Amtrak Monthly Reports

[oltmannd]

....contain some very interesting sections.

Check this out

http://www.amtrak.com/pdf/0410monthly.pdf page 79

Of the $746M in operating subsidy, the LD trains received $601 of it.

The LD trains generate 28% of the revenue and cosume 46% of the cost.

Gotta look into what's in and what's out of the "FRA defined cost", though, but is sure looks like the LD trains needs some improvement on the cost and revenue side of things.

[daveklepper]

But of course capitol projects for the Northeast Corridor are not shown as operating expenses for short-distance trains, and there is a good question as to which of these capital projects could be called maintenace. So the picture is not at all clear. Other short distance trains are State-Suported and thus some of the subsidy is hidden in the Amtrak report.

[Paul Milenkovic]

Don Oltmann:

No, I am not going to download that Amtrak Monthly Report just to look at p. 79. I am one of those cheapskates with only a phone modem, and last time I looked at an Amtrak Monthly Report, it took me the better part of the evening to download it!

I am probably going to want to take the time to download those things one of these days and try to figure out what is in them.

I am wondering if Andrew Selden (see http://www.unitedrail.org/pubs/nrhs/index.html) is on to something that we might have it all backwards -- maybe the LD trains are the success story and the NEC is the big money pit and we have been thinking of passenger trains the wrong way all of this time. Check out the link because he has a lot of interesting stuff to say that I don't have space to repeat here.

The conventional wisdom is that the "corridors" is where trip lengths are short enough that a high-speed train, or even a medium-speed train when you factor in the airport trip and clearing airport security, may be able to compete with air on an equal footing. The LD trains are dinosaurs because air gets from Chicago to Seattle 10 times faster than the Empire Builder. One of the potential Amtrak "reforms" is getting rid of the LD trains and concentrating on the NEC for the potential of airport and highway congestion relief.

I have been thinking about trains and why one would ride a train. There are two reasons I would get on the Empire Builder. One is that I am on vacation, and I want to get a sleeping car room, sit in the sight-seer lounge car, eat in the dining car, and see the great expanse of the West without having to do so much driving. If I need to go to Seattle for the day on business, the train is completely out of the question. The other reason is that I live in one of the towns on the route and there isn't any bus or airline service.

Suppose I am in New York and need to get to Boston. I suppose I could fly if someone was paying for it. But the NEC travel times are not that much better than driving -- I may as well just take my chances on traffic jams and just drive. I am a railfan, and I guess I want to take the train just to experience the equipment and look out the window and see other trains. But for most people, there is no particular reason for the train apart from getting from NY to Boston, and there are competing modes. I don't think of taking a NEC train to have a "travel experience."

Andrew Selden is arguing that Amtrak is "cooking the books" to pass of NEC costs on the whole rest of the network. Now even after you rationalize the accounting, the LD trains require subsidy, but he is arguing that if you took all of the money you put into the NEC into LD, you could expand service to the point of profit.

He also argues (if not in that essay, elsewhere on that Web site), that the NEC is fundamentally a NY-Philly commuter route for Amtrak and that the whole rest of the NEC is pretty thinly travelled or that the commuter operations aren't shouldering their share of the expenses.

Selden has another point that Amtrak's self-generated metric is ridership, which inflates the corridors, but if you look at traditional transportation industry metrics of ticket revenue, passenger miles, and load factors, the LD trains hold their own.

The other point I just thought of is that the LD trains may be seasonal operations -- February may not be their peak time. Selden thinks the LD trains and the NEC are pretty much a 50/50 split in passenger miles and revenues with the LD trains near break-even and the NEC a real money pit owing to the costs of owning the tracks and fiascos like the Acela trainsets.

I got to find some spare time to download a series of those Amtrak Monthly reports and try to figure out what is going on.

[oltmannd]

Paul-

You are right. The devil is in the detail of how you count and allocate costs. I definitely need more time to dig deeper into these reports. There is more detail in these report sthan you'll get from any 10 other corporations added up. Kudos for Amtrak for being as transparent as possible. I think this is Gunn's doing.

If you take the time to download one, do the October one (the one I posted a link to). Each of these has year to date numbers and the October one has a full year in the YTD pages.

Don't knock the NEC as a travel experience. The Conn shoreline is great as are the bridges over the Chesapeake. The ride over Hell Gate is pretty good, too, as is the trip approach to 30th St Phila on the north side. And the rest might not be as bad as you think. Even the NJ portion is a lot more scenic than the Turnpike.

I will definitely check the "Selden link".

BTW - A cable modem is a wonderful thing! I could never go back to dial up.

[jeaton]

It takes a little poking around and number crunching to develope the conclusions from the Amtrak monthly report, but it is pretty thorough in stating where the money comes from and where it goes to.

The problem with any cost accounting system is dealing with the cost of shared facilities. For example, how would you divy up the cost of the Beech Grove, Ind car shop operation among the trains with cars moving through that shop. The best that can be done on that account is to say here are the numbers and this is the rational for the allocations. The rational can be argued, but that is something akin to arguing about the number of angel that can stand on the head of a pin.

A very substantial proportion of railroad cost are shared or indirect (take your pick). In the very short run marginal cost can be next to nothing. What is the cost of adding one more car to the train? How much is saved when one car is removed? It takes a great deal of study and evaluation to take actions like train-offs. For example, Amtrak's New Orleans operation provides various kinds of services for the Cresent, City of New Orleans and the Sunset Limited. Remove Senator John McCain's poster train for a looser, the Sunset Limited. Do you get to cut the costs at New Orleans by one-third?

Political or emotional thoughts aside, it can be very difficult to get the desired results-greater overall profits-by making decisions solely based on "fully allocated" costs.

I haven't read the link yet but Andrew Seldon appears to be saying what Gunn has said all along. While the corridor trains show an operating profit, it takes big capitol bucks to generate that profit. By comparison, the capitol cost for the LD trains are modest. The bottom line may be that the ratio of the "cost of everything" to revenue for a train in any category may be about the same.

Jay

[daveklepper]

I think the last conclusion makes a lot of sense.