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Amtrak's FY 2008 Key Performance Numbers

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[quote user="blue streak 1"] Sam: So if I understand there is no place in AMTRAK's reports that give above the rail costs [/quote] It depends on what you mean by "above the rail costs".  Amtrak shows Direct Labor and Other Direct Costs to determine Total Avoidable Costs.  This would be the closest number to above the rail costs.  Total Shared Costs are added to Total Avoidable Costs to get Total Attributed Costs, which subtracted from Total Revenue gives the contribution or loss for each train or train route.  This number is before the application of interest, depreciation, and unallocated system costs.  Direct Labor includes wages, benefits, and supports costs.  These are clearly operating or above the rail costs. Other Direct Costs include hoist railroad Maintenance of Way, performance incentives, fuel and power, car and locomotive maintenance, turn around, commissions, reservations, call centers, passenger inconvenience, and route station.  Most cost accountants would classify these as operating or above the rail costs, although you could get an argument whether commissions, reservations, call centers and route stations are operating costs.  However, the classification is approved by the company's external auditors, which carries significant weight. Share costs include shared stations, supervision and training, yard operations, marketing and distribution, insurance, terminal payments, procurement, police, environment, safety, T&E overheads, NTS Infrastructure, and system.  Are these operating costs?  Yes, although again some accountants might differ with this conclusion.   It appears that Amtrak has a good cost accounting system.  Equally important, they provide enough information for the public to determine whether its trains are covering their costs. What is not clear is how the interest and depreciation is allocated.  I assign most of it (80 to 90 per cent) to the NEC, since most of it is owned by Amtrak, and it has invested heavily in it.  Nevertheless, some interest and depreciation must be assigned to other operations since the equipment is still being depreciation and, as far as I can tell, it still carries some of the debt service (interest) associated with the purchase of the equipment.    It is crystal clear that Amtrak does not cover its costs and requires a significant contribution from federal and state governments.  This is not good from a business person's perspective.  On the other hand, for those who argue that trains provide a valuable social service that should be supported irrespective of the large per passenger mile subsidies required by Amtrak, they can bolster their case by pointing out that Amtrak's deficit as a per cent of the federal deficit is so small as to be unworthy of mention. In the long run all costs are variable and should be attributed to the activity that drives them.  In Amtrak's case the activity is running passenger trains.  If it was a market driven business, it would be required to recover all of its costs, as well turn a profit for the shareholders if it hoped to stay in business.
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