Freight: Amtrak's Profit Center

A budding express freight delivery service that competes with truckload carriers holds promise of becoming a profit center for Amtrak and helping to supplement the cost of running its passenger rail services, according to a federal report.

	Michael James - Transport Topics
	Amtrak expects freight service to help its bottom line.

In its latest look at the railroad’s finances, the Department of Transportation’s inspector general’s office paints a generally positive picture of Amtrak’s long-term prospects for hauling freight, even though the rail company will lose more money than anticipated this year from the program.

“While we continue to believe that the express market presents a real business opportunity for Amtrak, we anticipated that it would take several years before Amtrak would develop the experience and traffic necessary to generate the revenues projected during the early years of the business plan,” the IG wrote in a report released July 22.

Congress requires periodic reviews of Amtrak’s finances as long as the railroad receives federal money. The latest analysis looks at the books for the period of Oct. 1 to March 31.

Amtrak hopes to wean itself from federal operating subsidies by 2002. To do so, the railroad has undertaken other projects to bring in additional revenue and improve its bottom line. One such step is expanding from hauling mail for the U.S. Postal Service and light parcels into the express delivery arena.

Amtrak prices for RoadRailer bimodal trailer service is comparable to the current truckload carrier rates of $1.20 to $1.40 for each trailer-mile, the IG found. Boxcar service is cheaper than RoadRailer, and Amtrak plans to exploit that on cross-continent trips.

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