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Rail News Home Passenger Rail

January 2016



Rail News: Passenger Rail

Guest comment: Why are U.S. rail companies snubbing the business traveler? — by Robert Perrin



I love to travel by rail, so I try to use rail transportation whenever possible for business travel. Unfortunately, with a few exceptions, service options don’t seem to exist.

To me, this is a market that offers both benefits to travelers and an opportunity for rail executives with a vision of revitalizing profitable service in a market that is begging for alternative modes of transportation. We are seeing this in the urban transit market, where there has been an explosion of light- and heavy-rail commuter implementations within the last decade. But opportunity still exists within the short- to medium-haul range for passenger-rail service. Take the time I tried to travel from Chicago to Cincinnati.

Airfares were high, and with the extent that airlines use small planes now on short hauls, I knew the flight would be cramped and uncomfortable. I wasn’t interested in making the five-hour drive myself, so I explored the options on Amtrak. That didn’t take long. The rail carrier only offered service to Cincinnati three days a week, and departure and arrival times were inconvenient. I could leave at 5:45 p.m., but wouldn’t arrive in Cincinnati until 3:27 a.m. Even accounting for changing time zones, that’s still more than nine hours of transit time. Besides, did I really want to arrive in Cincinnati at three in the morning? What business traveler would want to do that?

Currently, a captive audience for airlines

The story is different on the Northeast Corridor, where I can, and do, make use of rail systems and agencies, especially Amtrak. But where I live in the Midwest, Amtrak’s Chicago-to-Milwaukee route is the only one offering similar service. Even when daily service is offered — for instance to Minneapolis and Kansas City — there’s only one train per day; both have afternoon departures, which is not conducive for business travel.

As a business traveler, I fly an average of 100,000 miles annually, 40 percent of which is short-haul flights of less than 500 miles. Those short-haul trips would be an ideal distance for train travel. But rail options are limited. So, like many business travelers, I fly out of necessity. The airlines know that they have a captive audience. They can increase fares, reduce service and capacity, and still be fairly sure that business travelers will continue to book the same number of flights.

That’s where Amtrak, visionary companies such as Iowa Pacific Holdings LLC and — provided the right motive — even the large rail carriers can come in. By offering convenient schedules, amenities such as meal service and Wi-Fi, and space for travelers to conduct small meetings while on board, companies have the potential to take a big bite out of the airlines’ business.

For example, Iowa Pacific Holdings is already providing high-end service, with premium cars attached to existing Amtrak lines. Although service has been limited, the company recently took over the state-funded train service between Chicago and Indianapolis. This is a giant step forward in business travel, but just a small step in fulfilling the potential of an underserved market.

For travelers like myself, rail travel could get me where I need to go often as quickly as flying and without all the hassle. When you add up all the components to traveling by air, getting to and from the airport, going through security, boarding a flight some 30 minutes before departure and sitting on the tarmac before take-off and after landing, a 45-minute flight can easily turn into a four- to five-hour ordeal. Business travelers would welcome the option to make that trip in a roomy rail car, rather than stuffed in the cramped tube of a small jet. I know I would.

In my years as a consultant, I’ve come to realize one key difference between good companies and great companies: Great companies create markets and opportunities where they don’t exist. Catering to business travelers is a tremendous opportunity for the rail industry — an opportunity it should jump at.

Having traveled to other countries where passenger rail service is the primary mode of transportation, I’m left wondering, why not here? The convenience, reliability, comforts and even comparable transit times on short distances are very attractive to the business traveler. That’s why I always try to use Amtrak’s Northeast Corridor service when traveling on the East Coast. When is the rest of the country going to get on board?

Robert Perrin is president and CEO of Magellan Associates LLC, a Chicago-based management consultancy founded in 2003. He has more than 30 years of executive and IT experience, with expertise in the transportation industry. He also is a founding faculty member of the University of Miami’s Executive Information and Technology Institute, an international center of excellence in executive management.





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