QUOTE: Originally posted by Junctionfan QUOTE: Originally posted by futuremodal QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal This may be somewhat off topic, but I would like to comment on this statement by Mark's aquaintance of Amtrak: Originally posted by M.W. Hemphill Here's excerpts from a response I received this morning from one of the people that I carbon copied with my e-mail, a person present at Amtrak's birth: (snip) So what does this have to do with the insurance issue. Well, it goes back to the low access charges; Amtrak pays virtually nothing to use the system; UPS pays as much to get a carload between Chicago and New York as Amtrak pays for an entire train. So if there were real market pricing out there, Amtrak payments would go up something like 50-100 times. I think the railroads would have a different attitude about assuming liability if Amtrak was paying normal commercial rates." I wholeheartedly agree... LC Hey lc, I'm glad to see you're finally growing a brain cell or two. Nice try. Your thinking hasn't improved any either... LC Since you couldn't rationalize your argument, you resort to contemptable insults. Typical of your type. Gentlemen please.[:(] Don't want to be peace officer here but you should save the stabbing for Halloween.[}:)][:D] I apologize to the forum, but my gut reaction to an unsolicited insult is to hit back. I'm just trying to have conversations here, but some who cannot rationalize their arguments ALWAYS resort to cheap shots. I promise from now on I will completely ignore LC's cheap shots. Reply Edit Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Friday, October 15, 2004 9:42 PM QUOTE: Originally posted by futuremodal QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal This may be somewhat off topic, but I would like to comment on this statement by Mark's aquaintance of Amtrak: Originally posted by M.W. Hemphill Here's excerpts from a response I received this morning from one of the people that I carbon copied with my e-mail, a person present at Amtrak's birth: (snip) So what does this have to do with the insurance issue. Well, it goes back to the low access charges; Amtrak pays virtually nothing to use the system; UPS pays as much to get a carload between Chicago and New York as Amtrak pays for an entire train. So if there were real market pricing out there, Amtrak payments would go up something like 50-100 times. I think the railroads would have a different attitude about assuming liability if Amtrak was paying normal commercial rates." I wholeheartedly agree... LC Hey lc, I'm glad to see you're finally growing a brain cell or two. Nice try. Your thinking hasn't improved any either... LC Since you couldn't rationalize your argument, you resort to contemptable insults. Typical of your type. I've responded to your arguments more than they or you deserve. Your arguments are transparent and lack any merit so I guess I'll just be happy to ignore you too... LC Reply Edit Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, October 16, 2004 12:15 AM Great, we've got Hannity & Colmes on the forum. Reply Edit MP57313 Member sinceJune 2001 From: L A County, CA, US 1,009 posts Posted by MP57313 on Saturday, October 16, 2004 12:34 AM QUOTE: Originally posted by jeaton MP57313- With the item you quoted, I was refering to a situation where Amtrak may or may not have caused a delay to freight trains. Ahh...in that case it would be when an engine conks out, and Amtrak then needs an assist from the host railroad. This happened on the San Diegan years ago, but that line was not a heavy freight route then so I doubt it delayed anything... Reply PNWRMNM Member sinceMay 2003 From: US 2,593 posts Posted by PNWRMNM on Saturday, October 16, 2004 1:29 AM Dear Ed, I was in the industry at the time. Mr. Gates was a known bad actor who in any other industry would have been fired long before the accident. Only because congress and the unions made it impossible to get rid of him and those like him was he working that day. After the accident he told whatever story the FRA wanted to justify their drug testing program to keep himself out of jail. The larger point is this: one bad policy, jobs for life for those who should not be in the industry, lead to another, drug testing of the innocent. Mac Reply Rick Gates Member sinceFebruary 2004 From: Balto. MD 213 posts Posted by Rick Gates on Saturday, October 16, 2004 3:43 AM Since the government long ago shifted focus on highway transportation the railroads could not make a profit on passenger service. Service gradually became worse and the quality of service declined. That's free enterprise. The government's policy does influence our markets. Amtrak was, in my opinion, a bail-out for passenger service. All of us pay taxes that go toward highway infrastructure and Amtrak. All railraods are paying these taxes as well. Amtrak is not paying it's fair share as a lessee as compared with freight rates. So it is evident to me that we are all paying for it's subsidies including the indemnity issue. Again, this is just an over-simplification of my opinion. As for Mac comments....conjecture and opinion also. I lived through the accident not an on purpose. I did not talk to the FRA, nor am I an "actor." I simply lived it. I cannot take responsibilty for the so-called hysteria or reaction of others, though I understand it. I can learn from my mistakes. I have never heard of any form of tenure of to any T & E employees. The unions are not that powerful. I made no deal with the feds, nor did I say anything I didn't believe or needed to be said. Drug testing protects the innocent and the problematic, just as airport security searches do. Yet they are invasive also. As for where you wish my soul to go.....that has some Judeo-Christian implications and leads me to think you may be somewhat of a believer. Love one another and love your enemies are two of the precepts of these religions. I respect your opinion and; I love you man.[2c] In the accident I had in my this corner of the world, I could never have imagined the reprecussions it has had with others all over. It was not intentional. If the waves of my problem have hurt you so much, I am truly sorry. As for holding on to that anger and resentment....that's your problem. I cannot take it from you. God bless. Railroaders do it on steel Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, October 16, 2004 10:30 AM Mark- I'll be the first to admit I've never been a sterling economist (taking basic economics from Alfred Kahn didn't even make a dent)... Could you perhaps in layman's terms explain the cross subsidization? Is it the cost of freight railroads investing in additional capacity enhancements (i.e. lengthening sidings, adding main tracks, interlockings, signalling improvements) or is it in some other form (congestion losses, lost business, lost customers or other opportunity costs)? LC Reply Edit jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Saturday, October 16, 2004 11:30 AM Mark Thanks for the references. They made some points that I learned over time from other sources, some that I understood intuitively and others that were a new view for me. It may have come out that way a little, but I didn't mean that I favor any specific approach to to establishing the host railroad cost for running Amtrak trains. My intent was to point out that there is no definable "true" cost or any specific formula that could be followed so that "all would be well" in the future. In many ways all of these things enter into my personal business decisions. Given the size and scope of my business, the task is not too difficult. For example on, if on April second only a quarter of my day is booked and and a "new" person calls willing to pay half of my base rate, I am likly to do the job, because I don't add any cash cost to my business. On the other hand, I may forgo a ton of business that I could have if my rate was say 10% lower, because that option might leave me financially better off just to stay home and watch daytime TV. Now, consider the need for that kind of decision to be made in a business that is vastly more complicated, such as a railroad, then recognition should be given to the enormity of the task faced by the directors, CEO and staff of that railroad. Frankly, I am glad it is not my job to participate in that task. Many of us posting on this forum like to dream about how things should be with railroads. At times, I am very much in that camp. Often those dreams are based on some excellent ideas, but more often than not, running them through a real decision making process would show that the adoption of the idea would not make the entity financially better off in the future. I think Amtrak's "Route At Risk" section in the latest 5 year plan indicates an awarness of the potential impact of the oppurtunity cost issue on many of the LD segments. I will be very interested in the response to your inquiry. Jay "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply Junctionfan Member sinceFebruary 2004 From: St.Catharines, Ontario 3,770 posts Posted by Junctionfan on Saturday, October 16, 2004 11:41 AM That leads me to conclude that UP would run Amtrak on their lines like a Z train if Amtrak (feds) would pay them to be able to run them as a Z train. I don't know what UP is making off of Amtrak but it seems to be manifest class money at best. Andrew Reply jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Saturday, October 16, 2004 11:49 AM Mark, Thanks for the complement, but now I am going to have to work on keeping my ego in check. I know how to do that, I just get in a discussion of some controversial issue with one of my kids and humble comes back big time. Jay[:D][:D] "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply Junctionfan Member sinceFebruary 2004 From: St.Catharines, Ontario 3,770 posts Posted by Junctionfan on Saturday, October 16, 2004 12:04 PM I don't have to worry about checking if i'm humble or not; i'm sure L.C or somebody will be more than happy to put me in my place if I need it.[:I][B)] Andrew Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, October 16, 2004 12:30 PM QUOTE: Originally posted by M.W. Hemphill Jay: Your very polite summary of different accounting methods is appreciated. The Amtrak vs. freight issue is a textbook-perfect case of opportunity-cost accounting vs. incremental-cost accounting. See http://en.wikipedia.org/wiki/Opportunity_cost and substitute "Amtrak and freight" for "guns and butter" as the axes on the production possibilities frontier graph. Think about 1971 vs. 2004, and it becomes clear what has happened, and why. Then see http://www.pricingsociety.com/pdf-4-index/dangers-o-cost.pdf for why incremental cost accounting is a trap at any time, especially in a capital-intensive environment such as a railroad. If you accept that opportunity-cost accounting is the rational and proper approach -- which you hint you accept -- then the issue of Amtrak becomes the lost opportunity it represents by its denial of track capacity for freight service, not its volume-sensitive costs, which are almost impossible to discriminate anyway, as so much of railroad costs are shared and volume-insensitive costs. Because on most Amtrak routes, the fixed plant has limits of capacity that have now been reached at multiple points, a true accounting will show that the freight railroads are right back in the business of cross-subsidizing passenger service with freight service, deja vu 1971, and that the subsidy is significant and growing larger by the day. Amtrak isn't going to enjoy this subsidy for long, I think, because the congestion affects its volume-sensitive costs. I think it is already seeing its volume-sensitive costs climb to the point that to continue to live within its budget, it will have no choice but to begin withdrawing service from congested lines. (I now wonder if the Three Rivers and Florida discontinuances are all or in part for this reason.) I think I can verify that Amtrak is coming up against a cost wall on congested lines with just one phone call on Monday. I'll let you know what I learn. MWH Mark, Can you give a ballpark estimate of the number of Class I route miles (which host at least 1Amtrak train per day) that are running at capacity? Should Amtrak be forced to pay the opportunity costs on those lines, while keeping the access costs lower on the underutilized lines? While on the subject of opportunity costs, wouldn't you agree that the loss of extra capacity is the fault of the Class I's themselves via the over-mergers/abandonments & embargoes et al. To play DA for a second, why should Amtrak be forced to pay the difference in opportunity costs when the railroads themselves are responsible for the lost capacity? To be sure, the STB, in its rubber stamping of abandonments and over-mergers, should shoulder the blame for not taking into consideration the eventuality that line retrenchments would eventually lead to the taxpayers being forced to cough up funds for increased Amtrak operating costs and federal aid for Class I infrastructure improvements. Reply Edit jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Saturday, October 16, 2004 12:53 PM Dave Partial answer to first question can be found at http://www.amtrak.com/pdf/strategic05.pdf Go to page a-30 Jay "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Monday, October 18, 2004 9:32 PM QUOTE: Originally posted by BNSF railfan. So if Amtrak phucks up and is ordered to pay up,Then who PAYS for Amtrak's *** UP? Very difficult question. Offhand, I'd say Amtrak. LC Reply Edit Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Monday, October 18, 2004 9:40 PM QUOTE: Originally posted by M.W. Hemphill LC: The subsidy is the lost business opportunity. For simplicity's sake, suppose a line can handle 40 trains per day, each with a revenue of $50,000. Assume the Amtrak train (each way daily) carries no penalty for its speed differential and service guarantees, which is of course very untrue, but the penalty is difficult to calculate. Now the railroad can only realize the revenue from 38 trains per day because it must deduct for the two Amtraks. Its revenue on that line, which could have been $2M per day, is now $1.9M per day. Over a year, the lost revenue is $36.5M. Over 10 years, $365M. That's revenue that cannot be reinvested in track, locomotives, computers, signals, etc. Because the revenue can't be spent, the railroad is that much less productive. The return to investors is diminished because of the productivity deficit. It would be difficult to calculate, but it would be interesting to see how much ROI is diminished each year because of the presence of Amtrak. Of course, Amtrak pays something to use the line, but you can now see that the revenue deficit Amtrak must climb out of to be value-neutral to the freight railroad is quite large. In reality, Amtrak isn't paying anywere near that. The subsidy is that the passenger train is not paying its true costs of occupancy, which is the opportunity cost, not the wear and tear on the track. Every time the Amtrak train runs, the opportunity to handle freight in that time slot is lost forever. Now, some will argue that the opportunity cannot be realized because the freight railroad is incompetent to realize its opportunity, or that rates will rise to account for the scarcity of capacity. The first is a logical fallacy, and to it I respond, "If you really are so cynical as to believe that, then by your own premise the problem can never be solved, so you must be here solely for the ulterior and dishonest motive of personal self-aggrandizement." To the second argument, I respond that most freight has alternatives of modes or points of production, or both, and that the ability of a railroad to use rates to extract value has limits. You'll recall that passenger-train advocates beginning in the 1950s, when train-off applications began, argued that passenger trains should only pay their incremental costs, whereas railroads wanted them to carry their fully allocated costs. While the incremental-cost argument might be sufficient for a already existing trainset on a less-than-fully utilized route with good track material, it was never sufficient to capture the capital cost of the equipment, nor the capital cost of the renewal of track material. Thus the incremental-cost advocates were already acknowledging that the passenger train should be subsidized by the freight shippers just to stretch its existence out a few more years, though they rarely came out and admitted that bluntly. They were only considering short-run variable costs rather than long-run variable costs, and in effect, arguing that the railroads should bankrupt themselves. Is it any wonder that the railroad and railfan communities began to split into separate and hostile camps at this point in time? Mark- Well put. I understand now. I think I was on the right road, but a few of the terms threw me a bit. One of these days I need to find time for an MBA...lol... Oh and I see your point on Railfans v. Railroads alright. You learn that split pretty shortly after hiring out. LC Reply Edit Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Monday, October 18, 2004 9:41 PM QUOTE: Originally posted by Junctionfan I don't have to worry about checking if i'm humble or not; i'm sure L.C or somebody will be more than happy to put me in my place if I need it.[:I][B)] Andrew- I'm actually trying to encourage you. At 25 you are certainly old enough to hire out... LC Reply Edit Junctionfan Member sinceFebruary 2004 From: St.Catharines, Ontario 3,770 posts Posted by Junctionfan on Monday, October 18, 2004 9:55 PM Which morons in Congress agreed to allow the railroads to get their way on the issue of payment of punitive damages? As far as i'm concerned, Congress has allowed the railroad to get away with murder and does not hold them responsible and does not encourage them to do better. I could have sworn that the voters voted for Clinton or Dole in one election and than in another it was GW Bush or Gore. I don't recall either Michael Ward or *** Davidson entering the race never mind winning. As far as i'm concerned, the voters interest should be put a head of corporations especially when the class 1s screw ups come out of your pocket. Why should the American people pay for a bunch of greedy s.o.bs mistakes if not wanten mistakes? You folk deserve better than that don't you? You are already paying for amtrak's upkeep of equipment, track leasing etc. Can you imagine how better Amtrak would run if they didn't have to dip into their bottomline to pay unfair punitive damages plus repair any equipment involved in the wreck? I can't imagine that kind of nonsense in Canada; I don't think that would or should stand in any country. Honestly if I was president, I would fine them, tax them and change the punitive damage rubbish around. It doesn't make sense from a business stand point to spend 100 million for the track plus spend about 50 or 60 million to give the railroad for unlawful type of Retard Greedy Screwup Liability insurance-punitive damages. Than you spend money to fix up those cars or engines that get banged up in any accident. I am starting to wonder if it is cheaper to build new track or go through the class 1's moron cheapskate service. Andrew Reply jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Monday, October 18, 2004 11:00 PM Andrew You might as well lighten up on this. Here is a news flash. It is rare that the person or entity that causes a personal injury actually pays the injured party with personal funds. A kid blowing down the highway at twice the speed limit turns to swap some spit with his girl friend, blows a stop sign and smashes into your car leaving you in a wheel chair for the rest of your life. You sue and get an award that is big enough to cover all of your needs for the rest of your life plus several million more in punitive (punishment) damages. The money is going to be paid by the kids insurance company. No matter how hard you tried, you probably could not get an order that the kid pay you money out of his own pocket as punishment for his deed. That is called transfer of risk. It is a fact of our world and it is not going to change. If Amtrak had not agreed to take the risk for personal injuries of its passengers, their rent payments to the host railroads would increase by an amount about equal to the amount they pay out for personal injuries. So why would the railroads demand this indemnification? Think about it. If a freight train is in a wreck, the chance of personal injury is very low. If a passenger train is in a wreck, the chances for personal injury could be a hundred times greater. So the railroads said, "If you want us to run your trains, either pay us in rent an amount to cover possible personal injury claims or agree to pay the claims yourself. That is just the way it works. "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply Junctionfan Member sinceFebruary 2004 From: St.Catharines, Ontario 3,770 posts Posted by Junctionfan on Tuesday, October 19, 2004 6:31 AM QUOTE: Originally posted by jeaton Andrew You might as well lighten up on this. Here is a news flash. It is rare that the person or entity that causes a personal injury actually pays the injured party with personal funds. A kid blowing down the highway at twice the speed limit turns to swap some spit with his girl friend, blows a stop sign and smashes into your car leaving you in a wheel chair for the rest of your life. You sue and get an award that is big enough to cover all of your needs for the rest of your life plus several million more in punitive (punishment) damages. The money is going to be paid by the kids insurance company. No matter how hard you tried, you probably could not get an order that the kid pay you money out of his own pocket as punishment for his deed. That is called transfer of risk. It is a fact of our world and it is not going to change. If Amtrak had not agreed to take the risk for personal injuries of its passengers, their rent payments to the host railroads would increase by an amount about equal to the amount they pay out for personal injuries. So why would the railroads demand this indemnification? Think about it. If a freight train is in a wreck, the chance of personal injury is very low. If a passenger train is in a wreck, the chances for personal injury could be a hundred times greater. So the railroads said, "If you want us to run your trains, either pay us in rent an amount to cover possible personal injury claims or agree to pay the claims yourself. That is just the way it works. Two problems I have with that. First is that Amtrak shouldn't be the Allstate of the class 1s-if they want liability insurance, get their own. Second is it's bad PR to make Amtrak look liable all the time, it likely is a contributing factor when it comes to funding. If the taxpayer has to pay the extra money anyways, wouldn't it be better to make the class 1's get into trouble and force themselves to improve/ fix mistakes than allow your taxes to essentially award the railroads a "licence to kill"? Andrew Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Tuesday, October 19, 2004 8:28 AM QUOTE: Originally posted by jeaton Andrew You might as well lighten up on this. Here is a news flash. It is rare that the person or entity that causes a personal injury actually pays the injured party with personal funds. A kid blowing down the highway at twice the speed limit turns to swap some spit with his girl friend, blows a stop sign and smashes into your car leaving you in a wheel chair for the rest of your life. You sue and get an award that is big enough to cover all of your needs for the rest of your life plus several million more in punitive (punishment) damages. The money is going to be paid by the kids insurance company. No matter how hard you tried, you probably could not get an order that the kid pay you money out of his own pocket as punishment for his deed. That is called transfer of risk. It is a fact of our world and it is not going to change. If Amtrak had not agreed to take the risk for personal injuries of its passengers, their rent payments to the host railroads would increase by an amount about equal to the amount they pay out for personal injuries. So why would the railroads demand this indemnification? Think about it. If a freight train is in a wreck, the chance of personal injury is very low. If a passenger train is in a wreck, the chances for personal injury could be a hundred times greater. So the railroads said, "If you want us to run your trains, either pay us in rent an amount to cover possible personal injury claims or agree to pay the claims yourself. That is just the way it works. Whoops. Hold on a second. Insurance companies are prohibited by law in all states from paying punitive or exemplary damages. Insurance does not cover the intentional act of the insured. Negligence however is covered and to the extent damages are awarded for negligent conduct damage awards of compensatory damages including loss of future earnings, pain and suffering and loss of consortium are recoverable and that can easily be in the Millions, especially in a quadraplegia case. LC Reply Edit jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Tuesday, October 19, 2004 9:26 AM LC OK, I'll stand corrected. "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Tuesday, October 19, 2004 9:40 AM QUOTE: Originally posted by jeaton LC OK, I'll stand corrected. J- Thanks. This rule can be really harsh. Years ago, in a case before the California Supreme Court (I wore the black hat) I represented an insurance company that was seeking refusing to cover a case of child sexual molestation by a well known business man of a very young girl. The girl and her mother sought damages for the molestation and sued the molester. The insurance company refused to cover him based upon the theory that sexual molestation was always intentional. As discussed above, intentional acts by an insured can never be covered by insurance. Suffice it to say that despite several appeals by the plaintiff, the courts sustained the insurance company's position. Sometimes the law doesn't work justice, it is merely a choice. So it is also with things like railroad indemnification. A choice was made at the formation of Amtrak to run the indemnification in a certain way as a quid pro quo for Amtrak gaining access to the freight railroads trackage. LC Reply Edit jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Tuesday, October 19, 2004 10:18 AM LC Thanks for the clarification. Just in case you wonder, I might spout something about the way that I understand the law on a forum, but with my tax clients I hve to watch that I don't cross the line between explaining regulations and giving legal advice. I think I understand why personal injury victims want to punish wrong doers. I wonder if many understand that money paid as a punishment may not come from the person or people who actually may be at fault. For the victim quoted in the Times article, even if CSX had been the source of the payment, as an artificial person, CSX would feel no pain. On your last paragraph, that setup makes some sense. As I have noted before, for Amtrak's host railroads the risk of personal injury is much greater than it would be for a freight only operation. Jay "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Tuesday, October 19, 2004 10:25 AM Mark Hope you get OK's to repeat comments you have received on the this subject. I'm always interested in the inside scoop on historical decisions. Jay "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply Junctionfan Member sinceFebruary 2004 From: St.Catharines, Ontario 3,770 posts Posted by Junctionfan on Tuesday, October 19, 2004 10:27 AM What I can't figure out is what reasoning would Congress have for making their public corporation look bad. In Canada if the government does something like that, the government tends to have to correct that before the election or a new government is formed. If they can't get them in civil court, perhaps they should give the criminal courts a crack at them. Next time a freight train derails, nail them to the wall with one hell of a fine and see if some executives can't do some time. Maybe the government should tax the railroads who cause amtrak to derail. The railroads can't win against the government really. If the government had to, they could force the railroad to accept compensation for running on their lines (you know what I mean). It should be the fault of whoever caused the accident. If a train hits the a car and causes a derailment, the following should take place. If it was the fault of the car because he drove around the crossing, the driver of the car is responsible; if Amtrak train failed to do something to avoid the accident like not slowing down(possible speed restrictions) or failed to sound the horn, than Amtrak should pay. If the railroad has a faulty crossing and failed to activate when the train entered the block, than the railroad should pay. I believe in logical compensation of whom ever is injured and is at fault. The only time I would say that fault could not be established is say during a natural disaster, unknown vandalism, accident related to interaction with large wild animal and stuff like that. Than maybe the government should hand out berievment packages or something like that. Of course wouldn't it be redundant if the victims family can claim on life insurance? I don't particularly like the insurance companies much and don't understand their reasoning behind their policies but wouldn't any claim do to accident resulting in injury or death be covered? Andrew Reply dharmon Member sinceAugust 2003 From: Bottom Left Corner, USA 3,420 posts Posted by dharmon on Tuesday, October 19, 2004 10:36 AM Mark, Jay, LC... [tup] Reply 12 Join our Community! Our community is FREE to join. To participate you must either login or register for an account. Login » Register » 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 More great sites from Kalmbach Media Terms Of Use | Privacy Policy | Copyright Policy
QUOTE: Originally posted by futuremodal QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal This may be somewhat off topic, but I would like to comment on this statement by Mark's aquaintance of Amtrak: Originally posted by M.W. Hemphill Here's excerpts from a response I received this morning from one of the people that I carbon copied with my e-mail, a person present at Amtrak's birth: (snip) So what does this have to do with the insurance issue. Well, it goes back to the low access charges; Amtrak pays virtually nothing to use the system; UPS pays as much to get a carload between Chicago and New York as Amtrak pays for an entire train. So if there were real market pricing out there, Amtrak payments would go up something like 50-100 times. I think the railroads would have a different attitude about assuming liability if Amtrak was paying normal commercial rates." I wholeheartedly agree... LC Hey lc, I'm glad to see you're finally growing a brain cell or two. Nice try. Your thinking hasn't improved any either... LC Since you couldn't rationalize your argument, you resort to contemptable insults. Typical of your type. Gentlemen please.[:(] Don't want to be peace officer here but you should save the stabbing for Halloween.[}:)][:D]
QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal This may be somewhat off topic, but I would like to comment on this statement by Mark's aquaintance of Amtrak: Originally posted by M.W. Hemphill Here's excerpts from a response I received this morning from one of the people that I carbon copied with my e-mail, a person present at Amtrak's birth: (snip) So what does this have to do with the insurance issue. Well, it goes back to the low access charges; Amtrak pays virtually nothing to use the system; UPS pays as much to get a carload between Chicago and New York as Amtrak pays for an entire train. So if there were real market pricing out there, Amtrak payments would go up something like 50-100 times. I think the railroads would have a different attitude about assuming liability if Amtrak was paying normal commercial rates." I wholeheartedly agree... LC Hey lc, I'm glad to see you're finally growing a brain cell or two. Nice try. Your thinking hasn't improved any either... LC Since you couldn't rationalize your argument, you resort to contemptable insults. Typical of your type.
QUOTE: Originally posted by futuremodal QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal This may be somewhat off topic, but I would like to comment on this statement by Mark's aquaintance of Amtrak: Originally posted by M.W. Hemphill Here's excerpts from a response I received this morning from one of the people that I carbon copied with my e-mail, a person present at Amtrak's birth: (snip) So what does this have to do with the insurance issue. Well, it goes back to the low access charges; Amtrak pays virtually nothing to use the system; UPS pays as much to get a carload between Chicago and New York as Amtrak pays for an entire train. So if there were real market pricing out there, Amtrak payments would go up something like 50-100 times. I think the railroads would have a different attitude about assuming liability if Amtrak was paying normal commercial rates." I wholeheartedly agree... LC Hey lc, I'm glad to see you're finally growing a brain cell or two. Nice try. Your thinking hasn't improved any either... LC
QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal This may be somewhat off topic, but I would like to comment on this statement by Mark's aquaintance of Amtrak: Originally posted by M.W. Hemphill Here's excerpts from a response I received this morning from one of the people that I carbon copied with my e-mail, a person present at Amtrak's birth: (snip) So what does this have to do with the insurance issue. Well, it goes back to the low access charges; Amtrak pays virtually nothing to use the system; UPS pays as much to get a carload between Chicago and New York as Amtrak pays for an entire train. So if there were real market pricing out there, Amtrak payments would go up something like 50-100 times. I think the railroads would have a different attitude about assuming liability if Amtrak was paying normal commercial rates." I wholeheartedly agree... LC Hey lc, I'm glad to see you're finally growing a brain cell or two.
QUOTE: Originally posted by futuremodal This may be somewhat off topic, but I would like to comment on this statement by Mark's aquaintance of Amtrak: Originally posted by M.W. Hemphill Here's excerpts from a response I received this morning from one of the people that I carbon copied with my e-mail, a person present at Amtrak's birth: (snip) So what does this have to do with the insurance issue. Well, it goes back to the low access charges; Amtrak pays virtually nothing to use the system; UPS pays as much to get a carload between Chicago and New York as Amtrak pays for an entire train. So if there were real market pricing out there, Amtrak payments would go up something like 50-100 times. I think the railroads would have a different attitude about assuming liability if Amtrak was paying normal commercial rates." I wholeheartedly agree... LC
Originally posted by M.W. Hemphill Here's excerpts from a response I received this morning from one of the people that I carbon copied with my e-mail, a person present at Amtrak's birth: (snip) So what does this have to do with the insurance issue. Well, it goes back to the low access charges; Amtrak pays virtually nothing to use the system; UPS pays as much to get a carload between Chicago and New York as Amtrak pays for an entire train. So if there were real market pricing out there, Amtrak payments would go up something like 50-100 times. I think the railroads would have a different attitude about assuming liability if Amtrak was paying normal commercial rates."
QUOTE: Originally posted by futuremodal QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal This may be somewhat off topic, but I would like to comment on this statement by Mark's aquaintance of Amtrak: Originally posted by M.W. Hemphill Here's excerpts from a response I received this morning from one of the people that I carbon copied with my e-mail, a person present at Amtrak's birth: (snip) So what does this have to do with the insurance issue. Well, it goes back to the low access charges; Amtrak pays virtually nothing to use the system; UPS pays as much to get a carload between Chicago and New York as Amtrak pays for an entire train. So if there were real market pricing out there, Amtrak payments would go up something like 50-100 times. I think the railroads would have a different attitude about assuming liability if Amtrak was paying normal commercial rates." I wholeheartedly agree... LC Hey lc, I'm glad to see you're finally growing a brain cell or two. Nice try. Your thinking hasn't improved any either... LC Since you couldn't rationalize your argument, you resort to contemptable insults. Typical of your type. I've responded to your arguments more than they or you deserve. Your arguments are transparent and lack any merit so I guess I'll just be happy to ignore you too... LC Reply Edit Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, October 16, 2004 12:15 AM Great, we've got Hannity & Colmes on the forum. Reply Edit MP57313 Member sinceJune 2001 From: L A County, CA, US 1,009 posts Posted by MP57313 on Saturday, October 16, 2004 12:34 AM QUOTE: Originally posted by jeaton MP57313- With the item you quoted, I was refering to a situation where Amtrak may or may not have caused a delay to freight trains. Ahh...in that case it would be when an engine conks out, and Amtrak then needs an assist from the host railroad. This happened on the San Diegan years ago, but that line was not a heavy freight route then so I doubt it delayed anything... Reply PNWRMNM Member sinceMay 2003 From: US 2,593 posts Posted by PNWRMNM on Saturday, October 16, 2004 1:29 AM Dear Ed, I was in the industry at the time. Mr. Gates was a known bad actor who in any other industry would have been fired long before the accident. Only because congress and the unions made it impossible to get rid of him and those like him was he working that day. After the accident he told whatever story the FRA wanted to justify their drug testing program to keep himself out of jail. The larger point is this: one bad policy, jobs for life for those who should not be in the industry, lead to another, drug testing of the innocent. Mac Reply Rick Gates Member sinceFebruary 2004 From: Balto. MD 213 posts Posted by Rick Gates on Saturday, October 16, 2004 3:43 AM Since the government long ago shifted focus on highway transportation the railroads could not make a profit on passenger service. Service gradually became worse and the quality of service declined. That's free enterprise. The government's policy does influence our markets. Amtrak was, in my opinion, a bail-out for passenger service. All of us pay taxes that go toward highway infrastructure and Amtrak. All railraods are paying these taxes as well. Amtrak is not paying it's fair share as a lessee as compared with freight rates. So it is evident to me that we are all paying for it's subsidies including the indemnity issue. Again, this is just an over-simplification of my opinion. As for Mac comments....conjecture and opinion also. I lived through the accident not an on purpose. I did not talk to the FRA, nor am I an "actor." I simply lived it. I cannot take responsibilty for the so-called hysteria or reaction of others, though I understand it. I can learn from my mistakes. I have never heard of any form of tenure of to any T & E employees. The unions are not that powerful. I made no deal with the feds, nor did I say anything I didn't believe or needed to be said. Drug testing protects the innocent and the problematic, just as airport security searches do. Yet they are invasive also. As for where you wish my soul to go.....that has some Judeo-Christian implications and leads me to think you may be somewhat of a believer. Love one another and love your enemies are two of the precepts of these religions. I respect your opinion and; I love you man.[2c] In the accident I had in my this corner of the world, I could never have imagined the reprecussions it has had with others all over. It was not intentional. If the waves of my problem have hurt you so much, I am truly sorry. As for holding on to that anger and resentment....that's your problem. I cannot take it from you. God bless. Railroaders do it on steel Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, October 16, 2004 10:30 AM Mark- I'll be the first to admit I've never been a sterling economist (taking basic economics from Alfred Kahn didn't even make a dent)... Could you perhaps in layman's terms explain the cross subsidization? Is it the cost of freight railroads investing in additional capacity enhancements (i.e. lengthening sidings, adding main tracks, interlockings, signalling improvements) or is it in some other form (congestion losses, lost business, lost customers or other opportunity costs)? LC Reply Edit jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Saturday, October 16, 2004 11:30 AM Mark Thanks for the references. They made some points that I learned over time from other sources, some that I understood intuitively and others that were a new view for me. It may have come out that way a little, but I didn't mean that I favor any specific approach to to establishing the host railroad cost for running Amtrak trains. My intent was to point out that there is no definable "true" cost or any specific formula that could be followed so that "all would be well" in the future. In many ways all of these things enter into my personal business decisions. Given the size and scope of my business, the task is not too difficult. For example on, if on April second only a quarter of my day is booked and and a "new" person calls willing to pay half of my base rate, I am likly to do the job, because I don't add any cash cost to my business. On the other hand, I may forgo a ton of business that I could have if my rate was say 10% lower, because that option might leave me financially better off just to stay home and watch daytime TV. Now, consider the need for that kind of decision to be made in a business that is vastly more complicated, such as a railroad, then recognition should be given to the enormity of the task faced by the directors, CEO and staff of that railroad. Frankly, I am glad it is not my job to participate in that task. Many of us posting on this forum like to dream about how things should be with railroads. At times, I am very much in that camp. Often those dreams are based on some excellent ideas, but more often than not, running them through a real decision making process would show that the adoption of the idea would not make the entity financially better off in the future. I think Amtrak's "Route At Risk" section in the latest 5 year plan indicates an awarness of the potential impact of the oppurtunity cost issue on many of the LD segments. I will be very interested in the response to your inquiry. Jay "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply Junctionfan Member sinceFebruary 2004 From: St.Catharines, Ontario 3,770 posts Posted by Junctionfan on Saturday, October 16, 2004 11:41 AM That leads me to conclude that UP would run Amtrak on their lines like a Z train if Amtrak (feds) would pay them to be able to run them as a Z train. I don't know what UP is making off of Amtrak but it seems to be manifest class money at best. Andrew Reply jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Saturday, October 16, 2004 11:49 AM Mark, Thanks for the complement, but now I am going to have to work on keeping my ego in check. I know how to do that, I just get in a discussion of some controversial issue with one of my kids and humble comes back big time. Jay[:D][:D] "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply Junctionfan Member sinceFebruary 2004 From: St.Catharines, Ontario 3,770 posts Posted by Junctionfan on Saturday, October 16, 2004 12:04 PM I don't have to worry about checking if i'm humble or not; i'm sure L.C or somebody will be more than happy to put me in my place if I need it.[:I][B)] Andrew Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, October 16, 2004 12:30 PM QUOTE: Originally posted by M.W. Hemphill Jay: Your very polite summary of different accounting methods is appreciated. The Amtrak vs. freight issue is a textbook-perfect case of opportunity-cost accounting vs. incremental-cost accounting. See http://en.wikipedia.org/wiki/Opportunity_cost and substitute "Amtrak and freight" for "guns and butter" as the axes on the production possibilities frontier graph. Think about 1971 vs. 2004, and it becomes clear what has happened, and why. Then see http://www.pricingsociety.com/pdf-4-index/dangers-o-cost.pdf for why incremental cost accounting is a trap at any time, especially in a capital-intensive environment such as a railroad. If you accept that opportunity-cost accounting is the rational and proper approach -- which you hint you accept -- then the issue of Amtrak becomes the lost opportunity it represents by its denial of track capacity for freight service, not its volume-sensitive costs, which are almost impossible to discriminate anyway, as so much of railroad costs are shared and volume-insensitive costs. Because on most Amtrak routes, the fixed plant has limits of capacity that have now been reached at multiple points, a true accounting will show that the freight railroads are right back in the business of cross-subsidizing passenger service with freight service, deja vu 1971, and that the subsidy is significant and growing larger by the day. Amtrak isn't going to enjoy this subsidy for long, I think, because the congestion affects its volume-sensitive costs. I think it is already seeing its volume-sensitive costs climb to the point that to continue to live within its budget, it will have no choice but to begin withdrawing service from congested lines. (I now wonder if the Three Rivers and Florida discontinuances are all or in part for this reason.) I think I can verify that Amtrak is coming up against a cost wall on congested lines with just one phone call on Monday. I'll let you know what I learn. MWH Mark, Can you give a ballpark estimate of the number of Class I route miles (which host at least 1Amtrak train per day) that are running at capacity? Should Amtrak be forced to pay the opportunity costs on those lines, while keeping the access costs lower on the underutilized lines? While on the subject of opportunity costs, wouldn't you agree that the loss of extra capacity is the fault of the Class I's themselves via the over-mergers/abandonments & embargoes et al. To play DA for a second, why should Amtrak be forced to pay the difference in opportunity costs when the railroads themselves are responsible for the lost capacity? To be sure, the STB, in its rubber stamping of abandonments and over-mergers, should shoulder the blame for not taking into consideration the eventuality that line retrenchments would eventually lead to the taxpayers being forced to cough up funds for increased Amtrak operating costs and federal aid for Class I infrastructure improvements. Reply Edit jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Saturday, October 16, 2004 12:53 PM Dave Partial answer to first question can be found at http://www.amtrak.com/pdf/strategic05.pdf Go to page a-30 Jay "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Monday, October 18, 2004 9:32 PM QUOTE: Originally posted by BNSF railfan. So if Amtrak phucks up and is ordered to pay up,Then who PAYS for Amtrak's *** UP? Very difficult question. Offhand, I'd say Amtrak. LC Reply Edit Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Monday, October 18, 2004 9:40 PM QUOTE: Originally posted by M.W. Hemphill LC: The subsidy is the lost business opportunity. For simplicity's sake, suppose a line can handle 40 trains per day, each with a revenue of $50,000. Assume the Amtrak train (each way daily) carries no penalty for its speed differential and service guarantees, which is of course very untrue, but the penalty is difficult to calculate. Now the railroad can only realize the revenue from 38 trains per day because it must deduct for the two Amtraks. Its revenue on that line, which could have been $2M per day, is now $1.9M per day. Over a year, the lost revenue is $36.5M. Over 10 years, $365M. That's revenue that cannot be reinvested in track, locomotives, computers, signals, etc. Because the revenue can't be spent, the railroad is that much less productive. The return to investors is diminished because of the productivity deficit. It would be difficult to calculate, but it would be interesting to see how much ROI is diminished each year because of the presence of Amtrak. Of course, Amtrak pays something to use the line, but you can now see that the revenue deficit Amtrak must climb out of to be value-neutral to the freight railroad is quite large. In reality, Amtrak isn't paying anywere near that. The subsidy is that the passenger train is not paying its true costs of occupancy, which is the opportunity cost, not the wear and tear on the track. Every time the Amtrak train runs, the opportunity to handle freight in that time slot is lost forever. Now, some will argue that the opportunity cannot be realized because the freight railroad is incompetent to realize its opportunity, or that rates will rise to account for the scarcity of capacity. The first is a logical fallacy, and to it I respond, "If you really are so cynical as to believe that, then by your own premise the problem can never be solved, so you must be here solely for the ulterior and dishonest motive of personal self-aggrandizement." To the second argument, I respond that most freight has alternatives of modes or points of production, or both, and that the ability of a railroad to use rates to extract value has limits. You'll recall that passenger-train advocates beginning in the 1950s, when train-off applications began, argued that passenger trains should only pay their incremental costs, whereas railroads wanted them to carry their fully allocated costs. While the incremental-cost argument might be sufficient for a already existing trainset on a less-than-fully utilized route with good track material, it was never sufficient to capture the capital cost of the equipment, nor the capital cost of the renewal of track material. Thus the incremental-cost advocates were already acknowledging that the passenger train should be subsidized by the freight shippers just to stretch its existence out a few more years, though they rarely came out and admitted that bluntly. They were only considering short-run variable costs rather than long-run variable costs, and in effect, arguing that the railroads should bankrupt themselves. Is it any wonder that the railroad and railfan communities began to split into separate and hostile camps at this point in time? Mark- Well put. I understand now. I think I was on the right road, but a few of the terms threw me a bit. One of these days I need to find time for an MBA...lol... Oh and I see your point on Railfans v. Railroads alright. You learn that split pretty shortly after hiring out. LC Reply Edit Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Monday, October 18, 2004 9:41 PM QUOTE: Originally posted by Junctionfan I don't have to worry about checking if i'm humble or not; i'm sure L.C or somebody will be more than happy to put me in my place if I need it.[:I][B)] Andrew- I'm actually trying to encourage you. At 25 you are certainly old enough to hire out... LC Reply Edit Junctionfan Member sinceFebruary 2004 From: St.Catharines, Ontario 3,770 posts Posted by Junctionfan on Monday, October 18, 2004 9:55 PM Which morons in Congress agreed to allow the railroads to get their way on the issue of payment of punitive damages? As far as i'm concerned, Congress has allowed the railroad to get away with murder and does not hold them responsible and does not encourage them to do better. I could have sworn that the voters voted for Clinton or Dole in one election and than in another it was GW Bush or Gore. I don't recall either Michael Ward or *** Davidson entering the race never mind winning. As far as i'm concerned, the voters interest should be put a head of corporations especially when the class 1s screw ups come out of your pocket. Why should the American people pay for a bunch of greedy s.o.bs mistakes if not wanten mistakes? You folk deserve better than that don't you? You are already paying for amtrak's upkeep of equipment, track leasing etc. Can you imagine how better Amtrak would run if they didn't have to dip into their bottomline to pay unfair punitive damages plus repair any equipment involved in the wreck? I can't imagine that kind of nonsense in Canada; I don't think that would or should stand in any country. Honestly if I was president, I would fine them, tax them and change the punitive damage rubbish around. It doesn't make sense from a business stand point to spend 100 million for the track plus spend about 50 or 60 million to give the railroad for unlawful type of Retard Greedy Screwup Liability insurance-punitive damages. Than you spend money to fix up those cars or engines that get banged up in any accident. I am starting to wonder if it is cheaper to build new track or go through the class 1's moron cheapskate service. Andrew Reply jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Monday, October 18, 2004 11:00 PM Andrew You might as well lighten up on this. Here is a news flash. It is rare that the person or entity that causes a personal injury actually pays the injured party with personal funds. A kid blowing down the highway at twice the speed limit turns to swap some spit with his girl friend, blows a stop sign and smashes into your car leaving you in a wheel chair for the rest of your life. You sue and get an award that is big enough to cover all of your needs for the rest of your life plus several million more in punitive (punishment) damages. The money is going to be paid by the kids insurance company. No matter how hard you tried, you probably could not get an order that the kid pay you money out of his own pocket as punishment for his deed. That is called transfer of risk. It is a fact of our world and it is not going to change. If Amtrak had not agreed to take the risk for personal injuries of its passengers, their rent payments to the host railroads would increase by an amount about equal to the amount they pay out for personal injuries. So why would the railroads demand this indemnification? Think about it. If a freight train is in a wreck, the chance of personal injury is very low. If a passenger train is in a wreck, the chances for personal injury could be a hundred times greater. So the railroads said, "If you want us to run your trains, either pay us in rent an amount to cover possible personal injury claims or agree to pay the claims yourself. That is just the way it works. "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply Junctionfan Member sinceFebruary 2004 From: St.Catharines, Ontario 3,770 posts Posted by Junctionfan on Tuesday, October 19, 2004 6:31 AM QUOTE: Originally posted by jeaton Andrew You might as well lighten up on this. Here is a news flash. It is rare that the person or entity that causes a personal injury actually pays the injured party with personal funds. A kid blowing down the highway at twice the speed limit turns to swap some spit with his girl friend, blows a stop sign and smashes into your car leaving you in a wheel chair for the rest of your life. You sue and get an award that is big enough to cover all of your needs for the rest of your life plus several million more in punitive (punishment) damages. The money is going to be paid by the kids insurance company. No matter how hard you tried, you probably could not get an order that the kid pay you money out of his own pocket as punishment for his deed. That is called transfer of risk. It is a fact of our world and it is not going to change. If Amtrak had not agreed to take the risk for personal injuries of its passengers, their rent payments to the host railroads would increase by an amount about equal to the amount they pay out for personal injuries. So why would the railroads demand this indemnification? Think about it. If a freight train is in a wreck, the chance of personal injury is very low. If a passenger train is in a wreck, the chances for personal injury could be a hundred times greater. So the railroads said, "If you want us to run your trains, either pay us in rent an amount to cover possible personal injury claims or agree to pay the claims yourself. That is just the way it works. Two problems I have with that. First is that Amtrak shouldn't be the Allstate of the class 1s-if they want liability insurance, get their own. Second is it's bad PR to make Amtrak look liable all the time, it likely is a contributing factor when it comes to funding. If the taxpayer has to pay the extra money anyways, wouldn't it be better to make the class 1's get into trouble and force themselves to improve/ fix mistakes than allow your taxes to essentially award the railroads a "licence to kill"? Andrew Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Tuesday, October 19, 2004 8:28 AM QUOTE: Originally posted by jeaton Andrew You might as well lighten up on this. Here is a news flash. It is rare that the person or entity that causes a personal injury actually pays the injured party with personal funds. A kid blowing down the highway at twice the speed limit turns to swap some spit with his girl friend, blows a stop sign and smashes into your car leaving you in a wheel chair for the rest of your life. You sue and get an award that is big enough to cover all of your needs for the rest of your life plus several million more in punitive (punishment) damages. The money is going to be paid by the kids insurance company. No matter how hard you tried, you probably could not get an order that the kid pay you money out of his own pocket as punishment for his deed. That is called transfer of risk. It is a fact of our world and it is not going to change. If Amtrak had not agreed to take the risk for personal injuries of its passengers, their rent payments to the host railroads would increase by an amount about equal to the amount they pay out for personal injuries. So why would the railroads demand this indemnification? Think about it. If a freight train is in a wreck, the chance of personal injury is very low. If a passenger train is in a wreck, the chances for personal injury could be a hundred times greater. So the railroads said, "If you want us to run your trains, either pay us in rent an amount to cover possible personal injury claims or agree to pay the claims yourself. That is just the way it works. Whoops. Hold on a second. Insurance companies are prohibited by law in all states from paying punitive or exemplary damages. Insurance does not cover the intentional act of the insured. Negligence however is covered and to the extent damages are awarded for negligent conduct damage awards of compensatory damages including loss of future earnings, pain and suffering and loss of consortium are recoverable and that can easily be in the Millions, especially in a quadraplegia case. LC Reply Edit jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Tuesday, October 19, 2004 9:26 AM LC OK, I'll stand corrected. "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Tuesday, October 19, 2004 9:40 AM QUOTE: Originally posted by jeaton LC OK, I'll stand corrected. J- Thanks. This rule can be really harsh. Years ago, in a case before the California Supreme Court (I wore the black hat) I represented an insurance company that was seeking refusing to cover a case of child sexual molestation by a well known business man of a very young girl. The girl and her mother sought damages for the molestation and sued the molester. The insurance company refused to cover him based upon the theory that sexual molestation was always intentional. As discussed above, intentional acts by an insured can never be covered by insurance. Suffice it to say that despite several appeals by the plaintiff, the courts sustained the insurance company's position. Sometimes the law doesn't work justice, it is merely a choice. So it is also with things like railroad indemnification. A choice was made at the formation of Amtrak to run the indemnification in a certain way as a quid pro quo for Amtrak gaining access to the freight railroads trackage. LC Reply Edit jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Tuesday, October 19, 2004 10:18 AM LC Thanks for the clarification. Just in case you wonder, I might spout something about the way that I understand the law on a forum, but with my tax clients I hve to watch that I don't cross the line between explaining regulations and giving legal advice. I think I understand why personal injury victims want to punish wrong doers. I wonder if many understand that money paid as a punishment may not come from the person or people who actually may be at fault. For the victim quoted in the Times article, even if CSX had been the source of the payment, as an artificial person, CSX would feel no pain. On your last paragraph, that setup makes some sense. As I have noted before, for Amtrak's host railroads the risk of personal injury is much greater than it would be for a freight only operation. Jay "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply jeaton Member sinceSeptember 2002 From: Rockton, IL 4,821 posts Posted by jeaton on Tuesday, October 19, 2004 10:25 AM Mark Hope you get OK's to repeat comments you have received on the this subject. I'm always interested in the inside scoop on historical decisions. Jay "We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics Reply Junctionfan Member sinceFebruary 2004 From: St.Catharines, Ontario 3,770 posts Posted by Junctionfan on Tuesday, October 19, 2004 10:27 AM What I can't figure out is what reasoning would Congress have for making their public corporation look bad. In Canada if the government does something like that, the government tends to have to correct that before the election or a new government is formed. If they can't get them in civil court, perhaps they should give the criminal courts a crack at them. Next time a freight train derails, nail them to the wall with one hell of a fine and see if some executives can't do some time. Maybe the government should tax the railroads who cause amtrak to derail. The railroads can't win against the government really. If the government had to, they could force the railroad to accept compensation for running on their lines (you know what I mean). It should be the fault of whoever caused the accident. If a train hits the a car and causes a derailment, the following should take place. If it was the fault of the car because he drove around the crossing, the driver of the car is responsible; if Amtrak train failed to do something to avoid the accident like not slowing down(possible speed restrictions) or failed to sound the horn, than Amtrak should pay. If the railroad has a faulty crossing and failed to activate when the train entered the block, than the railroad should pay. I believe in logical compensation of whom ever is injured and is at fault. The only time I would say that fault could not be established is say during a natural disaster, unknown vandalism, accident related to interaction with large wild animal and stuff like that. Than maybe the government should hand out berievment packages or something like that. Of course wouldn't it be redundant if the victims family can claim on life insurance? I don't particularly like the insurance companies much and don't understand their reasoning behind their policies but wouldn't any claim do to accident resulting in injury or death be covered? Andrew Reply dharmon Member sinceAugust 2003 From: Bottom Left Corner, USA 3,420 posts Posted by dharmon on Tuesday, October 19, 2004 10:36 AM Mark, Jay, LC... [tup] Reply 12 Join our Community! Our community is FREE to join. To participate you must either login or register for an account. Login » Register » 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 More great sites from Kalmbach Media Terms Of Use | Privacy Policy | Copyright Policy
QUOTE: Originally posted by jeaton MP57313- With the item you quoted, I was refering to a situation where Amtrak may or may not have caused a delay to freight trains.
"We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics
QUOTE: Originally posted by M.W. Hemphill Jay: Your very polite summary of different accounting methods is appreciated. The Amtrak vs. freight issue is a textbook-perfect case of opportunity-cost accounting vs. incremental-cost accounting. See http://en.wikipedia.org/wiki/Opportunity_cost and substitute "Amtrak and freight" for "guns and butter" as the axes on the production possibilities frontier graph. Think about 1971 vs. 2004, and it becomes clear what has happened, and why. Then see http://www.pricingsociety.com/pdf-4-index/dangers-o-cost.pdf for why incremental cost accounting is a trap at any time, especially in a capital-intensive environment such as a railroad. If you accept that opportunity-cost accounting is the rational and proper approach -- which you hint you accept -- then the issue of Amtrak becomes the lost opportunity it represents by its denial of track capacity for freight service, not its volume-sensitive costs, which are almost impossible to discriminate anyway, as so much of railroad costs are shared and volume-insensitive costs. Because on most Amtrak routes, the fixed plant has limits of capacity that have now been reached at multiple points, a true accounting will show that the freight railroads are right back in the business of cross-subsidizing passenger service with freight service, deja vu 1971, and that the subsidy is significant and growing larger by the day. Amtrak isn't going to enjoy this subsidy for long, I think, because the congestion affects its volume-sensitive costs. I think it is already seeing its volume-sensitive costs climb to the point that to continue to live within its budget, it will have no choice but to begin withdrawing service from congested lines. (I now wonder if the Three Rivers and Florida discontinuances are all or in part for this reason.) I think I can verify that Amtrak is coming up against a cost wall on congested lines with just one phone call on Monday. I'll let you know what I learn. MWH
QUOTE: Originally posted by BNSF railfan. So if Amtrak phucks up and is ordered to pay up,Then who PAYS for Amtrak's *** UP?
QUOTE: Originally posted by M.W. Hemphill LC: The subsidy is the lost business opportunity. For simplicity's sake, suppose a line can handle 40 trains per day, each with a revenue of $50,000. Assume the Amtrak train (each way daily) carries no penalty for its speed differential and service guarantees, which is of course very untrue, but the penalty is difficult to calculate. Now the railroad can only realize the revenue from 38 trains per day because it must deduct for the two Amtraks. Its revenue on that line, which could have been $2M per day, is now $1.9M per day. Over a year, the lost revenue is $36.5M. Over 10 years, $365M. That's revenue that cannot be reinvested in track, locomotives, computers, signals, etc. Because the revenue can't be spent, the railroad is that much less productive. The return to investors is diminished because of the productivity deficit. It would be difficult to calculate, but it would be interesting to see how much ROI is diminished each year because of the presence of Amtrak. Of course, Amtrak pays something to use the line, but you can now see that the revenue deficit Amtrak must climb out of to be value-neutral to the freight railroad is quite large. In reality, Amtrak isn't paying anywere near that. The subsidy is that the passenger train is not paying its true costs of occupancy, which is the opportunity cost, not the wear and tear on the track. Every time the Amtrak train runs, the opportunity to handle freight in that time slot is lost forever. Now, some will argue that the opportunity cannot be realized because the freight railroad is incompetent to realize its opportunity, or that rates will rise to account for the scarcity of capacity. The first is a logical fallacy, and to it I respond, "If you really are so cynical as to believe that, then by your own premise the problem can never be solved, so you must be here solely for the ulterior and dishonest motive of personal self-aggrandizement." To the second argument, I respond that most freight has alternatives of modes or points of production, or both, and that the ability of a railroad to use rates to extract value has limits. You'll recall that passenger-train advocates beginning in the 1950s, when train-off applications began, argued that passenger trains should only pay their incremental costs, whereas railroads wanted them to carry their fully allocated costs. While the incremental-cost argument might be sufficient for a already existing trainset on a less-than-fully utilized route with good track material, it was never sufficient to capture the capital cost of the equipment, nor the capital cost of the renewal of track material. Thus the incremental-cost advocates were already acknowledging that the passenger train should be subsidized by the freight shippers just to stretch its existence out a few more years, though they rarely came out and admitted that bluntly. They were only considering short-run variable costs rather than long-run variable costs, and in effect, arguing that the railroads should bankrupt themselves. Is it any wonder that the railroad and railfan communities began to split into separate and hostile camps at this point in time?
QUOTE: Originally posted by Junctionfan I don't have to worry about checking if i'm humble or not; i'm sure L.C or somebody will be more than happy to put me in my place if I need it.[:I][B)]
QUOTE: Originally posted by jeaton Andrew You might as well lighten up on this. Here is a news flash. It is rare that the person or entity that causes a personal injury actually pays the injured party with personal funds. A kid blowing down the highway at twice the speed limit turns to swap some spit with his girl friend, blows a stop sign and smashes into your car leaving you in a wheel chair for the rest of your life. You sue and get an award that is big enough to cover all of your needs for the rest of your life plus several million more in punitive (punishment) damages. The money is going to be paid by the kids insurance company. No matter how hard you tried, you probably could not get an order that the kid pay you money out of his own pocket as punishment for his deed. That is called transfer of risk. It is a fact of our world and it is not going to change. If Amtrak had not agreed to take the risk for personal injuries of its passengers, their rent payments to the host railroads would increase by an amount about equal to the amount they pay out for personal injuries. So why would the railroads demand this indemnification? Think about it. If a freight train is in a wreck, the chance of personal injury is very low. If a passenger train is in a wreck, the chances for personal injury could be a hundred times greater. So the railroads said, "If you want us to run your trains, either pay us in rent an amount to cover possible personal injury claims or agree to pay the claims yourself. That is just the way it works.
QUOTE: Originally posted by jeaton LC OK, I'll stand corrected.
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