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If I were the head of Amtrak what would you do

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Posted by blue streak 1 on Monday, March 10, 2008 7:50 PM
Harvey: That is a new one on me but still remediation of that zone can be effected somehow.
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Posted by HarveyK400 on Monday, March 10, 2008 5:24 PM

Blue Streak 1,

Eliminating slow zones as you suggested is important; but I look at that more as ongoing management than a new initiative. 

Not all slow zone remediation involves track.  When IC took over the GM&O and became the ICG, speed limits were reduced out of Chicago for Metra and Amtrak.  My recollection is the line was designated as being within a new yard limit in order to remove time locks from manual mainline turnouts.  This was done to speed up switching freight customers.  The result was that about ten minutes were added to the schedules.

Harvey 

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Posted by blue streak 1 on Monday, March 10, 2008 10:30 AM
Harvey: exactly what I was getting at in my post ---  keep up the good thoughts.
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Posted by HarveyK400 on Sunday, March 9, 2008 8:29 PM

Back in the 1980's, Amtrak assigned a pro-rated system marketing cost to the Valparaiso commuter service that was about equal to the amount paid to Conrail for using its tracks.  As I recall, marketing comprised around 10% of the budget.  Outside of the timetables at the stations, there was nary a word of the commuter service printed or broadcast for the tens of thousands of dollars loaded onto the service.  Maybe this wasn't arbitrary in the sense that sharing the overhead was justified?

The money going to the marketing budget was needed to adequately meet projected track and signal maintenance costs for the Valparaiso service.

Getting back to Amtrak today, I have to ackknowledge that I am ill-prepared to be the CEO of Amtrak to ensure best management practices are adopted or continued.

Furthermore, Amtrak is subject to changing government policies, funding, and priorities that allow little discretionary initiative.  Even so, part of the job is to provide justification for improvements with the resulting benefits.  There are a number of opportunities, by no means complete, that I would like to see explored.

  • How much dwell time could be reduced at stations?
    • Use all doors, remote operated, for boarding & alighting
    • Low-floor cars for non-NEC corridors for easier unassisted boarding and compatibility with current long-distance and suburban equipment
    • Distributed car and seat assignment
    • Every minute of time saved at a station equals, for example, about 5 miles of running at 110 mph instead of 79 mph.
  • Would lower fares attract a compensating volume of passengers and revenue?
    • Line utilization:
      • Peak period schedule slots for 250 intercity passengers cannot be justified with suburban trains carrying over 1,250 passengers.
      • Line capacity improvements for fast or high-speed intercity services are not affordable for a small number of passengers during short periods of the day.
    • Affordability:
      • More passengers not subject to high downtown parking costs can be attracted to use the service for a wider range of travel needs.
      • Lower fare compensates for access time and cost.
      • Attracting new travel spurs economy and communication
    • Relevance: More riders strengthen support.
    • Diverting travel from roads frees capacity for growth and development.
  • Would funding be available for tilting equipment that would improve non-NEC service, even on Midwestern routes and if only to attain 79 mph?
    • New equipment is needed for expansion
    • Current Amfleet and Horizon equipment unsuited for low-level boarding outside NEC.
    • Attraction, "Buzz," of new equipment
    • Reduce time lost by easing curve restrictions.
    • Reduce fuel consumption to recover speed after a restriction.
    • Option to purchase or lease
  • Would highway funding be increased, my preference being the motor vehicle fuel tax, for rail crossing safety and crossing elimination?
  • Would highway funding be available for intercity corridor park-n-ride to attract riders as it has for commuters?
  • Would funding be available for bus feeder and rural access services?
  • Would funding be available to assist rail passenger and freight with positive train control and cab signalling?
 
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Posted by al-in-chgo on Thursday, March 6, 2008 10:14 PM

 

PS:  If I were "King" of Amtrak, I'd also see that the Silver Service between Florida and New York gets decent l-d reclining-seat coaches, not those cramped Metroliner shells.  It is, after all, an overnite route.  (Next step:  New-era slumbercoaches!).  -  a. s. 

 

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Posted by blue streak 1 on Thursday, March 6, 2008 1:13 PM
Work very hard to eliminate slow orders. The North Carolina DOT has done a good job of eliminating slows that are on their owned ROW from Charlotte-Greensboro-Raleigh-Selma and now the future Goldsboro-Morehead City streach. That has done more to speed up the route than spending mega bucks for 90-110 MPH streches. From 5 hrs Selma-Charlotte to 4:11 to a possible 3:20 Hrs on the 202 mile route averaging 60MPH including stops . now averaging 48MPH
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Posted by Amtrak77 on Wednesday, March 5, 2008 12:12 PM

First: expand the Acela route, the northeast corridior is ok but I hate they reduce the speed of my FAVORITE Trains.  She need room to burn!!! so people can see those high speed babies fly.  I would start from DC to Chicago and make that the first high speed route.

Second: Amtrak just got a new paint scheme! (Phase 5) but i would take on new ideas though

Third: increase and improve a more timely manger to my short line trains.  Got to branch out more to those family, college kids and love ones who are only few states away and don't want to spend lots of money flying.

Fouth:  I would say new lococmotive but darnit I love the AMD-103 P42!!!.  Those are and still is the best Loco's amtrak has!  They command attention when you see them.  However, the Metra trains in chicago has a new nice loco pulling there commuter trains.  If I can buy those and dawn a few in the paint scheme of amtrak and the acela colors.
GAME OVER!!!!Bow [bow]

Timothy D. Moore Take Amtrak! Flying is for upper class lazy people
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Posted by al-in-chgo on Tuesday, March 4, 2008 12:05 AM

 blue streak 1 wrote:
I also have  heard that there is a large demand Charlottesville - Washington. Anyone confirm that?
 

I have to agree.  When I was a student in Charlottesville in the middle seventies, Southern Rwy. was still running its own trains and there was more than one train a day connecting Washington, D.C. with parts South.  Today the only varnish connecting D.C. and C'ville (all the trains in total, in fact) are the daily Crescent and the thrice-weekly Cardinal

The Crescent is on an excellent am in / pm out schedule for the D.C. and northern Va. market, in which a hefty plurality of U.Va. students grew up. A "breakfast train" from C'ville north (lv 7:20 a.m. arr WAS 10:10 a.m.); becomes a "dinner train" with sched. depart. WAS 6:30 p.m. - arr. CVS (C'ville) 8:47 p.m.  I wonder if the diner is as good as it used to be!  It's an extremely pleasant journey and saves the rigors of mostly non-Interstate highways and nightmarish center D.C. parking for those C'ville citizens who park at the depot and don't mind the $100+ RT fare for taking the train as an occasional treat:  Washington Union Station is awfully handy for culture (the Mall, Smithsonian, etc.) and downtown D.C. shopping. 

In other words, the Crescent's ridership from C'ville up to D.C., along with the NEC-bound, a handful of long-distance commuters and some students -- is highly skewed towards Charlottesville's good-sized bourgeoisie, aka upper-middle class.  These are vocal and politically sophisticated folk, full-time citizens of Charlottesville, who would howl -- and probably howl quite effectively -- if Amtrak proposed eliminating the Crescent, turning it into a triweekly, or significantly altering its schedule.  IIRC, something like that has happened at least once during the 30 years I've been away.

But resource-wise, that's almost the exact opposite of the situation many of not most U.Va. students find themselves in, usu. part-time residents of C'ville with minimal political clout, and "voluntarily indigent" in welfare terms (i.e., poor by choice as the sacrifice for higher education).  Moreover, the trouble is -- if it's to be considered trouble -- Amtrak lists two Thruway bus runs each way per day C'ville - DC; the RT fare is just a little over half what Amtrak charges; one bus's schedule is highly compatible with the train's time -- about an hour later going up and an hour earlier going down; the other run is a good alternative with afternoon departures on both ends. Travel time C'ville - D.C. is about the same or a few minutes more than Amtrak.  Since RT on the Thruway bus incurs a fifty-dollar-plus savings over Amtrak, I assume there are enough impecunious undergrads who will save the fifty-some bucks and take a bus, even if they would prefer the train instead.   

   
Since those buses are listed as Thruways and tickets (though much cheaper) can be booked thru Amtrak, I wonder if their C'ville terminus is at the Amtrak station (former Sou. Rwy. mainline station.  It would be particularly convenient if that were the case, since a large if not the largest portion of the undergraduates can walk as little as two blocks to about a mile to the Amtrak station; a cab to the downtown bus station (if it's still there) is a further mile to the east and almost always requires a cab for the carless. 
  
I don't know whether The Commonwealth of Virginia subsidizes those bus runs on not; Amtrak's trains are federally funded and I don't believe the Va. legislature subsidizes any of it.  Quite unlike North Carolina's NC-DOT and its sponsorship of in-state Amtrak runs that fit North Carolinians' schedules much better than the overnight Crescent halfway to/from Atlanta and D.C.!    But that's a subject for a different post.  
.Virginia's students are still stereotyped as "rich kids," a heritage that becomes less relevant with each passing year.  Nonetheless, even though U.Va. is a state school with in-state tuitions to match, the stereotype still lingers and the legislature on the whole tries strenuously to avoid the appearance of trying to cater to or accommodate U.Va. students, probably most of whom, despite background, are indeed conspicuously in training for the upper-middle-class. Lots of legislators went to U.Va. or U.Va. Law, and know or should know that U.Va. students are not on the whole "elite" in money, only in strivings.  But it wouldn't be the worse hypocrisy I've ever encountered; I live in Chicago. Banged Head [banghead].  
.So I guess, short story long, is that the status quo avoids the likelihood of any Virginia-funded trains for the foreseeable future.  That seems a pity, because two bus runs each way with (what?  fewer than 120 seats total), are way too meager an effort for a state university  whose student body holds the potential for dozens of train travelers daily, swelling to over a thousand at term breaks, vacation and (to some exten
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Posted by blue streak 1 on Monday, March 3, 2008 12:16 PM
Get congress to appropriate enough money to fix all equipment that is not operational and put those cars on those routes that are sold out
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Posted by Dakguy201 on Monday, March 3, 2008 8:45 AM

I have seen the Empire Builder being refueled (somewhere in the middle of the "big empty") and it was as Samatha described it in Texas.  A fuel truck pulls up to each engine and pumps, and the driver completes some paperwork.  I would be nearly certain that paperwork is the source of a billing to Amtrak and contains date, time, amount delivered and the engine(s) that received it. 

My conclusion is that Amtrak is getting the data for each route, what we don't know is if they are capturing it for use in their "cost" records.

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Posted by Anonymous on Sunday, March 2, 2008 9:27 PM

In our discussion of the amount of fuel that Amtrak uses for the Hiawatha Service, or any other route, I forgot an important source of information.  A basis for estimating the fuel burn and cost is found in the Amtrak Monthly Performance Report.

For the FY ended September 30, 2007, Amtrak used an average of 2.3 gallons of diesel fuel per train mile.  The average cost was $2.10 for the year.  This does not tell us how much was used on the Hiawatha service, but it gives us a basis to come up with a reasonable estimate.  And it is a pretty good indicator that some one at Amtrak has at least a rough handle on how much fuel its trains drink.

When I rode the Hiawatha last year it consisted of a loco, four horizon cars, and a cabbage [sic] unit.  Also, if I am correct, the line from Chicago to Milwaukee is relatively flat.  My impression is that we are talking about a train that is no heavier than the average Amtrak train and runs over relatively flat territory, thereby not requiring the extra power and fuel to climb a mountain.  It is probably reasonable to assume that the fuel burn on the Hiawatha's is not greater than Amtrak's average, and it may be less.

The distance from Chicago to Milwaukee is 86 miles.  Thus, for a typical run, the average fuel burn would be 197.8 gallons of fuel.  The cost would be $415.38.  Of course, the actual cost on any day would be different because of weather, operating constraints, engine performance, etc.  But at least one can use the Amtrak averages to get a reasonable idea of how much fuel is required to power the Hiawatha's.

The Hiawatha Service is financed primarily by the Illinois and Wisconsin Departments of Transportation.  Presumably Amtrak manages the service under a contract, either jointly or severely, with both states.

If the contract is structured properly, i.e. it contains terms that can be administered and audited; the terms should spell out the billing requirements. 

Terms and conditions can vary, but most contracts specify that the service provider will bill the client or customer monthly.  If it is time and materials contract, it will spell out the detail required in the billings.  For example, the vendor (Amtrak) would be required to show the billed labor charges by class, rate, and hours.  Furthermore, Amtrak would be required to provide reasonable supporting documentation, e.g. time tickets, labor sheets, etc., or at least make the documentation available for an audit.   The billed consumables (fuel) should show the grade, amount, and cost per unit.  If it is a lump sum contract, it should show the anticipated labor, fuel, maintenance, etc. in schedules in the body of the contract or as addendums. 

Whether the contract is time and materials or lump sum, it should contain details regarding the vendor's costs to provide the service, and it should contain a right to audit clause.  This would give the state's auditors the right to look through Amtrak's records to make sure that the billings are complete, thorough, and accurate or that the schedules in the contract were based on reasonable and supportable costs.  If the contracts lack sufficient detail or do not contain a right to audit clause, the person(s) who formulated and executed them dropped the ball.

 

  

 

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Posted by Packers#1 on Friday, February 29, 2008 5:15 PM
Get a better paint scheme, maybe a red base, blue long hood, some white stripes. Just anything other than that silver and small stripes. 

Sawyer Berry

Clemson University c/o 2018

Building a protolanced industrial park layout

 

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Posted by oltmannd on Friday, February 29, 2008 4:11 PM

Fuel gauges - not a good idea.  Broad, flat tanks and notoriously unreliable gauges are a bad combination.

Contractor tickets work OK, provided you can get the same effort out of every tank fill.  I doubt LA meters fuel, and you don't knoe if the loco will go back on the Sunset or run on the Starlight next.

The best bet is simulation and/or throttle clocks and kw-hr meters - which are built into modern loco control systems, but readings would have to be uploaded after each trip.

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by Anonymous on Friday, February 29, 2008 12:18 PM

Fueling from a pool is not always the case for Amtrak.

In Fort Worth, for example, the Heartland Flyer and Texas Eagle are fueled by a contractor.  He pulls his truck next to the locomotive and gives it a drink of diesel.  On more than one occasion I have stood on the platform in Fort Worth and watched the operation.  I have observed the driver doing the paper work before and after each load.  It is possible that he is drawing cartoons, but I doubt it.

The contractor completes a ticket that probably shows the amount of fuel dispensed, time, date, and other required information.  I would be surprised if he does not note the locomotive number or some other identifying mark.  Otherwise, neither he nor Amtrak have an audit trail for the fuel load. 

At the end of the month, if not before hand, he sends an invoice to Amtrak.  It probably requires supporting fuel tickets for each load.  If Amtrak is paying invoices without proper supporting documentation, their external and internal auditors would be all over them.   Paying an invoice for materials and supplies without supporting documentation does not work in this post Enron era. 

Accounts payable matches the fuel tickets with the invoice to make sure that Amtrak got what it is paying for and is paying the correct amount.  It then cuts a check to the vendor or wires the money to his bank.

Amtrak's locomotives, as far as I have observed in Texas, have fuel gages on the tanks.  It would be relatively easy for someone to spot check the amount of fuel loaded and used and project the samples to a year or whatever period is appropriate.

In the case of the re-fueling in Fort Worth, it would be easy to determine within reason how much fuel goes into the locomotives since there are not many of them.  In Chicago, which I presume is the base for the Hiawatha locomotives, tracing the amount of fuel used might be a greater challenge if it is only metered into a pool tank and not metered into each locomotive (a weak control that should draw the attention of the auditors).   

If Amtrak does not know how much fuel is pumped into each locomotive or used by it, it could estimate the fuel cost.  Presumably it knows the rated fuel consumption for each class of locomotive under various load conditions.  It knows how many miles a Hiawatha runs each day; calculating an estimated fuel burn and cost would be relatively easy.  Of course, if the fuel comes out of a common pool, it would have to use average inventory cost, as opposed for FIFO or LIFO, to determine the cost of the fuel, but I suspect that it could get a reasonable estimate. 

I don't know how precisely Amtrak knows or doesn't know how much fuel is burned on each of its major routes.  I would be shocked if they did not have at least a reasonable estimate for the amount and the cost.

 

 

 

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Posted by oltmannd on Friday, February 29, 2008 10:00 AM
 Samantha wrote:
 Paul Milenkovic wrote:

I disclose who I am and anyone with an Internet connection can quickly determine my credentials.  I know you are representing your own guess

I have no idea who you are or how to verify your credentials. 

My comments regarding Amtrak's accounting practices are based on a thorough reading of their financial and operating reports.  They are available to the public.  My observation regarding KPMG's audit program for Amtrak comes from years of working with the big four accounting firms including KPMG. 

Absent any proof, I don't know whether a person in high places does or does not know how much fuel Amtrak burns on the Hiawatha service.  But I would be surprised if Amtrak does not know how much fuel its burns on each of its routes.

I spent more than 30 years in heavy industry.  We had more than a thousand trucks and heavy equipment, i.e. drag lines, loaders, haulers, railway locomotives, and hundreds of coal cars.  In fact, we operated more than 55 miles of rail line that interfaced with two major carriers.  We knew to the penny how much fuel we used in each vehicle.  We kept a log of it.  Metering fuel into a vehicle, i.e. car, truck, locomotive, is not difficult to track. 

If Amtrak does not know how much fuel each route requires, I would be surprised if the auditors (external and internal) did not raise it as an issue.  

You may be surprised to know that RRs generally know how much fuel is put into their storage tanks and how much comes out, but they don't know how much goes into each locomotive.  There are not generally meters on each fuel stanchion nor any mechanism to log the fuel put in each tank.

I am not suprised at all that Amtrak has no idea of their actual fuel consumption rate by route.

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by Anonymous on Thursday, February 28, 2008 10:35 PM
 Paul Milenkovic wrote:

I disclose who I am and anyone with an Internet connection can quickly determine my credentials.  I know you are representing your own guess

I have no idea who you are or how to verify your credentials. 

My comments regarding Amtrak's accounting practices are based on a thorough reading of their financial and operating reports.  They are available to the public.  My observation regarding KPMG's audit program for Amtrak comes from years of working with the big four accounting firms including KPMG. 

Absent any proof, I don't know whether a person in high places does or does not know how much fuel Amtrak burns on the Hiawatha service.  But I would be surprised if Amtrak does not know how much fuel its burns on each of its routes.

I spent more than 30 years in heavy industry.  We had more than a thousand trucks and heavy equipment, i.e. drag lines, loaders, haulers, railway locomotives, and hundreds of coal cars.  In fact, we operated more than 55 miles of rail line that interfaced with two major carriers.  We knew to the penny how much fuel we used in each vehicle.  We kept a log of it.  Metering fuel into a vehicle, i.e. car, truck, locomotive, is not difficult to track. 

If Amtrak does not know how much fuel each route requires, I would be surprised if the auditors (external and internal) did not raise it as an issue.  

 

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Posted by Paul Milenkovic on Thursday, February 28, 2008 8:58 PM

My guess is that they do, but they choose not to make the information available to an outsider who has not demonstrated a need to know them.

Samantha, I respect your knowledge of transportation issues and your contribution to the forum.  I don't think we are that far apart in positions on policy as I too have skepticism about the viability of the long-distance trains.  The short passage I have quoted, however, is a serious provocation to enter into the sort of protracted argument that this forum has become notorious for.

I disclose who I am and anyone with an Internet connection can quickly determine my credentials.  I know you are representing your own guess and not an official position of Amtrak, but if I am an outsider who does not have a need to know whether Amtrak is helping with energy security, I can give you 1.2 billion reasons why I have a need to know that information, along with any other citizen and voter in our society.

The thought that an organization that gets that amount of public funding would even consider keeping any information from the public -- and no, I don't mean employment records -- pretty much discredits the idea that Amtrak is transparent.

If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?

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Posted by Anonymous on Thursday, February 28, 2008 6:20 PM

Since I began participating in the Train's forums, I have seen allegations that Amtrak cooks the books.  The most common allegations are that it shifts costs from one product line, i.e. the NEC to another, most often the long distance trains.

The assertion that Amtrak arbitrarily assigns costs to a route without any justification for the assigns is saying in a nutshell that it is cooking the books, i.e. not reporting truthfully.

Depreciation is not money set aside for a rainy day.  It is the amortization of a capital expenditure, i.e. money that was used to buy equipment, materials, property improvements, etc.  Money that is put aside for a rainy day is a reserve.

Cost accountants identify the costs associated with an organization.  Looking back they are historical numbers.  Looking forward they are projections based on historical trends and regression analysis. Projections usually require a range of scenarios, i.e. how much will fuel cost in six months, twelve months, eighteen months, etc., and what is the likely low to high range. 

Cost accountants can tell management which product lines are covering their costs and which ones are not.  But they cannot and do not tell management how to run the business, i.e. what business to be in, what product lines to offer, how to run it, etc.   

Whether a business or a product line will be successful is a function of the entities' business model.  Putting together a successful model requires a variety of disciplines, i.e. marketing, engineering, accounting, finance, economics, IT, HR, etc.  The cost accountants can tell the planners what they need to charge to cover the cost of a product line; that is to say, the breakeven point, but the other disciplines are required to put together a successful business plan.  Economists can tell the planners whether market economics will support the service.  Marketing people can make the business plan salable; pricing specialists can determine how much to charge for the services.  Financial people are necessary to fund the plan.  IT, HR, procurement, etc. are necessary to support it. 

A successful business plan can not be put together by controlling costs.  But if the costs are not known and controlled, the plan will ultimately fail. 

The long distance train has been a money sponge since Amtrak came into existence.  If it was run like a real business, as opposed to a government handout, the long distance train would have disappeared decades ago.  The reason that it has not been successful or expanded is because there is very little market demand for it.  People traveling long distances, e.g. greater than 200 miles or thereabouts prefer to fly.  And no amount of wishing is going to change this dynamic. 

Just because one cannot find out how much Amtrak spends on fuel for the Hiawatha Service does not mean that they don't have the numbers.  My guess is that they do, but they choose not to make the information available to an outsider who has not demonstrated a need to know them.

The external auditors, when performing their audit of Amtrak's financial statements, perform reasonable tests for all allocations, estimates, depreciation schedules, projections, etc. that impact the financial statements.  Anything having to do with cost allocation impacts them.  If they found that Amtrak parceled costs out to the different trains without regard for the actual costs on each route, they would raise an audit exception.  If it is serious, it could produce a qualified audit report, which is the last place in the world that management wants to go.  Moreover, the internal auditors, who are in a good position to catch improper allocations, would also raise an audit finding. 

What is meant by people in high places?  Who are these people?  Are they inside Amtrak?  What is the definition of high places?  I have met people in my career as an accounting and auditing manager who believed that the Accounts Payable Manager was a person in high places.  That would have been news to executive management. 

    

 

 

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Posted by alphas on Thursday, February 28, 2008 4:03 PM

There's a reason they haven't brought back direct Chicago to Florida service.   There's no real market for it that wouldn't require a huge subsidy.   These days, darn few people are willing to ride a train for 2 days and pay as much as, or more than, it costs to fly there in 3 hours.  There's plenty of airline competition for this market so prices are comparatively reasonable.  Also, there's bus service, fairly decent for this day and age, which is cheaper and faster than the train would be.

The last thing Amtrak needs right now is another expensive run that bleeds red ink.  

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Posted by CG9602 on Thursday, February 28, 2008 12:27 PM
Well stated, Paul.
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Posted by Paul Milenkovic on Wednesday, February 27, 2008 9:39 PM

If Amtrak's accountants attempted to circumvent Generally Accepted Accounting Principles, they would be roasted by the public accountants.  I suspect that most people who allege that Amtrak cooks the books do not have access to them and, even if they did, would not be able to understand them.  I spent more than 25 years as an accountant and auditor with a Fortune 250 company.  I am thoroughly familiar with generally accepted auditing practices in the United States.

No one is claiming that Amtrak is cooking any books or doing anything except Generally Accepted Accounting Principles.  Really.

They have a bunch of money coming in from fares and from Federal and State subsidy; they have a bunch of money going out in wages, fuel, insurance, supplies, and interest payments, and they account for depreciation of rolling stock and other capital items according to those Generally Accepted Accounting principles.  This accounting means that you know where all of the money is coming and going and you are setting money aside in a "rainy day account" (that depreciation) to account for the cost of replacing equipment at the end of its economic lifetime.

The issue is not an accounting problem but a transportation economics problem of the different performance of parts of the network.  Accounting is not economics and the question is regarding the economics of different routes and their justification for continuance or discontinuance (cancel the LD trains or build up the LD trains).  If you tried to run many a business based purely on accounting formulas without regard to economic concepts of avoidable cost, direct operating cost, marginal cost, and similar formulas and models for the revenue side, you stand to run it into the ground.

The charge or claim is that the accounting formulas (the RPS) takes the bulk costs for the Amtrak system, which is a real number because Amtrak knows how many people are on its payroll and how much it pays in insurance, and so on, and parcels that out to the different trains without regard for the actual costs on each route.

No one can even tell me how much fuel is used by the Hiawatha train and I have asked people in high places about this, and I am to accept that those Generally Accepted Accounting Principles give an accurate economic model of the relative performance of that train.  The accounting-principle cost accounting puts the fully-allocated costs of that train at a 4-fold multiple of what Greyhound charges as a fare and makes a small profit.  The Hiawatha train is the railroad version of a bus service -- no crew dorms, no checked baggage, no diner/lounge/sleepers -- but it is listed as having a lower fare recovery of expense than the LD trains.  And "Greyhound is subsidized" is something that does not have to be restated -- to the extent they are subsidized, it is only from the road surface downward, and the trackage payments of the Hiawatha to Canadian Pacific are a small slice of the subsidies imputed to that train.

If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?

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Posted by blue streak 1 on Wednesday, February 27, 2008 8:45 PM
I also have  heard that there is a large demand Charlottesville - Washington. Anyone confirm that?
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Posted by blue streak 1 on Wednesday, February 27, 2008 8:43 PM
old southern RR schedules had almost 1/2 the cars terminating in Washington. in the early 70's holiday extra section was atlanta-Washington only. That appears to be the high demand portion of the Cresent.
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Posted by jhugart on Wednesday, February 27, 2008 7:02 PM

In terms of Politics, I think Gunn's direction of making clear that trains cannot run as a profitable business when competing with airlines and roads that have subsidies is right.

There's a security aspect to the politics: After all, someone can't drive a train into a tall building. If there's a tunnel under the building, that's different. But a train is fundamentally different from a bus line like Greyhound. Different needs, different experiences. Making sure that some variety of cross-country travel exists is a good idea if we ever face another "planes all down" situation. Making sure Congress knows that is key to the politics of the job.

As for routes, I'm surprised they haven't brought back a Chicago-to-Florida route. You'd think that would be a big deal.

I take the Empire Builder, mostly, and I sometimes wonder if it could be managed to have additional trains, running twelve hours apart or something like that. It might make some stops more interesting, if you don't have to embark at 3 AM or so.

My other personal preference is that the trains don't run where I want to go. I have in-laws in Iowa, and there probably hasn't been passenger service from Minnesota to Iowa in half-a-century. There are times where having Chicago as a hub can be a royal pain.

In a broader way, perhaps focusing on some key tourist areas (like, say, Mt. Rushmore), and figuring out routes that will take people to those places, is a way to go.

I recently rode on a refurbished sleeping car on the Empire Builder, and it was really nice. Let's just say that the improvements to the toilets were fantastic: elbow room! Continuing that program of fleet maintenance and improvement is also important.

But I suspect Amtrak funding would have to go far up to manage such things.

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Posted by alphas on Wednesday, February 27, 2008 4:29 PM
Am I the only one who thinks that the NEC should be legally seperate, and operated seperately, from Amtrak since it is so different from the rest of Amtrak's operations?   (Besides which it actually operates on its own tracks in most of the NEC.) 
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Posted by Anonymous on Wednesday, February 27, 2008 10:29 AM

Allegations are not facts. 

If Amtrak's accountants attempted to circumvent Generally Accepted Accounting Principles, they would be roasted by the public accountants.  I suspect that most people who allege that Amtrak cooks the books do not have access to them and, even if they did, would not be able to understand them.  I spent more than 25 years as an accountant and auditor with a Fortune 250 company.  I am thoroughly familiar with generally accepted auditing practices in the United States.

For the fiscal year ended September 30, 2007, the Empire Builder had total revenues of $58 million.  It incurred direct labor of $26.1 million and other direct costs of $41.4 million, for total avoidable costs of $67.5 million.  It lost $9.5 million before shared costs, which were $25.3 million.  The total attributed cost was $92.8 million, which means the Builder lost $34.8 million before depreciation and interest.  The loss was 8.9 cents per passenger mile and 5.4 cents per seat mile before interest and depreciation.

Amtrak's public reports do not break down the amount of depreciation ($456.6 million) and interest ($95.9 million) attracted by the Empire Builder or the other long distance trains.  However, it is relatively small.  It is probably fair to say that the total losses for the long distance trains were five per cent higher than the losses before the application of depreciation and interest.  Five per cent is a conservative estimate.

For the same period (Amtrak's accounting year runs from October 1st to September 30th) the Auto Train had total revenues of $53.5 million.  It incurred direct labor of $15.8 million and other direct costs of $27.2 million for total avoidable costs of $43.0 million.  It had a positive contribution of $10.5 million before the absorption of shared costs, which were $19.4 million.  The total attributable costs for the Auto Train were $62.5 million, resulting in a net loss before depreciation and interest of $9.0 million.  It lost 4.7 cents per passenger mile and 2.8 cents per seat mile or about half the losses for the Builder.

The NEC trains earned $258.3 million before interest and depreciation.  Assuming the NEC attracts 80 per cent of the depreciation and interest, they had a net loss of $183.7 million after depreciation and interest. 

It does not matter how many passenger miles a train generates anymore than it matters how much market share an enterprise holds.  What counts in any business model is whether a service covers its costs.  If it does not, a prudent business person would drop the service or product line and concentrate on the ones that make money or have a reasonable probability of doing so. 

Given a net operating loss of $1,051 million, the average federal subsidy per Amtrak passenger was $40.68.  The estimated average federal subsidy per long distance passenger was approximately $130.

The numbers shown above, with the exception of the estimated federal subsidy per passenger, which is my calculation using Amtrak's numbers, can be verified at Financial Performance of Routes - Strategic Business Line (SBL), September 2007 YTD.  The report is located at Appendix C-1 in the montly report for September 2007. 

Amtrak's annual reports provide limited operating data.  Detailed operating reports are found in the monthly performance reports. 

   

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Posted by Paul Milenkovic on Wednesday, February 27, 2008 8:31 AM

As long as we are talking numbers here, let's talk about the Empire Builder. The Builder had over a half million riders, generating $ 43.2 million in revenue. That's ahead of AutoTrain, which had $ 42.8 million. The Builder generated 390.8 million passenger-miles, with the average trip being 774 miles. The train averaged 206.7 passengers per train mile, with a load factor of 61 percent. The Southwest Chief had 316,700 passengers, 302.7 million passenger miles, $ 35.7 million in revenue, with an average trip of 956 miles.

That sounds like the URPA line -- I believe you have a link to URPA in your post.

What URPA is saying is tantalizing, that there is indeed cost-shifting going on.  But it ends there.  The Empire Builder, AutoTrain, and Southwest Chief are great revenue generators compared to a non-NEC corridor route.  But at what cost?  How many locomotives, how many train sets, how many cars of different types in a consist, how much fuel, how much to pay the crew, how much to operate and staff train stations all up and down the route? 

URPA appears to just flap their arms about all of that.  I have tried e-mailing URPA to no response on these questions.  I talked to someone in our brick-and-morter advocacy group about URPA who knows some of the principals -- he conjectured that URPA has a "Deep Throat" within Amtrak who knows all of this but they are protecting their source.  OK.

My favorite horse carcass is Amtrak fuel consumption as oil has reached all-time highs and the general belief is that passenger rail is going to save us.  While fuel consumption is merely one slice of the cost of running trains, it is a quantitative basis for supporting a claim --that trains could save energy over other modes -- that should be easy enough to measure.  I write down how much gas my car uses over different route segments -- city driving, intercity trips -- one would think someone could say how much fuel each Amtrak run uses.

The Wisconsin DOT person who has a hand in the State side of the Hiawatha operation assured me the Amtrak knows how much fuel the Hiawatha uses and would get back to me.  I e-mailed the Global Warming and Carbon Reduction Office (or whatever they call it) in California and got assurances my question about how much fuel is used by the California trains would get answered.  Haven't heard from anybody.

Forget fuel usage.  URPA's dead horse had been the breakout by route of passenger miles (instead of simply giving passenger boardings as in the evaluation of a transit system).  I believe Amtrak has finally come around to reporting passenger miles and NARP has these numbers by named train on their Web site.

This gets back to the parent post about being made Head of Amtrak for the Day.  I have this suspicion that the powers that be don't want to know the breakdowns because it would show some trains to be winners and others to be losers.  One could keep the winners but be forced to cut the losers, further shrinking the network and hurting the remaining winners.  Kind of a misapplication of the management 80-20 rule: 20 percent of your people are doing 80 percent of the work (by some metric), so you fire the 80 percent of slackers.  Only the remaining 20 percent have to pick up the extra work, some keep working, others become demoralized and start slacking, and you keep laying people off until you have no market share, no revenue, no business left.

On the other hand, not knowing the breakdown between winners and losers, you have no information on who the losers are so you can make them become winners, and you run the whole organization as one mediocracy.

If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?

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Posted by Chafford1 on Wednesday, February 27, 2008 6:41 AM

 conrailman wrote:
The real money pit is NEC, it needs 30 Billion Dollars worth of work to make it into A-shape again from Boston to D.C. I heard that in 1999 to 2000 that the NEC need that much work. You could run the LD trains for 50 plus years with 30 Billion Dollars. Plus NEC needs new cars too. Tunnels into New York City needs 3 or 4 billion worth of work.My 2 cents [2c]

As a comparison, the West Coast Main Line in the UK which is 401 miles in length is undergoing an overhaul which should be completed in December 2008. The total cost is estimated at £9 billon ($18 Billion) and includes capacity enhancements (4 tracking), increased line speeds (110mph increased to 125mph) and tilting trains. Most of the upgrades have been concentrated on the southern 200 miles of the route.

As a result, from December the fastest London-Glasgow time (401 miles) will be 4 hours 8 minutes (Average speed 97mph). And that with trains that don't travel above 125mph.

 

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Posted by CG9602 on Wednesday, February 27, 2008 6:26 AM
See attached: http://archive.unitedrail.org/documents/highcost/index.htm

You had better believe that there are those of us who have long suspected that Amtrak takes the cost overhead and distributes it across the entire system, in other words taking costs associated with the corridors and NEC and charging them to the long distance trains. This has been alleged for over a decade.

As long as we are talking numbers here, let's talk about the Empire Builder. The Builder had over a half million riders, generating $ 43.2 million in revenue. That's ahead of AutoTrain, which had $ 42.8 million. The Builder generated 390.8 million passenger-miles, with the average trip being 774 miles. The train averaged 206.7 passengers per train mile, with a load factor of 61 percent. The Southwest Chief had 316,700 passengers, 302.7 million passenger miles, $ 35.7 million in revenue, with an average trip of 956 miles.

For comparison, the Capitol Corridor had 96.5 million passenger miles, 1.45 million riders, average trip of 66.5 miles, and only $ 16.7 million in revenue. Source: Amtrak annual reports.

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