WSJ Your Money Briefing - All Aboard! More Travelers Choose Trains Over Cars and Planes

Episode Date: August 2, 2024

As the nation’s airports and highways become more congested, more Americans are choosing to travel by rail. Wall Street Journal reporter Jacob Passy joins host J.R. Whalen to discuss the pros and cons—as well as the cost—of train travel.  Sign up for the WSJ's free Markets A.M. newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Carlsberg Canada Inc., Waterloo, Ontario. Here's your money briefing for Friday, August 2nd. I'm J.R. Whelan for The Wall Street Journal. Planning a vacation inevitably involves bracing for frustrating travel experiences, like dealing with crowds, or weather delays, or bumper-to-bumper traffic, not to mention the high cost of gas. So more Americans are looking past cars and planes and opting to take a train instead.

People are not as jam-packed as they are on planes. There are cafe cars. You can get up and walk around. You can appreciate the views in a different way than you can in the air. We'll talk to Wall Street Journal reporter Jacob Passy about crisscrossing the nation on the rails, the good and the bad. That's after the break. So what's it like to buy your first cryptocurrency on Kraken?

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See Kraken.com slash legal slash ca dash pru dash disclaimer for info on Kraken's undertaking to register in Canada. More Americans are foregoing travel on highways and in the air and opting to go by train. Wall Street Journal reporter Jacob Passy joins me. Jacob, just to be clear, we're not talking about commuter rails, right? Correct. We are talking about what they refer to as intercity trains. So these are your Amtraks, and there's a new service down in Florida called Brightline that can fit into this category. But these are trains going much longer distances than the trains that are part of like commuter networks in major cities. How much has intercity train travel grown in popularity in the U.S.? It is

still minuscule compared to air travel and driving, but it is definitely growing. Amtrak, so far this year, during their fiscal year, they have seen ridership climb upwards of 18%, and they are on track to set an all time record for ridership. Why all the interest in trains right now? The industry executives I spoke with point to a generational shift that they see happening. They say that folks in the US are increasingly aware of their environmental impact and traveling by train can be more environmentally friendly than other forms of transportation. But also you're seeing a lot of congestion, especially on major highways.

And folks are looking for methods of getting around that avoid that. So that can involve trains. And in a lot of cases, the most popular train lines are ones that roughly follow popular highway routes. And so they provide that alternative. The Northeast Corridor on Amtrak gets a lot of attention, but are routes besides that also gaining popularity? So you're correct. The Northeast Corridor of Amtrak is the beast of train travel in the U.S. It accounts for some 9 million riders so far this year, which is vastly more than any other

of Amtrak's routes. But we're also seeing growth in the West Coast. So we're seeing the Pacific Surfliner has had a major uptick in ridership, above 30%, and that's a route that goes along the coast of Southern California. The Cascades route of Amtrak is also increasingly popular. They've seen a 48% increase in ridership over the past year to date. And that route is in the Pacific Northwest from Oregon up through Vancouver in Canada. And then down in Florida, there is Brightline, which is its own whole thing separate from Amtrak. It's a privately owned rail operator. And they've essentially doubled their ridership over the past year, in part because they launched a new route to Orlando. But that rail operator has over a million riders so far this year. How has the rise in train travel impacted fares? Brightline's a great example of this. Since they have introduced this new service to Orlando, they have had to significantly increase their fares. Prior to that,

they solely were operating in South Florida and functionally were acting as a commuter rail in a major sense. But now that they are more of a long distance rail provider, they've had to increase fares for folks who were taking shorter journeys. So their fares have certainly risen. With Amtrak, the pricing fluctuates based on demand. And so you definitely see the popular routes having fares rise, especially during popular travel days. But in a lot of cases, it is still a pretty affordable option for folks. How does the actual cost of travel by train compare with travel by air? The actual cost of travel by train compared with travel by air? Again, that varies depending on where you're traveling to.

Generally, folks think it's fairly comparable. Brightline is a good example of that. The trips from Orlando to South Florida, again, they vary in price. But they are, generally speaking, about in line with a similar airfare from a low-cost carrier. Cross-country trains are going to be more expensive than short-distance trains. You can get amazing deals, though. Amtrak in the Northeast Corridor, you can really score rock-bottom fares that are much cheaper than traveling by air. Sometimes those are at weird times of the day, but those cheap fares are out there. You spoke to industry

analysts who said that interest in rail travel has been strong for a long time, but limited access has kept ridership down. What do they mean by that? So with the exception of the Northeast Corridor and now Brightline down in Florida, when we're talking about rail travel, it is a drop in the bucket. A lot of these routes only have one, two, maybe three trains a day. Sometimes those trains are at odd hours of the day. And oftentimes outside of the Northeast Corridor, passenger trains with Amtrak are competing with freight railroads for space and schedules. That can cause delays, etc. space and schedules that can cause delays, etc. So the lack of frequency and reliability outside of the Northeast corridor has limited the feasibility of rail being an option to folks. So in the cases we're seeing now where Amtrak has been able to add service and increase service

on existing routes, folks are responding. They want to travel by train. It's just a matter of getting trains to them. Let's say somebody's going on vacation and they're taking a long train ride as opposed to a plane ride. What's the difference in the experience for them? To start off, there's no TSA. Obviously, rail operators do check tickets, but we're not talking about the long lines at security. And that's one of the aspects that folks seem to love about train travel, as opposed to the airport where you need to show up hours in advance to make sure that you make your flight. You can show up a few minutes before your train and be fine. Not to say that folks shouldn't give themselves attention, but that is a major difference. And then in terms of the experience on board the train, people are not

as jam-packed as they are on planes. There are cafe cars. You can get up and walk around. You can appreciate the views in a different way than you can in the air. But there are other drawbacks. Train travel in the U.S. is not high speed, by and large, and the routes are going to take longer than a similar flight would take. You might deal with delays because of other rail operators on the same railroad, because of accidents, things like that. A cross-country train trip from the west coast to the east coast takes days still, as opposed to flying, which takes hours. Do transportation officials expect interest in rail travel to continue to rise?

They do. There's this idea out there that especially when folks come back from Europe or Asia, where rail travel is much more prominent, they want it here. And then the recent legislation, the infrastructure bill that President Biden signed into law, had a lot of funding attached to it for rail travel. And folks I spoke with said that dramatically increased awareness of rail travel across the country. It's really a matter of once people become aware of rail as an option, they want to take advantage of it. And so it's a matter of getting more frequency, more train options across this country, and then making people aware of it.

That's WSJ's Jacob Hasse. And that's it for your Money Briefing. We'll be back Monday morning with WSJ's Veronica Dagger to discuss the protection umbrella insurance can provide beyond your auto and homeowner's policies and why it's getting more expensive. Today's show was produced by Zoe Kulkin. I'm your host, J.R. Whalen. Additional support this week from Ariana Osprey. Jessica Fenton and Michael LaValle wrote our theme music. Our supervising producer is Melanie Roy. Aisha Al-Muslim is our development producer. Scott Salloway and Chris Zinsley are our deputy editors.

And Falana Patterson is The Wall Street Journal's head of news audio. Thanks for listening.