Sam1 Recognizing that the freight carriers are different businesses than Amtrak, I thought it would be interesting to look at their compensation expenses. In FY12 Norfolk Southern's compensation and benefits expenses were 37.4 per cent of operating expenses and 26.8 per cent of operating revenues. For the Kansas City Southern the numbers were 28.3 and 19.2 per cent. Comparing expenses across companies, especially when they stem from other countries or companies with a different mission, is dicy. Nevertheless, it appears that Amtrak's compensation expenses are high relative to those of its major competitors.
Recognizing that the freight carriers are different businesses than Amtrak, I thought it would be interesting to look at their compensation expenses. In FY12 Norfolk Southern's compensation and benefits expenses were 37.4 per cent of operating expenses and 26.8 per cent of operating revenues. For the Kansas City Southern the numbers were 28.3 and 19.2 per cent.
Comparing expenses across companies, especially when they stem from other countries or companies with a different mission, is dicy. Nevertheless, it appears that Amtrak's compensation expenses are high relative to those of its major competitors.
And, given that NS and Amtrak likely pay similar wages and benefits per employee, the trouble is likely the head count. They need to do some serious benchmarking....
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Don,
I suspect the real problem is on the revenue side. There are not enough people willing to pay a high enough fare to support passenger trains.
Mac McCulloch
If for a variety of reasons Amtrak decides to continue to run the western LD routes then, as Boardman says, they should not be subsidized by Acela + the taxpayers. Rather, the biggest expense, dining cars and sleepers, should have to cover their costs by raising those fares above and beyond the coach fare sufficiently to do so. Recall in the Golden Age, Pullman passengers paid for a more expensive first class ticket + the sleeper charges and paid for their dining car food if they chose to use it.
C&NW, CA&E, MILW, CGW and IC fan
schlimmIf for a variety of reasons Amtrak decides to continue to run the western LD routes
Which is likely true. It's a political liability to try to drop them.
schlimmRather, the biggest expense, dining cars and sleepers, should have to cover their costs by raising those fares above and beyond the coach fare sufficiently to do so. Recall in the Golden Age, Pullman passengers paid for a more expensive first class ticket + the sleeper charges and paid for their dining car food if they chose to use it.
Or, just don't do sleepers and diners at all. Do overnight stops. Or, at least minimize the overnight travel.
Or, hire someone to do the sleepers and diners.
Or, find ways to do sleepers and diners cheaper.
Or, as you suggest, raise fares. Lots of anecdotal evidence shows the sleepers fill up fairly often. The price probably isn't high enough. Picking on my favorite whipping boy...there are no roomettes available on the Crescent northbound for the next 8 days. There is a bedroom availble two of the next 8 days. Not peak travel season, yet.
Or, do some combo of all of the above.
I suspect as long as you protect those LD, "lines on the map" the amount of political furor over service changes would be endurable. There might even be some "cancelling out" where the benefits of reasonable time of day station stops outweigh the lack or increased pricing of the amenities.
PNWRMNM Don, I suspect the real problem is on the revenue side. There are not enough people willing to pay a high enough fare to support passenger trains. Mac McCulloch
Mac- We could start the regular "who's on first" routine here.
Start:
"Why can't they raise fares?"
"Because the other modes have cheap prices."
"How can they have cheap prices?"
"Because they are subsidized."
"But, isn't Amtrak subsidized?"
"Yes, but, the other modes get more subsidy."
"But, don't they carry a lot more people?"
"Yes, but only because Amtrak does not get more subsidy."
"So, they could lower their fares?
"No, so they could provide more service."
"But, if they don't lower their fares, who would ride new service?"
"There would be new routes, not more trains on the same routes. Everyone should have access to a train."
"So there would be more trains with fares that don't cover their costs?
"Yes, but there would be more overall passengers."
"Proportional to the increase in service?"
"Yes."
"So, you'd need higher fares to cover the cost?"
"Yes. But it would be fair because there would be more trains." (goto start)
I think that covers the revenue side very well.
Mac
Our community is FREE to join. To participate you must either login or register for an account.