Arguing that passenger rail may be a viable solution in high density corridors; that it would be a legitimate role for the federal government to help fund the capital improvements required to expand or launch it; and requiring the users to cover the operating costs does not strike me as inconsistent.
I have always discussed the numbers shown in Amtrak's financial and operating reports. I have not said that the system has not covered its operating costs on certain segments, particularly the NEC, but it has not done so on a consistent basis. And I am doubtful that the envisioned moderate or high speed rail corridors will be able to do so. What is crystal clear, however, is that Amtrak cannot cover its fully allocated costs without a significant infusion of federal and state funds. As a result it requires a greater per passenger mile subsidy of any form of common transportation.
In FY08 Amtrak received $1.4 billion in federal paid in capital as well as $110 million in state paid in capital. Divided by the number of passenger miles produces an average system subsidy of 22.61 cents per mile. This would include the operating and capital subsidy. The system needs both of them to survive.
The operating results per passenger mile for each route can be found in the monthly Amtrak Operating Reports, with the September reports showing the results for the fiscal year.
In FY08 the NEC realized an operating profit of $369 million or an average of 20.7 cents per passenger mile (34.9 cents for the Acela and 12.8 cents for the regional trains). However, on a fully allocated basis, the NEC had a loss of nearly 6 cents (average) per passenger mile. The State Supported and Other Short Distance Corridor trains lost an average of 6.6 cents per passenger mile, whilst the long distance trains lost an average of 18.5 cents per passenger mile. Amtrak does not tell us how the interest and depreciation is allocated. Since the NEC is Amtrak's largest capital investment, it is reasonable to assume that 80 per cent of it is attributable to the NEC, with 10 per cent being attributable to each of the other categories.
In FY09 Amtrak received $1.6 billion in federal paid in capital as well as $126 million in state paid in capital. I have not calculated an average system subsidy for FY09. However, since the transfer amount from the federal and state governments is higher than FY08, whilst the passenger miles dropped, the average system subsidy per passenger undoubtedly increased in FY09.
In FY09 the NEC had a $200,000 operating profit before interest and depreciation. It barely covered the operating costs. On a passenger per mile basis, the 11.8 cents earned by the Acela was wiped out by the loses on the regional and special trains. The State Supported and Other Short Distance Corridor trains lost an average of 13 cents per passenger mile, whilst the long distance trains lost an average of 21.5 cents per passenger mile. These results were before interest and depreciation. After interest and depreciation the system probably lost more money per passenger mile in FY09 than FY08. Only the Acela covered its operating costs in FY09. Every other train had an operating loss, and most of them, on average, were up significantly over FY08.
In FY09 the Pacific Surfliners lost 10.7 cents per passenger mile. Amtrak does not breakout the results for the LAX to San Diego segment of the Pacific Surfliner operations. At the end of the FY10 first quarter (December 2009), no results were shown for the Washington to Lynchburg service.
If the long distance trains were terminated, Amtrak's financial results would improve dramatically. Whether it could cover its operating costs on a consistent basis, given its current structure, is doubtful. Whether any of the planned high or moderate speed corridors in the U.S. will cover their operating expenses on a consistent basis is equally problematic. What is not in doubt is the fact that none of them will be able to hoist their capital costs.
Amtrak has lost more than $25.4 billion since its inception. As stated by its external auditors, its prospects for covering its costs without significant government support are nil. If Amtrak was a business, it would have gone belly up decades ago.
As I had surmised, sam1 is including in the "subsidy" numbers the federal capital subsidy, when most people are referring to operating subsidies when they discuss "above the rails" matters. If highly used corridors are actually showing an operating profit as you show for NEC Acela services, and newer corridors are showing a profit at least in some months, then it would seem to be a logical conclusion that reducing/eliminating services with low load factors (low demand), increasing high load factor services should allow Amtrak, or whatever it morphs into, to break even. We all know Amtrak has not been a business that is expected to show a profit. If you keep putting forward that criterion as the standard for judgments, then it is rather facetious to continue to claim you are not opposed to a passenger rail system
C&NW, CA&E, MILW, CGW and IC fan
Sam1 Amtrak has lost more than $25.4 billion since its inception. As stated by its external auditors, its prospects for covering its costs without significant government support are nil. If Amtrak was a business, it would have gone belly up decades ago.
So what would be the figure for airlines without the aid of government from their inception? And what would be the figure for trucks, buses and cars if the government did not build roads, etc.? Or is Amtrak the only one there are figures for so the only one that can have an arguement against it? Greyhound has been on its knees many times as has virtually every airline and man trucking company. Surviving companies are the mostly the results of mergers, bankruptcies and total quits. Can all that be quantified like Amtrak?
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
schlimm As I had surmised, sam1 is including in the "subsidy" numbers the federal capital subsidy, when most people are referring to operating subsidies when they discuss "above the rails" matters. If highly used corridors are actually showing an operating profit as you show for NEC Acela services, and newer corridors are showing a profit at least in some months, then it would seem to be a logical conclusion that reducing/eliminating services with low load factors (low demand), increasing high load factor services should allow Amtrak, or whatever it morphs into, to break even. We all know Amtrak has not been a business that is expected to show a profit. If you keep putting forward that criterion as the standard for judgments, then it is rather facetious to continue to claim you are not opposed to a passenger rail system
But then again, why worry over this criterion if it is not a 'business' as such. I keep hearing Amtrak officials calling it such... He is merely pointing out the issue that if it was to be run like a business there would have to be different operating systems in place. I would not say that just because he uses that criterion means therefore he is opposed to passenger rail service in its entirety. I don't think that an all/nothing categorization of someone's claims helps here. There is this issue about long distance passenger rail service and its being a drain on the Amtrak system as such. Mind, the same thing appears on a lot of airlines books too. It could be that another business model might be an idea here---
My wife and I have been looking around at a whole bunch of city pair trips connected a la daisy chain across the US---gonna have some fun this summer!
Any argument carried far enough will end up in Semantics--Hartz's law of rhetoric Emerald. Leemer and Southern The route of the Sceptre Express Barry
I just started my blog site...more stuff to come...
http://modeltrainswithmusic.blogspot.ca/
blownout cylinderBut then again, why worry over this criterion if it is not a 'business' as such. I keep hearing Amtrak officials calling it such... He is merely pointing out the issue that if it was to be run like a business would be there would have to be different operating systems in place. I would not say that just because he uses that criterion means therefor he is opposed to passenger rail service in its entirety. There is this issue about long distance passenger rail service and its being a drain on the Amtrak system as such. Mind, the same thing appears on a lot of airlines books too.
It's a difficult topic. The key notions, IMO, are operational expenses/subsidies and resource allocation, whether business or otherwise. Accounting can be used in non-business settings to see contributions and where to put the money for the best use. Sparsely used long-distance routes and some feeder routes need greater subsidies, but if so, perhaps that could be seen as a valuable form of social service subsidy, like the subsidized airline routes into small towns in the West.
oltmanndOops. Wrong paper. Try this one
This one should be up for an Oscar for Best Screenplay! Very dramatic. Thanks, Don.
henry6 Sam1 Amtrak has lost more than $25.4 billion since its inception. As stated by its external auditors, its prospects for covering its costs without significant government support are nil. If Amtrak was a business, it would have gone belly up decades ago. So what would be the figure for airlines without the aid of government from their inception? And what would be the figure for trucks, buses and cars if the government did not build roads, etc.? Or is Amtrak the only one there are figures for so the only one that can have an arguement against it? Greyhound has been on its knees many times as has virtually every airline and man trucking company. Surviving companies are the mostly the results of mergers, bankruptcies and total quits. Can all that be quantified like Amtrak?
The infrastructure for every transportation mode in the U.S. (canals, roadways, railways, airways, etc.) has be kick started with government monies. The users pay for the infrastruce through user fees or general revenues. Whether they pay their proportional share is debatable, but at the end of the day the users pay for them. Only Amtrak as well as commuter rail has failed to pay for the infrastructure that it uses.
Many intercity bus companies, airlines, trucking companies, etc. have gone belly-up because they could not cover their operating costs, including the cost of the infrastructure embedded in the user fees. The costs for Southwest Airlines (consistently profitable), American Airlines, etc. could be quantified. It would take a considerable amount of time to do it, but the information is there.
The airlines that have survived, i.e. Southwest, American, United, Delta, etc. have done so because they have accumulated retained earnings to allow them to do so. To be sure, United and Delta had to resort to bankruptcy to survive, but they did it.
Airlines, trucking companies, bus operators, cruise ship operators, etc. must cover all their costs. Not just the operating costs! Why should passenger rail be given a pass?
In FY09 only the Acela covered its operating costs. No other route covered its operating costs, and most of them did not even come close. Covering the operating costs for a month or two is not a very good test of its viability. No business person would survive for very long if he or she only considered the operating costs.
The original intention was for Amtrak to cover its costs. All of them! Just because I believe that rail should cover its costs from the users, although I recognize that covering the operating costs is probably the only realistic expectation, does not mean that I am opposed to passenger rail. I support passenger rail, where it can cover its operating costs and contribut to the capital costs. I don't choose to hide my head in the sand regarding the cost of passenger rail. Or use dodgy accounting to make a case for it.
sam1: There seems little value in going around and around - I guess you want to see passenger rail succeed. So, in the name of looking productively toward the future, I wonder if you would consider applying your professional acumen to an examination/analysis of Amtrak expenses? In the annual report and also in the first of the studies Don linked, it appears that salaries, wages and benefits are pretty high - almost 48% of total expenses and consuming about 78% of passenger/commuter revenue. There is a defined benefit pension plan and healthcare insurance premiums are, as elsewhere in business, growing rapidly. In your experience, do those numbers seem in line with those of other businesses, especially railroads and airlines?
Sam1The original intention was for Amtrak to cover its costs. All of them! Just because I believe that rail should cover its costs from the users, although I recognize that covering the operating costs is probably the only realistic expectation, does not mean that I am opposed to passenger rail. I support passenger rail, where it can cover its operating costs and contribut to the capital costs. I don't choose to hide my head in the sand regarding the cost of passenger rail. Or use dodgy accounting to make a case for it.
I like the last bit. I've run into advocates who would support using dodgy accounting-
Was there anywhere in all the enabling docs for Amtrak anything relating to the control of those operating costs? If the labour costs are an issue--48%(?)of operating costs--where is the control factor here? What is working in Acela's favour in this case?
Again, why do we have this merry go round going on here----just because someone argues as Sam1 does should not equal therefore that he is against it. Can't we think OTHER than either you're with me or you're against me?
In FY09 salaries, wages, and benefits accounted for 72 per cent of Amtrak's revenues and 48 per cent (rounded) of its expenses for continuing operations before extraordinary items. A sample comparative analysis shows that the percentages for American Airlines were 34 and 32; Southwest Airlines 34 and 34; United Airlines 23 and 23; Delta Airlines 24 and 24; and Greyhound Lines 41 and 42.
To fully understand the numbers one would have to drill into all of the financial statements, put the key numbers in a spreadsheet, run a variety of financial analytic tools, and perform a cross industry analysis. Needless to say, this would be a time consuming effort.
Amtrak has a legacy pension plan as does American Airlines and Greyhound. On the other hand, Southwest Airlines, Delta Airlines, and United Airlines never had a defined benefit plan or were able to throw it off in bankruptcy proceedings. It would take a considerable amount of time just to analyze the pension plan costs.
Outside of the NEC, as well as the California and Chicago corridors, Amtrak is hobbled by high fixed costs per unit of service, i.e. only one or two trains per day, with many of the infrastructure facilities staffed at least 8 to 10 hours per day. For example, the El Paso Station has at least five Amtrak employees or contract employees for six trains a week. Moreover, the last time I was in the station, which was last year, they had at least three if not more computers.
Whether Amtrak employees are paid on a par with other transport employees performing similar functions would require an exhaustive job survey. My employer, which was a Fortune 250 energy company, had two or three full time employees in HR whose sole responsibility was to perform these surveys. I say that to say this: it would take a considerable effort to determine if Amtrak's employees are overpaid or under paid. A similar study would be required to determine how effective they are managed and how efficiently they perform their assigned tasks.
sam1: Thanks for the numbers. Sadly, I suppose that the El Paso example is repeated over and over. I doubt if anything will occur to reduce the waste, in staffing little used facilities and other high cost areas such as the Amtrak repair facility.
From the article linked by oltmann:
These trends in employment costs at Amtrak compared unfavorably with totaloperating cost trends in the airline industry. From 1994 to 2000 Amtrak’s coreemployment expense per mile exceeded the airlines’ total operating cost per mile.Airlines had kept their costs within the annual inflation rate and discount carrierSouthwest Airlines had controlled costs even further. Amtrak’s employment costsper mile exceeded airline and bus intercity operating costs per mile for a number ofreasons, including the high underlying level of compensation and a rate of growth incompensation that outpaced inflation. Average compensation for railroad workersexceeded that of air and bus employees. From 1980 to 1999, the real growth incompensation for core Amtrak employees grew more than 30% while that for airlineemployees decreased nearly 20%, and bus line employees’ compensation droppedmore than 10%. Supporting documentation provided by the FRA showed thatairfares were 1/3 below Amtrak fares and perceived automobile driver costs per milewere less than ½ of Amtrak’s fares. In addition, airfares and perceived driver costsper passenger mile were found to be below Amtrak labor costs per passenger mile.A DOT Inspector General report dated November18, 2004 stated that labor costswere Amtrak’s largest operating cost and should be a key focal point for costreduction by Amtrak. The report also noted that labor costs (including those ofAmtrak commuter rail employees) had been reduced during 2002 , 2003, and 2004.Annual labor costs as a percentage of total operating costs for 2003 were roughly 3%lower than in 2001. Part of this percentage decline, however, occurred because risingdepreciation costs (not counted as an operating cost in the FRA study discussedabove) pushed up the overall non-labor operations total. On a dollar basis, laborcosts in 2003 were $110 million below labor costs for 2001. Most of this reduction,according to Amtrak, was accomplished through elimination of redundant or underused positions (1,179 employees in 2002 and 492 employees in 2003).
Amtrak has been in contract negotiations with most of its unions since theexisting labor agreements expired in 1999. Amtrak, however, did reach a collectivebargaining agreement with the Transportation Communication Workers InternationalUnion (TCU) in September 2003. The agreement included some work rule changesand measures to contain medical costs, but it also provided TCU members with wageparity with freight rail workers and gave them a 6.6% wage increase. The parityconcession was based on the fact that some Amtrak occupations’ job skills, anengineer’s for instance, can also be used for freight rail or commuter rail, and wageparity for engineers could be seen as necessary to prevent a loss of skilled employeesfrom Amtrak to other rail companies. Amtrak’s intercity rail operations, however,are not in business competition with freight or commuter rail companies, but withairline and bus companies, which, as discussed earlier, have much lower unit wageand benefit costs.
schlimm sam1: Thanks for the numbers. Sadly, I suppose that the El Paso example is repeated over and over. at the present the El Paso example is a good example of waste. If AMTRAK ever decides to make the Sunset/Eagle a daily train then there would be less waste. Changes may be coming but when? See thread possible Sunset changes? I doubt if anything will occur to reduce the waste, in staffing little used facilities and other high cost areas such as the Amtrak repair facility.The ARRA projects are set up to expand and allow a more logical work flow repairing and completing periodic maintenance. From the figures I have seen it would take fewer maintenance personel for the present fleet or a much larger fleet will be able to be worked on without more personel. The locations subject to these improvements are LAX, SEA, NOL, MIA, CHI, and NY- Sunnyside. Improvements at WASH and BOS are somewhat less.
sam1: Thanks for the numbers. Sadly, I suppose that the El Paso example is repeated over and over.
at the present the El Paso example is a good example of waste. If AMTRAK ever decides to make the Sunset/Eagle a daily train then there would be less waste. Changes may be coming but when? See thread possible Sunset changes?
I doubt if anything will occur to reduce the waste, in staffing little used facilities and other high cost areas such as the Amtrak repair facility.The ARRA projects are set up to expand and allow a more logical work flow repairing and completing periodic maintenance. From the figures I have seen it would take fewer maintenance personel for the present fleet or a much larger fleet will be able to be worked on without more personel. The locations subject to these improvements are LAX, SEA, NOL, MIA, CHI, and NY- Sunnyside. Improvements at WASH and BOS are somewhat less.
blue streak 1 schlimm sam1: Thanks for the numbers. Sadly, I suppose that the El Paso example is repeated over and over. at the present the El Paso example is a good example of waste.
schlimm sam1: Thanks for the numbers. Sadly, I suppose that the El Paso example is repeated over and over. at the present the El Paso example is a good example of waste.
at the present the El Paso example is a good example of waste.
and the unwed mother around the corner who gets $20 more a week in assistance than she should is also a good example of the rampant waste of government spending! Come on! This is BS! Political postering that one bad thing in one place means every place in the Country has the same bad thing happening. Scare tactic to be a scare mongering Populist to gain power of one's own convictions no matter how unfounded or how weak they may be!
henry6 blue streak 1 schlimm sam1: Thanks for the numbers. Sadly, I suppose that the El Paso example is repeated over and over. at the present the El Paso example is a good example of waste. and the unwed mother around the corner who gets $20 more a week in assistance than she should is also a good example of the rampant waste of government spending! Come on! This is BS! Political postering that one bad thing in one place means every place in the Country has the same bad thing happening. Scare tactic to be a scare mongering Populist to gain power of one's own convictions no matter how unfounded or how weak they may be!
The El Paso situation is repeated up and down the line for Amtrak's long distance trains, with the exception of the east coast, where many points see four trains movements per day. In Texas, the only staffed stations that see more than one train a day are Fort Worth and San Antonio, and in the case of SA it only happens four days per week.
Texarkana, Marshall, Longview, Dallas, Fort Worth, Temple, Austin, San Antonio, Houston, and El Paso are staffed Amtrak stations in Texas. I don't know the number of employees for each station, although in the case of Dallas, where I lived for 32 years and return frequently on Amtrak, they have at least six employees. Fort Worth appears to have a similar number.
Lets say, for argument sakes, that Amtrak has an average of four employees for each of its staffed stations in Texas. If this number is accurate, then it takes an average of 40 employees to staff the stations. These employees would be classified as customer service representatives in the Bureau of Labor Statistics wage database.
The average national pay for customer service representatives in 2008 (latest verifable data) was $40,960. Comparative data shows that Amtrak's wages are competitive with national averages. If this is true, then the wage cost to staff the stations in Texas would be in the neighborhood of $1,638,400. Add an average payroll loading of 35 per cent, which is common in the U.S., and the annual compensation package for Texas station employees works out to be $2,211,840. And this is just for Texas.
Whether the cost to staff Amtrak's Texas stations, at least, is wasteful is debatable, but clearly it is not very efficient, which was the original point. Moreover, there is nothing political in arguing that the cost of staffing a station for two train movements a day is costly and inefficient.
According to the U.S. Bureau of Labor Statistics, the average pay for a railroad engineer in the U.S. is $53,680. The average wage for an over the road heavy truck driver is $42,580. The averages for railroad conductors, customer service representatives, and others are $54,200, $40,960 and $31,780. This data is from the 2008 database, which contains the latest national information compiled by the BLS.
The only data that I could find for Amtrak is in the current job postings, which is limited and may not be representative of Amtrak's wage scales. Amtrak's station agents (Dallas, San Antonio, El Paso, etc.) probably fall into the customer service classification.
Amtrak is looking for a police officer in Los Angeles. The pay is $45,552 per year. The average pay for a similar role in Los Angeles $46,230, which puts the Amtrak pay slightly below the average. The average pay for a city police officer in the U.S. is $52,810, whilst in California it is $74,660.
It is also looking for a trainmaster and operations supervisor on the west coast. The pay for the trainmaster is $65,000 to $90,000 per year, whilst the pay for the operations supervisor is $63,819. The average pay for similar positions (freight, passenger, major carrier, regional carrier) is $84,500. At least for this category Amtrak does not appear to be giving the store away.
Amtrak is looking for assistant conductors in numerous locations. The training wage is $36, 920 per year. Assuming the training wage is 75 per cent of the annual wage, the wage for an assistant conductor would be $49,226. And if assistant conductors earn 75 per cent of the wages of a conductor, then Amtrak's conductors would earn $65,635, which would be considerably more than the national average of $54,200 for conductors. The average for all conductors, however, includes regional freight lines, as well as commuter lines, which pay considerably less than the major carriers.
What is unknown in all this, of course, is the value of the benefit package, e.g. medical insurance, retirement benefits, savings plans, etc. It can add easily 35 per cent to the base wage. Frequently, unions in particular will sacrifice hourly wages for rich benefit packages. I suspect that Amtrak's benefit package is generous.
Sam1What is unknown in all this, of course, is the value of the benefit package, e.g. medical insurance, retirement benefits, savings plans, etc. It can add easily 35 per cent to the base wage. Frequently, unions in particular will sacrifice hourly wages for rich benefit packages. I suspect that Amtrak's benefit package is generous.
That may very well be the case that Amtrak's benefit packages would be attractive---and if the value is about 35% of the base wage, that'll likely add another---if I just toss a base at $60000--- the amount would be an extra $21000 to the cost---just in that one area alone.
OY----and with 6 working in a station with only 2 trains/day---how many passengers embark there---another OY
So Sam, stop making Texas judgements on Illinois or New York or Pennsylvania truths.
Sam1The GAO, which is arguably the most objective U.S. Government Agency, looked at 16 domestic high and moderate speed passenger rail projects. That strikes me as more than a single spoke. I spent more than 40 years working for corporate America, including 33 years in Dallas. I was an accounting and audit manager. The only government agency that we looked to for best practice ideas was the GAO, primarily because of its objectivity and the excellent quality of its work.
Sam1These is scant evidence to support this point. For example, the Union Pacific said that it would cost more than $1.86 billion to route freight traffic off of its line from Taylor to San Antonio to enable the Austin to San Antonio commuter rail project. That is just the cost of the relocation work. It does not include the financing. Depending on the length and terms of the financing, it could easily double the total cost over the life of the debt financing, which usually runs in the neighborhood of 30 years.
I think the point was it's cheaper to re-engineer the frieght system where it traverses our congested cities and use those lines for high speed rail then it is to build new high speed rail systems entirely from the ground up in those congested areas. Your earlier argument was that HSR could never be achieved on a system mixing frieght with passenger. While that is true you neglect to point out in many of those cases where the ROW is shared, frieght carriers would probably benefit with increased transit times if they were located elsewhere. The UP's estimate is probably inflated because it knows the consumer is the government and it assumes purchase vs eminent domain probably among other things. I'd be curious to know what a independent organization assesses the costs are. I'm pretty sure the costs of relocating frieght are cheaper then building a seperate HSR line through the congested area so that frieght and passenger traffic is not mixed. Just a hunch though. The other point your missing here and by using the Texas example you avoid discussing it. Is in some cases the shift of the frieght can take place on a competing rail line or slightly more circuitous rail line.
Sam1The cost of the airways system has been paid for by the commercial airlines, general aviation, and the military operatiing in civilian airspace. All modes of transport, however, recieve some subsidy from the federal, state, and local governments. But nothing comes close to the amount of subsidy required by passenger rail. In FY2008 Amtrak, as an example, received an average federal subsidy of 22.61 cents per passenger mile compared to .42 cents for the airlines and .026 cents for vehicle miles travelled. Closer to home, Trinity Railway Express (TRE) received an average subsidy of 20.5 cents per passenger mile.
Again though your looking at passenger rail as "Amtrak". Not a hub and spoke system with intermodalism as it was before the Private Industry exited the Passenger Rail sphere. I understand NARP's arguments are flawed and I don't believe them either but I see a whole lot of new airport infrastructure in place thats paid for by taxpayer money. Lots of first class airports in rural areas where the air traffic doesn't cover their cost and ostensibly they are built for political reasons or for the reason of increasing tourism. You should be able to Google "AIRLINE" and "SUBSIDY" and come up with a list of recent non-9-11 related misc direct subsidies. Likewise subsidies to serve rural airports to the airlines.
Sam1The FAA is replacing the air traffic control system. Although the current system is outmoded, it is not dysfunctional. Monies for Next Gen, which will cost approximately $20 billion, is in the FY10 and FY11 budgets.
I heard the assurance since the 1980's that the FAA was about to fix the Air Traffic Control system. It's great your still hanging onto that. I'll believe it when I see it. Not dysfunctional.....what?
Sam1I spent more than 40 years working for corporate America, including 33 years in Dallas. I was an accounting and audit manager. The only government agency that we looked to for best practice ideas was the GAO, primarily because of its objectivity and the excellent quality of its work.
Yeah again though your avoiding the whole argument I tried to make which rail does increase mobility and does add to GDP. GAO is NOT an Economics body. In fact, it very much analyzes things in a silo using a strict bean counter perspective. We would not have Airlines today if the GAO was in charge of analyzing the situation in the 1940's and 1950's. Having worked on a Economics Staff myself we would look at the GAO findings at arms length. Very much the PhD Economists on the staff I supported viewed the GAO findings with suspicion because their premise was flawed in some way. BTW, I have a BBA in Finance, really can't see why a Private Firm would use Government Accounting by the GAO as a example to follow maybe you were looking at a small subset of what they do because.......Public Accounting <> Private Accounting.
blownout cylinder Sam1What is unknown in all this, of course, is the value of the benefit package, e.g. medical insurance, retirement benefits, savings plans, etc. It can add easily 35 per cent to the base wage. Frequently, unions in particular will sacrifice hourly wages for rich benefit packages. I suspect that Amtrak's benefit package is generous. That may very well be the case that Amtrak's benefit packages would be attractive---and if the value is about 35% of the base wage, that'll likely add another---if I just toss a base at $60000--- the amount would be an extra $21000 to the cost---just in that one area alone. OY----and with 6 working in a station with only 2 trains/day---how many passengers embark there---another OY
Amtrak does not provide station boardings in its public reports, so it is difficult to say how many board at each station. In any case, the ratio of passengers handled by the station agents for Amtrak's long distance trains in Texas, as well as most other intermediate spots in the national system, is very low.
henry6 So Sam, stop making Texas judgements on Illinois or New York or Pennsylvania truths.
As I make clear in most of my posts, references to Texas as examples are not necessarily meant to apply to the national passenger rail system. They are examples. Having said that, the cost and efficiency of staffing the stations in Texas is representative of the costs of staffing the stations throughout the country, including the states that you mentioned, where only one or two trains movements a day are common.
Amtrak hoists 14 long distance trains on 11 routes. Nine of the routes see only two train movements per day, whilst two of them only see at least one train movement four days per week. Moreover of the 28 State Supported and Other Short Distance Corridor Trains, 12 of them operate wholly or partially over a route that only sees two train movements per day. Thus, when examined closely, it is clear that the Texas example, when use to judge Amtrak's efficiencies, is more rather than less typical.
CMStPnP Sam1The GAO, which is arguably the most objective U.S. Government Agency, looked at 16 domestic high and moderate speed passenger rail projects. That strikes me as more than a single spoke. I spent more than 40 years working for corporate America, including 33 years in Dallas. I was an accounting and audit manager. The only government agency that we looked to for best practice ideas was the GAO, primarily because of its objectivity and the excellent quality of its work. Your right, it is a series of single spokes spread across the country, still not a integrated or intermodal system though, is it? Based on the corridor proposals put up by the U.S. DOT, the proposed moderate or high speed rail systems will never be an integrated whole. I don't get your point. Sam1These is scant evidence to support this point. For example, the Union Pacific said that it would cost more than $1.86 billion to route freight traffic off of its line from Taylor to San Antonio to enable the Austin to San Antonio commuter rail project. That is just the cost of the relocation work. It does not include the financing. Depending on the length and terms of the financing, it could easily double the total cost over the life of the debt financing, which usually runs in the neighborhood of 30 years., I think the point was it's cheaper to re-engineer the frieght system where it traverses our congested cities and use those lines for high speed rail then it is to build new high speed rail systems entirely from the ground up in those congested areas. Your earlier argument was that HSR could never be achieved on a system mixing frieght with passenger. While that is true you neglect to point out in many of those cases where the ROW is shared, frieght carriers would probably benefit with increased transit times if they were located elsewhere. The UP's estimate is probably inflated because it knows the consumer is the government and it assumes purchase vs eminent domain probably among other things. I'd be curious to know what a independent organization assesses the costs are. I'm pretty sure the costs of relocating frieght are cheaper then building a seperate HSR line through the congested area so that frieght and passenger traffic is not mixed. Just a hunch though. The other point your missing here and by using the Texas example you avoid discussing it. Is in some cases the shift of the frieght can take place on a competing rail line or slightly more circuitous rail line. I don't recall saying anything about mixing freight and moderate or high speed passenger service. I don't think the country can afford to build separate moderate and high speed rail networks, California to the contrary notwithstanding. The U.P. cost estimate to shift its freight traffic to the east of Austin, on an existing line, has been submitted to the Texas DOT. Presumably it will be examined closely the the state auditors, amongst others. There is no evidence that it is inflated. Sam1The cost of the airways system has been paid for by the commercial airlines, general aviation, and the military operatiing in civilian airspace. All modes of transport, however, recieve some subsidy from the federal, state, and local governments. But nothing comes close to the amount of subsidy required by passenger rail. In FY2008 Amtrak, as an example, received an average federal subsidy of 22.61 cents per passenger mile compared to .42 cents for the airlines and .026 cents for vehicle miles travelled. Closer to home, Trinity Railway Express (TRE) received an average subsidy of 20.5 cents per passenger mile. Again though your looking at passenger rail as "Amtrak". Not a hub and spoke system with intermodalism as it was before the Private Industry exited the Passenger Rail sphere. I understand NARP's arguments are flawed and I don't believe them either but I see a whole lot of new airport infrastructure in place thats paid for by taxpayer money. Lots of first class airports in rural areas where the air traffic doesn't cover their cost and ostensibly they are built for political reasons or for the reason of increasing tourism. You should be able to Google "AIRLINE" and "SUBSIDY" and come up with a list of recent non-9-11 related misc direct subsidies. Likewise subsidies to serve rural airports to the airlines. I have looked at various arguments regarding airline subsidies. Many of them are flawed. Each year I download the budget and financial information for Amtrak, FAA, DOT, Homeland Security, Benefit Guarantee Corporation, etc., and calculate the federal subsidies for the various modes of transportation covered by these organizations or agencies. For those who know how to read the federal reports, as well as the state and local government reports, the picture is clear. Passenger rail requires a greater subsidy than any other form of common transport in the U.S. Airports, highways, etc. are built using government financing. The interest associated with this financing is usually lower than the interest charged in the private capital markets, although the spreads are not as great as many people imagine. Most people seem to miss the key point that the costs of building airports, highways, etc., for the most part, is recoved through user fees. The essential air services program, which requires approximately $114 million per year, is a direct and relatively large subsidy to support air service to outback communities. It is the one subsidy that approximates the subsidy received by Amtrak on a per passenger miles basis. Sam1The FAA is replacing the air traffic control system. Although the current system is outmoded, it is not dysfunctional. Monies for Next Gen, which will cost approximately $20 billion, is in the FY10 and FY11 budgets. I heard the assurance since the 1980's that the FAA was about to fix the Air Traffic Control system. It's great your still hanging onto that. I'll believe it when I see it. Not dysfunctional.....what? The FAA budget has monies to modernize the air traffic control system. Sam1I spent more than 40 years working for corporate America, including 33 years in Dallas. I was an accounting and audit manager. The only government agency that we looked to for best practice ideas was the GAO, primarily because of its objectivity and the excellent quality of its work. Yeah again though your avoiding the whole argument I tried to make which rail does increase mobility and does add to GDP. GAO is NOT an Economics body. In fact, it very much analyzes things in a silo using a strict bean counter perspective. We would not have Airlines today if the GAO was in charge of analyzing the situation in the 1940's and 1950's. Having worked on a Economics Staff myself we would look at the GAO findings at arms length. Very much the PhD Economists on the staff I supported viewed the GAO findings with suspicion because their premise was flawed in some way. BTW, I have a BBA in Finance, really can't see why a Private Firm would use Government Accounting by the GAO as a example to follow maybe you were looking at a small subset of what they do because.......Public Accounting <> Private Accounting.
Your right, it is a series of single spokes spread across the country, still not a integrated or intermodal system though, is it?
Based on the corridor proposals put up by the U.S. DOT, the proposed moderate or high speed rail systems will never be an integrated whole. I don't get your point.
I don't recall saying anything about mixing freight and moderate or high speed passenger service. I don't think the country can afford to build separate moderate and high speed rail networks, California to the contrary notwithstanding. The U.P. cost estimate to shift its freight traffic to the east of Austin, on an existing line, has been submitted to the Texas DOT. Presumably it will be examined closely the the state auditors, amongst others. There is no evidence that it is inflated.
I have looked at various arguments regarding airline subsidies. Many of them are flawed. Each year I download the budget and financial information for Amtrak, FAA, DOT, Homeland Security, Benefit Guarantee Corporation, etc., and calculate the federal subsidies for the various modes of transportation covered by these organizations or agencies. For those who know how to read the federal reports, as well as the state and local government reports, the picture is clear. Passenger rail requires a greater subsidy than any other form of common transport in the U.S.
Airports, highways, etc. are built using government financing. The interest associated with this financing is usually lower than the interest charged in the private capital markets, although the spreads are not as great as many people imagine. Most people seem to miss the key point that the costs of building airports, highways, etc., for the most part, is recoved through user fees.
The essential air services program, which requires approximately $114 million per year, is a direct and relatively large subsidy to support air service to outback communities. It is the one subsidy that approximates the subsidy received by Amtrak on a per passenger miles basis.
The FAA budget has monies to modernize the air traffic control system.
The GAO has a variety of in-house experts, including economists. It is, however, primarily an auditing organization known for the thoroughness and objectivity of its work. You assessment of the the GAO is wrong. I can only suspect that you have never had any dealings with the GAO executives. I see nothing in your writing that suggest that you have deal with the GAO or understand its methodologies.
If you have a BBA in Finance, then you should know that the busines community and governments use somewhat different accounting rules and standards. Most businesses use GAAP, as do most governments, except government accounting is moderated by the Government Accounting Standards Board.
But Sam, you continuously use Texas as an example! And you conintuously extend that example to the rest of the system. Then you say not to take it as anything more than an example. Therefore it is time for you to use someplace else as an example. If I were to take the ticket offices at NYP, Newark, Philly or D.C. as examples all the time, and extending them to every Amtrak desk in Texas you'd be all over me. So lets stop using Texas as an example of all of Amtrak just like we don't use NYP, Newark, Philly, or D.C. as examples of all of Amtrak. How about telling us the total number of station workers at each location; at stations being served by one round trip weekly, two rt's trains weekly, three rt'strains weekly, then one rt daily, and so forth. Then you can make your point with facts we cannot refute.
henry6 But Sam, you continuously use Texas as an example! And you conintuously extend that example to the rest of the system. Then you say not to take it as anything more than an example. Therefore it is time for you to use someplace else as an example. If I were to take the ticket offices at NYP, Newark, Philly or D.C. as examples all the time, and extending them to every Amtrak desk in Texas you'd be all over me. So lets stop using Texas as an example of all of Amtrak just like we don't use NYP, Newark, Philly, or D.C. as examples of all of Amtrak. How about telling us the total number of station workers at each location; at stations being served by one round trip weekly, two rt's trains weekly, three rt'strains weekly, then one rt daily, and so forth. Then you can make your point with facts we cannot refute.
If you had read my post clearly, you would have seen estimated numbers, based on personal knowledge, i.e. I know the number of agents in Dallas, Fort Worth, Temple, and Austin, stemming from Texas, that are applicable to the long distance and 12 of the 28 State Supported and Other Short Distance Trains. I never suggested that Amtrak's traffic levels would apply to Penn State, 30th Street Station, etc.
I gave you my estimate of the number of station workers at each location in Texas. There is every reason to believe that the same estimates would apply to Salt Lake City, Denver, Omaha, etc., again as examples. Obviously, the metrics for New York, Philadelphia, and Washington would be different. Applying different market numbers, i.e. New York, Philadelphia, with numerous train movements a day, to Dallas and San Antonio, would be inappropriate. .
You consistantly making sweeping statements without any data to back them up. No matter how one slices and dices the numbers, Amtrak's long distance trains, as well as nearly half of the State Supported and Other Short Distance Trains, are inefficient.
Sam1: Or anyone else for that matter. IIRC there was, at least here in London's VIA station, a type of counter that counted passengers boarding at the gate just before you got to the platform----here we go through a specific door rather than just any ol' door. Was there ever anything like that being used at one time?
If not, be interesting to see what'll break down to if some type of passenger count was done.
Sam1 No matter how one slices and dices the numbers, Amtrak's long distance trains, as well as nearly half of the State Supported and Other Short Distance Trains, are inefficient.
This brings up an interesting thought here. Is there a way of ascertaining what works in the cases that have efficient working systems? And is there a numerical threshold that gets it going in that direction?
And, if not, then we start working on all the methods of passenger traffic---make them efficient and make them such that people will use them. Or---------
I can think of several ways to ascertain efficiency or worthwileness or profitability of a given service:
1) earns more money than it spends
2) relieves pollution in a given area that improves the quality or viability of life.
3) moves people in a given area where there might not be other means of travel
4) provides traffic relief on highways and in parking situations
5) allows an area to provide jobs and or produce products that forms local economy
6) gives people place to live apart from where they work thus develope a local economy
I am sure there are several if not many more factors to be considered. But for now any one, combination of the six, or all six, are reasons to consider a rail passenger operations efficient, worthiwhile, or profitable to if not to the carrier than to the society which is being served (both the public as well as the business sectors). Or is earning more than it spends the only measure?
And in talking long distance travel and Amtrak, I would also add my thought that long distance trains and Amtrak is not an excercise in running trains but providing service. No train is no service, and nei one train or a dozen trains may or may not be. That train A loses money is theoretically unacceptable. But if train A feeds to train B that does earn money beyond expendituress, and the demise of train A would cause train B to lose money, is it smart to cut out train A? Here is where you've got to stop thinking in terms of running trains and instead think in terms of providing a service.
Sam1In FY09 salaries, wages, and benefits accounted for 72 per cent of Amtrak's revenues and 48 per cent (rounded) of its expenses for continuing operations before extraordinary items. A sample comparative analysis shows that the percentages for American Airlines were 34 and 32; Southwest Airlines 34 and 34; United Airlines 23 and 23; Delta Airlines 24 and 24; and Greyhound Lines 41 and 42.
Sam1s figures are thought provoking. Could the higher proportion of labor expenses for Amtrak (48%) also represent lower expenses and greater efficiences in other areas? It's clear that the much higher proportion of labor to revenue (72%) is due to overall deficit operations.
HarveyK400Could the higher proportion of labor expenses for Amtrak (48%) also represent lower expenses and greater efficiences in other areas? It's clear that the much higher proportion of labor to revenue (72%) is due to overall deficit operations.
When I cited those figures, i also wondered. But the study Don cited, which I quoted from, makes it clear that salary expenses are high for Amtrak. I believe wasteful operations on lightly used LD lines could/should be specifically subsidized in the same way as the FAA subsidizes the "essential service" routes in smaller cities in the West as a separate item. That way, the existing/upgraded and new corridor services can have a fair chance at covering operating expenses as they already do in the NEC. If you read those two studies, one thing that is embarrassing is the idea that in 40 years, the speed in the NEC, from Metroliners to Acela has only increased marginally. Having services in the NEC run at a much higher speed was the original goal.
The high cost of Amtrak labor is from using full time employees to do part time jobs.
One or Two trains movements a day does not justify even one full time staff member, much less three or four.
Perhaps staffing of low use stations (which is most of them outside a few high use corridors) should be delegated to the local government and staffed with part time employees.
Dave
Lackawanna Route of the Phoebe Snow
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