The Interaction of Freight and Passenger Rail

Anyone who has ever ridden a train in Europe (let alone Japan) has seen that they know how to run a railway. Their passenger trains are faster, more reliable, more extensive, and far more frequent than in North America. Unless one enjoys hopping freight cars, however, it is less obvious but no less true that North America has many lessons to teach Europe about freight rail. In fact, Canadian railways move almost as many tonne-kilometres of freight per year as moves by rail in the entire European Union – 349.1 billion tonne-kilometres in Canada versus 377 billion in Europe. Canadian freight railways benefit from long distances and shipments of bulk natural resources, but the figure remains striking given the difference in population and economic size.

In recent decades, North American railways have become increasingly reliable and economical providers of freight transportation service. They’ve expanded beyond their traditional dominance in hauling bulk goods like coal and grain over long distances and have made major gains in hauling manufactured goods since the invention of the intermodal container. Canada’s own CN is often considered the gold standard of freight railways worldwide. Meanwhile, in Europe, most bulk traffic uses the continent’s extensive inland waterway network, while lighter goods tend to move by truck.

Operating a successful freight railway presents very different challenges from passenger rail. The most important criteria of success for freight rail are cost, followed distantly by reliability. As long as their goods arrive within a few hours of promised and the bill is lower than if they had gone by truck, most shippers are quite pleased. Low cost is achieved by packing as much as possible into each freight car, and as many cars onto each train. Over the past several decades, North American freight railways have invested billions into improving their infrastructure to increase their competitiveness. Tracks have been upgraded to accommodate heavier freight cars, new technologies like locomotives distributed throughout the train have permitted longer trains, and bridges and tunnels have been raised to permit the stacking of two shipping containers on each car. European freight cars look like toys compared to their North American counterparts and double-stacked containers are unheard-of. The average European train is less than thirty cars long, while more than a hundred cars per train is the rule in North America.

North American passenger rail operators are often quite reasonably accused of trying to operate as if they were freight railways, using freight locomotives, freight track maintenance standards and freight signalling systems. Europeans make the same mistake in reverse, trying to emulate their success in passenger rail by emphasizing the importance of speed and punctuality, even going so far as to propose running freight trains on high-speed lines. This does nothing to aid in the critical factor of cost per ton-mile. The limited amount of existing freight rail traffic makes large investment seem excessive, just as the low ridership of North America’s weak passenger rail service is used to claim that passenger rail investment is uneconomic. Of course demand is low when the service is poor; demand won’t get any higher until the service is improved.

The poor state of European freight rail is a clear demonstration of the difficulty of operating both a successful passenger and freight railway. The needs of the two types of trains are simply too different. In fact, much of what makes European passenger rail so successful causes serious problems for freight. Heavy North American freight trains wreak havoc on high-quality track built for high-speed passenger service. Europe’s extensive track electrification offers enormous benefits, but it also limits overhead clearance for double-stack containers. High platforms at stations permit passengers to board without needing to climb stairs, speeding loading and providing wheelchair accessibility. Unfortunately, they can also restrict the width of passing freight trains. Some of the problems are simply the result of history, particularly in Britain where railways were built in the Victorian age to a very narrow loading gauge. New European lines are built to minimize curves, a big problem for high-speed passenger trains, but which comes at the cost of steeper grades that are a nightmare for heavy freight trains. European railways have been built over decades for passenger rail, not freight, so it isn’t surprising that European freight railways have struggled.

The needs of passenger and freight railways are so different that separation is likely the only solution. Of course, passenger trains and freight trains can still share tracks in many places, especially on low-density long distance passenger routes, but major passenger corridors should be separated from major freight routes so that they can be optimized for their respective users. Fortunately, the advent of intermodal shipping means that only a core of freight network is required; instead of picking up a few cars at each shipper, much freight traffic is now delivered by trucks to a relative handful of intermodal terminals. North America benefits from its legacy of competing private railways, which produced multiple parallel corridors that can now be divided between passengers and freight. The Amtrak-owned Northeast Corridor has almost no freight traffic, as there is a parallel corridor owned by the freight railways and dedicated to their trains. Europe needs to embark on the arduous project of clearing a core network for heavy freight cars and double-stacked intermodal containers, likely after shifting most passenger trains to new high-speed lines.

Running a decent regional rail system in a North American city will require the exclusion of most freight trains from regional rail tracks. Local customers can have freight cars picked up and dropped off at night, when regional trains are not operating, but through freight traffic should use dedicated tracks. Especially for high-speed lines, the problems posed by North American heavy freight on track superelevation, track wear, platform height, and collision safety are too problematic for extensive track sharing. (More in future posts on sharing between freight and CityRail) Fortunately, many cities including Toronto have already shifted most of their freight rail traffic to bypass routes in the suburbs. Toronto’s main intermodal terminals are in Brampton and Vaughan and there are relatively few directly served industrial customers in the city centre. The Barrie and Stouffville lines, and most of the Richmond Hill, Lakeshore and Kitchener lines, have very little through freight traffic. The Milton line and segments of other routes would simply require separate tracks for freight traffic, either in the same corridor or on a new parallel route. Most freight traffic in the GTA would not interact with CityRail at all, while separating the two track users where they do interact would not be an insurmountable task.

The VIA Rail Cuts

The federal government recently announced severe cuts to VIA Rail service in a press release with the Orwellian title of “Via Rail continues its modernization and takes action to better meet customer demand." The reductions will hit hardest on the transcontinental routes and in Southwestern Ontario. The Canadian from Toronto to Vancouver will be reduced to only two trips per week in the Winter, while the Ocean from Montreal to Halifax will be cut back to three trips per week from six. These cuts seem like a worrisome prelude to hiving off these vital national services into a privatized summer-only cruise train like the Rocky Mountaineer. Southwestern Ontario was equally hard-hit with the cancellation of trains to Windsor, Sarnia, Kitchener, and Niagara Falls. VIA claims that riders can switch to parallel GO Transit services and coordination with GO makes sense where they have become direct competitors. However, many affected communities aren’t served by GO trains, either at all or at the affected times.

These cuts mark the end of a relatively friendly disposition towards VIA on the part of the present government. They had continued the “Renaissance of Passenger Rail” investment programme, which included station renovations, locomotive rebuilding, and track improvements in the Corridor. With their new majority government, the Conservatives may be returning to their more traditional views on passenger rail. While in opposition, they introduced multiple Private Member’s Bills to privatize VIA in its entirety. These cuts certainly don’t go that far, but they’re a worrisome step. In 1990, Prime Minister Mulroney’s government cut more than half of VIA service, including the abandonment of passenger service on the historic Canadian Pacific railway that united the country. VIA has never recovered from that blow.

As is so often the case, these cuts take the easy way out of cutting service rather than taking steps to make operations more efficient. VIA’s frequently uncompetitive fares are a major deterrent to riders. A regular adult round-trip from Kitchener to Toronto costs an astounding $62. Even given the cost of parking in Toronto, that is far higher than the cost of driving for a single person, let alone for a whole family. VIA’s schedules are also far too infrequent on many routes, forcing travellers to drive when they would prefer to ride the train. A significant expansion of service would attract many passengers to existing trains, strengthening VIA’s operations in the long term.

According to its 2011 Annual Report, VIA’s “Direct costs per available seat-mile” in the Southwestern Ontario region amount to 19 cents. That means that moving a seat, whether empty or full, from Toronto to Kitchener or Toronto to Brantford would cost $11.40 excluding all overhead and, presumably, most station costs. Current plans to cut trips will not reduce these costs at all. VIA’s revenues average 14 cents per available seat-mile in the region, requiring a government subsidy of 21 cents per passenger-mile. Government subsidy is the rule in passenger service around the world. The exception comes only after massive capital investment to provide service of sufficient reliability and speed to compete with automobile and air travel. If VIA is not going to receive the investment required to make its operating budget self-sustaining, and the government is going to continue cuts to its subsidy, it may have to take a hard look at some of its operating practices in order to reduce costs without reducing frequencies and further depressing ridership. These could include reducing the number of staff on trains, relying on e-ticketing and automated machines at all but the busiest stations, and reducing the staff at major stations to direct people to tracks. This would hurt VIA’s admirable customer service standard, but it may be the only option in the face of continued reductions in the operating subsidy. Further fare increases would be devastating to ridership while more cuts to the already-skeletal network would leave little remaining. Lower operating costs just might permit lower fares, which could attract people back to VIA and finally create a virtuous cycle of ridership and service increases.

Many VIA trains consistently operate well below capacity, yet their fares are as high as peak-period services that are routinely sold out. While VIA has taken admirable steps toward yield management in recent years, there is still much room for improvement. Several years ago, after a strike scare, VIA offered a temporary across-the-board reduction of 50%. The late night train from Toronto to Kitchener, on which less than one of its five or more cars is usually occupied, ran almost full. While it might not work in all circumstances, a dramatic reduction in fares on less busy trips could result in higher, rather than lower revenues. VIA also has a price floor, which makes short trips like Kitchener to Guelph or London to Brantford unreasonably expensive. Such short trips could be a good source of passengers for otherwise-empty trains.

VIA Rail could also adapt its reservation system so that its trips are displayed on an even playing field with airline trips on consumer and business travel search engines. Many companies require business trips to be purchased through services where train trips are not currently an option. In the more distant future, better connection with Pearson and Trudeau airports would permit through-ticketing with airlines and even code sharing with the use of flight numbers on VIA trains. This practice occurs in many countries, including the United States, France, the Netherlands, and Germany.

Some of the hostility to federal funding for VIA Rail in parts of the country is understandable. VIA’s network is clearly centred on Central Canada, and all of Western Canada sees a handful of train trips per week. There are a number of corridors, such as Edmonton to Calgary and Victoria to Courtenay, that are very suitable for intercity rail service. Investing in these lines would give VIA a real presence in Western Canada and would help build a broad national base of support for greater investment in passenger rail.

These cuts are a bad precedent for the future of VIA Rail over the next several years. While it is fortunate that the core Toronto-Ottawa-Montreal corridor is seeing some investment, the cuts to transcontinental trains suggest that they may go the way of train service to Calgary and Regina and VIA looks to be all but abandoning the potentially lucrative Southwestern Ontario market.