"Amtrak's Grand Plan for Profitability"

1835 views
62 replies
1 rating 2 rating 3 rating 4 rating 5 rating
  • Member since
    December 2001
  • 1,450 posts
"Amtrak's Grand Plan for Profitability"
Posted by Victrola1 on Friday, December 6, 2019 12:17 PM

A Wondover Productions video on Amtrak and its future. 

https://www.youtube.com/watch?v=dSw7fWCrDk0

 

  • Member since
    May 2003
  • From: US
  • 18,028 posts
Posted by BaltACD on Friday, December 6, 2019 1:00 PM

Bloviation at its finest.

  • Member since
    October 2013
  • 37 posts
Posted by spsffan on Friday, December 6, 2019 3:02 PM
O! What a load! This guy must have a crush on Anderson or something.
  • Member since
    September 2017
  • 2,935 posts
Posted by charlie hebdo on Friday, December 6, 2019 3:14 PM

It did discuss some negatives about what Anderson and Amtrak are doing,  such as attribution of costs and planning to not serve many rural areas.  Apparently your remarks are classic examples of confirmation bias. 

  • Member since
    October 2014
  • 374 posts
Posted by Gramp on Friday, December 6, 2019 8:20 PM

And AWAY we go. 

  • Member since
    February 2016
  • From: Texas
  • 1,410 posts
Posted by PJS1 on Friday, December 6, 2019 8:39 PM
The narrator should have said operating profit.  None of Amtrak’s routes have generated a profit on a fully allocated cost basis.  Some of the other numbers presented by the narrator are suspect.
 
According to Amtrak’s September 2018 Monthly Performance Report, the Heartland Flyer had an operating loss of $800,000.  It carried 68,100 passengers.  The operating loss per passenger was $11.75.  It was made up by the federal taxpayers.  But this does consider the state payments.
 
In 2017 the Heartland Flyer generated $1,800,000 in ticket revenues.  It had operating expenses of $7,500,000, which resulted in an operating loss on ticket sales of $5,700,000.  Of this amount $800,000 was absorbed by Amtrak, with the remainder being covered by Texas and Oklahoma taxpayers.  The state loss per passenger was $69.01.  The total loss per passenger $80.7. 
 
There is no evidence that the narrator had access to Amtrak’s accounting policies, procedures, and practices.  He is parroting the Rail Passengers Association line regarding Amtrak’s accounting.  There is no evidence that the narrator or RPA has access to Amtrak’s accounting books, which is to say that they don't know how Amtrak allocates its costs among its three service lines.  Even a government managed for profit company would not be stupid enough to allocate snow removal costs in Miami.   
 
Many people would miss the long-distance trains.  Really?  In FY19 the long-distance trains had 4.5 million riders.  However, when adjusted for round trips, the number of people actually using long distance trains was approximately 3 million out of a population of nearly 330 million people!  
 
Amtrak could discontinue the Texas Eagle and Sunset Limited tomorrow and few Texans would even know that they were gone.  Or care!
 
The company had a net operating loss in FY19 of $29.8 million.  But it had a fully allocated loss of $874.4 million.

Rio Grande Valley, CFI,CFII

  • Member since
    May 2019
  • 852 posts
Posted by Lithonia Operator on Friday, December 6, 2019 10:13 PM

Well, at least there was some really nice video footage in that piece.

Really, some of Amtrak's cost allocation schemes are pretty shady.

  • Member since
    December 2017
  • From: I've been everywhere, man
  • 2,210 posts
Posted by SD70Dude on Friday, December 6, 2019 10:55 PM

I hope the part about getting close to breaking even on operations is actually true. 

That is a major feat for a public transit agency.

Greetings from Alberta

-an Articulate Malcontent

  • Member since
    August 2019
  • 60 posts
Posted by Psychot on Saturday, December 7, 2019 7:51 AM

PJS1
The narrator should have said operating profit.  None of Amtrak’s routes have generated a profit on a fully allocated cost basis.  Some of the other numbers presented by the narrator are suspect.
 
According to Amtrak’s September 2018 Monthly Performance Report, the Heartland Flyer had an operating loss of $800,000.  It carried 68,100 passengers.  The operating loss per passenger was $11.75.  It was made up by the federal taxpayers.  But this does consider the state payments.
 
In 2017 the Heartland Flyer generated $1,800,000 in ticket revenues.  It had operating expenses of $7,500,000, which resulted in an operating loss on ticket sales of $5,700,000.  Of this amount $800,000 was absorbed by Amtrak, with the remainder being covered by Texas and Oklahoma taxpayers.  The state loss per passenger was $69.01.  The total loss per passenger $80.7. 
 
There is no evidence that the narrator had access to Amtrak’s accounting policies, procedures, and practices.  He is parroting the Rail Passengers Association line regarding Amtrak’s accounting.  There is no evidence that the narrator or RPA has access to Amtrak’s accounting books, which is to say that they don't know how Amtrak allocates its costs among its three service lines.  Even a government managed for profit company would not be stupid enough to allocate snow removal costs in Miami.   
 
Many people would miss the long-distance trains.  Really?  In FY19 the long-distance trains had 4.5 million riders.  However, when adjusted for round trips, the number of people actually using long distance trains was approximately 3 million out of a population of nearly 330 million people!  
 
Amtrak could discontinue the Texas Eagle and Sunset Limited tomorrow and few Texans would even know that they were gone.  Or care!
 
The company had a net operating loss in FY19 of $29.8 million.  But it had a fully allocated loss of $874.4 million.
 

Passenger rail is like any other form of public transportation: absent frequent, relatively fast, and reliable service, most people will not use it. Couple that with the fact that the cost of driving a private automobile in the U.S. does not come even close to reflecting the actual cost in terms of infrastructure maintenance and environmental impact, and it becomes clear why very few people in America care about passenger rail.

  • Member since
    July 2016
  • 708 posts
Posted by Backshop on Saturday, December 7, 2019 8:09 AM

Psychot

 

  Couple that with the fact that the cost of driving a private automobile in the U.S. does not come even close to reflecting the actual cost in terms of infrastructure maintenance and environmental impact, and it becomes clear why very few people in America care about passenger rail.

 

But they do cover the cost.  They are taxpayers.  They pay for it with gas taxes, excise taxes, tolls and taxes from the general fund.  And the thing is, they generally support a good highway system because it's useful to them and a great majority of the rest of the country.  Amtrak...not so much.

  • Member since
    February 2016
  • From: Texas
  • 1,410 posts
Posted by PJS1 on Saturday, December 7, 2019 8:44 AM

Lithonia Operator
 Well, at least there was some really nice video footage in that piece.

Really, some of Amtrak's cost allocation schemes are pretty shady. 

The video, although it contains some inaccuracies, is a pretty good general overview. 
 
To know whether Amtrak’s cost allocation schemes are shady, you would need to have access to Amtrak’s books.  No one has been able to show that they have access to the company’s books. 
 
I am a Texas CPA (retired).  If I made a claim about the accounting practices of an entity that did not give me access to its books, I would lose my license.

Rio Grande Valley, CFI,CFII

  • Member since
    September 2017
  • 2,935 posts
Posted by charlie hebdo on Saturday, December 7, 2019 8:55 AM

Backshop

 

 
Psychot

 

  Couple that with the fact that the cost of driving a private automobile in the U.S. does not come even close to reflecting the actual cost in terms of infrastructure maintenance and environmental impact, and it becomes clear why very few people in America care about passenger rail.

 

 

 

But they do cover the cost.  They are taxpayers.  They pay for it with gas taxes, excise taxes, tolls and taxes from the general fund.  And the thing is, they generally support a good highway system because it's useful to them and a great majority of the rest of the country.  Amtrak...not so much.

 

 

Only cover road costs by making taxpayers pony up, which is fine,  since no one has the guts to raise the federal gasoline tax.  In any case,  you are wrong if you think those fees and taxes cover environmental costs. 

  • Member since
    February 2016
  • From: Texas
  • 1,410 posts
Posted by PJS1 on Saturday, December 7, 2019 9:05 AM

SD70Dude
 I hope the part about getting close to breaking even on operations is actually true. 

That is a major feat for a public transit agency. 

Amtrak could have broken even on operations in 2019 by raising ticket prices an average of $.916 or 92 cents per rider.   
 
As the video makes clear, however, the problem lies with the long-distance trains.  Ticket prices for the long-distance riders would have had to been an average of  $104 higher per rider to cover the operating loss. 
 
The segment operating results for 2019 were a profit of $569 million for the NEC, offset by a loss of $58 million for the state supported trains and $475 million for the long-distance trains.
 
When the state subsidies are included in the recorded loss for the state supported trains, the combined loss was approximately $292 million.  

Amtrak records the state supported payments as revenues.  But they come from the state’s taxpayers and should be combined with the federal subsidy to get the complete taxpayer subsidy.  For example, Texas and Oklahoma taxpayers paid approximately $4.9 million in 2018 to cover the operating losses for the Heartland Flyer.   

Rio Grande Valley, CFI,CFII

  • Member since
    May 2019
  • 852 posts
Posted by Lithonia Operator on Saturday, December 7, 2019 11:18 AM

PJS1

 

 
Lithonia Operator
 Well, at least there was some really nice video footage in that piece.

Really, some of Amtrak's cost allocation schemes are pretty shady. 

 

The video, although it contains some inaccuracies, is a pretty good general overview. 
 
To know whether Amtrak’s cost allocation schemes are shady, you would need to have access to Amtrak’s books.  No one has been able to show that they have access to the company’s books. 
 
I am a Texas CPA (retired).  If I made a claim about the accounting practices of an entity that did not give me access to its books, I would lose my license.
 

I hear you.

But that video alluded to sketchy practices, as did at least one article and one column in Trains.

And snow removal in Miami .. ?

But no, I have not seen their books, so your point is valid. Even if I do tend to believe they are cooking the books, to reflect poorly on the LD trains.

  • Member since
    September 2017
  • 2,935 posts
Posted by charlie hebdo on Saturday, December 7, 2019 12:46 PM

If you tell a tale enough times in an echo chamber,  people tend to believe it's true,  even with no evidence presented. 

  • Member since
    July 2016
  • 708 posts
Posted by Backshop on Saturday, December 7, 2019 1:20 PM

charlie hebdo

Only cover road costs by making taxpayers pony up, which is fine,  since no one has the guts to raise the federal gasoline tax.  In any case,  you are wrong if you think those fees and taxes cover environmental costs. 

 

There are plenty of state gasoline taxes, also.  How do you determine "environmental" costs and does anyone really care?
  • Member since
    September 2003
  • 10,415 posts
Posted by Overmod on Saturday, December 7, 2019 2:57 PM

charlie hebdo
Only cover road costs by making taxpayers pony up, which is fine, since no one has the guts to raise the federal gasoline tax.

The 'real' action is in the state taxes, which might be thought of as an analogue to state-based finance or subsidy of their 'share' of rail operations in corridors that involve them.  The catch, of course, is that adjacent states can predatorily or opportunistically take advantage -- as is the case now between northwest Pennsylvania and Ohio, and in the olden days around the turn of this century between southwest Tennessee and Arkansas, in the days of less-than-a-dollar diesel.  

Then you have the fun of explaining to your electorate why taxes are so high statewide when a certain, ahem, likely comparatively small region gets most of the resulting money for 'environmental costs' or infrastructure reconstruction or new building priority.  This in no small part makes ubiquitous RFID-enabled touchless tolling a much more equitable solution -- and a fixed-income one that does not suffer from the lethal problem faced by the Highway Trust Fund and similar gas-tax related things that become leveraged into relative poverty as fuel consumption goes down, driven miles decrease with usage and preference changes, and BEVs and plugins become more popular (these contribute just as much to congestion and infrastructure wear, but presently pay little if anything toward construction or upkeep).

We could go to a system which would measure miles run per year and calculate a tax based on that.  With only slight additions to present law (for instance, at renewal time incorporating a mandatory code in license plate stickers, or a mandatory transponder tied to the registration or plate number, as part of the required process, and then tracking this via a network of road sensors) you could implement this in a fairly comprehensive and low-cost fashion -- one that might actually be well-supported if formal gas taxes were triumphantly and obviously rolled back at the same approximate time. 

Note that this could almost trivially be extended to track route and section utilization, peak occupancy (e.g. during rush hours), determination and promotion of alternative 'savings', etc. etc. which, among other things, makes the equivalent of electricity pricing come within the range of practicality for American driving habits, including autonomous preference programming or genetic algorithms.

Then get rid of preferential EZ-Pass type pricing based on local issuance or use, at least on Federal interstate highways ... use the commerce clause if you have to; it's been abused far worse before.  Make things fair, including use of regional resources.

On the full Federal level, take a leaf from the railroads and use FULL cost basis for assessing road-use taxes for trucks.  Make it formally illegal to do that classical fuel-saving tactic of being underpowered dragging up every hill, then 75 or better down the other side.  Put teeth in mandatory no-passing zones on Interstates.  And if that results in truckers passing along their costs to shippers ... well, we were talking about fair assessment of ultimate responsibility, and there's always at least the potential to find rail service attractive.  (Yes, that goes for PSR-infatuated railroads, in the longer term, too...)

Oh, and one more thing: we can finally find a use for front license plates if we can't get rid of them.  Remember how much aerodynamic resistance is posed by all that substantially vertical, unstreamlined area!  And the mass adds up over millions of vehicles accelerating and decelerating every day!  If you MUST retain those abominable potential-Constitution-violating things, make them earn their keep in some positive sense.  

Wink

  • Member since
    September 2017
  • 2,935 posts
Posted by charlie hebdo on Saturday, December 7, 2019 3:45 PM

Backshop: Are you joking? 

  • Member since
    July 2016
  • 708 posts
Posted by Backshop on Saturday, December 7, 2019 4:03 PM

charlie hebdo

Backshop: Are you joking? 

 

 

Nope.  The great majority of people don't even think about it.  If they did, SUVs and full size pickups wouldn't be as popular as they are.

  • Member since
    September 2017
  • 2,935 posts
Posted by charlie hebdo on Saturday, December 7, 2019 9:04 PM

Backshop

 

 
charlie hebdo

Backshop: Are you joking? 

 

 

 

 

Nope.  The great majority of people don't even think about it.  If they did, SUVs and full size pickups wouldn't be as popular as they are.

 

I suggest you look at some polls.  Even with one party in denial because they are in the pocket of Big Carbon,  a large and growing number of Americans are very concerned. 

  • Member since
    September 2017
  • 2,935 posts
Posted by charlie hebdo on Saturday, December 7, 2019 9:08 PM

Backshop

 

 
charlie hebdo

Backshop: Are you joking? 

 

 

 

 

Nope.  The great majority of people don't even think about it.  If they did, SUVs and full size pickups wouldn't be as popular as they are.

 

I suggest you look at some polls.  Even with one party in denial because they are in the pocket of Big Carbon,  a large and growing number of Americans are very concerned. 

https://www.cbsnews.com/news/cbs-news-poll-most-americans-say-climate-change-should-be-addressed-now-2019-09-15/

  • Member since
    May 2003
  • From: US
  • 18,028 posts
Posted by BaltACD on Saturday, December 7, 2019 10:11 PM

charlie hebdo
 
Backshop 
charlie hebdo

Backshop: Are you joking?  

Nope.  The great majority of people don't even think about it.  If they did, SUVs and full size pickups wouldn't be as popular as they are. 

I suggest you look at some polls.  Even with one party in denial because they are in the pocket of Big Carbon,  a large and growing number of Americans are very concerned. 

https://www.cbsnews.com/news/cbs-news-poll-most-americans-say-climate-change-should-be-addressed-now-2019-09-15/

They are concerned - as long as they aren't required to change the way THEY live; change for everyone else is fine by them.

  • Member since
    September 2003
  • 10,415 posts
Posted by Overmod on Sunday, December 8, 2019 1:34 AM

Based on what I see in the poll, the likeliest thing to result in beneficial action on climate change is to tax Democrats with the higher carbon charges, renewable-energy developments, etc. based on stated party affiliation or contributions.  When they demonstrate the selflessness and effectiveness of putting their money and not everyone else's on the line for their 'peculiar' priorities, attitudes may begin to change.

  • Member since
    July 2016
  • 708 posts
Posted by Backshop on Sunday, December 8, 2019 7:15 AM

BaltACD
 

They are concerned - as long as they aren't required to change the way THEY live; change for everyone else is fine by them.

 

Exactly!  What's the old saying "actions speak louder than words"?

  • Member since
    May 2019
  • 852 posts
Posted by Lithonia Operator on Sunday, December 8, 2019 7:35 AM

Overmod

Based on what I see in the poll, the likeliest thing to result in beneficial action on climate change is to tax Democrats with the higher carbon charges, renewable-energy developments, etc. based on stated party affiliation or contributions.  When they demonstrate the selflessness and effectiveness of putting their money and not everyone else's on the line for their 'peculiar' priorities, attitudes may begin to change.

 

Then again, they could tax Republicans a nickel each time they resort to the hypocrisy of invoking tired stereotypes of free-spending Dems, while the Orange One gives massive tax breaks to billionaires, builds vanity border walls, and in many other ways runs up massive deficits at the behest of the "party of fiscal responsibility."

The money generated would quickly fix both the deficit and the national debt, plus there would be enough left over for a very nice giant national free barbeque picnic.

  • Member since
    September 2017
  • 2,935 posts
Posted by charlie hebdo on Sunday, December 8, 2019 9:47 AM

Lithonia Operator

 

 
Overmod

Based on what I see in the poll, the likeliest thing to result in beneficial action on climate change is to tax Democrats with the higher carbon charges, renewable-energy developments, etc. based on stated party affiliation or contributions.  When they demonstrate the selflessness and effectiveness of putting their money and not everyone else's on the line for their 'peculiar' priorities, attitudes may begin to change.

 

 

 

Then again, they could tax Republicans a nickle each time they resort to the hypocrisy of invoking tired stereotypes of free-spending Dems, while the Orange One gives massive tax breaks to billionaires, builds vanity border walls, and in many other ways runs up massive deficits at the behest of the "party of fiscal responsibility."

The money generated would quickly fix both the deficit and the national debt, plus there would be enough left over for a very nice giant national free barbeque picnic.

 

+1

  • Member since
    February 2016
  • From: Texas
  • 1,410 posts
Posted by PJS1 on Sunday, December 8, 2019 10:08 AM

Backshop
 BaltACD They are concerned - as long as they aren't required to change the way THEY live; change for everyone else is fine by them. 

Exactly!  What's the old saying "actions speak louder than words"? 

I recently attended a conference on the impact of renewable energy on the electric utility industry in Texas, which has more wind generated electric energy than any other state.

Most of the attendees, if my unscientific survey is reasonable, praised the move toward more renewable energy sources.  

Afterwards, I noticed that the majority of the attendees climbed into big pick-up trucks and SUVs.  I suspect many of them can relate to the pollution created by fossil fuel fired power plants, but don't seem to see how their low fuel mileage vehicles contribute to Texas’ air quality problem. 

Rio Grande Valley, CFI,CFII

  • Member since
    September 2003
  • 10,415 posts
Posted by Overmod on Sunday, December 8, 2019 2:39 PM

PJS1
I suspect many of them can relate to the pollution created by fossil fuel fired power plants, but don't seem to see how their low fuel mileage vehicles contribute to Texas’ air quality problem.

I, on the other hand, would suspect they were at the conference for economic reasons, largely dealing with profitability and baseline considerations for the electric-power industry, and would really be concerned little with nonmandated pollution reduction or 'carbon whatever' past the extent to which it affected their costs of operation, or promotional/political advantages.

So I find little cognitive dissonance in their then using Texas-size transportation afterward.  Presumably most aspects of power provision in Texas are still profitable enough to allow them to do so.

  • Member since
    February 2016
  • From: Texas
  • 1,410 posts
Posted by PJS1 on Sunday, December 8, 2019 4:15 PM

Overmod
 PJS1 I suspect many of them can relate to the pollution created by fossil fuel fired power plants, but don't seem to see how their low fuel mileage vehicles contribute to Texas’ air quality problem. 

I, on the other hand, would suspect they were at the conference for economic reasons, largely dealing with profitability and baseline considerations for the electric-power industry, and would really be concerned little with nonmandated pollution reduction or 'carbon whatever' past the extent to which it affected their costs of operation, or promotional/political advantages.

So I find little cognitive dissonance in their then using Texas-size transportation afterward.  Presumably most aspects of power provision in Texas are still profitable enough to allow them to do so. 

The conference attendees came from a variety of organizations, i.e. industry, government, academic, and advocacy.

People are quick to spot the climate impacts of large organizations and/or functions, but not so quick to see how they are contributing to the problem.

It is easy for people to focus on the pollution created by a coal fired power plant and tell the operator to shut the damn thing down.  Especially given that most people don't have a clue how electric energy is generated, transmitted, and distributed!   Not so easy to focus on one's own behavior!

Tell a Texan that his gas guzzling pick-up contributes to the degradation of the environment, and he probably will respond: Now you gone to meddling.

Rio Grande Valley, CFI,CFII

  • Member since
    February 2018
  • From: Great Plains
  • 1,312 posts
Posted by York1 on Sunday, December 8, 2019 6:55 PM

Not so green?

What to do with the windmill blades when they wear out and need to be replaced -- One million tons of fiberglass and other waste headed to landfills (if they can find landfills willing to take the stuff).

https://www.desmoinesregister.com/story/money/agriculture/2019/11/06/few-recycling-options-wind-turbine-blades-head-iowa-landfills/3942480002/

 

On a personal note, this past week I drove to Dallas, crossing Oklahoma.  One of the natural treasures in Oklahoma is the Arbuckle Mountains, the oldest geologic formation between the Appalachians and Rockies.  This anticline is a geologist's dream.

Unfortunately, this geologic wonder is now covered with windmills.  Instead of seeing, from the overlooks, the anticline's ridges trailing into the distance, one now sees and hears the windmills.  I can only imagine people's howls of protest had a natural gas-fired generating plant been built on the top of the anticline.

I don't call this environmental progress.

John  --  Saints Fan  

Join our Community!

Our community is FREE to join. To participate you must either login or register for an account.

Search the Community

Newsletter Sign-Up

By signing up you may also receive occasional reader surveys and special offers from Trains magazine.Please view our privacy policy