Need for a passenger railroad
There is a need for an inclusive passenger railroad in the US. This need is grounded on the need for a very high speed rail system. A passenger railroad will be required to accommodate the need for intercity transportation within the US. In addition, the need for urban transportation will be accommodated by the passenger railroad. The transit centers in the US will be crowded, hence the need for a passenger railroad (McMahon, 2012). Other transport modes such as highways and aviation are constrained in capacity, and they are starved of capital. Therefore, with expected business and population growth, there will be a need for a passenger railroad.
In Chicago, for example, train traffic is expected to grow by 40% by the year 2040 (McMahon, 2012). Without an accompanying passenger railroad, aviation and road transportation will not handle such capacities. As a result, traffic jams will arise, which will slow business productivity. Therefore, the US will need a passenger railroad to meet the new demand for a fast and efficient transportation. All the workers will have to be transported to their destinations in a fast manner to maintain efficiency. With a passenger railroad, the transportation system in the US will be enriched by a dependable railroad system (McMahon, 2012).
Subsidization of Amtrak
Amtrak should be subsidized by the government to empower its financial capabilities. Subsidizing Amtrak will ensure that it continues to serve the population across many cities. This is a major concern for individuals in cities where train service by Amtrak is the major transport mode. Without subsidization, such residents would be troubled by other modes of transportation that would be slow or more expensive than Amtrak services (Nixon, 2013). Subsidization by many states will ensure that service availability will continue uninterruptedly. With subsidization by states where Amtrak covers at least 750 miles, revenues will increase by around $ 85 million (Nixon, 2013).
Subsidization of Amtrak services will ensure that states such as Pennsylvania and Virginia will remain connected to the Northeast line. The need for subsidization is high since this company has to cover its operational costs. Its tickets and fees cover around 88% of its operational costs (Nixon, 2013). The company incurs high maintenance costs for bridges and tracks. Therefore, such efforts must be subsidized so that Amtrak can maintain operations in the long run. The other need for subsidization is based on the losses it incurs in its long distance routes. The benefit for such subsidization is that Amtrak will be in a position to cut across states and serve customers.
Actions for Amtrak’s profitability
In order to be profitable, Amtrak must adopt some specific strategies to improve its overall performance. One of the ways to achieve such restructuring is through corporate restructuring. This restructuring will segment its operations hence allowing for inclusion of separate infrastructure managers and also other operating divisions (McMahon, 2012). Through these initiatives, accessibility of Amtrak’s services will improve. Therefore, profitability will increase since customers will purchase Amtrak’s services.
In addition, Amtrak can improve its infrastructure, which has been suffering from underinvestment. This can be done through private funding. Such strategies will improve reliability and customer service, which will improve profitability in return (Nixon, 2013). The other strategy is the bullet train from Boston to New York. This train will provide a fast means of travel between the two locations and improve the image of Amtrak. Overall, such initiatives will transform Amtrak from loss making to profitability.
References
McMahon, J. (2012). U.S. Poised For Passenger Rail Boom. Forbes Magazine, 37-39.
Nixon, R. (2013). Amtrak Subsidy Gone, States Must Pay the Freight to Keep Rail Routes. The New York Times, 44-47.
