This post is a follow up to The Benefits of High Speed Rail by guest writer Matt Sindt, a recent graduate of the Hamline University School of Law who has worked in both state and local government, serving as a staffer on both the Business, Industry and Jobs Committee, and the Economic Development and Budget Committee of the Minnesota State Senate.
The United States has the most efficient railway system of transporting freight in the world, but what it has in volume it lacks in alacrity. There is a viable option to remedy this problem. The idea of High Speed Rail (HSR) freight trains is being instituted in Europe by a consortium of Western European countries called Euro Carex.
Despite rather large outlays for HSR infrastructure over several decades, the trains themselves are relatively inexpensive when compared to air freight infrastructure. While the 11 car AGV train-sets cost approximately $40 million each, a commercial cargo jet with the same cargo capacity, the Boeing 747-400 ERF, costs $238 million. If a nationwide network was built this would allow express freight companies to service areas that do not currently have international airports and hence lack bulk air freight service. Currently these areas are served by multimodal transport: i.e. small airplanes, conventional freight trains, and semi-trucks. Even if delivery times could not be dramatically abbreviated, in many instances it would decrease the cost of service significantly. The Euro Carex estimates have the cost per ton set at €1622 when the project is completed. This would only be practicable for the shipment of perishable or express goods due to relatively high cost.
The cost of building five regional High Speed Rail (HSR) lines in the USA that the Obama Administration solicited bids for in 2009 has been estimated to be $270 billion. I feel that this type of system provides a fine starting point but is insufficient to utilize the full potential of HSR. In order to achieve the maximum gain it will be necessary to build a truly transcontinental HSR system. Even though the plans for the five total Amtrak and SNCF projects provide professional financial estimates that call for all of the investment to be paid back in twenty years simply based on fares, this assumption is not satisfying for many critics. Tackling this problem, I have thought of various ways to increase revenue. All of these proposals seem to presuppose that passenger service is the exclusive goal of building HSR. First of all, HSR provides a service, a service that will be in direct competition with commercial air travel; so I pose the question: what advantages does HSR have over air travel as an experience?
Turbulence and other forms of motion are a modest issue on a High Speed Train (HST) which opens up certain avenues of profit that would be impractical on an airplane. I propose that each train have a designated entertainment car with a full bar, casino games including slot machines and card tables, satellite television channels playing horse and dog races, and sporting events on flat screens, with a kiosk featuring off-track betting and a sports book. In addition to an entertainment car it would seem reasonable to have an old-fashioned dining car. Unlike commercial airplanes, trains can be economically equipped with actual kitchens rather than just a refrigerator/freezer and a microwave. Passengers could be treated to standard fare included in the ticket price and have the ability to order steak, lobster, salad, or perhaps salmon that has been freshly prepared.
Television cables can be run along the electrical lines to ensure reliability of television service. Every seat could include wireless internet access, a hard-line telephone, modem access, a flat screen television for watching pay-per-view movies, and plug-ins for operating laptop computers and other electronic devices. Experience in Europe has shown that internet and phone service on HST’s are much more reliable than on aircraft, and internet and phone service can be utilized at all times because extensive navigational instruments are not necessary to pilot a train. These advantages allow business travelers to work more effectively on HST’s than on commercial airliners.
Another critical issue is marketing. One of the benefits of a transcontinental system would be to allow access to places that have a high seasonal occupancy but lack the year-round population to justify the massive expense of building international airports. In particular, tourist attractions such as the Grand Canyon, Yellowstone National park and Mount Rushmore have millions of visitors every year but no major airports in their vicinities. Millions travel to these sites on long car trips and perhaps many others are dissuaded in traveling to these landmarks on the basis of their relative inaccessibility.
Rather than marketing HSR as mere transport, the pitch should be that you can go on a multi-day “land-cruise”. Just as a cruise ship calls in many ports over a few days, trips could be arranged to allow tourists to see many American landmarks and thereby contribute to the national economy. Sleeper cars could be installed in certain cars and be sold in travel packages. Another boon for HSR could be accessing other hard to reach destinations like famous ski resorts in Vail, Aspen, Sun Valley, Colorado Springs, Jackson Hole etc. Rather than have European and East Coast tourists taking regional flights through connections in Denver and Salt Lake City, they could fly to Denver or Salt Lake City and take the HSR to the resort cities.
For example, if a traveler were to leave Minneapolis on a west-bound HST he could reach the Mount Rushmore National Memorial in approximately 3 hours and 40 minutes with three intermediate stops at Mankato, Sioux Falls, and Mitchell. If he then left to go to Yellowstone National Park on a nonstop trip, it would take him another 2 hours and 50 minutes. From Yellowstone it would be 4 hours and 30 minutes to Portland, Oregon via Boise, Idaho or 2 hours directly to Salt Lake City, Utah. While these trips would be considerably longer than equivalent airline flights, they would be far superior to car travel when going to areas without significant commercial air service.
Of course other sources of revenue in addition to passengers would be preferable to ensure profitability. My first thought in this regard was express mail. Many of the same planes that carry commercial passengers simultaneously carry freight in their holds. UPS, FedEx, DHL, the US Postal Service, and all other carriers combined to ship $70 billion revenue ton-miles of express mail domestically in 2010. The postal service alone shipped 12.8 billion revenue ton-miles. A revenue ton mile (RTM) is one ton of revenue traffic transported one mile.
If an effective transcontinental HSR network could be established it could easily displace the majority of domestic air freight carriers. HST’s take three times as long to deliver over long distances as airliners, but that would be timely enough for next day delivery. Their cost per pound would be lower. Since airplanes are susceptible to spikes in oil prices and HSR is susceptible only to fluctuations in the North American electricity market it is more insulated from international energy crises, especially speculation due to instability in the Middle East.
A nationwide High Speed Rail system should be built to improve inter-modality in the transportation sector, lower express mail prices, enable improved access to America’s natural wonders, and provide superior comfort and service to America’s traveling public at a reasonable price.
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I agree that passenger comfort – of which dining and entertainment cars are a component – are a reason that HSR will be an attractive option to many travelers and why ridership and revenue estimates that seem high compared to Amtrak may not be far off. Gambling is a state-regulated activity, though, so chances are slim that it would be feasible in a multistate operation.