AMTRAK ASSIGMENT

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AMTRAKASSIGMENT

  1. Does the United States need a passenger railroad?

Apassenger railroad is a critical and very important sector ofAmerica’s transportation sector and it has never been more crucialin modern days due to the increased congestion on the highways causedby the increase in population in urban areas. Congestion, especiallyin the Northeast Corridor affects the American economy adversely,with the area estimated to have a population of over 50miliion peoplewho cause congestion on airports and highways, which reduces theeconomic productivity of the region and the country as a general. Dueto this problem, Amtrak is an effective solution as it contributesheavily in moving people from one city to another and reducescongestions on highways and airports. It is estimated that about840,000 commuters use this railway service on a weekly basis andtherefore a key sector in the American transportation sector thatcannot be done away with in the near future(DeGood, n.d.).

  1. Should Amtrak be subsidized by the Federal Government?

Therehave been many discussions on whether the subsidies provided by thefederal government actually effect realistic changes to Amtrak or thebest course of action will be to privatize it so that it can beprofitable and grow. Some argue that Amtrak is the most subsidizedintercity transportation with a 40% subsidy of the totalper-passenger costs and it is argued that in some routes where thesesubsidies are effected it would be economical to subsidize thealternative sectors of transportation like the airline. While bydoing this the railway sector may perish, and to many Americans andits economy, this is not a viable solution since there is a lot ofcongestion that will lead to delays and inefficiency. Amtrak shouldbe freed from the federal government, political control andregulation so that maintenance and operational costs of Amtrak couldbe efficient. While this is not in play for the time, being thegovernment should increase subsidies to Amtrak so that it is able tocompete with other sectors and avoid catastrophic incidents like thewreck of Amtrak 188, which could be related to insufficient funds toimprove the safety standards of the railway cooperation.

  1. What can Amtrak do to make itself profitable?

Amtrak’sroutes strategy influences majorly on how they make a profit andaccrue losses. The shorter passenger routes, which connect majorcities like the Acela Express, are more profitable than the 15 longhaul routes like the California Zephyr, which accrue $597.3 millionin losses. The long haul routes should also be given the sameCongressional support as the shortest routes for Amtrak to realizeprofits. By doing so their operating costs will be reduced and thiswill in the long run be able to reduce the amount of subsidiesprovided by the federal government. Another option is privatization,which will reduce the government’s political influence on Amtrak,since citizens working majorly use the shorter routes and earning afavorable higher wage Amtrak can use these profits and be able tostand on its own without the total reliance on the federalgovernment.

References

DeGood,K. (n.d.). Understanding Amtrak and the Importance of Passenger Railin the United States. Retrieved January 24, 2017, fromhttps://www.americanprogress.org/issues/economy/reports/2015/06/04/114298/understanding-amtrak-and-the-importance-of-passenger-rail-in-the-united-states/

Amtrakloses a ton of money each year. It doesn’t have to. (n.d.).Retrieved January 24, 2017, fromhttps://www.washingtonpost.com/news/wonk/wp/2013/03/01/amtrak-loses-a-ton-of-money-each-year-it-doesnt-have-to/?utm_term=.947e2a6f7eca

AmtrakSubsidies: This is no Way to Run a Railroad. (1997, May 22).Retrieved January 24, 2017, fromhttps://www.cato.org/publications/commentary/amtrak-subsidies-is-no-way-run-railroad