Amtrak, INDOT Says Relations Have Improved

The train name hasn’t changed, but the faces behind the Hoosier State have and that has made for better relations with Amtrak.

Amtrak took over complete responsibility for the quad-weekly Chicago-Indianapolis train on March 1.

Back in 2015, the Indiana Department of Transportation awarded Iowa Pacific Holdings a contract to operate the Hoosier State although Amtrak wasn’t entirely out of the picture.

IP provided locomotives, rolling stock and on-board service and marketing support. Amtrak provided operating crews and handled relations with the host railroads.

But IP didn’t think it was receiving enough money from INDOT and said it would cease operating the train after the state turned down a request for more money.

Amtrak wanted to continue operating the Hoosier State, but state officials say the price was too high.

That sent INDOT seeking another operator. An agreement with a private contractor fell apart, which sent INDOT to IP.

Now INDOT and Amtrak seem to be getting along just fine. What changed?

“Some of the faces have changed in the last several years,” said Amtrak spokesman Marc Magliari says. “A different governor, a different transportation commissioner, different people at Amtrak, too, sat down with a fresh sheet of paper and said, ‘What can we do?’”

INDOT spokesman Will Wingfield said the relationship improved when former Amtrak President and CEO Joe Boardman retired and was replaced by Charles “Wick” Moorman, the former CEO of Norfolk Southern.

“They’ve been an eager partner to work with us,” Wingfield says. “We have good things to say about the new Amtrak CEO and his team.”

Before IP came along, the Hoosier State was a bare-bones train. IP brought food service, free Wi-Fi and business class service.

Amtrak has agreed to continue providing those services even if its food service car won’t be serving the same freshly-prepared meals that IP served.

Wingfield declined to say how much INDOT and its funding partners along the route are paying to continue those services.

He did say, though, that INDOT is using all of the $3 million earmarked for the Hoosier State.

Amtrak also agreed to give INDOT a discount because the Hoosier State is used to shuttle equipment between Amtrak’s Beech Grove shops in suburban Indianapolis and Chicago.

Amtrak’s Magliari said the passenger carrier is looking at growing the business.

“The way you build ridership is to have frequencies that are attractive on a schedule that people can support and see is better than driving, and fares people can afford,” Magliari said. “Those are the three elements of the elixir to grow ridership – frequency, fare and schedule.”

The current contract between INDOT and Amtrak will expire on June 30.

That means the Indiana legislature has to agree to extend the funding. Wingfield said INDOT is asking lawmakers to approve Hoosier State funding for next two years.

Some lawmakers have indicated, though, that they have misgivings about a new deal because of the collapse of the public-private partnership between IP and INDOT.

IP Hoosier State Makes Last Trip Today

The Hoosier State was to make its last trip today with Iowa Pacific equipment and on-board service.

The train will operate from Indianapolis to Chicago. The last run from Chicago to Indianapolis was to occur on Monday night.

Effective with Wednesday morning’s departure from Indianapolis, Nos. 850/851 will become solely an Amtrak operation as it was before IP took over the train in July 2015.

IP pulled out of the Hoosier State operation after the Indiana Department of Transportation spurned its request for more funding.

Amtrak and IP had shared the state funding of the quad-weekly run with Amtrak being paid for providing operating personnel and acting as the go-between with the host railroads. IP provided equipment and marketing support.

Operation of the tri-weekly Chicago-New York Cardinal, which shares the Hoosier State route between Indianapolis and Chicago, will remain unchanged.

No. 50 operates eastbound through Indiana on Tuesday, Thursday and Saturday while westbound No. 51 operates on Monday, Thursday and Saturday.

The Hoosier State operates on days and schedule slots that the Cardinal does not. The two trains serve the same stations in Indiana.

INDOT Supports Continued Hoosier State Funding

An Indiana newspaper reported last week that although Iowa Pacific was playing up the improvements in on-time performance and increasing patronage of its Chicago-Indianapolis Hoosier State, the operation had become a money pit.

The Journal & Courier of Lafayette said IP wanted the Indiana Department of Transportation to pay it $900,000 to operate the quad-weekly train through July.

INDOT spokesman Will Wingfield told the paper that IP said if it didn’t get that money it wanted it would cease participating in its partnership with Amtrak to operate the train.

 

For his part, IP President Ed Ellis told the newspaper that he blames the partnership’s failure on the formula INDOT used to pay IP and Amtrak.

That clause, Ellis noted, meant that as the on-time performance of the train improved IP was getting less money.

INDOT rejected IP’s demand for an additional $900,000 for six months of service because it was beyond the means of the state and municipalities that pay for the train.

Funding for the Hoosier State is provided by INDOT, Lafayette, West Lafayette, Tippecanoe County, Crawfordsville and Rensselaer.

Since IP became involved with the Hoosier State in July 2015, it has provided locomotives and passenger cars and been responsible for marketing and on-board service.

Among other steps, IP began offering business class service and had a chef prepare on-board meals. Business class passengers were able to sit in the upper level of a full-length dome car.

Amtrak’s role was to provide the operating crews and handle relationships with the host railroads. That included incentive payments to CSX to handle the train on time.

The Hoosier State, which uses the same route between Chicago and Indianapolis traversed by Amtrak’s tri-weekly Chicago-New York Cardinal, primarily uses tracks of CSX.

Amtrak has said it will take over complete responsibility for the Hoosier State on March 1, including providing rolling stock.

Marc Magliari, an Amtrak spokesman based in Chicago, said the services Amtrak will provide are still being worked out.

However, he said Amtrak hopes to offer Wi-Fi and business class service. One amenity that Amtrak is likely to offer that IP did not is on-board power outlets.

The type of food service, if any, that Amtrak will provide is another unknown at this point. In the years before IP took over the Hoosier State, Amtrak did not offer food service.

Magliari said the train’s schedule will remain the same.

“What we think is important is that we have those amenities,” Tippecanoe County Commissioner Tom Murtaugh said in reference to the services that IP provided. “We think this has led to the increase in ridership.”

As he has said in the past, Ellis told the Journal & Courier that if the Chicago-Indianapolis corridor is to thrive it needs a faster travel time and more trains.

“You have to be able to run multiple frequencies,” Ellis said. “It takes a lot of capital to do that. I was hopeful we would be able to, but here we are: We have the same number of trains going at the same speed.”

Wingfield said INDOT has recommended to Indiana Gov. Eric Holcomb that the state continue for the next two years to fund the Hoosier State at $3 million a year.

Ellis said anything beyond the current level of service will require a higher level of funding from the state.

“I know the folks at INDOT want to solve this, but it’s beyond them,” he said. “It’s up to the legislature and a higher level of commitment to the Hoosier State.”

Indiana Legislators Taking Note of IP Exit as an Operator of the Hoosier State, Future Uncertain

Indiana lawmakers aren’t saying just yet if they will continue to support paying for the Chicago-Indianapolis Hoosier State.

An Indiana radio station reported that legislators were prepared to continue the funding in the next state budget, but that has been called into question with the exit of Iowa Pacific Holdings as a partner in operating the train.

The Indiana General Assembly provided $6 million in one-time funding in the current state to pay for the quad-weekly Hoosier State.

Senator Brandt Hershman (R-Buck Creek) said he thought the service provided by Iowa Pacific was good.

“It’s comfortable, you don’t have to worry about traffic, you can get work done, you get something to eat, you have Wi-Fi – all those things help the value proposition of the train,” Hershman says.

Another lawmaker, House Ways and Means Chair Tim Brown (R-Crawfordsville), is skeptical that Amtrak can provide that level of service.

“We know that performance under Amtrak wasn’t what we wanted,” Brown said. “We got better performance out of Iowa Pacific and I don’t know if there’s another vendor out there but we’ll just have to have more talk about this.”

The budget for the next fiscal year has yet to be released.

Iowa Pacific and Amtrak have a partnership to operate the Hoosier State with IP providing equipment, marketing and on-board service, and Amtrak providing operating crews and handling relationships with the host railroads.

Amtrak will take full control of the Hoosier State on March 1.

Divorcing Amtrak is Hard to Do

The great Hoosier State privatization experiment is about to end. It started in July 2015 when Iowa Pacific Holdings began “operating” the quad-weekly Chicago-Indianapolis train.

I put the word “operating” in quotation marks because in one sense IP did not “operate” the Hoosier State.

It had a partnership with Amtrak. IP provided the equipment and marketing support and was in charge of on-board service.

But the operating crews were Amtrak employees and the nation’s passenger carrier handled the relationships with the host railroads, primarily CSX.

As it turned out, Amtrak has received most of the money paid by INDOT and its partner communities that fund the service.

For awhile, Iowa Pacific received many kudos because of what it wasn’t, which is Amtrak.

Under Amtrak auspices, the Hoosier State was a bare-bone operation that shuttled equipment between Chicago and the Beech Grove Shops in suburban Indianapolis.

By comparison, the IP operation of the Hoosier State was a luxury train, with business class, meals freshly prepared on board and a full-length dome car for those willing to pay extra fare.

IP head Ed Ellis – who once worked at Amtrak – talked about expanding service and the need to cut the travel time.

He said IP would aggressively market the service, seeking to build markets that Amtrak had ignored.

One marketing gambit IP talked about was running a bus between the Crawfordsville station and Bloomington, the home of Indiana University.

IP correctly recognized the college market is a good source of passengers, but apparently the Bloomington shuttle never got on the road.

Iowa Pacific had a lot of people rooting for it to succeed with the Hoosier State, many of whom believe that a private operator can provide better service than Amtrak.

Ellis always knew that increased daily service and faster trains hinged upon the willingness of government entities within Indiana to provide the capital funding needed to upgrade the slow meandering route used by the Hoosier State and Amtrak’s tri-weekly Chicago-New York Cardinal.

If IP could demonstrate that the Hoosier State was a success despite its route limitations, then perhaps Indiana officials would be amendable to funding track work in the same manner that the departments of transportation in neighboring Michigan and Illinois have.

But that has always been a long shot. Indiana has never been as supportive of intercity passenger rail as its neighbors.

Amtrak will take back the Hoosier State in Toto on March 1. Although INDOT said it has a verbal agreement that some of IP’s services will be retained, that is not a sure thing. It is unlikely that the food service will be freshly-prepared meals if there is any food service at all.

It remains to be seen if INDOT will seek an operator other than Amtrak and, for that, matter, how much longer the state and on-line communities are willing to pony up money to underwrite the operating losses.

One key take away from the IP Hoosier State experiment is that divorcing Amtrak is more difficult than it might seem or that some people might wish.

IP Gave Up Hoosier State for Financial Reasons

As the Indiana Department of Transportation frames it, the withdrawal of Iowa Pacific from operating the Hoosier State was due to IP making an unreasonable demand.

But as Iowa Pacific CEO Ed Ellis sees it, it was the result of a quirk in the contract that his company had with INDOT to operate the train.

That quirk, Ellis said, was that the compensation IP received declined each time the on-time performance of the Chicago-Indianapolis train improved.

Ellis said he sought to renegotiate the contract to guarantee that IP would receive a guaranteed $150,000 a month. But INDOT turned that down.

The situation is complex because Amtrak was also involved in operating the Hoosier State by providing operating crews and handling relationships with the host railroads.

Iowa Pacific provided the rolling stock (including locomotives) and food service employees, and did the marketing and promotion work.

Ellis told WBAA radio station in West Lafayette, Indiana, that INDOT paid Amtrak before it paid Iowa Pacific whenever there was any profit.

INDOT held separate contracts with Amtrak and Iowa Pacific. Amtrak billed the state for fixed operating costs plus “estimated third party costs,” that included maintenance of way charges and “performance incentives” paid to CSX for running the Hoosier State on time.

Iowa Pacific received the difference between what INDOT paid Amtrak and a fixed monthly sum of $254,000, INDOT spokesman Will Wingfield said.

Consequently, Amtrak received $4 million in 2016 while IP got $500,000.

Amtrak received monthly payments of between $288,000 in April to $172,000 in August. IP lost $34,000 in April but earned $82,000 in August.

The costs charged by Amtrak and Iowa Pacific are separate from what those companies earned in coach revenue, food service and business-class fares.

The guarantee that IP sought was more than what the contract specified said Wingfield, who added that it was more than what was reasonable for Iowa Pacific to seek.

Ellis said going into the arrangement to operate the Hoosier State that he didn’t realize how much the payments would favor Amtrak.

“The one thing that I would want to change going forward is to make sure that we put some kind of a floor under what our monthly revenue would be from the contract so that we don’t get into a situation where, at the end, we’re several hundred thousand dollars less than where we thought we would be,” Ellis said.

The Hoosier State began on Oct. 1, 1980, as an Amtrak train. IP took it over in July 2015.

It operated quad-weekly on days that Amtrak’s Chicago-New York Cardinal did not operate between Chicago and Indianapolis.

Amtrak will begin operating the Hoosier State with its own equipment on March 1. Wingfield said Amtrak has verbally committed to trying to add some of the amenities that Iowa Pacific offered, including Wi-Fi service.

INDOT agreed to let Iowa Pacific out of its contract, which was to expire on June 30.

Amtrak to Take Back the Hoosier State

Iowa Pacific will cease operating the quad weekly Chicago-Indianapolis Hoosier State at the end of February with Amtrak taking it over on March 1.

The Indiana Department of Transportation, which had contracted with IP to operate the train, said the contract was to have run through June 30, but IP demanded more money than the contractual amount.

“They were looking for a minimum monthly subsidy that was outside the budget we had,” said INDOT spokesman Will Wingfield said. “Even under the existing contracts, their needs were beyond what we had budgeted.”

IP has operated the Hoosier State since July 2015, taking over it from Amtrak after INDOT advertised for bidders.

INDOT said it has paid Iowa Pacific Holdings $500,000 to date to provide on-board service, marketing and equipment for the Hoosier State and $3.9 million to Amtrak, which provides crews to operate the train.

IP will receive an additional $300,000 to operate the Hoosier State through the end of February.

“It should be said we signed contracts in good faith with Iowa Pacific that was through the end of June, and then they came to us and said they we’re unable to continue under those contracts,” Wingfield said.

IP President Ed Ellis wrote on Facebook that his company is moving to “a different service model.”

There have been discussions on railfan chat lists that IP might be experiencing financial difficulties after it failed earlier this month to issue paychecks to employees in Saratoga Springs, New York.

Some employees of the IP-operated Texas State Railroad were laid off, but IP said in a statement that those layoffs were seasonal.

Ellis said on his Facebook page that IP was “unable to continue providing passenger train equipment and on-board services under the terms of its existing contract for the Hoosier State.”

IP received high marks for instituting business class, upgrading the food service and offering a dome car on the Hoosier State.

Ellis wrote that these service enhancements improved customer satisfaction, revenue and ridership, but the train suffered from poor on-time performance when it reached its destination hours late, if at all, on some occasions.

Amtrak spokesman Marc Magliari said the Hoosier State will operate with Amtrak equipment starting March 1.

INDOT said it’s seeking to continue on-board wi-fi and business-class seating for the train, which operates between Chicago and Indianapolis on days that the Chicago-New York Cardinal does not operate.

It is unclear, though what the long-term future will be for the Hoosier State, including whether INDOT will again put the operation out for bid.

The Hoosier State is funded by INDOT, Lafayette, West Lafayette, Tippecanoe County, Crawfordsville and Rensselaer.

Hoosier State Expansion Not Expected Soon

Although expansion of Iowa Pacific’s Chicago-Indianapolis service has been discussed, Indiana officials say it is unlikely anytime soon.

Nor does the Indiana Department of Transportation expect the travel time of the state-funded Hoosier State to materially increase in the near or medium term.

INDOT said ridership of the Hoosier State has been growing. It was up by 22.3 percent compared with the same month in 2015.

In October 2016, the train handled 2,805 passengers. IP President Ed Ellis said last summer his company would work toward expanded service.

INDOT spokesman Will Wingfield said the agency discussed expansion with consultants last month, but one of them described expansion as a “chicken and egg problem.”

Pasi Lautala, a professor of civil engineering at Railway Transportation Program at Michigan Technological University, said, “You can’t have strong ridership if you don’t have frequency of your trains, and if you start adding trains now you’re adding costs. That’s the constant struggle with public transportation.”

Lautala said that faster travel times would require track upgrades costing millions of dollars and the freight railroads whose tracks Amtrak uses in the Midwest are unlikely to pay for that because they don’t need faster speeds.

Incremental improvements to the existing track might cut the running time by a few minutes here and there.

One example of that on the Chicago-Indianapolis route, which is also used by Amtrak’s tri-weekly Chicago-New York Cardinal, was the replacement of a manual switch in Crawfordsville, Indiana, with a remote-controlled one.

That is expected to shave eight to 15 minutes off the travel time of the Cardinal and Hoosier State because the crew will no longer have to stop to line the switch at Ames, which is the junction of a former Peoria & Eastern line with a former Monon line.

Amtrak uses the ex-P&E to and from the Indianapolis region and the ex-Monon north of Crawfordsville. Those tracks are now owned by CSX.

INDOT is helping to pay for Purdue University graduate students to conduct a survey of passengers riding the Hoosier State.

They are riding the train to ask passengers how they get to the station, how far they travel and how frequently.

IP Offers BOGO for Hoosier State Travel

Iowa Pacific is offering buy one get one free fares for coach travel aboard the Chicago-Indianapolis Hoosier State.

It is also offering a deal of 50 percent off a business class ticket with the purchase of another business class ticket at full fare.

This offer is valid for travel through March 17, 2017, and blackout dates apply during the Thanksgiving and Christmas holiday periods.

Advance reservations are required a minimum of three days prior to travel. Seating is limited and seats may not be available on all days. Fares are subject to availability.

The companion and full fare passenger must travel together on the same itinerary and have tickets issued together.

For more information, visit http://www.hoosierstatetrain.com/promotions

Rail Rangers to Ride Hoosier State

Members of the American Passenger Rail Heritage Foundation will begin riding the Hoosier State on Nov. 27 and providing commentary about the territory served by the Chicago-Indianapolis train.

The members are part of the group’s Rail Rangers program and will offer commentary similar that provided on select Amtrak long-distance trains that is provided by the National Park Service.

In a statement, APRH said it has worked with Amtrak and the NPS in providing interpretive services on Amtrak long-distance trains serving Illinois, Iowa and Missouri between 2012 and 2015.

APRHS has also provided commentary aboard private trains in six states.

“We are really excited to partner with both Iowa Pacific and the Indiana Department of Transportation to provide our services for passengers,” said APRHF Rail Rangers Executive Director Robert Tabern. “In addition to some light narration about the towns we pass through, our interpretive guides are going to have free route handout sheets for everyone and maps of Downtown Chicago.”

The Rail Rangers will board the Hoosier State in Lafayette, Indiana, and provide interpretive services until the train arrives in Chicago.

The Hilton Garden Inn and the Campus Inn in West Lafayette are providing lodging for the APRHF members.

Further information is available at www.railrangers.org or www.hoosierrails.org.

Iowa Pacific Holdings President Ed Ellis became interested in working APRHF after experiencing commentary by its members during a June 2016 private rail excursion in Illinois.

As part of an agreement with Iowa Pacific, the APRHF Rail Rangers are releasing a 110-page route guidebook for the Chicago-Indianapolis route titled Riding the Hoosier Rails: A Route Guide From Indianapolis to Chicago.

The book includes information about communities along the Hoosier State route, the Monon and the equipment used by IP. Much of the route uses former Monon rails now owned by CSX.

Tabern said the Rail Rangers program is expected to operate at least twice a month for a trial period through March 26.