John WR Sam1In FY12 Amtrak lost 18.21 cents per passenger mile. Yes. But we need to bear in mind that is an average figure. Some lines lost more and some lines lost less. Based on how you figure it, Acela lost very little and may have even made a profit. It is no secret that Amtrak looses the most on its long distance trains. Yet so far Congress still is willing to spend it.
Sam1In FY12 Amtrak lost 18.21 cents per passenger mile.
Yes. But we need to bear in mind that is an average figure. Some lines lost more and some lines lost less. Based on how you figure it, Acela lost very little and may have even made a profit.
It is no secret that Amtrak looses the most on its long distance trains. Yet so far Congress still is willing to spend it.
It is an average. And the losses vary per product or service line.
Amtrak has three service lines, i.e. NEC, State Supported and Other Short Distance Corridor Trains, and Long Distance Trains. In FY12 the NEC had an operating profit of $281.9 million whist the State Supported..trains had an operating loss of $183.8 million and the Long Distance Trains had an operating loss of $600.9 million. Within the NEC the Acela trains had an operating profit of $206.5 million. And three of the State Supporte trains had a small operating profit.
Assuming that the NEC wears 80 per cent of Amtrak's depreciation, interest, and miscellaneous charges, the NEC lost $337.7 million after allocation of these charges. Even if the NEC only wears 70 per cent of these charges, the loss would have been $183 million. The losses would have been mitigated slightly by the state capital payments, but they are only 1.42 per cent of route revenues.
As I pointed out in a previous post, if one spreads the losses over the estimated 2012 federal income tax payers, they are very small per taxpayer. The typical taxpayer, I suspect, is not even aware of the federal subsidies for Amtrak or at least the amount. But small items can add up.
If one rounds the losses on the long distance trains and calculates an opportunity cost associated with their continuance, the numbers become impressive. For example, assuming the current U.S. Treasury long bond interest rate, the opportunity cost of the long distance trains over 25 years would be $27.8 billion. For 30 years it would be $37.2 billion whilst 35 years would come in at $48.5 billion and 40 years could see $62.1 billion. The last number is pretty close to the estimated cost of the California High Speed Rail Project before inclusion of finance charges. These numbers do not include an accretion in the long distance train subsidies attributable to inflation, which historically averages approximately three per cent a year over the long run. Depending on the inflation in the out years, it could have a dramatic impact on the numbers.
So it depends on which case you want to make. If you support the long distance trains, you cite the small amount of federal and state subsidies per taxpayer. It is even smaller than the numbers for federal income tax payers when all taxpayers are taken into consideration. If you don't believe the long distance trains are a high priority, you cite the compounded opportunity costs over time.
oltmanndYeah, but nobody was complaining about it. [Moving to the suburbs in the 50's and 60's]. In fact, migration to the suburbs and highway construction was wildly popular in the 50s and 60s! It's what the people wanted!
I don't know if that is precisely accurate, Don. My experience is that at that time there were people who lived in the cities or inner suburbs and liked it. However, they married and had children and were concerned about schools. They found that suburban schools were better and that drove there decision. It was a trade off, the amenities of the city for the suburban life style. Yes, they did accept a car oriented life style but they would have preferred to have public transit available. But you can't always have what you want. Yet in 1952 Buck Dumaine, then President of the New Haven Railroad, built a parking lot with a shack and two platforms where the tracks crossed Route 128. It was extremely successful and has been repeated in many places since.
John
oltmannd Sam1 oltmannd Sam1Unless he means 12 cents is the amount that most be recovered from the taxpayers. That is exactly it. The 88% is the operating costs recovered from all sources of revenue including payment from states. One of the problems that I have with Boardman, as well as some other advocates of passenger rail, is his tendency to cherry pick numbers. He consistently ignores depreciation, interest, and miscellaneous items, as if somehow they don't count. Yet Amtrak's financial statements include these items in its Consolidated Statement of Operation. The 12.8 cents for the long distance trains is per seat mile. But the seats don't pay the fares and, therefore, don't represent the gap between what the customer pays and what it costs to transport him or her on a long distance train. That number for 2012 was 20.5 cents per passenger mile. And that is before depreciation, interest, and miscellaneous items. The 88% cost recovery overall for Amtrak is all revenue/operating costs. It's a "cherry pick" because it feels like farebox recovery, but it includes state subsidies, so it really isn't. It's important because it provides the "right" message at the Federal level. That is, if Amtrak focuses on corridor development, the Feds will only have to fork over capital money and won't be on the hook for an operating subsidy - or a fairly small one, at worst. It's coupled with the LD train message to Congress "You are the ones directing us to do this, so you need to pay for it. We're not taking any operating "surplus" from corridors to cover the LD trains" It's probably the political message that he thinks he can sell. He can't tell Congress the LD trains are their "baby" and then turn around and tell them their baby is "ugly".
Sam1 oltmannd Sam1Unless he means 12 cents is the amount that most be recovered from the taxpayers. That is exactly it. The 88% is the operating costs recovered from all sources of revenue including payment from states. One of the problems that I have with Boardman, as well as some other advocates of passenger rail, is his tendency to cherry pick numbers. He consistently ignores depreciation, interest, and miscellaneous items, as if somehow they don't count. Yet Amtrak's financial statements include these items in its Consolidated Statement of Operation. The 12.8 cents for the long distance trains is per seat mile. But the seats don't pay the fares and, therefore, don't represent the gap between what the customer pays and what it costs to transport him or her on a long distance train. That number for 2012 was 20.5 cents per passenger mile. And that is before depreciation, interest, and miscellaneous items.
oltmannd Sam1Unless he means 12 cents is the amount that most be recovered from the taxpayers. That is exactly it. The 88% is the operating costs recovered from all sources of revenue including payment from states.
Sam1Unless he means 12 cents is the amount that most be recovered from the taxpayers.
That is exactly it. The 88% is the operating costs recovered from all sources of revenue including payment from states.
One of the problems that I have with Boardman, as well as some other advocates of passenger rail, is his tendency to cherry pick numbers. He consistently ignores depreciation, interest, and miscellaneous items, as if somehow they don't count. Yet Amtrak's financial statements include these items in its Consolidated Statement of Operation.
The 12.8 cents for the long distance trains is per seat mile. But the seats don't pay the fares and, therefore, don't represent the gap between what the customer pays and what it costs to transport him or her on a long distance train. That number for 2012 was 20.5 cents per passenger mile. And that is before depreciation, interest, and miscellaneous items.
The 88% cost recovery overall for Amtrak is all revenue/operating costs. It's a "cherry pick" because it feels like farebox recovery, but it includes state subsidies, so it really isn't.
It's important because it provides the "right" message at the Federal level. That is, if Amtrak focuses on corridor development, the Feds will only have to fork over capital money and won't be on the hook for an operating subsidy - or a fairly small one, at worst. It's coupled with the LD train message to Congress "You are the ones directing us to do this, so you need to pay for it. We're not taking any operating "surplus" from corridors to cover the LD trains"
It's probably the political message that he thinks he can sell. He can't tell Congress the LD trains are their "baby" and then turn around and tell them their baby is "ugly".
In FY12 Amtrak lost 18.21 cents per passenger mile. That's after state payments as well as depreciation, interest, etc. It is the amount the federal taxpayers had to chip in to cover Amtrak's system losses.
If Amtrak were a competitive business managed like Apple, the CEO might just tell Congress that its baby is ugly. Apparently that is what Tim Cook did this week when he testified regarding Apple's tax avoidance and tax deferral strategies. He reminded the Congress that Apple was only taking advantage of the tax laws and treaties that Congress had passed or ratified. The implication was that the tax laws are ugly. According to the news reports that I read he got high praise from the Congress persons for being so forthright.
squiggleslashAnd the government(s) actively supported (and continues to, to this day) its primary competition, to the point of making car ownership effectively mandatory for anyone living in any new development since the early 1950s.
Yeah, but nobody was complaining about it. In fact, migration to the suburbs and highway construction was wildly popular in the 50s and 60s! It's what the people wanted!
squiggleslash- A sane transportation infrastructure consists of multiple transportation options, because people have different transportation needs.
squiggleslash- We pretend roads are self funding through usage taxes and that nobody's forced to pay towards their use that doesn't use them. That's not true..
squiggleslash- We also make it way more expensive than it should be - there really isn't any reason why a single car (D/E/DE)MU needs to be so much heavier than a bus. And our planning policies, which prevent high density development around stations, also make each train generate far revenue than it should.
Sure. We could get coaches from China for less than $1M. Why are we spending nearly $3M for commuter coaches?
The Gov't doesn't "just do things" that are "evil". They act based on what their constituents want. They want roads? Roads get built.
The problem we have, isn't that gov't or people in general are too stupid or ignorant to see the "light of goodness" in trains, it's that they have arranged their life around the in infinite OD pairs cars and roads provide. Trains to line-haul, batch transport. We don't live that way....but we are starting to, again.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Sam1The government does not have a social obligation to run a passenger rail operation. Boardman's assertion that Amtrak has a social obligation to provide passenger train service to a few rural communities, whilst leaving out the overwhelming majority of rural communities that it does not serve defies any form of logic that I know.
I'm not entirely sure it's as clear cut as that. The government(s)'s (state & federal) involvement with rail and passenger rail in particular has been murky from the start, with it expecting the railroads to build out essential infrastructure while capturing the majority of the value pretty much from the beginning. I'm a strong believer in the notion that passenger rail didn't so much become obsolete (as those on the anti-rail side argue) so much as it was strangled to death by local, state, and Federal governments from the mid 1920s on.
How was it strangled to death? Well, it was taxed as if there was a link between revenues and the amount of value it added to land. It was regulated to an extreme with rail being required to provide historical routes regardless of current needs. It was regulated poorly. Its infrastructure was actively attacked by local government.
And the government(s) actively supported (and continues to, to this day) its primary competition, to the point of making car ownership effectively mandatory for anyone living in any new development since the early 1950s.
Now, you may argue, fairly, that it's only the government's job to ensure that essential infrastructure is provided, not that a particular form of infrastructure be provided. I'd sort of agree, except that that's not happening. Even the most swivel-eyed car zealot has to admit, at some point, that not everyone can drive, not everyone should drive, and not everyone wants to drive, and that buses are hardly a substitute given they're, by their nature, cramped, claustrophobic, motion-sickness inducing, and slow.
And the market has, actually, spoken but few in government actually want to hear. Calls for more passenger rail are not from some tiny band of zealots, they're from people willing to put their money where their mouths are. Homes built within walking distance of rail transit stations are generally worth around 80% more than similar homes with similar demographics built away from transit. Local governments are making money hand over fist from increased property taxes from homes and businesses built near transit. They're also making money hand over fist <i>taxing the infrastructure</i> needed to provide passenger rail.
And these taxes should continue to be spent on the suburbs... why, exactly?
Now, obviously, the way we hold governments to account needs tweaking. We fund Amtrak and local passenger systems like Tri-rail through a variety of Federal, state, and local taxes. We pretend that Amtrak is solely a Federal operation, and we split local and national passenger rail up in a way that hides the fact they're part of a connected whole. We steal money from rail infrastructure and use it to build roads, but we pretend, because 2/3 of the money used to build Interstate highways comes from gas taxes, that the road system is self funding and that nobody is forced to pay for it who doesn't have a car.
And so it becomes easy to miss. The bottom lines though are:
- Government is responsible for ensuring that we have high quality transportation infrastructure.
- A sane transportation infrastructure consists of multiple transportation options, because people have different transportation needs.
- We pretend roads are self funding through usage taxes and that nobody's forced to pay towards their use that doesn't use them. That's not true..
- We don't actually know if rail is self funding because the value it generates is split over so many different entities. We seem to go out of our way to make it awkward to find the real numbers.
- We also make it way more expensive than it should be - there really isn't any reason why a single car (D/E/DE)MU needs to be so much heavier than a bus. And our planning policies, which prevent high density development around stations, also make each train generate far revenue than it should.
There's an argument for saying that passenger rail shouldn't be provided by the current state owned and Federally owned corporations that provide it. But I think there's a fair argument for suggesting that Federal, state, and local governments should ensure the option is available, be it via a pseudo-subsidized system, or by removing all the barriers that make it so "unprofitable" for private companies to provide.
daveklepper The present skelatal long distance service does serve most rural communities, in that a three hour auto journey can bring 90% of the rural population to a train station. The social responsibility results from the fact that a majority of USA citizens still want some long distance train service and tell their elected representatives. Many of them have the "prefer to drive or fly but want the train there in case I need it" attitude. ON a per-taxpayer basis they are happy to fork over the $12 per year that keeps them happy about this matter. That is the social responsibility.
The present skelatal long distance service does serve most rural communities, in that a three hour auto journey can bring 90% of the rural population to a train station. The social responsibility results from the fact that a majority of USA citizens still want some long distance train service and tell their elected representatives. Many of them have the "prefer to drive or fly but want the train there in case I need it" attitude. ON a per-taxpayer basis they are happy to fork over the $12 per year that keeps them happy about this matter. That is the social responsibility.
Joe B stated that the LD trains serve 40% of rural America.
I interpret what he says as:
1. LD trains are a form of social justice - primarily - as they are available to a significant % of the rural population - whether people ride them or not.
2. LD trains are primarily of interest to Amtrak because Congress mandates and directs their operation
3. Amtrak will do it's best to run what Congress mandates
4. Amtrak does not want funding of LD trains to interfere with corridor development.
I would argue that there are cheaper and better ways to do #1, that Amtrak could "corridor-ize" many of the eastern LD routes by making day trains out of the route segments and #4 is the real point he's trying to hammer home - which I see as a hopeful sign.
CSSHEGEWISCH Joe Boardman seems to have come to the conclusion that the long-distance trains are something that he's stuck with in order to mollify Congress so he can get what he really sees as useful and practical in the various corridors.
Joe Boardman seems to have come to the conclusion that the long-distance trains are something that he's stuck with in order to mollify Congress so he can get what he really sees as useful and practical in the various corridors.
John WR Sam1Posters to these forums who are knowledgeable about the origins of Amtrak have argued that it is unclear whether Amtrak had or has a mandate to run long distance trains. Joe Boardman was appointed President of Amtrak by George W. Bush. He does not have a history with the corporation that goes back to the 1970's. And he had not commented on the Pioneer or National Limited, at least not as far as I know. But I think it is clear that he believes our long distance trains will continue to not cover their costs. He also believes that they are important to the country and to the areas they serve. He as also pointed out that intercity bus companies have contracted their service. So at some point is it valid for government to provide a service for people that will never be taken up by the private sector as it is unprofitable because there is a social need for that service? In this discussion my point (and my only point) has been that Joe Boardman believes that a social contract exists between Congress and the American people for Amtrak to continue to operate its long distance passenger rail service but he does not propose extending it. In the past we have sometimes disagreed because I believe there have been unconsidered subsidies while you question my belief. Here, however, you and I agree long distance passenger service is not profitable and there is no reason to believe it will be. Rather the issue here is whether it is valid for government to provide service where there is a social need when that service will never be profitable.
Sam1Posters to these forums who are knowledgeable about the origins of Amtrak have argued that it is unclear whether Amtrak had or has a mandate to run long distance trains.
Joe Boardman was appointed President of Amtrak by George W. Bush. He does not have a history with the corporation that goes back to the 1970's. And he had not commented on the Pioneer or National Limited, at least not as far as I know.
But I think it is clear that he believes our long distance trains will continue to not cover their costs. He also believes that they are important to the country and to the areas they serve. He as also pointed out that intercity bus companies have contracted their service. So at some point is it valid for government to provide a service for people that will never be taken up by the private sector as it is unprofitable because there is a social need for that service? In this discussion my point (and my only point) has been that Joe Boardman believes that a social contract exists between Congress and the American people for Amtrak to continue to operate its long distance passenger rail service but he does not propose extending it.
In the past we have sometimes disagreed because I believe there have been unconsidered subsidies while you question my belief. Here, however, you and I agree long distance passenger service is not profitable and there is no reason to believe it will be. Rather the issue here is whether it is valid for government to provide service where there is a social need when that service will never be profitable.
The government does not have a social obligation to run a passenger rail operation. Boardman's assertion that Amtrak has a social obligation to provide passenger train service to a few rural communities, whilst leaving out the overwhelming majority of rural communities that it does not serve defies any form of logic that I know.
John WR Joe Boardman suggests eincresing speed to between 125 mpg and 150 mph but no more. You ask if reduching trip frime from abut 5 1/2 hours to 3 1/2 hours is worth while. But based on his speech Joe Boardman would most likely say it is. John
Joe Boardman suggests eincresing speed to between 125 mpg and 150 mph but no more. You ask if reduching trip frime from abut 5 1/2 hours to 3 1/2 hours is worth while. But based on his speech Joe Boardman would most likely say it is.
John WR Sam1If an objective of the long distance trains is to "pay justice for those who are being abandoned in rural areas", then Amtrak or another government agency should provide passenger train service to every community in the United States above a set population, i.e. 25,000, especially those that serve agricultural areas. And the Congress should come up with the money fund it. Sam, If we accept the "justice to those who are being abandoned" argument you are absolutely correct. In an ideal world that would happen. However, Amtrak must operate within the budget Congress decides and that budget is not sufficient to provide rail passenger service for "every [small] community in the United States. So the issue than becomes should Amtrak provide service to those communities it can reach or should all service be denied becaue Amtrak cannot achieve perfect service. John
Sam1If an objective of the long distance trains is to "pay justice for those who are being abandoned in rural areas", then Amtrak or another government agency should provide passenger train service to every community in the United States above a set population, i.e. 25,000, especially those that serve agricultural areas. And the Congress should come up with the money fund it.
Sam,
If we accept the "justice to those who are being abandoned" argument you are absolutely correct. In an ideal world that would happen. However, Amtrak must operate within the budget Congress decides and that budget is not sufficient to provide rail passenger service for "every [small] community in the United States. So the issue than becomes should Amtrak provide service to those communities it can reach or should all service be denied becaue Amtrak cannot achieve perfect service.
My argument that Amtrak should provide service to every rural community with a population above a set trigger point is absurd. I intended it to be so. It was designed to point out the weakness of Boardman's assertion that dropping the long distance trains would leave rural America high and dry. By his logic most of rural America is high and dry since it lost passenger train service decades ago. For a very good reason. People did not ride them in sufficient numbers to cover their costs.
If the communities served by the long distance trains lost them, intercity bus companies could take up the slack, albeit without lounge, dinning, and sleeping cars, which are used by a tiny minority of Amtrak's customers. This is what has happened in Texas.
In Texas Amtrak serves the largest cities with once a day train service that is used by very small percentage of the population. It also serves some smaller communities, i.e. Marshall, Longview, Mineola, etc. But it does not serve Abilene, Brownsville, Lubbock, Midland, etc. The cities get Amtrak service in Texas or don't is a function of politics and has little if anything to do with supporting rural communities. Boardman's argument is not logically consistent.
Posters to these forums who are knowledgeable about the origins of Amtrak have argued that it is unclear whether Amtrak had or has a mandate to run long distance trains. Oltmand, for example, if I remember correctly, has stated that at least some of the enablers envisioned Amtrak dropping its unprofitable routes after a reasonable time if they could not cover their costs. Clearly, Amtrak has some wiggle room in its Congressional directive regarding the long distance trains, i.e. it has dropped the National Limited, Pioneer, etc.
CSSHEGEWISCHJoe Boardman seems to have come to the conclusion that the long-distance trains are something that he's stuck with in order to mollify Congress so he can get what he really sees as useful and practical in the various corridors.
I agree with the second part of the statement. But I think Boardman argues Congress should be held to its agreement made back in 1970.
blue streak 1All that upgrading for 2 hour time savings. ( 5 stops ) But do that before even thinking of 150 / 220 MPH.
Streak,
Joe Boardman suggests increasing speed to between 125 mpg and 150 mph but no more. You ask if reducing trip frime from abut 5 1/2 hours to 3 1/2 hours is worth while. But based on his speech Joe Boardman would most likely say it is.
squiggleslashBut I suspect that actually much could be improved without trying to get freight railroads who really don't care all that much about passenger rail to upgrade their lines.
It has been suggested that splitting trains in two about mid point and running both as day trains. People wanting to travel beyond the mid point of the route would stay in a hotel over night.
It is interesting that he noted that food costs are only 1-2% of all of Amtrak costs.
Johnny
John WR Joe Boardman is stronger than I have ever heard him in being a leader for passenger rail in the US. But it is also a limited vision of a limited passenger rail system.
Joe Boardman is stronger than I have ever heard him in being a leader for passenger rail in the US. But it is also a limited vision of a limited passenger rail system.
From a person who takes offense at the suggestion that they are a "passenger train advocate" or otherwise express opinions and engage in activities towards the furtherance of passenger train service, that is a rather strong judgement to make of the Amtrak director.
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
John WR On high speed rail corridors in the midwest he say 220 mph is not possible but realistically speeds could be at least 125 mph and probably 160 mph.
On high speed rail corridors in the midwest he say 220 mph is not possible but realistically speeds could be at least 125 mph and probably 160 mph.
“We ask Congress to make the right decisions by acting with prudence and having the courage to stay the course that they set in 1970 and 1971, and to pay justice for those who are being abandoned in rural areas.”
If an objective of the long distance trains is to "pay justice for those who are being abandoned in rural areas", then Amtrak or another government agency should provide passenger train service to every community in the United States above a set population, i.e. 25,000, especially those that serve agricultural areas. And the Congress should come up with the money fund it.
I am not sure what Boardman means by recovery of 12 cents on every dollar spent. In FY12 the long distance trains lost $600.9 million before depreciation, interest, and miscellaneous charges. The loss was 20.5 cents per passenger mile and 12.8 cents per seat mile. This was on revenues of $557.1 million. Unless he is referring to the 12.8 cents lost for every seat mile, which clearly is not a recovery. Unless he means 12 cents is the amount that most be recovered from the taxpayers. If this is the case, it is not correct because the loss of 12.8 cents was before depreciation, etc., which in the case of the long distance trains is not great but probably adds a penny or two to the loss per seat mile.
125mph would be a huge improvement. But I suspect that actually much could be improved without trying to get freight railroads who really don't care all that much about passenger rail to upgrade their lines.
The Silver service takes over 30 hours to do a complete Miami to NYC trip, which is around 1200 miles. That's an average speed of much less than 50mph. The Silver Star has 35 stops excluding Miami and NYC themselves. Many of these stops take place at absurd times in the morning when nobody's going to board (6 between 10pm and 7am), others stop at a collection of stations all served by a comprehensive commuter system (Tri-rail in Florida, for example, covers six of them, and even five stops along the NEC between DC and NYC not-inclusive), and what's left... well, is it really sane to run a sleeper train from North Carolina to NYC when the entire journey is during the day?
I'm not an expert in railroading, but I suspect that the train could be made to run entirely during daylight hours from Miami to NYC by eliminating most of the stops, massively increasing its popularity in the process.
And that's without getting CSX to improve anything...
On News Wire Bob Johnston reports Joe Boardman's speect to the Midwest HIgh Speed Rail Association. The report says to me that Boardman is a militant moderate.
On long distance trains Boardman insists that they are important and are part of a contract between Amtrak and the American People which was made in 1970 BUT he does not propose to add any more because they do not make a profit. He also says the American people must hold Congress to the terms of the contract.
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