Amtrak Cuts Deals to Expand Freight

Amtrak announced four new business ventures that will take it deeper into the freight transportation business.

The deals involve an agreement with Burlington Northern Santa Fe that will enable Amtrak to ship priority packages throughout the Southwest; a fleet expansion to carry more U.S mail; a venture into the refrigerated carload business; and a partnership with a ground courier to provide same-day delivery between Washington, D.C., and New York.

Amtrak will lease 40 Roadrailers — bimodal cars that are attached to the rear of passenger trains — from BNSF. Amtrak said the extra cars will be used to transport packages for United Parcel Service and less-than-truckload companies between Kansas City, Mo., and Albuquerque, N.M.

"It’s not a big deal in terms of the volume being shipped on that route and for that lane, but it is interesting because we’re looking at it as an experiment to see if Amtrak can handle it," said Robert Godlewski, a UPS spokesman.

UPS hasn’t been satisfied with some of the rail service it has used in the past, Mr. Godlewski said, but that the company always looks for new ideas on how to ship freight economically and reliably. "We’re going to give it a try and we’ll see if it lives up to its potential," he said. "If it doesn’t, then we’ll have to think long and hard about trying any other routes with them."

Amtrak estimates this service will net additional $2.9 million a year.

More Roadrailers also were acquired to haul a greater volume of second-class mail for the U.S. Postal Service. The 89 Roadrailer Mailvan trailers brings Amtrak’s total fleet for its postal operations up to 166 and will enable Amtrak to handle mail business on two new routes: between Los Angeles and Oakland, Calif., and between Philadelphia and Springfield, Mass. The postal service is Amtrak’s largest commercial customer, generating $73 million in the last fiscal year. Amtrak hopes these new services will produce $15.2 million more.

Perishables also will start traveling along Amtrak’s rails. A joint venture with ExpressTrak, a refrigerated car company out of Michigan. Amtrak will haul eight refrigerated express cars, primarily from California to the Northeast and Florida. ExpressTrak will provide marketing, billing, car maintenance and customer service.

And in February Amtrak and Dynamex will kick off a partnership for a same-day package delivery on its three-hour Metroliner service between New York and Washington, D.C. Dynamex, a Dallas-based same-day delivery and logistics company with operations in the U.S. and Canada, will provide the pickup, sorting, delivery and tracking of the packages. Amtrak expects the pilot program to generate as much as $1 million between the start date and the end of the fiscal year, Sept. 30.

The passenger railroad is banking on these forays into the commercial world to make up some of its operating losses before Congress cuts off its subsidies in 2002.

For the full story, see the Jan. 25 print edition of Transport Topics. Subscribe today.