the annual appropriations process, in addition to whatever the appropriators gave them each year.)
While the freight rail industry experienced declines in traffic during the peak of the initial shutdowns in March and April, traffic has since recovered. Measured by carloads, is higher now than it was in this point in 2019. But the industry has shifted freight patterns in part to respond to pandemic disruptions. Some committee members, notably Senator Deb Fischer (R-NE), had many concerns over safety impacts, rail efficiency, and the regulations maintained on the industry by the Surface Transportation Board (STB). One issue of great importance was also workforce availability. “One of our concerns is the reduction of workforce which have led to delays which in turn affect shippers,” said Pierce of the Teamsters, “It is no lie we are understaffed, and many are still furloughed.”
When asked about specific changes made across the rail industry in light of the STB reauthorization, AAR’s Jefferies shared how network planning has made for a nimbler intermodal system, and that constant communication is key to optimize delivery with shippers. Jefferies also commented on the importance of maintenance and safety compliance, suggesting that conducting categorical exclusion acts, improving federal decisions on environmental reviews, and streamlining existing processes can make maintenance projects work faster and more efficient in these trying times.
Jefferies also highlighted key advancements made to address the current status of rail safety even during the pandemic. “When we look at safety numbers year over year, there have been decreases in employee causalities and track caused incidents. Railroads are faring well in both safety and service, and Positive Train Control has also been integrated across 100 percent of the required miles.”