Trains.com

New York to Baltimore

11425 views
101 replies
1 rating 2 rating 3 rating 4 rating 5 rating
  • Member since
    April 2003
  • 305,205 posts
Posted by Anonymous on Thursday, September 5, 2013 3:39 PM

henry6

Sam1

No...discounts are offered upfront when it is a known factor, i.e., a guarantee minimum amount of money to be spent or milage or whatever the criteria....it is money in the bank, it can be used as Irrespective of when they offered, for whatever period of time, if a business offers discounts that don't cover the variable costs and the fixed costs or at least make a contribution to the fixed costs, it ultimately goes out of business.  It is a relatively simple accounting problem.

Of course we are talking business professionals and not amature model railroaders.  If a discount is offered or negotiated it will be with a profit for the railroad; no business would sell its product for breakeeven or less!   It is a relatively simple rule of business.  No body at Amtrak is an amature nor a non business person.  If they did as you suggest, Sam 1, they'd be out of a job and the company out of business.

You have quoted yourself and mixed my comments in with your comments.  

My argument is simple.  Don't offer discounts unless they cover the variable costs up front and ultimately all or most of the fixed costs. Sometimes a business will offer a loss leader if it has other product lines to make up the difference, or the discounts can be used to hook loyal clientele that will subsequently carry the note.  This is especially true for many start-up businesses. This is what I said or at least mean from the get go.  

As noted the key point with respect to Amtrak's premium services (Acela, business class, sleepers, etc.) is whether the pricing covers the incremental costs.  Without access to Amtrak's books, it is impossible to know. It may be worth remembering, however, that in its 2005 report the IG found, amongst other things, that the subsidy for Amtrak's sleeping car passengers was greater than the subsidy for its coach passenger. Raises the question of what has changed?

  • Member since
    December 2001
  • 8,156 posts
Posted by henry6 on Thursday, September 5, 2013 3:49 PM

Sam1...don't play Amtrak or any business for being stupid about what they have to do to stay in business when making contracts and rate.  Of course they know they have to get enough to cover costs and add something to the kitty...Stop making them out to be idiots because they aren't! 

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.

  • Member since
    April 2003
  • 305,205 posts
Posted by Anonymous on Thursday, September 5, 2013 4:39 PM

CJtrainguy

Sam1

As of the end of Fy12 Amtrak had accumulated losses of $29.3 billion. If the numbers are restated inn 2012 dollars, the accumulated losses would be north of $40 billion.  Amtrak should not be offering discounts or services that acerbate these losses.

One wonders then what level of annual losses would be acceptable for Amtrak?

Or would it be your contention that if Amtrak can't be run at a profit, considering all possible and sundry expenses that can be charged to it, it should not be run at all?

Over the past four years Amtrak has lost approximately $1.2 to $1.3 billion per year.  Outside of a few budget hawks, most people, by their silence, appear to find this acceptable.  

Most Americans don't use Amtrak.  In FY11 only .13 per cent of intercity passenger miles was by train, as per Table I-40, National Transportation Statistics. For those who use Amtrak, most of the people that I have encountered don't understand how it is funded. 

In FY10 the average federal Amtrak subsidy was $ $15.50 per taxpayer. The average tax bill for a median income family was $4,828 as per IRS Table 1.1.  Needless to say, that did not register for most taxpayers and, therefore, did not raise any concern about Amtrak's federal subsidy.

Amtrak requires approximately $1 dollar of federal and state subsidy for every $2 of revenue.  Could privatizing Amtrak generate a better result?  That is a key question.  Covering all of the variables associated with this issue is beyond the scope of this thread.  Or maybe even these forums.

The long distance trains cannot generate enough revenue to cover their costs. Depending on how much additional capital is plowed into the NEC and how quickly it is amortized, it could cover all of its costs in time. Interestingly, as I plan to show later this year, after the FY13 numbers have come in, many of the State Supported and Other Short Corridor Trains could cover all of their expenses with some tweaking of their pricing and better cost control.  

  • Member since
    July 2006
  • 9,610 posts
Posted by schlimm on Thursday, September 5, 2013 5:13 PM

Sam1
My argument is simple.  Don't offer discounts unless they cover the variable costs up front and ultimately all or most of the fixed costs.

In re the above, take a look sometime at Ken's (greyhound) reasoning on offering differential rates on the same route and distance on freight lines.   The airlines do the same.  Ditto with Megabus.   It is better to fill a seat or car at a bargain fare then to let it sit empty.   Some customers might object, but it is a sane practice in a deregulated market.

C&NW, CA&E, MILW, CGW and IC fan

  • Member since
    March 2013
  • 297 posts
Posted by CJtrainguy on Thursday, September 5, 2013 5:30 PM

Sam1: From your elaboration it then seems that you side with the people who would prefer to see no government funding of Amtrak and hence Amtrak ceasing to exist. Unless a private knight in shining armor steps in and magically starts running passenger trains for profit.

Personally, I have nothing against $15.50 of my federal taxes going to fund Amtrak. There are many wasteful things funded by government at all levels, but passenger rail as such is not one of them. 

I am all for running things efficiently and I am sure there are many places where Amtrak could do better in that area. At the same time, being fed hand-to-mouth as a beggar by annual budget appropriations that may or may not be there next year, makes it very hard to plan long term. I have personal experience of that, at one time working for state and federal government and trying to manage a media production facility that required consistent investment and long term planning, but what we got was a random amount every year, usually in no relation to actual need. Yet we managed to keep moving forward.

Running passenger service as a comprehensive network in a privately funded and managed model that generates profit is either utterly rare or non-existent in this world. Most passenger rail is either government run or funded by government money paying private operators in a bid or franchise system. There are a few passenger rail services that purport to run regular service on a totally for-profit, self-funded basis, but they are typically limited to running between isolated city pairs and only on days and times when they can be profitable. That doesn't constitute a network that will seriously attract travelers.

All that to say that I don't believe that re--privatizing passenger rail in the US will go anywhere. There just won't be any takers.

Finally, that $1.2-1.3 billion a year you refer to as Amtrak's loss, I assume is the federal budget appropriation. I consider that an investment. Just as we invest in education, defense, health care or other services that make our society what it is.

  • Member since
    April 2003
  • 305,205 posts
Posted by Anonymous on Thursday, September 5, 2013 5:41 PM

schlimm

Sam1
My argument is simple.  Don't offer discounts unless they cover the variable costs up front and ultimately all or most of the fixed costs.

In re the above, take a look sometime at Ken's (greyhound) reasoning on offering differential rates on the same route and distance on freight lines.   The airlines do the same.  Ditto with Megabus.   It is better to fill a seat or car at a bargain fare then to let it sit empty.   Some customers might object, but it is a sane practice in a deregulated market.

It is better to fill an empty seat if you can recover the variable cost of that seat and contribute something to the fixed costs. We don't know whether Amtrak's pricing models do that because we don't have access to them.

We use discounts and incentive pricing in the competitive electric utility market in Texas. But we cover the variable costs.  They can change depending on time of day.  We try to get something for the fixed costs, but don't always do so, at least in the short run, for a variety of complex reasons.

Southwest Airlines and Greyhound are based in Dallas. We worked closely with them to develop some of our costing models. They were way ahead of us in understanding and pricing in competitive markets.  I don't remember them ever saying that they did not attempt to recover their variable costs. The run empty seats rather than give them away.

Sometimes it is better to fill the seat even if you cannot contribute anything to the fixed costs, providing you are knowingly selling it as a lost leader, and anticipate recovering it over time. But if one loses money filling an empty seat, it is an ineffective marketing and pricing strategy.

Amtrak has lost money every year since its inception.  The NEC, assuming that it wears 80 per cent of the depreciation, which may be understated, loses as much per passenger mile as the long distance trains after allocations of its fixed costs.  A real business has to recover all of its costs. Not just the operating costs. Given Amtrak's dismal financial record, I would like to see the books before concluding that its Acela service is a good go and discounts contribute positively to its outcomes.

  • Member since
    January 2001
  • From: Atlanta
  • 11,968 posts
Posted by oltmannd on Thursday, September 5, 2013 7:30 PM

Sam1
It is better to fill an empty seat if you can recover the variable cost of that seat and contribute something to the fixed costs.

Yes, the very, very short term variable cost, which is incremental fuel and  seat fabric wear.  On a bus or a train, the incremental cost for filling an otherwise empty seat is pretty much the cost to book the ticket!  An extra 200# of weight toward rolling resistance fuel (aero drag change is zero) is nearly zero.

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

  • Member since
    August 2012
  • 3,727 posts
Posted by John WR on Thursday, September 5, 2013 8:10 PM

Sam1
In FY10 the average federal Amtrak subsidy was $ $15.50 per taxpayer.

I wonder how the number of "taxpayers" is being counted here, Sam.  IRS defines "taxpayer" as any person or corporation that is subject to a tax administered by IRS.  That is, there are not just persons who actually pay taxes but also personw who do not pay taxes and even most persons who do not file returns because they are not required to.  Almost all people in the US are subject to taxes.  I wonder if all of those people are included.  When it comes to people who don't file returns I wonder how we can even know how many there are.  For example, how can IRS know how many undocumented workers who are paid off the books there are in the United States.  

  • Member since
    April 2003
  • 305,205 posts
Posted by Anonymous on Thursday, September 5, 2013 9:46 PM

John WR

Sam1
In FY10 the average federal Amtrak subsidy was $ $15.50 per taxpayer.

I wonder how the number of "taxpayers" is being counted here, Sam.  IRS defines "taxpayer" as any person or corporation that is subject to a tax administered by IRS.  That is, there are not just persons who actually pay taxes but also personw who do not pay taxes and even most persons who do not file returns because they are not required to.  Almost all people in the US are subject to taxes.  I wonder if all of those people are included.  When it comes to people who don't file returns I wonder how we can even know how many there are.  For example, how can IRS know how many undocumented workers who are paid off the books there are in the United States.

I should have been more precise. I should have said per federal personal income tax payer. In its statistics the IRS differentiates between tax filers and persons with a tax liability, i.e. obligated to pay federal income tax.   

If one includes everyone who files a return, as well as other sources of federal tax income, which would be difficult to identify, the amount per tax filer would be less, since in 2010 40 per cent of those filing a tax return did not pay federal income taxes.   

The point is on a taxpayer, filer, etc. basis, Amtrak's loss (subsidy) is small and probably does not register with most people. They don't feel it and, therefore, don't react to it. But Amtrak's subsidy, along with all the other small stuff adds up.

Each year the CBO puts out a report on steps that could be taken to reduce the federal deficit. It consists of reducing or eliminating out flows and/or enhancing revenues. I downloaded the data in 2011into an Excel spreadsheet and went through it line by line.

I isolated every item that was less than $10 billion, which at the time was a small portion of the estimated annual federal deficit of $1.25 trillion. I then divided this number by the number of federal income tax payers, not filers, for 2009, since the IRS numbers are two years behind in their release. The estimated number in payers in 2011 was reasonably close to the confirmed number of filers in 2009, so I decided to stick with the 2009 numbers.

The federal cash transfer to Amtrak in 2011 was $3.8 billion, which consisted of the normal operating and capital subsidy, plus the ARRA appropriations. It worked out to $45 per federal income tax payer. Spread across all filers, as well as other persons, the amount would have been less, but even the IRS does not try to calculate that number.  Not much of a burden irrespective of how one spreads it.  

Here some other numbers:  Post Office $109.90, Highway Trust Fund Transfer $28.08, Delay FAA's Net Gen $7.28, reduce the subsidized crop insurance premium $4.88, eliminate the Essential Air Service Program $2.16, eliminate cotton see storage subsidy $.01.  

As is the case with the Amtrak subsidy, none of these payments, on a per capita or taxpayer basis are large. And every proponent of these subsidies, including Amtrak's supporters, argue that the are in the nation's interest. They are off the radar.  But they added up to $721 or 14.9 per cent of the average tax paid by a median income family.  

The real biggies are Social Security, Medicare, Medicaid, and defense.  But if no one is willing to give on his or her federal perk, how does the nation ever solve its fiscal problems?  One way to reduce the Amtrak subsidy would be to drop the long distance trains, which are used by less than one per cent of intercity travelers. Needless to say, this issue is a hot potato.  As Texans like to say when their perks are being threatened, now you gone to meddling boy.

  • Member since
    July 2004
  • 2,741 posts
Posted by Paul Milenkovic on Friday, September 6, 2013 8:17 AM

Sam1
My argument is simple. Don't offer discounts unless they cover the variable costs up front and ultimately all or most of the fixed costs. Sometimes a business will offer a loss leader if it has other product lines to make up the difference, or the discounts can be used to hook loyal clientele that will subsequently carry the note.

Didn't the Trains Magazine "Professional Iconoclast" columnist John Kneiling offer up the parable of the automobile dealership "that lost money on every car sold, but made it up on the volume"?

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

  • Member since
    December 2001
  • 8,156 posts
Posted by henry6 on Friday, September 6, 2013 8:29 AM

The dealer did not lose money on each car sold....he lowered the price and sold more cars to make up the difference but he sure as hell didn't sell below his costs.   That is he took a smaller profit margin per car but his volume of sales made up for it..  

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.

  • Member since
    July 2004
  • 2,741 posts
Posted by Paul Milenkovic on Friday, September 6, 2013 9:50 AM

henry6

The dealer did not lose money on each car sold....he lowered the price and sold more cars to make up the difference but he sure as hell didn't sell below his costs.   That is he took a smaller profit margin per car but his volume of sales made up for it..  

There is no car dealer who did that.  Note that I said "parable."  Like in the Bible.  Even if your belief is in the literal truth of the Bible, there was no Samaritan man who helped the other man who was beaten and robbed.  It is a parable, in other words a story, a story told to illustrate a moral principle, in this case, a man who held religious beliefs contrary to the orthodoxy of the day but was pure of heart in taking pity on a man beaten by robbers and who translated those feelings into concrete action.

On the other hand, in John Kneiling's times, there were railroad companies that were losing money, not only on their passenger service pre-Amtrak but also on their freight operations, and in Kneilings (unhumble) opinion, railroad management did not have working accounting systems in hand to tell where their money was going, and they were engaged in failed marketing efforts that did not staunch the losses.  In other words, they lost money on every car sold, but they were hoping to make it up on the volume.

Maybe individual car dealers never did such a thing, but in recent history, the U.S. auto companies were indeed selling every automobile at a loss and hoping to make up the difference in marketing arrangements.  Famously, the US auto makers were selling large numbers of cars to rental car companies and other volume purchasers of automobile fleets (Federal and state governments, etc.).  These volume sales may have covered the direct cost or avoidable cost or incremental cost of manufacturing those cars, but the auto companies had large fixed costs, especially retiree pensions and health care contributions, that these sales were not covering.  By "dumping" large numbers of cars into "those channels", there was a flood of used cars on the market (like Hertz selling its rental cars to consumers) that canabilized the sales of new cars. 

The flood of used cars also depressed "resale value" of new cars.  Now I know there are a few of us cheapskates who pinch our pennies, buy a new car for cash, and then try to keep it going for 20 years, but by and large the new car buyers buy their cars on a finance arrangement and trade them in, and there is a second tier of car buyers who buy the one-owner used cars, on down the line to people who buy "junkers" because that is what they can afford or they have the mechanical skills to keep them running.  The depressed resale value of the American cars increased the finance payment of owning a new car, that in turn made owning a new American car much more expensive than the Japanese and Korean competition, losing sales, which was driving the American automakers into bankruptcy (Ford escaped the need for the Federal bailout by "the skin of their teeth.") (yeah, yeah, a Honda is an "American car" because it is assembled in Ohio whereas a Ford is assembled in Mexico, but you know what I mean).

Now the Federal government bailed out the Eastern freight railroads in the form of Conrail just as the Federal government recently bailed on two of the Big 3 automakers.  But the government somehow managed to "spin off" private freight railroad companies in the form of CSX and what was sold off to Norfolk Southern, the government managed to "spin off" Chrysler to Fiat and, they tell me, is divesting itself of GM (a union guy proudly has a bumper sticker in my parking lot at work "Bin Laden is dead and GM is alive").  But the bailout of passenger service in the form of Amtrak subsidy continues for 40 years and the idea of "spinning off" the NEC as a profit-making entity and asking state governments to pony up for the outside-the NEC trains, that idea gets instant and vocal criticism from the passenger train support community.

A car dealer who sells every car at a loss and makes it up on the volume is a parable.  A car dealer who sells you a car "below invoice" is also a fable because the invoice is only a "manufacturer's list price" on sale to the dealer, upon which discounts are offered by the automaker.  But Amtrak is indeed selling every occupied train seat at a loss and "making it up on the volume", the profit on the Acela not withstanding as the Acela doesn't cover the costs of the NEC "fixed plant."

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

  • Member since
    July 2006
  • 9,610 posts
Posted by schlimm on Friday, September 6, 2013 12:55 PM

I guess it is so.  Now Acela, etc. are expected to cover the fixed costs of ROW infrastructure.  The goalposts have been moved (not a parable, a metaphorical example).

C&NW, CA&E, MILW, CGW and IC fan

  • Member since
    January 2001
  • From: Atlanta
  • 11,968 posts
Posted by oltmannd on Friday, September 6, 2013 2:06 PM

Paul Milenkovic
On the other hand, in John Kneiling's times, there were railroad companies that were losing money, not only on their passenger service pre-Amtrak but also on their freight operations, and in Kneilings (unhumble) opinion, railroad management did not have working accounting systems in hand to tell where their money was going, and they were engaged in failed marketing efforts that did not staunch the losses.  In other words, they lost money on every car sold, but they were hoping to make it up on the volume.

Penn Central's intermodal marketing scheme!  (and perhaps BN's Powder River coal plan, at least at the start)

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

  • Member since
    January 2001
  • From: Atlanta
  • 11,968 posts
Posted by oltmannd on Friday, September 6, 2013 2:11 PM

Sam1
Amtrak has lost money every year since its inception.  The NEC, assuming that it wears 80 per cent of the depreciation, which may be understated, loses as much per passenger mile as the long distance trains after allocations of its fixed costs.  A real business has to recover all of its costs. Not just the operating costs. Given Amtrak's dismal financial record, I would like to see the books before concluding that its Acela service is a good go and discounts contribute positively to its outcomes.

All passenger traffic lives in the "non-real business" world.  Therefore, you'd have to see more than Amtrak's books to determine if Acela is worth it or not.  What's the cost of the alternatives to Acela?  None, even "do nothing", come at zero cost to taxpayers.

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

  • Member since
    August 2012
  • 3,727 posts
Posted by John WR on Friday, September 6, 2013 2:31 PM

I have to take your word about the statistics, Sam, as I don't have the data myself.  I do wonder about how people who file joint returns are counted.  Are both people considered tax payers even if one has no income?

By the way, Social Security and Medicare Part A (hospital insurance) are not funded by income tax.  They are funded by a payroll tax collected under the Federal Insurance Contributions Act.  Workers who earn over $50 a quarter are subject to the FICA.  Many of these people have incomes too low for income tax.  Medicare Part B (medical Insurance) is funded by income tax.  I'm not sure about Medicare Part D (prescription drugs).

John

  • Member since
    December 2001
  • 8,156 posts
Posted by henry6 on Friday, September 6, 2013 2:50 PM

Deciding Amtrak losses per train is stupid because the whole system has to work within itself and it deemed a service so that one train or one seat does not defeat the whole entity.  Plus, Amtrak, being a government agency  despite being a corporation, cannot be defined the same as you are defining it here.  IT is very complex...a business owned and operated by the Federal Government but not allowed to follow good business practices of investment and allotment of funds like a business but rely on Congressional whims in the form of legislation, allotments, and (Congressional) budgets.  In effect there are no answers the way it is set up right now.  Congress either has to free Amtrak from it;s reins as it did Conrail or we have to put up with it the way it is.  We may have answers and theories but doesn't mean a thing under the way it has to operate now.  

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.

  • Member since
    July 2004
  • 2,741 posts
Posted by Paul Milenkovic on Friday, September 6, 2013 4:42 PM

schlimm

I guess it is so.  Now Acela, etc. are expected to cover the fixed costs of ROW infrastructure.  The goalposts have been moved (not a parable, a metaphorical example).

"I guess it is so."  You don't seem too enthusiastic about the claim that Acela turns a profit on a partial allocation of costs but still is in the red on a full allocation of costs?  Do you know differently?  Do you have a cost allocation plan, say, that the commuter agencies need to come up with more payments for their "slots" on the NEC?  Do you have a traffic model that Acela is paying its way, not only for its variable costs but for its slice of the fix costs?

As to expecting Acela to cover the fixed costs of ROW infrastructure, I don't think I advocated any such thing.  I was reasoning counter to the assertion that the Acela should be offering volume discounts to regular or loyal or frequent customers, citing the example of the automotive industry where such discounts were a failed marketing strategy.  As to moving goalposts, I am doing no such thing, literally, metaphorically, or in the sense of moral parables.

As to the remark "lose money on every unit but make it up on the volume", that remark was not made by me, that remark was made, and it was made frequently on none else than the pages of Trains Magazine, our generous host of this forum.  That remark was offered as dark humor regarding a railroad industry that was in a death spiral of discounting its product to make up for service shortcomings, but sometimes you just can't raise enough money through volume purchases to make discounting viable.

Now that was the David P Morgan Trains, the Trains of years past, the Trains of the archive in the State Historical Society of Wisconsin, a Trains with an editor who openly professed to care enough about 'there still being trains around for enthusiasts to enjoy watching and riding" that this editor offered a "tough love" critique to the railroad industry. 

No tough love these days, I guess articles more telling people in the advocacy community the way they like to hear it.  It may be selling magazines, but I miss the David P Morgan days.

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

  • Member since
    July 2006
  • 9,610 posts
Posted by schlimm on Friday, September 6, 2013 5:23 PM

Pardon me, but I really do not know what you are attempting to say. Other than your first comment, which seems pretty tangential, the remainder seems to have almost nothing to do with my post and far more to do with your pet peeves with some "advocacy community" you have encountered.   Whatever that may be in Madison, it is not what I subscribe to.  The goalposts metaphor was not in response to your previous remarks, in any case.

C&NW, CA&E, MILW, CGW and IC fan

  • Member since
    November 2011
  • 509 posts
Posted by V.Payne on Friday, September 6, 2013 9:21 PM

The first poster brought up real Consumer behavior that is not fitting the Model of total time savings alone. In honor of Mr. Coase, let’s build a model from the ground up to figure out why the Consumer is behaving this way, as there obviously aren’t enough fans to float Acela ridership. First assume destination Parking OR Cab Fare has an equal Financial Cost and Disutility of Time Value.

As usual, driving an automobile is the real reference point and competition for most people.

Expense Account: Common Carrier vs. Driving analysis:

Most travel departments allow you to compare Driving to a suitable Common Carrier cost and choose the least expensive financial option. So under these circumstances the cost to compare single occupant driving at 3.1 hours to is:

190 miles x $0.565/mile Total IRS cost of driving + Tolls at $27.5 = $135

Therefore a Common Carrier ticket can be up to this amount and be routinely approved by the expense department, certainly mine. Ok, let’s try to find airfare for that amount. Well shoot it isn’t still 1993 so fares at that level are not available. One week out, a non-stop airfare is $320ish for 1 hour timing and a single stop is $120ish for 3 hour timing (which of course is a pricing scheme made up by the airlines to maximize revenue as the non-stop flight is cheaper to operate). But once you add in access to and from the airport, the one-stop airfare is more expensive time and cost wise than driving and there is little productive time. So is the only alternative driving or the motorcoach? Not on this route…

Acela vs. Regional Analysis:

I believe the original posted prices were at the upper end of the difference, probably indicating the last few seats on a nearly sold out Acela in the AM peak. For other times of day, $30 to $75 price differentials are common when comparing Regional + Business Class and Acela (base coach is Business Class). I believe the correct way to evaluate the difference is by using the entire trip time in the denominator, not just the total time difference.

2.3 vs 2.55 hours, 0.25 hour total difference.

$172 vs $144 at 6 AM, $28 Difference

$222 vs $144 at 7 AM, $78 Difference

$197 vs $166 at 8 AM, $31 Difference

But even Acela could take about the same amount of total time as driving once you add transfers to Acela. What is going on?

So if say $50 is the average difference between Regional and Acela, the consumer is saying I value the difference in time at 0.25 hour x $40 (assumed wage rate) x (0.75) = $7 of Total time savings and ($50-$7)/2.30 = $19/hour of added Time Utility during the trip. Since this is probably less than half the wage rate a lot of business people would choose ths, particularly if they have a routine that allows them to bill for the time at 2.5 to 3x wage. So maybe you are just close enough that people are willing to pay $30-40 extra over driving for the extra productivity. They could be expense account people that have struck a deal with management in terms of what is counted as billable, we'll put you on but you have to bill an hour, or private consultants that can make the call themselves. A much greater time utility for the entire trip is generated relative to driving.

Competing with Curbside Motorcoach Carriers (other end of market):

So there still will be some travelers for which financial cost is the absolute priority. Right now the Regional is the only rail option, other than that you have curbside motorcoaches. But could the Financial Cost be even lower and Time Utility be greater? How, by adding more stops to the Regional on the outskirts of the various metro areas served (thus increasing run times but dropping access cost), decreasing the price, increasing the seating density in the standard product, and lengthening consists of the trains. Conversely, you have also market segmented your offerings even further, allowing for more revenue at Acela rates from those willing to choose the current Regional but not this version.

  • Member since
    December 2007
  • From: Georgia USA SW of Atlanta
  • 11,836 posts
Posted by blue streak 1 on Saturday, September 7, 2013 6:17 AM

Payne:   you have made some points that i've not considered.

A very complicated issue that has been ignored is the feed by final origination and destination. 

1.  It may be that the faster trains allow a connection to be made to commuter trains to final destination.

2.  We have no idea what connections say NJTransit at Newark & NYP are occurring to / from Amtrak. 

3.  MNRR connections from Hudson & NH lines might be better quantified.

4.  VRE & MARC connections are also unknown.

5.  If Amtrak could start a limited program of selling a oneway / RT ticket that includes a commuter line maybe a better idea of the potential and if it is worth the effort..  Web & agent reservations would naturally need to be modified.  

Ex.  buy an Amtrak ticket NYP - BAL and an additional coupon BAL - New Halthorpe on MARC ?  There could be no discount with the full MARC BAL - NHA amount to MARC ? Commuter agencies appear not to be able to produce Amtrak tickets although the quick track ticket machines at some locations may be  able to produce same ?

  • Member since
    April 2003
  • 305,205 posts
Posted by Anonymous on Saturday, September 7, 2013 2:09 PM

"Maybe you or someone else can answer a question regarding the incremental maintenance requirements for high speed rail.  Several recent articles in the popular press have stated that some of the world's high speed train operators, i.e. China, France, Germany, etc. have slowed down their trains because of excessive power consumption and wear/tear on the equipment. If tis is true it would suggest that the wear/tear of high speed rail is greater than anticipated."

My comment was not directed at German high speed rail operations exclusively nor did I claim that I was citing an authoritative source.  I made it clear that I was reacting to several articles that I had seen in the popular press over a period of time.  I confess to not writing down the page number and source of everything that I read. 

I was seeking input from Oltmannd or anyone else whether the speed reductions, to the extent that what I read was accurate, could be indicative of the impact of high speed operations on maintenance expense and, therefore, one way to reduce the incremental maintenance expenses was to reduce the speed. 

If a 112,000 lb. truck running 80 mph causes more wear and tear on a highway than a 72,000 lb.truck running 55 mph, is it not also true that a train running 220 mph would cause more wear and tear on rail infrastructure than one running 110 mph?    

  • Member since
    April 2003
  • 305,205 posts
Posted by Anonymous on Saturday, September 7, 2013 2:19 PM

John WR

Sam1
Why was the NEC infrastructure upgraded?  Was it to support the Acela's 150+ mph speeds, or was it to support higher speeds for the NEC regional trains, and the Acela was just an after thought.

Immediately or almost immediately after Amtrak began they also began to replace the ties and tracks in the northeast corridor.  The old ones were wooden ties and stick rail.  The new ones were concrete ties and continuous welded rail.  That was done many years before Acela.  

Between New Haven and Washington the tracks were electrified by the original railroad companies.  However, at New Haven trains would have to change engines from electric to diesel and vice versa.  The change took about 20 minutes, long enough to run into the New Haven station and make a phone call in the days before cell phones.  In the 1990's the tracks were electrified north of New Haven so they must have had Acela in mind.  Of course, the Northeast Regional trains also benefited as they no longer had to stop to change engines.   

The key question is how much of the NEC upgrade was for the Acela and how much of it was for other operations?  Without access to Amtrak's books, it is impossible to know.

Southwest Airlines unloads and loads a 737-700 at Dallas Love Field in approximately 20 to 25 minutes. Why did it take or does it take Amtrak 20 minutes to change power at New Haven? Could it be because Amtrak is a non-competitive monopoly?  Without any imperatives to hustle?

If the change could have been quicker, say five minutes, would the wires from New Haven to Boston been necessary for better NEC regional train service, i.e ones with a top speed of say 110 mph?  Or were they really put up for the Acela?  Without access to Amtrak's books we will never know.   

  • Member since
    July 2006
  • 9,610 posts
Posted by schlimm on Saturday, September 7, 2013 2:50 PM

Sam1
If a 112,000 lb. truck running 80 mph causes more wear and tear on a highway than a lighter truck running 55 mph, is it also true that a train running 220 mph would cause more wear and tear on rail infrastructure than one running 110 mph?    

Of course it does, both wear and power consumption (electric).  I have no idea about the French system.  The Chinese have dropped the top speed on the Beijing-Shanghai line for example, to 1319 km in 5:07 (average 159 mph), the top speed higher, of course, around 200 mph.   The German ICE3 trains still run at top speeds of 250-300 kmh (155 - 186 mph) and sustained (average) speeds of up to 135 mph on some routes.  

But as you can see, those speeds are far above 110 mph.  A top speed of 110 -124 mph is attained by many non-HSR trains in Germany.

C&NW, CA&E, MILW, CGW and IC fan

  • Member since
    April 2003
  • 305,205 posts
Posted by Anonymous on Saturday, September 7, 2013 3:33 PM

schlimm

Sam1
If a 112,000 lb. truck running 80 mph causes more wear and tear on a highway than a lighter truck running 55 mph, is it also true that a train running 220 mph would cause more wear and tear on rail infrastructure than one running 110 mph?    

Of course it does, both wear and power consumption (electric).  I have no idea about the French system.  The Chinese have dropped the top speed on the Beijing-Shanghai line for example, to 1319 km in 5:07 (average 159 mph), the top speed higher, of course, around 200 mph.   The German ICE3 trains still run at top speeds of 250-300 kmh (155 - 186 mph) and sustained (average) speeds of up to 135 mph on some routes.  

But as you can see, those speeds are far above 110 mph.  A top speed of 110 -124 mph is attained by many non-HSR trains in Germany.

I appreciate your response.  Hopefully, an engineer with a strong rail technical background will be able to quantify some of the variables, i.e. a 10 per cent increase in speed requires X per cent increase in power inputs and causes Y increase in maintenance.

I drive a Toyota Corolla.  Going from 65 to 70 mph is a 7.69 per cent increase in speed.  The incremental increase in fuel consumption is 9.6 per cent.  Presumably are similar curves for trains.

  • Member since
    July 2006
  • 9,610 posts
Posted by schlimm on Saturday, September 7, 2013 4:52 PM

I am confident that German engineers made these calculations in the past.  The fact that their ICE's have been in service starting with the first ones in 1989 and the newest in 1999, it would appear they are holding up in terms of wear and tear just fine.

C&NW, CA&E, MILW, CGW and IC fan

  • Member since
    August 2012
  • 3,727 posts
Posted by John WR on Saturday, September 7, 2013 4:58 PM

Sam1
Southwest Airlines unloads and loads a 737-700 at Dallas Love Field in approximately 20 to 25 minutes. Why did it take or does it take Amtrak 20 minutes to change power at New Haven? Could it be because Amtrak is a non-competitive monopoly?  Without any imperatives to hustle?

Sam,   

I think it is safe to say that Amtrak's 20 minute engine change time had nothing whatsoever to do with Amtrak being a government monopoly.  The New Haven's Merchants Limited, there crack train that took only 4 hours between Boston and New York, took 20 minutes to change engines.  The Penn Central's New York and Boston trains also took 20 minutes to change engines.   Thus Amtrak took no longer for their engine change than the two prior private railroad companies.  

Of course Amtrak did make a significant improvement in time but completing the electrification project the New Haven started.   By electrifying the rails all the way up to Boston the 20 minute delay to change engines is no longer required; New Haven is simply a station stop on the line.   

During the early 20th century J. P. Morgan owned a controlling interest in the New Haven.  From what I have read he ran the railroad into the ground and the road was never really able to recover from that.  That is why electrification was never completed.  

The original electrification was authorized in a bill signed by Gerald Ford in 1976.  However, electrification was delayed and it was not accomplished until 1996.  I don't know the degree to which Acela was involved in the decision.   

John

  • Member since
    April 2003
  • 305,205 posts
Posted by Anonymous on Saturday, September 7, 2013 8:17 PM

John WR

Sam1
Southwest Airlines unloads and loads a 737-700 at Dallas Love Field in approximately 20 to 25 minutes. Why did it take or does it take Amtrak 20 minutes to change power at New Haven? Could it be because Amtrak is a non-competitive monopoly?  Without any imperatives to hustle?

Sam,   

I think it is safe to say that Amtrak's 20 minute engine change time had nothing whatsoever to do with Amtrak being a government monopoly.  The New Haven's Merchants Limited, there crack train that took only 4 hours between Boston and New York, took 20 minutes to change engines.  The Penn Central's New York and Boston trains also took 20 minutes to change engines.   Thus Amtrak took no longer for their engine change than the two prior private railroad companies.  

Of course Amtrak did make a significant improvement in time but completing the electrification project the New Haven started.   By electrifying the rails all the way up to Boston the 20 minute delay to change engines is no longer required; New Haven is simply a station stop on the line.   

During the early 20th century J. P. Morgan owned a controlling interest in the New Haven.  From what I have read he ran the railroad into the ground and the road was never really able to recover from that.  That is why electrification was never completed.  

The original electrification was authorized in a bill signed by Gerald Ford in 1976.  However, electrification was delayed and it was not accomplished until 1996.  I don't know the degree to which Acela was involved in the decision.   

John

The central question is why did it take 20 minutes to change power in New Haven. Where is the data that it took the New Haven 20 minutes to change the power for the Merchants Limited?

Part of the problem, I suspect, is neither the New Haven or Amtrak had any competitive pressures to hustle. Or a corporate climate that encourage the employees to hustle. That it took 20 minutes to change the power is a solid argument to privatize passenger rail and introduce competition into the matrix.

  • Member since
    April 2003
  • 305,205 posts
Posted by Anonymous on Saturday, September 7, 2013 8:18 PM

schlimm

I am confident that German engineers made these calculations in the past.  The fact that their ICE's have been in service starting with the first ones in 1989 and the newest in 1999, it would appear they are holding up in terms of wear and tear just fine.

Where are the engineering curves, i.e. data?

  • Member since
    July 2006
  • 9,610 posts
Posted by schlimm on Saturday, September 7, 2013 8:55 PM

Sam1
Where are the engineering curves, i.e. data?

I have no idea, but the proof that they are not suffering abnormally fast wear is in how well they hold up over time in heavy service.   One of our engineers should know which factor contributes more to wear, on equipment and track, speed or weight?  For track, my hunch is weight contributes far more than speed.

C&NW, CA&E, MILW, CGW and IC fan

Join our Community!

Our community is FREE to join. To participate you must either login or register for an account.

Search the Community

Newsletter Sign-Up

By signing up you may also receive occasional reader surveys and special offers from Trains magazine.Please view our privacy policy