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Why is LD travel declining

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Posted by BaltACD on Saturday, October 13, 2018 10:36 AM

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BaltACD
 
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PS CMStPnP--one business traveler willing to pay out of pocket to take the train is an anomaly, not a trend.  Besides, the chances of Amtrak instituting a Dallas-Kansas City train are infintesimal, so your point is moot. 

Business travelers are on expense account - they don't pay out of their own pocket.  There are corridors where trains are faster and more convient than most any other form of transportation. 

Expense accounts aren't what they used to be.  You have to take the cheapest/most convenient option.  Maybe you should read what I was replying to where he stated that he would have to pay for any fare amount above what airfare would cost.

Been there done that - Company figured it was cheaper for company officials to spend TWO complete days driving to and from a location (and all the lost productivity from two complete days on the highway) because it was cheaper than other means of transport.  Pennywise and dollar foolish.

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Posted by Gramp on Saturday, October 13, 2018 4:11 PM

CMStPnP

    Seeing it happen in Wisconsin with Milwaukee to Chicago Amtrak service.   More and more folks are either taking Uber to the station and riding the train in or parking their cars at the station.    It will be interesting to see what happens when the frequency of trains jumps to 10 each way from the current 7 and then through in a new "West Milwaukee"  Amtrak station along with a second Twin Cities train.   Now part of  it is the massive increase in residential apartments in and around the Milwaukee Amtrak station which is increasing population density but not all of the ridership increase is attributable to that.

 

Yes, when heading to Chicago proper from the North, taking the Hiawatha from Milwaukee is the smarter choice.  And I think a good next step would be to have a "west" originating station adjacent to Hwy 16 at Pewaukee.  It's too bad the federal 880 million couldn't have gone to build a flyover north of CUS instead of the failed Madison nonsense.  Would have helped both Amtrak and Metra.  But I guess that was really intended as political payback rather than doing something constructive.

And I hear there's more residential building to come in close-in Milwaukee.

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Posted by Gramp on Saturday, October 13, 2018 4:31 PM

I went to a business conference in suburban Dallas via Hiawatha/Texas Eagle from Milwaukee five years ago.  Used TRE and jitney from Dallas Union to Grapevine and back.  Trains were on-time; good trip.  Was able to do some work without interruption while on the train.  Would go with sleeper if I were to do it again, though.  I've got a conference in Austin next October, but based on current Amtrak conditions, I'll take Southwest Air.

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Posted by petitnj on Saturday, October 13, 2018 4:40 PM

Lots of corporate speak in the report. The report seems to think that safety and security is a concern of the riders. That may be true, but one of the big reasons of long distance train ridership drop is the shrinking rural population. The little towns along the long routes are emptying out. Once the population moves to the big city,  access to air travel is far easier. Drive to the towns in Iowa, Missouri, Wisconsin, etc and see that most of the towns are abandoned. This means that the folks who used to ride the Empire Builder from Montana don't live there any more. 

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Posted by CMStPnP on Saturday, October 13, 2018 8:10 PM

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Expense accounts aren't what they used to be.  You have to take the cheapest/most convenient option.  Maybe you should read what I was replying to where he stated that he would have to pay for any fare amount above what airfare would cost.

That was for the sleeper option.   Overnight, long distance coach on some routes it would work.    Would never do that due to the sleep deprivation.    Oh and the extension of the Heartland Flyer to Newton and/or Kansas City is still being discussed by Amtrak management and the state parties that are interested (KS-TX-OK-MO)........not off the table officially yet.

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Posted by CMStPnP on Saturday, October 13, 2018 8:15 PM

Gramp
It's too bad the federal 880 million couldn't have gone to build a flyover north of CUS instead of the failed Madison nonsense.  Would have helped both Amtrak and Metra. 

Thank Ray LaHood for that (Republican that Obama put in charge of HSR program).    He was so paranoid of diversion of the money into non-rail areas he had so many restrictions written around the money it's use was pretty inflexible.  Also, if you payed attention in Milwaukee the first mention of the money, Milwaukee based aldermen and alderwoman proposed diverting large chunks of the money to highway spending or social programs, until some pointed out to them of the anti-diversion provisions written into the loan guarantees (the money would only become a grant after the system was up and running).

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Posted by PJS1 on Wednesday, October 17, 2018 8:58 AM

petitnj

.......but one of the big reasons of long distance train ridership drop is the shrinking rural population. The little towns along the long routes are emptying out. Once the population moves to the big city,  access to air travel is far easier. Drive to the towns in Iowa, Missouri, Wisconsin, etc and see that most of the towns are abandoned. This means that the folks who used to ride the Empire Builder from Montana don't live there any more. 

You are correct.  The population of my hometown, which is a small city in central Pennsylvania, has declined from more than 60,000 in the 1950s to approximately 44,000 today.  Some of the folks moved to the county, but most of them moved to the big city.  After graduation from college, I moved to New York City.  

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Posted by PJS1 on Wednesday, October 17, 2018 9:07 AM

Gramp
 I've got a conference in Austin next October, but based on current Amtrak conditions, I'll take Southwest Air. 

Good idea.  Over the past five days the Texas Eagle has been on average 2 hours, 48 minutes late into Austin.  

Word spreads rapidly.  The prospect of a consistently late running train, especially when it means arriving in San Antonio at or after midnight, which has often been the case recently, does not appeal to many people.  So, some of us that might have used the train to travel from DFW to Austin or San Antonio are driving, flying, or taking the bus.  

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Posted by BaltACD on Wednesday, October 24, 2018 10:43 AM

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Posted by blue streak 1 on Friday, October 26, 2018 12:00 PM

Our group has several theorys 

1.  Amtrak may be pushing for longer distance passengers over 2 shorter distance passengers over same travel pairs ?

2.  The Amfleet-1s have much less mileage than -2s even though they are much older than the -2s.  Now Amtrak is hinting that they are going to replace the -1s first ?

3.  Superliners are also high mileage units.

4.  Amtrak may feel that they cannot get enough funds to replace the AM-2s and Superliners. Then Amtrak can replace the -1s as well and get enough cars for the short distance and NEC trains instead of the LD train cars needed now.

5.  Amtrak perceives that operating costs are less and revenue per car mile is greater on the NEC and short distance trains.  Maybe Amtrak is thinking why not concentrate on getting rid of long distance trains ?  That way Amtrak does not have to worry about buying LD car replacements ?

6.  Amtrak may expect that the 39 train limit thru CT will be raised and will need more NEC cars for additional trains ?

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Posted by PJS1 on Friday, October 26, 2018 1:17 PM

blue streak 1

5.  Amtrak perceives that operating costs are less and revenue per car mile is greater on the NEC and short distance trains.  Maybe Amtrak is thinking why not concentrate on getting rid of long distance trains ?  That way Amtrak does not have to worry about buying LD car replacements ? 

In 2017 the average total revenue per passenger mile was 64 cents for the NEC vs. 40 cents for the state supported trains and 20 cents for the long-distance trains.  The average ticket revenue per passenger mile was 62 cents for the NEC vs. averages of 26 cents for the state supported trains and 19 cents for the long-distance trains.
 
During 2017 the NEC had an average operating profit of 24 cents per passenger mile vs. average losses of 5 cents for the state supported trains and 19 cents for the long-distance trains on the basis of total revenues.  On the basis of ticket revenues, the NEC had an average operating profit of 22 cents per passenger mile vs. average losses of 19 cents for the state supported trains and 20 cents for the long-distance trains.
 
The figures for the state supported trains are misleading because Amtrak counts the state subsidies as revenue. 
 
Assuming that the NEC wears 70 percent of Amtrak’s depreciation, which is a guess, the average fully allocated loss per passenger mile based on total revenues would have been an average of 4 cents for the NEC vs. averages of 25 cents for the state supported and long-distance trains.  Change the depreciation percent to 85 percent for the NEC, and the average fully allocated loss per passenger mile would have been 10 cents for the NEC vs. an average of 22 cents for the state supported and long-distance trains.
 
Based on Amtrak’s numbers, the NEC is within shouting distance of being able to breakeven on a fully allocated cost basis.  I suspect Anderson knows this and is acting accordingly.

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Posted by runnerdude48 on Friday, October 26, 2018 2:45 PM

PJS1
Based on Amtrak’s numbers, the NEC is within shouting distance of being able to breakeven on a fully allocated cost basis. 

I usually really enjoy all of your posts because they come with a good dose of realism and numbers to back-up your statements.  On this one I have some questions though.  Why is including revenue from the states misleading?  Revenue is revenue and as long as it is stated as such I don't have a problem including it.  Also, isn't there more to full allocation than just depreciation?  It should also include corporate overhead and other costs that are not specifically allocated to a particular line or train.  And depreciation, while a financial statement item, is a non-cash expense so it doesn't really affect operating costs does it?  You had me until then.  But, I totally agree with your thesis and thank you for getting the numbers.

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Posted by PJS1 on Friday, October 26, 2018 5:35 PM

runnerdude48
 Why is including revenue from the states misleading?  Also, isn't there more to full allocation than just depreciation?  

Including state support payments in revenues understates the amount of subsidy for the state supported trains.  The state support payments come from state as opposed to federal taxpayers, but they still come from the taxpayers. Including them in revenues is not dodgy accounting, but unless one knows what to look for, it is not terribly transparent.     

I should have said depreciation, OPEBs, Office of Inspector General, etc.  Of these items, which netted to $797 million in 2017, $790 million was depreciation expense.  I was trying to keep it simple. Most importantly, I don't know how much of these items should be assigned to the different product lines.  That is why I gave two scenarios, i.e. 70 percent and 85 percent to the NEC.  Amtrak does not show how these items are allocated.  It is not required to do so in its financial statements. 

The key figures that can be traced to Amtrak’s Monthly Operating Report are the operating outcomes.  I understand that they include the overheads, i.e. IT, marketing, accounting, finance, etc.  No matter how you slice and dice the numbers, they show clearly that NEC is Amtrak’s only viable financial operating horse.  

For FY17 the operating expenses for the routes add up to $3.4 billion, which agrees with the number in the FY17 Corporate Statement of Operations.  It comes from Amtrak’s Financials.  Expenses included in the Statement of Operations includes facility, communications, office, advertising, sales, casualty and other claims, professional fees, data processing, and transfers.  So, this tells me that these overheads were allocated to the routes in FY17.

Depreciation, OPEBs, etc. are non-cash items.  You are correct, they are not included in the operating results.  But including them in operating income or loss on a what-if basis shows that the NEC, even if depreciation is included, would incur a hypothetical loss that is considerably less per passenger mile than the losses realized by the state supported and long-distance trains. 

Including depreciation and other non-cash items in the financials is important because it shows the ability of current revenues to recapture prior period capital expenditures and/or monies to fund future capital expenditures.   

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Posted by Amtrak207 on Monday, October 29, 2018 11:32 PM

Amtrak is losing LD riders, not loosing them.  

Notice also what has been happening to the CSI numbers.  I think those are even more telling than the overall ridership. 

Management quits the senior and college discounts, CSI takes a hit.  

Management appears to prefer to shut down the entire NEC at the drop of a hat, CSI goes down.  (If this is truly and entirely in the name of safety, I support it, but the system should be more resilient than that.  Amtrak’s primary duty is to provide mobility, not make a profit.)

Management reforms the refund and exchange policy, CSI nosedives.

Management abruptly removes the PP cars, CSI goes into free fall.   

Management sacks cooking staff and replaces something that at least partially resembled real food with lethal nutritional supplements from hell (read the labels!), CSI tanks. 

Yes, two high-profile and fatal derailments had a detrimental effect as well, but after Frankfort and Chester the numbers rebounded. 

As a passenger, these changes, especially removal of discounts and futzing with the refund policy, while it may have been necessary, make it seem like management does not value the business of seniors.  That’s not cool.  That doesn’t work in rail.  Penn Central much?  

I don’t want to cast dispersions on people of my parents’ generation, in fact the opposite is true.  When I ride a long distance train, I look around.  I walk the train.  I have dinner.  I’m 38, and I am easily twenty years younger than their median-age passenger.  I want to meet people in the diner, not retreat to my isolated room and stuff my face alone while hunched over a cell phone.  International travelers certainly don’t want to do that, either.  This management team either is clueless (I doubt this), or they are trying to force passengers to conform to their preconceived notions, which are only partially grounded in facts.  Putting profits over passengers will make the passengers feel left out   

I have said this on their Face-Book feed also.  Long distance trains are more than sitting down, shitting up and hanging on for three hours to get you where you want to go.  Trains include the experience of traveling.  Many passengers chose the train because they want this experience. 

And now that management has taken steps which erode the experience, the passengers are voting with their feet.  I believe that deemphasizing the experience makes people no longer want to put up with the multiple hours of Precision Scheduled Delays or old equipment issues or traveling with demoralized employees.  

Covering their operating costs, regardless of the consequences, has had, well, consequences.  

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Posted by BaltACD on Tuesday, October 30, 2018 5:05 PM

Amtrak207
Amtrak is losing LD riders, not loosing them.  

Notice also what has been happening to the CSI numbers.  I think those are even more telling than the overall ridership. 

Management quits the senior and college discounts, CSI takes a hit.  

Management appears to prefer to shut down the entire NEC at the drop of a hat, CSI goes down.  (If this is truly and entirely in the name of safety, I support it, but the system should be more resilient than that.  Amtrak’s primary duty is to provide mobility, not make a profit.)

Management reforms the refund and exchange policy, CSI nosedives.

Management abruptly removes the PP cars, CSI goes into free fall.   

Management sacks cooking staff and replaces something that at least partially resembled real food with lethal nutritional supplements from hell (read the labels!), CSI tanks. 

Yes, two high-profile and fatal derailments had a detrimental effect as well, but after Frankfort and Chester the numbers rebounded. 

As a passenger, these changes, especially removal of discounts and futzing with the refund policy, while it may have been necessary, make it seem like management does not value the business of seniors.  That’s not cool.  That doesn’t work in rail.  Penn Central much?  

I don’t want to cast dispersions on people of my parents’ generation, in fact the opposite is true.  When I ride a long distance train, I look around.  I walk the train.  I have dinner.  I’m 38, and I am easily twenty years younger than their median-age passenger.  I want to meet people in the diner, not retreat to my isolated room and stuff my face alone while hunched over a cell phone.  International travelers certainly don’t want to do that, either.  This management team either is clueless (I doubt this), or they are trying to force passengers to conform to their preconceived notions, which are only partially grounded in facts.  Putting profits over passengers will make the passengers feel left out   

I have said this on their Face-Book feed also.  Long distance trains are more than sitting down, shitting up and hanging on for three hours to get you where you want to go.  Trains include the experience of traveling.  Many passengers chose the train because they want this experience. 

And now that management has taken steps which erode the experience, the passengers are voting with their feet.  I believe that deemphasizing the experience makes people no longer want to put up with the multiple hours of Precision Scheduled Delays or old equipment issues or traveling with demoralized employees.  

Covering their operating costs, regardless of the consequences, has had, well, consequences.  

R R Young, back in the day complained that livestock had a complete trip coast to coast in the same car whereas humand had to change trains in Chicago, St. Louis, Memphis and/or New Orleans to make the same trip.

I guess Amtrak is trying to give people the livestock trip for Long Distance travel.

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Posted by charlie hebdo on Tuesday, October 30, 2018 5:19 PM

The missionl statement for Amtrak is to provide passenger rail transportation, not an experience.  There is no applicable law today that requires it to run most of the same routes as 47 years ago.  The times have changed.  As you said above,  Long distance trains are more than sitting down, shitting up and hanging on for three hours to get you where you want to go.  Trains include the experience of traveling.  Many passengers chose the train because they want this experience.  

If the median age of LD passengers is ~60, that means as time goes on, fewer and fewer people will want to relive riding LD trains for some experience they hd in their youth, because in another ten years the number of people who rode LD trains in their golden age will be approaching zero.  As it is, the ridership numbers for LD trains has been fairly stagnant for some years before the despied Anderson (on here) took over.  If a business wants growth, it needs to attract younger people. I doubt if most of them are interested in having 1950s-style food in a diner while they ride a train for 40 hours instead of boarding a plane for a flight of a few hours and getting to the desired destination.

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Posted by Deggesty on Tuesday, October 30, 2018 7:58 PM

Not yet do we have stops legally required every so often for watering and feeding.

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Posted by Philly Amtrak Fan on Wednesday, October 31, 2018 5:33 AM

BaltACD

 R R Young, back in the day complained that livestock had a complete trip coast to coast in the same car whereas humand had to change trains in Chicago, St. Louis, Memphis and/or New Orleans to make the same trip.

I guess Amtrak is trying to give people the livestock trip for Long Distance travel.

 
With such few long distance trains available these days, LD travel is so inconvenient. Imagine traveling between Texas and Florida on Amtrak these days. If you are in Dallas or San Antonio, you have to take the Texas Eagle to CHICAGO, then go on the Capital Limited to WASHINGTON DC, then on the Silver Meteor or Silver Star to Florida. If you are in Houston, you can also take the Sunset Limited to New Orleans and then take the Crescent to Washington and then back down to Florida but you'd have to spend a night in New Orleans on your own dime because there's no train that goes straight through between New Orleans and Florida anymore. There's also no train service in Las Vegas, Columbus, Louisville, etc. Then you have Phoenix which is served only by Maricopa and cities like Cincinnati which have 3 trains a week and only graveyard shift service and Cleveland which also has only graveyard shift service. 
 
I guess the question of why is LD travel declining depends on from since when. Certainly there have been trains canceled and fewer options and that can contribute to fewer LD travel. I am particularly angry of the Broadway Limited/Three Rivers being canceled and the daily train from Philly to Chicago going away. 
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Posted by CSSHEGEWISCH on Wednesday, October 31, 2018 7:00 AM

The decline in long distance train travel began long before May 1, 1971.  The straw that broke the camel's back was probably the introduction of the 707 and DC-8 to commercial airline service in 1958.  Nearly empty trains deemed to be "in the public convenience and necessity" that remained in the timetable but no longer provided a useful service didn't help, either.

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Posted by NKP guy on Wednesday, October 31, 2018 9:34 AM

  Philly Amtrak Fan:   My sentiments exactly.   Well said.

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Posted by PJS1 on Wednesday, October 31, 2018 9:48 AM

NKP guy
    My sentiments exactly.   Well said. 

Who are you responding to?

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Posted by PJS1 on Wednesday, October 31, 2018 10:04 AM

Philly Amtrak Fan
 Imagine traveling between Texas and Florida on Amtrak these days. 

I have lived in Texas for 43 years.  Most of the Texans that I know or have known drive from Texas to Florida.  They were usually headed Disney Land, Fort Walton Beach, etc. for vacation. For those going on business or did not want to drive, they flew.  

The long-distance trains don't make any economic sense.  This is the reason there are so few of them.  If it were not for the politics, I suspect Amtrak's senior management would discontinue them straightaway. 

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