Paul MilenkovicLaughable? Airports were commonly placed out in a swamp someplace where there was cheap land and away from where they annoy people with the noise. That is part of why they have so many problems with bird strikes. Maybe bad policy, but it has to do with when the rails went in (not through swamps when they could help).
Then why can't we run lines by/through/to airports as is seen in Europe where both the ROW and airports were often installed earlier than here?
C&NW, CA&E, MILW, CGW and IC fan
schlimm Very true. A sound, rational policy would use rail, buses and air in an integrated approach. It is arguably laughable that very few major airports (Billy Michell Field in Milwaukee and BWI are the only ones that come to mind) are on main passenger routes in the US.
Very true. A sound, rational policy would use rail, buses and air in an integrated approach. It is arguably laughable that very few major airports (Billy Michell Field in Milwaukee and BWI are the only ones that come to mind) are on main passenger routes in the US.
Laughable? Airports were commonly placed out in a swamp someplace where there was cheap land and away from where they annoy people with the noise. That is part of why they have so many problems with bird strikes. Maybe bad policy, but it has to do with when the rails went in (not through swamps when they could help).
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
The problem I have had for years with transportation issues is that most people argue "either or" rather than "this and that". In other words to say one form of transportation is better than another means nothing because each fits into an overall plan of service needed to maintain the intercourse of business and commerce. Between envronmental issues of use of space and pollution from fuel emissions to economic issues of traffic and congestion the east does seem to be a little more into expansion of rail services, both freight and passenger, than other parts of the country. California has apparently studied and identified transportation problems and has been working to solve them with a fair amount of success. I have for years called for a unified, universal approach to an intermodal transportation system utilizing each form to the best extent in any given situation. For example, to hear the new Governor of New Jersey wail against NJT and its services, threatening all kinds of cut backs, curtailments, and rate hikes for one form of transportation over another, is not sound judgement of transportation policy in my mind unless he has calculated the cost of more highways, poorer air quality, lack of mobility (either in commutning or moving freight through the hills), loss of jobs (with loss of income and sales tax revenues) among things; he is not making a good universal, transportation policy for the benifet of the State, its population, nor the bottom line of transportation costs. It is populist politics, or partisan politics, or even payoff politics, rather than sound tranportation policy.
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
I don't know what a schedule would look like - my guess would be hourly was presumed. However, I remember if correctly that the run to Champaign-Urbana would take 0:45 and Saint Louis would take 2:20. The study for the recommendation was commissioned by the Midwest High Speeed Rail Association; but I have never seen the details.
One windfall is that the CN route would improve service to Carbondale and might encourage a new corridor to Memphis. With capacity improvements, the Edgewood cutoff would offer a substantial reduction in time to West Paducah and Memphis.
henry6 Sam1, you are being very insulting and rude not just to those of us on these forums but also Americans as a whole in a very self serving way. That "way" is because a majority of people do not seem to agree with your points of view. Insulting people, calling them names, and denegrating them in general will not only make enemies of those around you but also make you lonely because you are unwanted. If you want to argue, argue facts and truths instead of lowering you and these forums to pages of name calling. Please rephrase your case and give us real points to talk about.
Sam1, you are being very insulting and rude not just to those of us on these forums but also Americans as a whole in a very self serving way. That "way" is because a majority of people do not seem to agree with your points of view. Insulting people, calling them names, and denegrating them in general will not only make enemies of those around you but also make you lonely because you are unwanted. If you want to argue, argue facts and truths instead of lowering you and these forums to pages of name calling. Please rephrase your case and give us real points to talk about.
There is a story about how Anthony Hopkins went on the talk-show circuit to explain how he got his entertainment.
He is supposed to have said that he would go to showings of his most notorious movie "Silence of the Lambs" and sit down behind a young couple seeing the movie "on date night." Part of the setup to this is the idea that a young man would think that "Silence of the Lambs" was proper entertainment to take a young lady to on a date.
Anyway, Hopkins would wait until the end of the film until the couple was ready to leave, and then in his best Hannibal Lecter voice, he would intone "Howww did you llllike the moooovie? I found it . . . delicious!"
Ask me how I like Sam1's comments. "In contrast with the common repetition of the basic NARP advocacy position that I have heard for over 40 years, I find them . . . refreshing!"
I far from agree with Sam1 in totality, and I have spent time on the receiving end of the Wrath of Sam1 for suggesting/proposing accounting heresy. Were I to (dare!) to offer one piece of advice to Sam1, it would be to think more politically. No, one does not have to agree with everyone around here, and your willingness to disagree is you contribution. But to disagree with everyone without recruiting or accomodating any allies puts one out on a limb, no matter how true or virtuous or correct one's position, and this is especially true in the corporate world if not in many others.
But someone needs to make these points, that trains cost more money than most people are comfortable with, and the belief in the inherent goodness of trains to justify the cost is not widely held.
While I agree long distance trains are costly, they may be some political necessity for Amtrak to be relevant for majorities of Senate and House Members and their constituents in order to fund corridor development. Nevertheless, the apparent commitment to procure new long distance equipment to both maintain and expand services is perplexing in the face of more appropriate corridor priorities.
Maybe it's just getting news from Trains; but interest seems higher for the North Coast Hiawatha, Pioneer, and Sunset than for corridors.
Harvey: That's very interesting information. Thanks for sharing. It really makes sense to tap into more population centers by using the CN & NS rails, rather than the old GM&O, particularly hitting Champaign with all the UIUC kids. Any idea of what a schedule would look like?
Paul MilenkovicoltmanndSam1Many of the people who participate in these forums, as well as organizations like NARP, point out the upside of passenger rail but fail to mention the downsides. That is dishonest. Yes, but "dishonest" is a bit harsh. They are just Pollyannas. The point I am trying to make is that even in a non-market government-subsidized environment, there are still economic choices to make. The only difference is that the choices get made through politics rather than pure market decisions. For example, the Midwest Regional Rail Initiative was once priced out at 5 billion dollars, the market study projected a ridership of 2 billion passenger miles/year -- that is half-an-Amtrak. The projection is that moderate fares would cover operating costs. So, the 35 billion or so spent on Amtrak since inception, using some formula to adjust for inflation, could have funded 7 MWRRI's and thus be carrying more than three times the passenger miles of the current Amtrak, all at break-even on operating costs, which would have important political advantages in "selling" expansion to more train service. What would you rather have. Seven regional passenger rail networks carrying three times present passenger-mile volumes, with a political climate favorable for further expansion? Or what we have right now?
oltmanndSam1Many of the people who participate in these forums, as well as organizations like NARP, point out the upside of passenger rail but fail to mention the downsides. That is dishonest. Yes, but "dishonest" is a bit harsh. They are just Pollyannas.
Sam1Many of the people who participate in these forums, as well as organizations like NARP, point out the upside of passenger rail but fail to mention the downsides. That is dishonest.
The point I am trying to make is that even in a non-market government-subsidized environment, there are still economic choices to make. The only difference is that the choices get made through politics rather than pure market decisions.
For example, the Midwest Regional Rail Initiative was once priced out at 5 billion dollars, the market study projected a ridership of 2 billion passenger miles/year -- that is half-an-Amtrak. The projection is that moderate fares would cover operating costs.
So, the 35 billion or so spent on Amtrak since inception, using some formula to adjust for inflation, could have funded 7 MWRRI's and thus be carrying more than three times the passenger miles of the current Amtrak, all at break-even on operating costs, which would have important political advantages in "selling" expansion to more train service.
What would you rather have. Seven regional passenger rail networks carrying three times present passenger-mile volumes, with a political climate favorable for further expansion? Or what we have right now?
I understand being out of the loop and not terribly aggressive that detailed reports on Midwest rail passenger corridors may have slipped by. However, I have not seen any details on methodology on the Midwest Regional Rail Initiative plan findings; and therefore have no confidence in their claims. They do put out a handsome brochure. Estimating costs is not hard; but projecting ridership and revenue is the issue. So how does an advocate such as myself or the public generally trust these people with $5 billion? Or urge other people including elected officials to support the MWRRI?
Illinois is $20 billion in debt, second only to California, with hugely underfunded pensions, schools, and public health needs that overshadow rail passenger service. It's a miracle that chump change was squeezed out for a new Quad Cities train; but finding ten times that amount doubtful, especially in these times. Chicagoland, the Midwest, and the nation may need better transit and intercity rail more; but we can less manage to make the improvements.
Even improving Chicago-Saint Louis partially to 110 mph with ARRA funds was surprisingly costly, having seen earlier estimates for a quarter of that amount. This still leaves unimproved access to both Chicago and Saint Louis that could significantly reduce travel time and improve reliability. Chief among these are grade separations for Brighton Park, Lemoyne, and Argo that also would benefit the Metra Heritage Corridor service to Joliet. Improved reliability would facilitate expanded HC service to divert riders and free capacity for BNSF extensions.
As it turns out, The idea was studied for a 220 mph high speed route between Chicago and Saint Louis by way of more populous Champaign, Decatur, and Springfield that would allow faster running out of Chicago. What is more, the existing Lakefront line could be even faster than the proposed connection at Grand Crossing, even at just 79 mph, by building a direct connection into Union Station instead of using the present back-up arrangement.
A summary of the curves between McCormick Place, Chicago and Tolono follows.
oltmanndI'd rather have the 7 regional systems - or maybe 5 regionals and a few trains that connect them - which was the original idea behind Amtrak. The LD trains were supposed to get thinned out and new, operating cost covering corridors were supposed to start up. But, what happened is we added MORE LD trains in the early years and NO new corridors or corridor extensions.I think it is politics that sets the playing field for the "Transportation Games" to be played on and then market forces shove things around on that field, however lumpy or tilted it is.
I think it is politics that sets the playing field for the "Transportation Games" to be played on and then market forces shove things around on that field, however lumpy or tilted it is.
I agree with you. I don't know how many regions would be sensible, but perhaps those area of the country that have widely scattered cities with not much population in between would prefer to opt out. Those regions desiring to build a transportation network, including buses, could be partially financed, as now, by state-support. LD service could (and should, IMO) be phased out.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Neither dishonest nor pollyanas! Interpreative is more the word which is applicable. Of course statistics and facts are presented as arguements to bolster the presenter's cause or point of view. Stating that NARP's figures are dishonest or that 90% of Amtrak's employee budget is for unions are two such examples. NARP believes and wants others to believe that rail passenger service has merit; the Amtrak employee statement is a point of view of the one who said it and not fact.
The final form of the financial statement that reaches the mass public is not a statement but a series and collection of informamtion as filtered by (in reverse order) 1) the reader; 2) the writer/journalist; 3) the one who wrote the press release based on what the company and writer wants highlighted; 4) by the audited version of the financial statement; and 5) by the initial financial statement before auditing. Thus the statement in the audited version of the financial statement to the effect that 90% of labor is under contracts is interpreted by one person as being union contracts because someone along the way didn't (or couldn't in his own mind) clarify what employees were under contract including managment, executive, and blue collar/unions. The Wall Street Journal, Progressive Railroading, Railpassenger Journal, the Daily News, the railfan newsletters, and your hometown newspapers can all have a different take on the same press release. I almost feel like adding that only the auditors know for sure!
henry6Definitely not all labor agreements are union contracts. Anybody who has a contract for a position has a labor agreement and in some companies that could mean 100% of the employees from the executive to janatorial staffs!
True, but I'm afraid that in the case of Amtrak, the term labor agreements appears to refer to union contracts. [BTW, Amtrak does not break out how many dollars of salaries, etc. are for union workers vs. management]. Read this section from the financial report and you'll see that meaning in this context:
Sam1Unfortunately, the probability of getting rid of subsidies, which is the position that I favor, is slim and none. And I know it.
There is an equally valid alternative. That would be to subsidize equally - which would make the true costs equally opaque between modes. .
Both are equally unworkable. We need simple, though imperfect, rules for playing the game. Every time you draw a control boundary around a system, you have two problems. One, is you have to measure and account for all flow in and out. Second, if you optimize what's inside, you sub-optimized the universe.
oltmanndPaul MilenkovicFor one thing, I am looking for some manner of social contract, some "engineering system boundary around the subsidized portion of the system", so people would just plain give up on the complaint, "why are people complaining about Amtrak subsidy and don't-get-me-started-about-the-airlines!" Put the modes on a level playing field and call it a day. But once you do that, don't come back complaining about how the low level of support for Amtrak is "unfair" and how rail is "underfunded."I think that is a very astute way of thinking. It's all about "the rules of the game". There are never really any truly "fair" rules or "wholly level playing field". I think the suggestion that construction can be subsidized and operations should cover costs is about as good a set of new rules as we can expect. Of couse, it still isn't perfect. There very well may be cases where their are more total monetized benefits to running subsidized service than an unsubsidized one, but if you make the rules too difficult to understand and apply, the game becomes too hard to play and everyone loses.
Paul MilenkovicFor one thing, I am looking for some manner of social contract, some "engineering system boundary around the subsidized portion of the system", so people would just plain give up on the complaint, "why are people complaining about Amtrak subsidy and don't-get-me-started-about-the-airlines!" Put the modes on a level playing field and call it a day. But once you do that, don't come back complaining about how the low level of support for Amtrak is "unfair" and how rail is "underfunded."
I don't have a problem with subsidizing the initial construction costs for transport infrastructure. In fact, I support it as being the only realistic alternative to developing new transport capabilities. But at the end of the day the users should pay directly the operating costs and the infrastructure costs. They should know what the system is costing them. That means, amongst other things, highway users, as an example, should foot the entire bill, through fuel taxes and fees, for the highways and support services that they use. The same concept should apply to passenger rail, airways, etc.
As it is motorists only pay a portion of the cost of the roadways and support services that they use through fuel taxes. The remainder is paid via general taxes, sales taxes, and property taxes. Given the large number of motorists in the U.S., most of them pay these taxes, which in turn flow back in part to cover the cost of the roadways. But they don't see the true cost and, therefore, don't know how much it costs to drive as opposed to using alternative modes of transport. If they did, they might very well change their behavior.
Subsidies can cause people to behave in a sub-optium manner. For example, because Americans don't wear the full cost of driving or at least don't see it directly, they have opted for relatively large, gas guzzling vehicles that create a lot of upstream and downstream problems.
Unfortunately, the probability of getting rid of subsidies, which is the position that I favor, is slim and none. And I know it.
schlimm Sam1The operating subsidy per passenger mile is a variable of the gross passenger load and would be influenced by market density. If more passengers can be attracted to the train, the subsidy per passenger mile would go down and, if enough passengers were attracted at a rate high enough to cover the operating costs, the operating subsidy could be eliminated. Realistically, the probability of this happening in the foreseeable future is low. You mention many statistics and I do not doubt their accuracy but I wonder precisely what is their source? It isn't cited. I don't think most folks expect train revenues to cover the operating costs, because there are other benefits. Ditto with transit systems. Another way of putting it is that the full cost to society of many endeavors is not found on a corporate balance sheet. There are many hidden subsidies. You disparage other countries' accounting standards, but the example of Arthur Anderson and Enron and others makes that sound like the kettle...
Sam1The operating subsidy per passenger mile is a variable of the gross passenger load and would be influenced by market density. If more passengers can be attracted to the train, the subsidy per passenger mile would go down and, if enough passengers were attracted at a rate high enough to cover the operating costs, the operating subsidy could be eliminated. Realistically, the probability of this happening in the foreseeable future is low.
You mention many statistics and I do not doubt their accuracy but I wonder precisely what is their source? It isn't cited.
I don't think most folks expect train revenues to cover the operating costs, because there are other benefits. Ditto with transit systems. Another way of putting it is that the full cost to society of many endeavors is not found on a corporate balance sheet. There are many hidden subsidies. You disparage other countries' accounting standards, but the example of Arthur Anderson and Enron and others makes that sound like the kettle...
All of my financial information, including statistics, comes from published financial statements, as well as reports generated by Amtrak, FAA, U.S. Department of Transportation, General Accountability Office, etc. Since you did not mention a specific statistic, I don't know which one you are referring to.
I also rely on accounting and economic theory, i.e. higher units (passengers) spread over fixed costs reduce the amount of fixed cost allocated to that unit. The same concept applies to some but not all variable costs.
Most Americans are financially illiterate. They are clueless when it comes to understanding how transport in the U.S. or anywhere for that matter is funded. On several occasions, whilst riding Amtrak, I have chatted with my fellow passengers about Amtrak's finances. What I get, more often than not, is a deer in the headlights look. They don't have a clue how passenger rail in this country or any other country is funded. Most of them don't even understand the costs associated with driving their automobile.
The full cost to society would not be found on any balance sheet. It is a statement of position. Costs are found in the income statement and, by inference, in the statement of cash flows. Irrespective of where they are found, at the end of the day, there is no free lunch. Every economic activity, including transport, incurs a cost. And someone has to pay it. If the users don't pay for it, the taxpayers have to take up the slack.
Other countries follow accounting standards that would not cut it in the U.S. Europeans, for example, allow for much more wiggle room in their accounting than we do in the United States. And in my opinion some of their practices, whilst within their acceptable framework, strike me as a bit dodgy. The French rail system, for example, attributes certain station restaurant revenues to train operations. It also appears to allocate certain transfer payments to high speed rail operations without providing detailed information about the transfers. That would never fly in the U.S.
Enron was an anomaly. The problems did not arise because the U.S. has a fundamentally flawed accounting system. They arose because Enron cooked the books and Anderson did not catch it, which happens from time to time. The Enron perpetrators went to jail. And Anderson went out of business. Ultimately, the system worked. Enron was a Fortune 500 company. It, along with maybe 15 to 20 other companies, was caught using fraudulent accounting, which is a fancy term for cooking the books. Thus, during an unusual period, approximately four per cent of the Fortune 500 companies engaged in inappropriate accounting practice. The percentage of businesses that are guilty of fraudulent accounting is generally less than one per cent.
No accounting system is perfect. But the U.S. system is considerably more robust than the system used in Europe, which is also the system that is used in Australia, where I lived and worked for more than five years. I am familiar with both systems. I'll take the imperfections of the U.S. system to the imperfections of the European system.
schlimm henry6TRAINS' Newswire 2/16 story on Lynchburg train making a profit is quite intrestng on several notes. First that it is making a profit in its second month negating the need for a state subsidy. Second that because of this train seats have opened up on the Crescent which has gone to the Crescent's bottom line making it's economics more favorable. I think it underscores the fact that if you think of running passenger trains as a service rather than merely running trains, it will work. The train makes one round trip a day but it is in addition to other trains on the route. Maine's Downeaster service and California's San Diego service, among others, have proven this point in the past, It is just not a point that gets through the crania of politicos! That is certainly good news. Yet sam1 states last night that the Surfer needs a subsidy of ~10 cents per passenger mile. Some discrepancy there, because I also thought I had read in the past that the Surfer was at least breaking even. I would like to see a citation for those numbers.
henry6TRAINS' Newswire 2/16 story on Lynchburg train making a profit is quite intrestng on several notes. First that it is making a profit in its second month negating the need for a state subsidy. Second that because of this train seats have opened up on the Crescent which has gone to the Crescent's bottom line making it's economics more favorable. I think it underscores the fact that if you think of running passenger trains as a service rather than merely running trains, it will work. The train makes one round trip a day but it is in addition to other trains on the route. Maine's Downeaster service and California's San Diego service, among others, have proven this point in the past, It is just not a point that gets through the crania of politicos!
That is certainly good news. Yet sam1 states last night that the Surfer needs a subsidy of ~10 cents per passenger mile. Some discrepancy there, because I also thought I had read in the past that the Surfer was at least breaking even. I would like to see a citation for those numbers.
The results for the Pacific Surfliner can be found on Page C-1 of the September 09 Monthly Operating Report. The number is for September YTD, which in Amtrak's case means for the fiscal year. To determine the true cost of an operation, one needs to consider a minimum of a year. Frequently news sources quote a month when the train may have broken even or had a positive result, but it is the longer term that is important.
The December YTD report, which covers the first quarter of FY10, shows a loss of 13.1 cents per passenger mile. These numbers exclude depreciation and interest, which would increase the loss. Amtrak does not tell us how much. Again, this information is found on Page C-1.
schlimm Sam1 I used the same financial statements. However, I showed the differences between FY08 and FY09, whereas you are showing just a couple of numbers from the financial statements. The financial statements contained in the Monthly Operating Report have not been audited. If prior practices hold forth, some of the results shown in the audited annual report will be different from the numbers shown here. (sorry, the formatting doesn't transfer) I used the audited National Railroad Passenger Corporation and Subsidiaries (Amtrak)Consolidated Financial Statements for the Years Ended September 30, 2008-2009. National Railroad Passenger Corporation and Subsidiaries (Amtrak)Consolidated Statements of Operations(In Thousands of Dollars) Twelve Months Ended 2009 Revenues:Passenger related ......................................................................................... $ 1,813,537 Commuter .......................................................................................................... 147,310 Other ................................................................................................................. 364,767 State capital payments ......................................................................................... 27,179 Total revenues ................................................................................................$ 2,352,793Expenses:Salaries, wages, and benefits ............................................................................ 1,699,101 Train operations .................................................................................................. 245,736 Fuel, power, and utilities ...................................................................................... 272,801 Materials ............................................................................................................ 209,030 Facility, communication, and office related ............................................................ 168,308 Advertising and sales .......................................................................................... 106,189 Casualty and other claims ..................................................................................... 49,118 Depreciation - net of amortization .............................................................. ...........562,584 Other ................................................................................................................. 299,242 Indirect cost capitalized to property and equipment ............................................... (104,871) Total expenses ................................................................................................. 3,507,238 Net loss from continuing operations beforeother (income) and expense ............................................................................... 1,154,445 Other (Income) and Expense:Interest income ..................................................................................................... (65,498) Interest expense ................................................................................................... 175,408 Other expense - net .............................................................................................. 109,910 Net loss .......................................................................................................... $ 1,264,355 Sam1Salaries, wages, and benefits account for approximately 48 per cent of total expenses. They represent 72.2 per cent of revenues. They account for 93.6 per cent of passenger related revenues. However, the flaw in this thinking is that all the salary, wage, and benefit expense is attributable to passenger revenues. This is probably not true. I would imagine most of it is related, since that is Amtrak's primary business and, in the Notes to Consolidated Financial Statements, Amtrak indicates that "approximately 90% of Amtrak’s labor force is covered by labor agreements." Of course that does not mean 90% of salary expense is for union employees, but I imagine around 80% is.
Sam1 I used the same financial statements. However, I showed the differences between FY08 and FY09, whereas you are showing just a couple of numbers from the financial statements. The financial statements contained in the Monthly Operating Report have not been audited. If prior practices hold forth, some of the results shown in the audited annual report will be different from the numbers shown here.
I used the same financial statements. However, I showed the differences between FY08 and FY09, whereas you are showing just a couple of numbers from the financial statements.
The financial statements contained in the Monthly Operating Report have not been audited. If prior practices hold forth, some of the results shown in the audited annual report will be different from the numbers shown here.
(sorry, the formatting doesn't transfer)
I used the audited National Railroad Passenger Corporation and Subsidiaries (Amtrak)Consolidated Financial Statements for the Years Ended September 30, 2008-2009.
National Railroad Passenger Corporation and Subsidiaries (Amtrak)Consolidated Statements of Operations(In Thousands of Dollars)
Twelve Months Ended 2009 Revenues:Passenger related ......................................................................................... $ 1,813,537 Commuter .......................................................................................................... 147,310 Other ................................................................................................................. 364,767 State capital payments ......................................................................................... 27,179 Total revenues ................................................................................................$ 2,352,793Expenses:Salaries, wages, and benefits ............................................................................ 1,699,101 Train operations .................................................................................................. 245,736 Fuel, power, and utilities ...................................................................................... 272,801 Materials ............................................................................................................ 209,030 Facility, communication, and office related ............................................................ 168,308 Advertising and sales .......................................................................................... 106,189 Casualty and other claims ..................................................................................... 49,118 Depreciation - net of amortization .............................................................. ...........562,584 Other ................................................................................................................. 299,242 Indirect cost capitalized to property and equipment ............................................... (104,871) Total expenses ................................................................................................. 3,507,238 Net loss from continuing operations beforeother (income) and expense ............................................................................... 1,154,445 Other (Income) and Expense:Interest income ..................................................................................................... (65,498) Interest expense ................................................................................................... 175,408 Other expense - net .............................................................................................. 109,910 Net loss .......................................................................................................... $ 1,264,355
Sam1Salaries, wages, and benefits account for approximately 48 per cent of total expenses. They represent 72.2 per cent of revenues. They account for 93.6 per cent of passenger related revenues. However, the flaw in this thinking is that all the salary, wage, and benefit expense is attributable to passenger revenues. This is probably not true.
I would imagine most of it is related, since that is Amtrak's primary business and, in the Notes to Consolidated Financial Statements, Amtrak indicates that "approximately 90% of Amtrak’s labor force is covered by labor agreements."
Of course that does not mean 90% of salary expense is for union employees, but I imagine around 80% is.
Professional accountants don't have the luxury of imagining. They are required to show a positive relationship or refrain from an opinion.
Frankly, I don't get your point. Labor costs, which are usually analyzed in relation to total costs, are just one element in the cost structure. Taken out of context, the number does not mean very much.
Amtrak loses a bundle of money, more per passenger mile than any other form of commercial transport, and no matter what spin one trys to put on the numbers, the bottom line has been and probably will continue to be that passenger rail will require a greater subsidy than any other form of commercial or private transport. That does not mean that it should not be supported in select areas, but it should be done with wide open eyes.
My original post, which apparently triggered these responses, was intended to point out that reporters, as well as passenger rail advocates, should tell the complete story when writing about or advocating for passenger rail. It is a costly alternative, and people should know that. Many of the people who participate in these forums, as well as organizations like NARP, point out the upside of passenger rail but fail to mention the downsides. That is dishonest.
Definitely not all labor agreements are union contracts. Anybody who has a contract for a position has a labor agreement and in some companies that could mean 100% of the employees from the executive to janatorial staffs!
Sam1I used the same financial statements. However, I showed the differences between FY08 and FY09, whereas you are showing just a couple of numbers from the financial statements. The financial statements contained in the Monthly Operating Report have not been audited. If prior practices hold forth, some of the results shown in the audited annual report will be different from the numbers shown here.
And where is it stated that 90% of salaries and benefits were for the unions? And if so, the it might be that Amtrak is light on supervisors and managers. You are making too broad a statement without factual support stated. .
schlimmI finally found some Amtrak numbers, though not the ones sam1 refers to. Interesting, nevertheless. In FY 2009 Total revenues were $2.35 bil., of that only $1.95 bil. was from passenger and commuter operations. Salaries and benefits were $1.7 bil. Net depreciation was $562 mil. Track usage to host RR's was $115 mil. So it appears that wages and benefits (90% union) eat up almost all the ticket revenues.
In FY 2009 Total revenues were $2.35 bil., of that only $1.95 bil. was from passenger and commuter operations.
Salaries and benefits were $1.7 bil.
Net depreciation was $562 mil.
Track usage to host RR's was $115 mil.
So it appears that wages and benefits (90% union) eat up almost all the ticket revenues.
Salaries, wages, and benefits account for approximately 48 per cent of total expenses. They represent 72.2 per cent of revenues. They account for 93.6 per cent of passenger related revenues. However, the flaw in this thinking is that all the salary, wage, and benefit expense is attributable to passenger revenues. This is probably not true.
Amtrak owns approximately 46 of the 525 stations that it serves. Pennsylvania Station, New York; Chicago Union Station; and 30th Street Station, Philadelphia, are structured as Amtrak subsidiaries. They charge Amtrak, as well as the other users, rent, which is the major source of revenue. Of course they pay all the costs. Anyone who has been to Penn Station knows that it has heaps of vendors who probably pay a pretty penny for the space that they occupy.
Amtrak maintains another 181 stations, in addition to the 46 stations it owns, as well as 411 platforms throughout the country. It generates revenue from these maintenance contracts.
In many cities, i.e. Dallas, Fort Worth, etc., the station is owned by the city. They don't pay taxes on these facilities. In Dallas, as well as Fort Worth, Amtrak rents a very small portion of the facility. Whether it pays a market rate for the space is unknown. I doubt it. In any case, city ownership is in effect a subsidy for Amtrak. This arrangement is a common pattern throughout the country.
Unfortunately, I have not been able to get hold of any of the financial statements for the stations owned by Amtrak to see if they earn a profit for the parent.
Dallas Union Station is not energy efficient. It is a cavernous building that was opened in 1913 or 14. It was designed to serve thousands of passengers every day. Under current conditions, it serves less than 100 passengers on a typical day. But the whole building must be cooled and heated. And cooling it during July and August in Texas is an expensive proposition.
henry6 This is a note I put on another adjacent thread but has pertinence to this conversation... TRAINS' Newswire 2/16 story on Lynchburg train making a profit is quite intrestng on several notes. First that it is making a profit in its second month negating the need for a state subsidy. Second that because of this train seats have opened up on the Crescent which has gone to the Crescent's bottom line making it's economics more favorable. I think it underscores the fact that if you think of running passenger trains as a service rather than merely running trains, it will work. The train makes one round trip a day but it is in addition to other trains on the route. Maine's Downeaster service and California's San Diego service, among others, have proven this point in the past, It is just not a point that gets through the crania of politicos!
This is a note I put on another adjacent thread but has pertinence to this conversation...
TRAINS' Newswire 2/16 story on Lynchburg train making a profit is quite intrestng on several notes. First that it is making a profit in its second month negating the need for a state subsidy. Second that because of this train seats have opened up on the Crescent which has gone to the Crescent's bottom line making it's economics more favorable. I think it underscores the fact that if you think of running passenger trains as a service rather than merely running trains, it will work. The train makes one round trip a day but it is in addition to other trains on the route. Maine's Downeaster service and California's San Diego service, among others, have proven this point in the past, It is just not a point that gets through the crania of politicos!
According to Amtrak's December Operating Report, which is the latest report posted on-line, the Washington to Lynchburg train turned 13.1 cents of operating profit per passenger mile for the first three months of FY10. Whether that will hold for the whole year remains to be seen.
The Cresent is not doing so well. It lost 30.9 cents per passenger mile before interest and depreciation. That's an increase of 3.1 cents per passenger mile over FY09 results through the first quarter.
henry6 One of the slight of hands here is how the cost is determined.
One of the slight of hands here is how the cost is determined.
The cost accounting rules are defined by the American Institute of Certified Public Accountants and are used by the external auditors in their annual audits of Amtrak financial statements. Allocations, estimates, etc. require judgment, but the wiggle boundaries are fairly strict. If Amtrak's management fails to follow generally accepted accounting principles, they are likely to find themselves facing a qualified or adverse opinion. Clearly, they don't want this in the post Enron and Sarbanes-Oxley period.
My read of Amtrak's financial reports tells me that they follow generally accepted accounting principles, as opposed to generally accepted governmental accounting principles, and they appear to do a pretty good job of it.
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