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To what extent is the Intercity Marketplace skewed in the US

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Posted by blue streak 1 on Wednesday, July 16, 2014 9:18 AM

food for thought. 

The Palmetto NYP - Savannah is 819 miles and is scheduled for  ~ 15:00  .  The Crescent NYP - Gainesville, Georgia   is 810 miles and is scheduled ~ 17:00.  Some of this can be accounted for as the Palmetto is scheduled :20 minutes less due to it not having any heritage cars but still takes 1:45 longer for 19  shorter miles.  As well :09 schedule padding for arrival at SAV.

This appears that all LD routes are not equal due to speed restrictions.

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Posted by V.Payne on Tuesday, July 15, 2014 10:21 PM

Yeah, politics. It seems like so often the concept of long distance trains polls quite well. Take this April 2014  poll from WV where the less than daily Cardinal comes through and the district leaned heavily away from the current Administration, yet 87 % wanted the same or more service. The Hill even commented on it though the poll was union backed for the incumbent. Financial giveaways to trucks, do not poll very well at all.

In both cases there are some fairly concerted efforts amongst the think tanks to convince people to not think what they intuitively appreciate with a good deal of literature put out that is not correct. I can understand the financial incentive for road freight. I don't get the NRPC opposition. Such opposition has become a echo chamber or a test case for certain groups and they really have no reason to oppose it other than the idea it represents and that is what they have been doing.

The same groups are not going to support HSR in congested corridors. Sessions has no backup plan to serve Houston with corridor trains if the Sunset is discontinued per his last minute ammendment as the actions spring from an incorrect understanding of the cost structure of the intercity segments of the Interstate promoted by the think tanks.

Sometimes it seems that NRPC's general lack of desire to improve the long distance product is a give-in to those certain think tanks. They really could be so much more to improve the product with just a bit of expanded consists and a game plan from Congress.

It really does come down to understanding the nature of the financial leveraging needed to support the Interstate highways as such understanding seems to be what the think tanks oppose for if it were to be corrected it would shift truck market share.

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Posted by Anonymous on Tuesday, July 15, 2014 9:30 PM

John WR

Sam1
As noted previously, approximately 92 per cent of Americans over 19 are licensed motorists.  All of them pay fuel taxes, sales taxes, etc.  Unless they live in public housing, they pay property taxes, which is a major source of funding for local streets and county roads.  And if they pay income taxes, which approximately 63.8 per cent of them did in 2011, they sent money to the federal and state government general funds.  Some of these funds flowed back to federal and state road authorities. America's roads are not paid for by overseas investors or little green men from Mars.

Well yes.  But individuals don't pay for roads in proportion to the amount they use the roads.  My wife and I share one car but we pay the same property taxes as our neighbor down the street whose family has 4 cars.   And sales tax is a regressive tax so poorer people pay more than wealthier people and to the extent that our roads are funded with sales tax there is a real distortion.   My part of the country has a lot of undocumented aliens who do not qualify for a drivers license but they must still pay taxes to support our roads.   Recently I read in my newspaper that the Federal transportation trust fund is out of money so about half of the money need to maintain Interstate highways will come from general revenues.  

If we had to pay for roads on a true economic basis where road users paid the costs of the roads in proportion to their use many more people would use public transit and there would be a greater demand for it.  

As noted some users, especially low income users, don't pay the full cost of the roads that they use.  Others, however, pay more than the cost of the roads that they use.

What seems to be missed in this discussion is the fact that American motorists pay for the roads that they use. To the extent that the cost is not covered by direct user fees, it is covered from a variety of other tax generated revenues.  The roadways are not being paid for by people from overseas or Mars.

Because such a large percentage of the population drives, they are the tax base from which the monies are drawn to pay for roads irrespective of how it comes about.  The problem, however, is one of awareness. Because most people don't see the full cost of driving, they tend to do more of it, in larger vehicles, than might be the case if they saw the true cost of driving at the pump, which I have long favored.

It ain't going to happen!  It is a political nonstarter!  It may be that the country has over emphasized roads and airways at the expense of passenger rail.  We need to get over it.  We are where we are! The key question is what is the best way forward?  For my money it is passenger trains in a very small number, at least for now, of high density, relatively short corridors where the cost to expand the airways and roadways is prohibitive.

Proponents of this approach or that approach can make all the intellectual arguments that they want. They may even have the best argument. But if they fail to take into consideration the politics, they lose. Big time!

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Posted by John WR on Tuesday, July 15, 2014 6:59 PM

Sam1
As noted previously, approximately 92 per cent of Americans over 19 are licensed motorists.  All of them pay fuel taxes, sales taxes, etc.  Unless they live in public housing, they pay property taxes, which is a major source of funding for local streets and county roads.  And if they pay income taxes, which approximately 63.8 per cent of them did in 2011, they sent money to the federal and state government general funds.  Some of these funds flowed back to federal and state road authorities. America's roads are not paid for by overseas investors or little green men from Mars.

Well yes.  But individuals don't pay for roads in proportion to the amount they use the roads.  My wife and I share one car but we pay the same property taxes as our neighbor down the street whose family has 4 cars.   And sales tax is a regressive tax so poorer people pay more than wealthier people and to the extent that our roads are funded with sales tax there is a real distortion.   My part of the country has a lot of undocumented aliens who do not qualify for a drivers license but they must still pay taxes to support our roads.   Recently I read in my newspaper that the Federal transportation trust fund is out of money so about half of the money need to maintain Interstate highways will come from general revenues.  

If we had to pay for roads on a true economic basis where road users paid the costs of the roads in proportion to their use many more people would use public transit and there would be a greater demand for it.   

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Posted by V.Payne on Tuesday, July 15, 2014 6:58 PM

To a degree, the fuel excise taxes are more like a general fund excise tax as they are placed upon the use of property not built using the funds, whereas a user fee is always on the property built with the fee.

It would be like having a food tax on all food bought in a town's groceries and restaurants, but only using the funds for a steak restaurant and not a fish house. There is a need to recognize the distinction.

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Posted by John WR on Tuesday, July 15, 2014 6:46 PM

Sam1
 Passenger trains lost out to the auto and airplane irrespective of whether we like the outcome. That's why the government had to take over the passenger rail service.  

But Sam, the reason passenger trains lost out to the automobile is because in the 1930's the Federal Government built a whole system of free state highways not for transportation needs but as a social welfare scheme to put people to work.  Then in the 1950's the Federal Government built a whole new system of Interstate Highways for which there was no transport ion need and justified them as a defense expenditure.  And both of these systems of highways were funded by general tax revenues.  Meanwhile, the railroads had to pay property taxes on every mile of track.  

So it was not simply the market place that was at work; it was massive Federal highway subsidies that the railroads could not compete with.     

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Posted by V.Payne on Tuesday, July 15, 2014 6:44 PM

Here is the thing, if it is about consumer choice then just commit to spend equal amounts per mile traveled on either road OR rail intercity transportation; freight and passenger and let the consumer choose to pay the remaining costs (and choose a operator who doesn't load up non-related costs).

If that commitment is not there then really the government is just making the decision for us, you know because we can't be trusted as some might choose a sleeping car and an after dinner beer (at the same cost mind you)! Instead there has been a concerted effort to portray that intercity roads pay themselves or that they are somehow the least cost choice. Neither is true, they are financially leveraged off the use of the local road system not paid for by fuel excise taxes but by property taxes.

The TX HSR proposal would launch tomorrow if drivers on the Interstate were being charged the costs, but instead it first has to overcome the hurdle of the leveraging and then use private finance rates to do so. Incredibly, this is what one of the original proponents of the Trans-Texas Corridors, Perry's supersized tollroad proposal believed.

That convoluted 25% back to education off state fuel taxes; it is just  giant circle of state level budget control, as the property taxes are funding the local roads the tax is collected upon in the first place, when they could go straight to the city if not for state oversight and redistribution. The other segments of SH-130 are commuter segment forming part of a ring, here sometimes tolls work, but the segment that is seeking debt relief is an intercity segment, which is an important distinction.  

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Posted by schlimm on Tuesday, July 15, 2014 9:10 AM

Sam1
It is not just ranchers and farmers who have benefited from the feeder roads.  As I drove up from the Rio Grande Valley today, I passed hundreds of roadside businesses, i.e. restaurants, service stations, motels, shopping outlets, etc.  Without the roads, they would not be there.  And they pay taxes.  Heaps of them.  And some of the tax revenues generated by these businesses find their way back into the roads.

I think your post makes an excellent case for public infrastructures which benefit us all in one way or another, directly and indirectly.  In other words, the concept of the commonwealth, instead of an emphasis some folks have on making everything paid through direct user-fees, which seem to me to be a throwback akin to medieval practices.

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Posted by Anonymous on Monday, July 14, 2014 10:57 PM

Here is another example of why it is important to look at the big picture.

Texas has thousands of Farm to Market and County Roads. Do the ranchers and farmers who use these roads pay enough in direct charges, i.e. fuel taxes, sales taxes, etc. to cover the cost of the roads?  Nope, probably not!  Do the property taxes that they pay cover the cost of the roads?  I don't know, but I suspect not! So why invest in them?  What it the benefit to society?

The Farm to Market and County Roads in Texas greatly expanded the markets for the rancher's and farmer's products.  Instead of being locked into a county market, the roads have made it possible for them to sell their products in regional, national and international markets. This in turn has enabled them to garner a better return for their products. It also made it possible for them to consolidate their operations, become more efficient, and generate the large returns associated with large scale ranching and farming.  Not a good outcome for the small family farm, to be sure, but it is time to get over that fantasy as well. 

Expanded markets and better returns mean higher incomes for the ranchers and farmers. Higher income means higher tax revenues, which flow into state and federal general funds, and some of these monies flow back to various road authorities, including the road authorities responsible for the Farm to Market and County Roads in Texas.  

Whether Texas ranchers and farmers pay enough in state and federal, as well as property taxes, to cover the cost of the Farm to Market and County Roads is unknown.  Tracing the monies from payment to end use would be practicability impossible. But at the end of the day, Americans pay for them, and most Americans, including most farmers and ranchers, are motorists.   

It is not just ranchers and farmers who have benefited from the feeder roads.  As I drove up from the Rio Grande Valley today, I passed hundreds of roadside businesses, i.e. restaurants, service stations, motels, shopping outlets, etc.  Without the roads, they would not be there.  And they pay taxes.  Heaps of them.  And some of the tax revenues generated by these businesses find their way back into the roads.

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Posted by Anonymous on Monday, July 14, 2014 10:46 PM

Did the Concession Company default on its debt?  Are they going to shutdown TX 130?  

Lots of projects restructure their debt. The TX 130 project is in the early phase of a 50 year contract. Practically every start-up enterprise, especially capital intensive ones, suffer loses during the  initial years. And many of them have to restructure their debt.  

I drove from Seguin to Georgetown today on Texas 130.  Between 4:00 and 6:00 p.m.!  I hit the Austin area during rush hour. Sections 5 and 6 had relatively little traffic on them.  Sections 1,2,3, & 4 had very heavy traffic, which caused the flow to drop below 70 mph. Lots of trucks!  Seems like more and more every day!

Time to get over it!  Whether there has been an over emphasis on highways, airways, etc. at the expense of railways is history.  It is a sunk cost.  In many respects cars and trucks are superior technologies to railway trains.  And Americans are not going to give them up in massive numbers to jump on intercity trains, buses, or local transit.  

It is not just about cost.  It is also about benefit.  If it were just about cost, people would never have bought anything more than a Ford, Plymouth or Chevrolet. But most people in America can afford more than the basics, and that is what they have opted for, i.e. suburbs, SUVs, Mercedes, etc. Because they can afford it individually and collectively. And that is what they will continue to opt for more than basic transportation in most parts of the country.  

You consistently overlook the fact that 25 per cent of the fuel tax in Texas goes to education. TX motorists are subsidizing education. And at the federal level they are subsidizing mass transit.  And in Dallas they are subsidizing Dallas Area Rapid Transit (DART).

American motorists pay for the roads that they use. To the extent that they don't cover  the cost in direct user fees, i.e. fuel taxes, license fees, etc., they cover it in property taxes, sales taxes, excise taxes, and general fund transfers. 

As noted previously, approximately 92 per cent of Americans over 19 are licensed motorists.  All of them pay fuel taxes, sales taxes, etc.  Unless they live in public housing, they pay property taxes, which is a major source of funding for local streets and county roads.  And if they pay income taxes, which approximately 63.8 per cent of them did in 2011, they sent money to the federal and state government general funds.  Some of these funds flowed back to federal and state road authorities. America's roads are not paid for by overseas investors or little green men from Mars.

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Posted by V.Payne on Monday, July 14, 2014 9:15 PM

Well it is official, at least for now. The average driver is not willing to pay anywhere near the full cost of using intercity limited access roads, a bit more than $0.15 an automobile mile for the SH-130 project.

Some of you might know that SH-130, which is an Interstate quality toll road bypass around Austin, TX is asking for a debt reorganization. Revenues were 30% of the plan, which was driven by projections of monetizing time savings from an 85 mph speed limit toll road. They have burned through all the short term start up funding and the drivers are just not showing up at the market rate.

Of course, they could have known this if they had read the 1939 Toll Roads and Free Roads report. There it was first postulated that drivers would never pay the full cost of driving on a toll road except in limited circumstances where once weekly short trips would predominate and overlap.

So historically, the financial leveraging of the fuel tax off city and county roads paid for by property taxes, was extended in the Interstate bill so as to intentionally underprice use of limited access road. This was done so that drivers would shift off the more dangerous 2-lane routes. Nothing happens in a vacuum, the result was road freight got access to the same roads at rates well below cost, and the ability of the investor owned railroads to provide intercity transportation was compromised by the loss of freight revenue.

We are still dealing with how to unwind this intentional underpricing of intercity roads. NRPC has been the bean bag between those who think roads pay for themselves and those who want to provide choices. Interestingly, even the TX GOP is starting to turn on the idea of toll roads, even with TxDOT's $4 Billion annual budget to maintenance needs gap, though I wonder if they too understand about the leveraging, as they now seem to be looking to general funds to make everything happen instead of trying to get money from drivers for incremental use.

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Posted by schlimm on Friday, October 25, 2013 4:33 PM

Sam1
Most people that I know is not a scientific survey.  Neither is lots of people.  But the market place has made it crystal clear.  Passenger trains lost out to the auto and airplane irrespective of whether we like the outcome. That's why the government had to take over the passenger rail service.  

The marketplace of the 1960's told us that people did not want to ride passenger trains in very large numbers anymore over distances taking more than a few hours.  Accordingly, decisions were made to abandon most routes, retaining 10-15 legacy services since then.   What people want today, 43-50 years later is unknown.  Perhaps a large, scientific survey could reveal what the public would use if it were available.   At this point, I have only seen pretty narrow surveys and many have lacked scientific rigor.   But given the accuracy of market surveys and political polling used by private corporations and political groups, it is fair to conclude it could be done if someone wants to pay.

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Posted by Anonymous on Friday, October 25, 2013 1:10 PM

Property, plant, and equipment, excluding land, is a wasting asset.  These are the major components of infrastructure. Amtrak depreciates PP&E over the estimated life of the assets. It uses straight line depreciation.

The allocation of depreciation is a function of the under lying cost driver(s).  Weather, erosion, etc. are factors. But the biggest factor is running trains. They literally pound the biggest component of PP&E to a point salvage value. The most likely indicator of infrastructure wasting on a railroad is train miles. Although I don't have access to Amtrak's books, I would be surprised if they did not use train miles or something like it to determine how to allocate depreciation. Having said that, although at least through 2012, Amtrak says that it doesn't allocate depreciation to routes.    

Amtrak bills freight carriers to use its tracks. The billings probably include a depreciation component. Using revenue miles or any component of revenue, which are not cost indicators, to determine the amount of depreciation to bill a foreign renter would not like go over well with the freight operator.

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Posted by Anonymous on Friday, October 25, 2013 12:50 PM

Personal preference and economics go hand in hand.  Daniel Kahneman and Amos Tversky have been instrumental in making this relationship clear.

Kahneman, who is a psychologist, won the Nobel Prize in Economics for the work that he and Tversky, also a psychologist, pioneered in showing the high correlation between economics and psychology. Tversky could have shared in the prize, but he died. To say that awarding the Nobel Prize in Economics to psychologists is unusual would be a master understatement.

Kahneman and Tversky have been key players in developing the field of behavioral economics. As a result, many economists realize that their econometric models, with their heavy reliance on mathematical analytic's, don't tell the whole story about how people make economic choices.  Personal preference, once above the affordability level, plays a key role in choices.

Most people that I know is not a scientific survey.  Neither is lots of people.  But the market place has made it crystal clear.  Passenger trains lost out to the auto and airplane irrespective of whether we like the outcome. That's why the government had to take over the passenger rail service.  

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Posted by blue streak 1 on Tuesday, October 22, 2013 9:23 AM

oltmannd

the Crescent into Atlanta from the west has an extra 15 minutes.  From the north, 20 minutes.  The trick is to look at the running time in the opposite direction.

Don:  IMHO one small reason for the time difference is the need to board the many more eastbound passengers.  Passengers from the north can get off quicker than boarding ?  Also eastbound ( north )  has the coaches at the far end of the platform ? Sometimes when the train is late ATL allows boarding and get off at the same time which really crowds up the platform. In all my travels I have not seen a platform as narrow as the one in ATL for a large boarding station.
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Posted by CJtrainguy on Tuesday, October 22, 2013 7:32 AM

schlimm

CJtrainguy
But over here in Arkansas, we have a perpetual construction zone called I-40, Little Rock to Memphis. Lots of people would gladly take the train, were there a passenger train on that route. And most of my friends up north are thrilled at the prospect of expanded passenger rail in their areas.

We are happy with the developing corridors in the Midwest, in Michigan and Illinois.  And our states largely pay for the operations.   Maybe Memphis to Little Rock could be a corridor, with the help of federal money for infrastructure.  But your state will need to subsidize the operation.

I am well aware that Arkansas (and Tennessee maybe) would have to put forth some real money to make passenger rail between Little Rock and Memphis happen (and some people on this board may yet again be upset, because this is moving the discussion into something specific, rather than just the nebulous area of why Amtrak doesn't totally open their books the way some want to see them).

Will that happen? I have no idea. I know that the Arkansas DOT is studying how to deal with the perpetual congestion along this segment of I-40. They are doing surveys of travelers, floating ideas like toll lanes and such.  So at state level the planners are aware of the problem. Not sure they will land on rail as the solution to increase capacity in the corridor. Although there is supposedly a study of HSR on the route going on. Unfortunately, the most direct rail line, the Rock, has been abandoned in segments, although I think it would still be possible to restore that ROW which in many places is straight as an arrow.

The point of my original comment was that there are many people (based on studies apparently a growing number) who would gladly give up driving if passenger rail existed where they need to go.

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Posted by schlimm on Monday, October 21, 2013 10:49 PM

CJtrainguy
But over here in Arkansas, we have a perpetual construction zone called I-40, Little Rock to Memphis. Lots of people would gladly take the train, were there a passenger train on that route. And most of my friends up north are thrilled at the prospect of expanded passenger rail in their areas.

We are happy with the developing corridors in the Midwest, in Michigan and Illinois.  And our states largely pay for the operations.   Maybe Memphis to Little Rock could be a corridor, with the help of federal money for infrastructure.  But your state will need to subsidize the operation.

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Posted by CJtrainguy on Monday, October 21, 2013 9:16 PM

Sam1

Cost is not the only driver in decision making.  Cost accountants can determine with a reasonable degree of precision how much a product or service costs.  But they don't price it. It is priced by marketing specialists who understand that amongst other things people buy the intrinsic utility value of a product or service, which may be much greater than its cost.  This is one of the reason that iPads and iPhones are priced way above what it costs to make and distribute them.

Most people I know are willing to pay for highway transport even if it costs two or three times what the alternatives cost.  They want the convenience, comfort, flexibility, etc. of a car.  They don't want to get on a bus, train, etc. and have to potentially share a seat with someone who has not bathed for a week or is shouting into a cell phone.  Most politicians, I believe, know this. Except for a few highly congested corridors, this fact is not going to change in the near future.

When I am traveling from New York to Hartford, I take the train. But you have about as much chance of getting me out of my car in central Texas as you have of getting cows to fly over the moon.  

So are you then in the end saying this is really not at all about economics, but about personal preference? 
Just like you know lots of people who won't give up their cars, apparently no matter what the cost to drive them, I know lots of people who will gladly take the train instead of driving on a given day. (I will grant you that those friends don't live in Texas though). But over here in Arkansas, we have a perpetual construction zone called I-40, Little Rock to Memphis. Lots of people would gladly take the train, were there a passenger train on that route. And most of my friends up north are thrilled at the prospect of expanded passenger rail in their areas.
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Posted by dakotafred on Monday, October 21, 2013 5:08 PM

Sam1

dakotafred

Sam1

This thread is the longest that I have seen since I began participating in the Trains forums.  Moreover, it has strayed significantly from the presenting topic.  The moderator should lock it, and the participants should open some new threads to discuss whatever is important to them.

 
This thread is nowhere close to longest, and anyone who is bored should just tune out rather than call for shutting it down for everybody. For me, it just began to get interesting when the discussion shifted to Iowa. How is the Iowa proposal not relevant to the "skewed intercity marketplace"?

This thing as been going on since September 2012.  I suspect that many of the participants cannot even remember what they said a year ago.  As a result some people are doubling back on themselves and contradicting what they say previously, and many folks have gone off on tangents that would be better discussed in a separate thread.
Having said that you can slam me for adding an accounting post script.  But shout it loudly because I will be in west Texas for the next 10 days.

 
When I said you might want to excuse yourself from this thread, in no way did I mean to suggest that you had to leave home. Smile
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Posted by oltmannd on Monday, October 21, 2013 10:56 AM

Dakguy201

oltmannd

Just look at the elapsed time in the schedule in the other direction to get a feel for the padding in schedule in the last leg - typically about 30 minutes of recovery time for the LD routes.

It is not just the end point that has half hour padding.  Examples from trains of the 20th:

The westbound Builder left Red Wing MN 22 minutes late but arrived at St. Paul 7 minutes early.

The westbound Zephyr left Creston IA 28 minutes late but arrived at Omaha on time.

I'm sure the study of more results would yield other examples; these were just the first two I found for yesterday.

The Crescent into Atlanta from the west has an extra 15 minutes.  From the north, 20 minutes.  The trick is to look at the running time in the opposite direction.

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by Dakguy201 on Monday, October 21, 2013 6:55 AM

oltmannd

Just look at the elapsed time in the schedule in the other direction to get a feel for the padding in schedule in the last leg - typically about 30 minutes of recovery time for the LD routes.

It is not just the end point that has half hour padding.  Examples from trains of the 20th:

The westbound Builder left Red Wing MN 22 minutes late but arrived at St. Paul 7 minutes early.

The westbound Zephyr left Creston IA 28 minutes late but arrived at Omaha on time.

I'm sure the study of more results would yield other examples; these were just the first two I found for yesterday.

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Posted by V.Payne on Monday, October 21, 2013 5:52 AM

If one where to file a FOIA request for the Total Cost formula that is in turn audited I suspect you would see a ratio of revenue being used to assign governmental costs of infrastructure to operations.

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Posted by Anonymous on Sunday, October 20, 2013 11:56 PM

dakotafred

Sam1

This thread is the longest that I have seen since I began participating in the Trains forums.  Moreover, it has strayed significantly from the presenting topic.  The moderator should lock it, and the participants should open some new threads to discuss whatever is important to them.

 
This thread is nowhere close to longest, and anyone who is bored should just tune out rather than call for shutting it down for everybody. For me, it just began to get interesting when the discussion shifted to Iowa. How is the Iowa proposal not relevant to the "skewed intercity marketplace"?

This thing as been going on since September 2012.  I suspect that many of the participants cannot even remember what they said a year ago.  As a result some people are doubling back on themselves and contradicting what they say previously, and many folks have gone off on tangents that would be better discussed in a separate thread.
Having said that you can slam me for adding an accounting post script.  But shout it loudly because I will be in west Texas for the next 10 days.
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Posted by Anonymous on Sunday, October 20, 2013 10:49 PM

The operating losses racked up by the long distance trains, including the silver service, can be found on Page C-1 of the September 2012 Monthly Operating Report. These numbers include all the variable costs (direct and allocated).  They do not include the fixed costs. These too must be considered in determining the viability of the enterprise and each of its product lines.  A company that cannot cover all of its costs goes out of business in time.  If Amtrak were not a ward of the state, it would have gone out of business shortly after it was created.

Amtrak's public numbers are audited by the company's outside auditors. The direct (avoidable) costs referred to by Mr. Boardman contain no detail and, as far as can be determined, have not been audited by an outside auditor. Taking numbers off of a dog and pony slide show intended for politicians is suspect. 

If all of the long distance trains were discontinued, most of the costs associated with them, including all of equipment costs, which are fixed, could be avoided in time. Some allocated costs, i.e. indirect labor, call center costs, etc., would have to be reallocated, but many of these, depending on how scable they are, would also go away in time if management pursued doing so robustly.  Not sure Amtrak's management is very robust when it comes to making hard choices!

What is and what is not an avoidable cost is contentious. For example, direct labor makes up approximately 85 per cent of Amtrak's labor costs.  If it discontinued the long distance trains, the direct labor cost (mostly operating) is avoidable almost immediately, but severance packages, if they are paid out over time, might not be considered avoidable until the payouts are complete. But ultimately they are avoidable.  So, how did Boardman classify the direct labor costs, including any severance liabilities, associated with the long distance trains or any one of the long distance routes? 

Amtrak calculates the per passenger mile results by dividing the operating results by the passenger miles.

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Posted by V.Payne on Sunday, October 20, 2013 8:50 PM

But still the on-topic point of this thread is: what is a reasonable financial cost comparison. I might wander a bit but can maybe get us back on topic by the end of the post.

March 2013 Congressional Testimony

So what is the Silver Service "above the rail" operating loss? That is the question that was asked, right? The combined service, all three trains, have a Direct Cost of around $0 per above. They don’t include equipment depreciation in Direct Cost, but they would include host railroad route rental, both wash out.

I believe the loss quoted below is based on Total Cost.  Those total costs include about $1.2 billion in system wide below the rail and station (NEC is $800 million, or so, alone for those two) and other non-operating costs. Total costs losses just allocate those expenses based on revenue not an actual requirement best I can tell. 

“In FY12 the Silver Star lost $45.9 million or 20.9 cents per passenger mile, and the Silver Meteor lost $38.7 million or 16.7 cents per passenger mile before depreciation, interest, and miscellaneous charges. These are the variable costs, i.e. those that occur because the trains operate.”

These costs are the Total Costs of the organization divided by revenue/revenue miles, the Direct Cost quoted above in Mr. Boardman’s testimony are the true variable costs that would go away. You can see that looking at it this way can cause one to make poor decisions. 

“The discussion regarding variable and fixed costs misses a key point.  A viable business (commercial activity) has to recover all of its costs or it goes out of business. Amtrak is supposedly a commercial activity that is being operating like a business. It is not recovering all of its costs, even though it gets special exemptions, i.e. no fuel taxes, no property taxes, no inventory taxes, etc.”

SO here is the on-topic point after that setup, the USDOT and state DOTs are not operated as businesses, they tax use of roads they don’t own, no business can do something like that. I believe the proper way to approach Amtrak finances is to realize the $800 million that is for NEC infrastructure (and Commuter operators), a governmental function, and the other offsets against the governmental tilting of the scales toward roadways elsewhere.

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Posted by oltmannd on Sunday, October 20, 2013 7:41 PM

dakotafred
Oh, definitely. The CZ I rode into Chicago on 9/27 made up at least 30 minutes between Naperville and Union Station, 28 miles. Altho it didn't seem we were burning up the rails,

Just look at the elapsed time in the schedule in the other direction to get a feel for the padding in schedule in the last leg - typically about 30 minutes of recovery time for the LD routes.

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by oltmannd on Sunday, October 20, 2013 7:36 PM

schlimm

CJtrainguy
Absolutely right. But back in the 50's, trains like the Cities or the 20th Century Limited or Broadway Limited were also allowed to rule the line. They didn't  go into a siding because there was a 10000' unit train coming the other way.

Yet another reason why passenger rail service has problems: unlike in other nations, passenger rail outside the NEC and the MI line is low priority with the freight hosts.

Absolutely, completely, not true - at least where I work. In fact, they to to stupid extremes in the other direction, at times.  I've seen times where the dispatcher would put a freight in the hole for hours instead of reasonably running it ahead a siding or two, just to give the Amtrak train a solid string of "clears". 

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by n012944 on Sunday, October 20, 2013 7:04 PM

CJtrainguy

Absolutely right. But back in the 50's, trains like the Cities or the 20th Century Limited or Broadway Limited were also allowed to rule the line. They didn't  go into a siding because there was a 10000' unit train coming the other way.

You must be a dispatcher at a different railroad than I am to say such things.  I can tell you that at my dispatch center, putting a passenger train into a siding is a rare event.  Of course running a 10000 foot unit train is not very common either.

An "expensive model collector"

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Posted by dakotafred on Sunday, October 20, 2013 7:03 PM

Sam1

This thread is the longest that I have seen since I began participating in the Trains forums.  Moreover, it has strayed significantly from the presenting topic.  The moderator should lock it, and the participants should open some new threads to discuss whatever is important to them.

 
This thread is nowhere close to longest, and anyone who is bored should just tune out rather than call for shutting it down for everybody. For me, it just began to get interesting when the discussion shifted to Iowa. How is the Iowa proposal not relevant to the "skewed intercity marketplace"?
 
 

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