Passenger vs. Freight Priority. Was: DOJ sues Norfolk Southern for making Crescent late

eolesen wrote: ↑Thu Sep 05, 2024 4:45 pm Okay, that's a good example. It's also a railroad that was built originally by the state with a Norfolk Southern predecessor as a partial owner... but is it a lease or just trackage rights?

A lease is paying a fixed price for use of the property over a term, regardless of how many trains you run on it, and the leasee has to perform regular maintenance.

Trackage rights are paid per use, and by tonnage and/or axle counts. The owner handles maintenance.

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The line was built by the state since no private company was interested in east-west connections in the very impoverished state. I don't believe the tracks were ever partially owned by any other railroad, although the tracks from Selma (maybe Raleigh?) to Beaufort were originally built and owned by a private company before the NCRR acquired them out of bankruptcy.

The NCRR agreement is referred to as trackage rights. More specifically NS has the exclusive right to run freight on the tracks that existed at signing. IIRC the initial term in the current agreement was 15 years starting in 1994(?) with two 15 year renewals. While it is termed as trackage rights, NS is responsible for nearly all maintenance costs. Improvements (like Linwood Yard) remain owned by the NCRR at the end of the agreement term.

Part of the agreement allows NCDOT (the 100% owner of the NCRR, which is a private corporation) to run as many passenger trains as they like, provided they don't interfere with NS freight capacity and NCDOT is responsible for any incremental maintenance cost incurred by passenger trains. The ARRA grants in 2009 paid for Class 5 track upgrades between Charlotte and Greensboro, but NCDOT realized it was obligated to pay the incremental inspection and maintenance costs over Class 4 track per the agreement. The end result was that Amtrak runs at 79mph on the tracks (since NCDOT decided not to pay).

Full text of the agreement is said to be embedded in this massive document: https://www.sec.gov/Archives/edgar/data ... 000037.txt
I am not a lawyer and I may misremembered some of these details.

Section 8. MAINTENANCE

(a) NSR will maintain the lines of NCRR over which it serves as the
exclusive freight operator.

(b) The standard of maintenance of any line segment shall be the FRA
track classifications as of July 1, 1999, consistent with timetable
and track profile speed restrictions and any other restrictions
therein that affect the speed of operation. The effective
timetables and track profiles are attached hereto as EXHIBIT A.

Suddenly the Crescent is running close to schedule on NS most delays are Amtrak caused or a couple on CSX WASH <> ALX.

Bob Roberts wrote: ↑Thu Sep 05, 2024 8:16 pm

eolesen wrote: ↑Thu Sep 05, 2024 4:45 pm Okay, that's a good example. It's also a railroad that was built originally by the state with a Norfolk Southern predecessor as a partial owner... but is it a lease or just trackage rights?

The line was built by the state since no private company was interested in east-west connections in the very impoverished state. I don't believe the tracks were ever partially owned by any other railroad, although the tracks from Selma (maybe Raleigh?) to Beaufort were originally built and owned by a private company before the NCRR acquired them out of bankruptcy.

Yep, I assumed incorrectly that the original 25% that the State didn't control until 1998 was partially held by SOU or a predecessor. They did have an operating lease prior to that, where SOU did the maintenance.

Brief history of the NCRR.

In 1848, the North Carolina legislature authorized an east to west railroad that would connect the coastal plain with the piedmont for the purpose of opening the state for economic and industrial development. To finance construction, the 1848 North Carolina Railroad bill authorized the State to purchase $2 million of NCRR stock leaving $1 million for purchase by private citizens. Construction costs exceeded expectations due to the rising cost of iron and in 1854, the legislature approved the State purchase of an additional $1 million in shares, making the railroad 75% owned by the State and 25% owned by private stockholders.

In 1871, NCRR signed a 30-year lease for operations and equipment with the Richmond and Danville Railroad (R&DRR). J.P. Morgan’s Southern Railway System acquired the R&D in 1894, and NCRR then entered into a 99-year lease with Southern Railway (now Norfolk Southern Railway Company.) commencing on January 1, 1896.

On September 29, 1989, the NCRR merged with the Atlantic & North Carolina Railroad (A&NCRR),
consolidating a 317-mile east-west corridor from Charlotte to the Port of Morehead City, North Carolina. The merged railroads retained the name “North Carolina Railroad”. In 1998 the State of North Carolina bought out the 25% of privately held shares of NCRR stock making the NCRR a privately run company, with the state of North Carolina being the sole shareholder. At the time of the state’s acquisition of NCRR in 1998, the total stock value of the NCRR was $282 million.

In 1999, Norfolk Southern Railway Company (NSR) (previously Southern Railway) and NCRR reached an exclusive trackage rights agreement for Norfolk Southern to continue freight and maintenance operations on the NCRR line for 15 years renewable for an additional 30 years. NSR operates with its own crews and rolling stock over lines and property owned by the NCRR. The agreement also allows for operations of the National Railroad Passenger Corporation (Amtrak) on the NCRR line.

Where leases during the previous century had given Southern Railway full control of NCRR’s assets, after the 1999 trackage rights agreement, the North Carolina Railroad Company was once again in charge of its own corridor and assets.

In a partnership that is unique nationwide, NCRR, Norfolk Southern and the North Carolina Department of Transportation work together, to improve the quality of crossings and bridges, add double track and sidings, realign curves, and improve signaling and other infrastructure along the corridor. One example of these improvements is between Raleigh and Selma, a distance of approximately 30 miles, passenger trains were operated at 49 mph. After a reasonable expenditure to install some ties and surfacing, the speed was increased to 59
mph, the maximum allowable without signals. Signals were also installed between Raleigh and Selma during this ten year period and passenger train speeds were increased to 79 mph.

There are politics at work to add NCDOT ownership for even more rail corridors within the state. How they will operate in conjunction with whatever RR company is to be determined.

lensovet wrote: ↑Wed Sep 04, 2024 7:49 pm

Tadman wrote: ↑Wed Sep 04, 2024 8:13 am You have this backwards. NS is the landlord. Amtrak is the tenant. There was an agreement in 1971. Then another in 1998ish.

Alright, let's run with this analogy. NS decided to rent their house to Amtrak in 1971 for a slightly below-market rate for 20 years because they couldn't bear to wait longer for someone to rent it out. Five years later, they decided that the rate was too low and as a result, stopped doing maintenance.

The renter would be swiftly taking them to court in most areas of this country for failing to provide a safe space to live and the landlord wouldn't be able to just say "oh well the rent is too low" and go on their merry way.

Even less so if they renewed the agreement 30 years later for rates that were still supposedly too low (by whose standards, no one knows).

The scenario you've imagined is the twelfth grade civics explanation. It is not reality.

First, nothing happens swiftly in court. Nothing. So during this "swift" process, the landlord would probaby counter claim against the tenant for all kinds of things, imagined and/or real. Now this aggrieved tenant is going to have to defend the counter claims. Did they ever pay rent late? Have a dog on the premises? Let a off-lease roommate stay for a few months? Neglect any responsibilities? All that is coming home to roost.

Second, we're not talking about five years, we're talking about fifty five years. Most leases and trackage rights have terms, "outs", and escalation and renegotiation triggers. They have automatic renewals unless one or both parties agree in writing to end the terms. Chances are in this case the "landlord" would decline to renew.

Third, its not good public policy and courts would be loathe to force two parties to get along after fifty years of strife. Because there is a countersuit now, it's probably better for the parties to move along and find new homes and tenants rather than continuing to battle.

Going back to that counter claim, Amtrak is probaby in the clear as long as they don't have any trains leaving the originating terminal late, no breakdowns en-route, no reasons to delay NS such as unruly passengers being let off at a impromptu stop, etc... Do we really think Amtrak has clean hands here?


All of this aside, every time you post I have to ask: Why do you continually stick up for a bad business? Amtrak is poorly run. The business model is broken. The passengers aren't returing in droves. Given fifty five years to reinvent themselves and become relevant, they instead choose to continue getting by poorly. Wouldn't you rather have a dynamically managed company serving twice as many cities and passengers? Because it's not going to happen this way, continuing to battle tooth and nail over late trains that don't carry many people.

I guess it's just fools who take Amtrak every day and set record passenger numbers? I'd love to see a business that's constrained by so many factors (politics, lack of control over its own infrastructure, unpredictable and frequently poor funding, unmeetable mandates made by people who've never run a railroad, etc) that's successful.

I'm tired of people complaining, I guess. Which is ironic because I complain all the time. I also actually ride on Amtrak 6x/week, so you could say I have a bit of a vested interest. I'd like lots of things, including a pony and not needing to go to work 5 days a week. But I live in the real world rather than the fantasy one.

Tadman wrote: ↑Fri Sep 06, 2024 1:28 pm Going back to that counter claim, Amtrak is probaby in the clear as long as they don't have any trains leaving the originating terminal late, no breakdowns en-route, no reasons to delay NS such as unruly passengers being let off at a impromptu stop, etc... Do we really think Amtrak has clean hands here?

Amtrak can *account* for all the things it can control and/or has caused. Everything NS has caused has been observed from Amtrak. Do I expect NS to drop everything when the Pennsylvanian is running nearly 4 hours late to Harrisburg? No, but have some reasonable accommodation just in case, sure. Do I expect NS to not reasonably not delay an on-time Pennsylvanian? Of course!

I'd be curious to see what the breakdown is of Amtrak cause delays versus host Road delays in this case.

If it's only arriving on time 24% of the time, I find it hard to believe that Norfolk Southern would be responsible for the other 76%.

We have a couple of family members who are always known for being 30 minutes to an hour late for any family function, so we just plan around it.

Sometimes, we deliberately tell them something is starting an hour earlier than it's supposed to start, knowing they'll show up late. Every once in a while, they actually show up on time and are an hour early....

It really wouldn't surprise me if there's some informal assumptions being built into the planning process that Amtrak is going to be late.

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eolesen wrote: ↑Sat Sep 07, 2024 11:03 am I'd be curious to see what the breakdown is of Amtrak cause delays versus host Road delays in this case.

If it's only arriving on time 24% of the time, I find it hard to believe that Norfolk Southern would be responsible for the other 76%.

We have a couple of family members who are always known for being 30 minutes to an hour late for any family function, so we just plan around it.

Sometimes, we deliberately tell them something is starting an hour earlier than it's supposed to start, knowing they'll show up late. Every once in a while, they actually show up on time and are an hour early....

It really wouldn't surprise me if there's some informal assumptions being built into the planning process that Amtrak is going to be late.

Oh you know Amtrak's been padding the schedule for accommodating some delays. I know when I first was taking trips to Pittsburgh via Amtrak, the train ended up being 1 hour early (7pm). I think this is beyond any padding they have built into the schedule.

Yeah, but that just proves the point. If you're that unreliable you can only predict with 60 minutes either way, why should anyone be surprised if the host keep their own trains moving when Amtrak doesnt show up as scheduled?

We learned as kids to show up for meals on time or expect your food to be cold (if not eaten by someone else).

The legislation requiring fines for missing ontime performance standards is relatively new and untested. I'd be surprised if it survives a real court challenge.

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I retitled the thread, as we don't have on on passenger train priority, and we seem to have gravitated to a more general discussion.

Here's a Marketplace article on the issue: https://www.marketplace.org/2024/09/10/ ... -railroad/

Amtrak spars with freight train industry over rules of the railroad

...
“Initially, the freight railroads were more than happy with the arrangements because in the 1970s, it was kind of the nadir of the rail industry in the United States,” said Albert Churella, a history professor at Kennesaw State University in Georgia. Many freight companies at that time were in or nearing bankruptcy, he said. They didn’t have enough freight business, and they were trying to maintain more track than they needed.

“There was substantial excess capacity, and so adding even a few Amtrak passenger trains was basically generating a lot of revenue with very little added cost,” Churella said.
...
And here’s where that issue of “preference” for Amtrak comes back. There are now fewer tracks with more freight on them, “and freight makes a lot more money than Amtrak pays to the companies for trackage rights,” said Elizabeth Deakin, a professor emerita at the University of California, Berkeley. “The result is that they basically ignore the rule and go ahead and give preference to freight trains.”

The freight industry has argued that the law does not mean Amtrak has “absolute” preference at all times. But Amtrak has complained to federal regulators about delays. Now, the Department of Justice is suing, and Deakin said those actions could send a message to the freight industry: “‘Hey listen, this is actually a law in the books, and you need to pay attention.’”
...

I keep reading Congress passed a law allowing Amtrak to develop metrics for being on-time. The US Courts in 2016 ruled otherwise. Here's a link to the final ruling, in a case that went all the way to the USSC and remained back to the Court of Appeals.
https://www.uschamber.com/assets/docume ... CADC29.pdf
Last paragraph
It may be said that PRIIA's architects shared Steinbeck's pride in the punctuality of train schedules. But as we've shown, there are limits to how far Congress can go to ensure Amtrak's on0time performance. The Constitution's drafters may not have foreseen the formidable prerogatives of the administrative state, but the Due Process Clause effectively guarantees the regulatory power of the federal government will be wielded by "presumptively disinterested" and "duly appointed" actors who, in excising that awesome power, are beholden to no constituency but the public good. Because the PRIIA grants this power to the economically self-interested Amtrak and to an unconstitutionally appointed arbiter, it transgresses that vital guarantee. We therefore Reverse.

Tadman wrote: ↑Fri Sep 06, 2024 1:28 pm All of this aside, every time you post I have to ask: Why do you continually stick up for a bad business? Amtrak is poorly run. The business model is broken. The passengers aren't returing in droves. Given fifty five years to reinvent themselves and become relevant, they instead choose to continue getting by poorly. Wouldn't you rather have a dynamically managed company serving twice as many cities and passengers? Because it's not going to happen this way, continuing to battle tooth and nail over late trains that don't carry many people.

Amtrak has 50 years of lackluster funding, back and forth mission statements, and mediocre commitments from Congress about whether we even want to even continue with intercity passenger rail. After 50 years we still can’t decide.

I’m willing to blame Amtrak management for what they can control. But I have noticed a trend of conservative leaning rail enthusiasts who always want to blame everything exclusively on Amtrak institutionally and deflect from lackluster funding and inconsistent back and forth on Amtrak’s mission. I’m happy to blame Amtrak management for what they control, but not for what they can’t.

Amtrak is a bizarre beast that has aspects and drawbacks of both public and private sector entities which results in a bizarrely managed enterprise - and which results in the enterprise that many complain about. But in large part Amtrak’s existence is due to private sector owned rails - and the desire to respect private property rights of the investor owned roads. I suspect from what I have seen from past posts the largest critics of Amtrak here want nothing to do with public sector ownership of the rails.

If respecting the private ownership of the infrastructure is the most important priority of North American railroading - then Amtrak is going to remain a necessary evil to ensuring passengers have access to that infrastructure.

lordsigma12345 wrote: ↑Wed Sep 11, 2024 8:46 pm I have noticed a trend of conservative leaning rail enthusiasts who always want to blame everything exclusively on Amtrak institutionally and deflect from lackluster funding and inconsistent back and forth on Amtrak’s mission.

It's a nice contrast to those who find it hard to admit that even with 50 years of life support, Amtrak's mission with regard to its long distance network has failed and continues to fail.

What is "Amtrak's mission with regard to its long distance network"?

The US Code states that

Amtrak shall operate a national rail passenger transportation system which ties together existing and emergent regional rail passenger service and other intermodal passenger service.

There is nothing in Chapter 247 requiring that the operation of the national rail passenger transportation system by profitable and not require grants from the Federal government, states, or other entities to cover its capitol or operating expenses although Chapter 243 does require that Amtrak attempt to minimize it's reliance on such funding, there remains no requirement that the national system be a self sustaining system.

The fact that Congress established Amtrak as a for profit corporation instead of a non profit corporation has more to do with tax and other legal obligations to the States than it has anything to do with Congress's intent that Amtrak or the national passenger rail transportation system be a self sustaining operation.

So how did it fail and continue to fail in maintaining that system that you require I admit to?