schlimm . People are people, not passenger miles. It is analogous to the false info from relying solely on ton miles for freight, which undervalues the lighter and more valuable container trains and overvalues coal trains. If your assumption were true, just give everyone a one time only free pass to ride coast to coast.
. People are people, not passenger miles. It is analogous to the false info from relying solely on ton miles for freight, which undervalues the lighter and more valuable container trains and overvalues coal trains.
If your assumption were true, just give everyone a one time only free pass to ride coast to coast.
But in determining the fairness between expenditures for citizens of the same country capital spending should be counted, subject to an appropriate term and interest rate to spread the capital out.
Ultimately, dollars are fungible in the democracy, or at least they should be.
It is time to use rationale financial analysis of both operations and capital dollars instead of the economic models that neglect capital while monetizing "time savings" at a rate higher than anybody would pay real money to buy in order to get high Benefit/Cost ratios.
Volpe entered into the assumptions for transportation modeling that existed in the mid 1960's and attempted to find a rationale for passenger rail service. He did his best against the misguided headwinds of the era and came up with theory of massive capital to produce high speed service, while using the operating only profits to offset a reduced national network. But the entire economic "time savings" monetized model had been created solely as the interstates would not generate incremental financial revenue from each user to pay for themselves, otherwise they could have been toll roads.
"Time Savings" isn't a truth of economics but a political shell game. People do value their time but it is according to dis-ultility of time methods that are a lot more nuanced as to number of transfers and quality of time.
Many commentators to this day do not realize that we professionals invented this shell game to address the congestion and accident rate failures of the WPA era 2 lane roads as professionals felt bound to do something about the loss of life. So the fuel tax was used to financially leverage the interstates off the existing urban roads while claiming a high B/C ratio. It is just that simple. I have one series of large highway projects that will generate a $0.23/automobile mile financial loss to my department's capital, excluding accident and maintenance costs. But we leverage it off the fuel taxes, borrow, produce a report with a high B/C ratio, and call it a day as the politicians want the project.
V.Payne capital spending on the NEC that is not counted in the operations figures?
In accounting, capital spending is not generally considered an operating expense to offset revenue, except some under IRS Section 179. Those are the rules.
C&NW, CA&E, MILW, CGW and IC fan
I don't understand this argument. Are you saying somebody riding NJ transit (Amtrak supplied infrastructure/capital spending) 10 miles in every day of their life (4800 passenger miles yearly) or taking the regional 50 miles each way every week of their life (4800 passenger miles yearly) deserves more importance than a passenger making two 600 mile trips on the City of New Orleans from an intermediate station (say 2400 miles yearly)?
What if the only option is a two stage regional aircraft at $0.65/mile that takes 9 waking hours (drive time, security, two segments with a layover, drive time) when the City only takes 11 hours that you can use productively or sleep? I have already suggested that the cross-subsidy to rural interstate travel is just as high as the incremental cost of running the Long Distance trains and it is markedly more dangerous to the user.
Particularly for the commuter activity the argument would be why don't they move closer to work to avoid burdening the rest of us with the capital spending on the NEC that is not counted in the operations figures?
The statistic that represents the most usage is # of passengers, which Amtrak does report. Passenger miles gives a false weight to one person riding from NYC to SF, 3000 passenger miles, which by that metric is equal to 20 people riding Philadelphia to DC. People are people, not passenger miles. It is analogous to the false info from relying solely on ton miles for freight, which undervalues the lighter and more valuable container trains and overvalues coal trains.
Schlimm. You say the most transportation for the most people. Passenger miles is your standard then. But a person who uses Amrak ten times does get ten times the voting that a person who uses it once does. Most corricor riders are repeat frequent riders. Most long distance train riders are once a lifetime, once a year, or a few times a year. Amtrak exists to serve as many USA cizens and visitors as possible, so maybe you can understand why most citizens who think about the matter want long distance trains continued.
Transmark was the consulting arm of British Rail back in the day. The rebutted report was done by the USDOT IG not Amtrak's IG, apparently under a congressional request, with what seems to have been a predetermined outcome given the faulty revenue assumptions. Mr. Beadles, the RF&P president has probably forgotten more than we know, take a look at his writing http://www.varpi.org/beadlesblog.htm and judge for yourself.
Now, what congressional testimony has Mr. Boardman offered regarding incremental costs and profit/loss from sleepers? I don't fault the other poster for sticking to the corridor train Volpe hypothesis as it is out there in the literature (probably the best that could be done given the era's auto influence) and Amtrak's financial reports are structured to ignore NEC capital in operations figures while reporting host railroad capital leases off corridor against operations.
Why should anyone accept the Transmark study (with sleepers having an unbelievable 32% profit margin?) as more valid than that of Amtrak's OIG? Or the comment of a board member of a lobbying group over Joe Boardman's testimony at a hearing?
Amtrak had LD trains (serving 4.75 mil. passengers) revenue of $568.7 mil. in FY2013 vs costs of $1162.5 mil., which resulted in a loss of $627.1 mil. That staggering loss offset $372.9 mil.positive contribution from the NEC (serving 11.40 mil. passengers) and dwarfed the $180.8 mil. loss on state supported and other short distance corridor services (serving 15.41 mil. passengers).
The point of Amtrak is to provide the most transportation for the most people. LD services detract from that mission, so at the very least that is why the losses on LD non-core services need to be cut.
The only credible analysis that I have seen is this study from 2004/2005 and the rebuttal of the DOT IG study (the link referenced by another poster above). The DOT IG report had negative payments to the host railroads on one line and assumed the coach lounge and all checked baggage service could be eliminated for long distance coach passengers along with the dinning car and sleepers, with no loss of customers. Now tell me, is that a valid revenue assumption?
The chart from within the study I would recommend gives the breakdown above. To update the study from FY 2004 I offer this comparison.
For FY 2013 sleeper revenue was about $188.2 million and FY 2012 $181.5. I get a cost basis of $109.4 using the BLS inflation calculator, add in another $4 million for fuel increases above inflation, and we’ll call the cost basis $114. So perhaps $74 million in operating cash above incremental costs.
Here what drives this. I get an long-term incremental cost of about $3.25/mile (including depreciation). Or a short-term incremental cost of $2.35 with just running and heavy maintenance and overhauls per each carmile added to a train. Both assume one staff member per car. The short-term cost is backed up a Transmark analysis from 1978, a snippet of which is shown below along with some explanation from a paper I wrote.
schlimm3. The actual data on the total losses from LD services broken down by source have been posted before. As I recall, the majority of the losses on most routes comes from the food and sleepers.
It is really hard to compare, but we do know from Amtrak's monthly reports that the LD trains lose money at a great rate compared to corridor trains. Worse, this doesn't take into account the indirect subsidy the LD trains get from the frt RR hosts - that is the "sweetheart" rent that Amtrak pays for the rights to run their train.
There were a couple of reports on sleeper and food service losses.
Here's a tidbit about food service: "Ted Alves, the Amtrak inspector general, testified that the bulk of the losses were on Amtrak’s long-distance routes, which account for 87 percent of the deficit. " (from http://www.nytimes.com/2012/08/03/us/politics/amtrak-lost-834-million-on-food-in-last-decade-audit-finds.html?_r=0 )
And this on incremental cost of carrying sleepers http://www.oig.dot.gov/sites/dot/files/pdfdocs/CR-2005-068.pdf
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
"The actual data on the total losses from LD services broken down by source have been posted before. As I recall, the majority of the losses on most routes comes from the food and sleepers."
I don't recall seeing such. Can anyone provide this document? I remember seeing something like this based on Amtrak's RPS but it isn't meant for such analysis. It had the host railroad paying Amtrak if you believed the numbers.
1. Please attempt to respond to what I actually said instead of throwing out a straw dog. I did not say sleeper service has to be dropped; only that the patrons pay the full cost. Some folks on here seem to be saying if they actually have to pay the cost for food and bed on Amtrak, they won't use it. Try selling that concept to the public.
2. Ditto with food service: charge patrons the for what they choose to eat - no less, no more.
3. The actual data on the total losses from LD services broken down by source have been posted before. As I recall, the majority of the losses on most routes comes from the food and sleepers.
4. Reduce or eliminate the need to subsidize the losses from food and sleeper services and more folks in rural areas might be served with more routes and more trains on existing routes.
5. The NEC is not losing money. In fact it is subsidizing the rest of Amtrak. Short corridors are still losing, but their position is far better than that of the LD segment. Joe Boardman is acting on this.
The basic point, which you did not answer, Schlimm, is that if the sleeping car passengers and their special wants were not accomodated, and their revenue was lost, the savings in dropping the sleeping and dining cars would not compensate for the loss in revenue, and the subsidy for the straight transportation folks would be higher, not lower. Furthermore, some of the coach passengers would also not ride unless decent meal service was provided.
However, I am at one with those who wish to cut food losses by adopting the Acela approach for long distance trains' meals.
Now, as far long distance trains in general, remember that there are people in rural America who have zero plans to use these trains, but wish them to continiue, just in case they need them.
I was reminded of this fact by somewhat analagous incident in my life. The bus Egged bus stop nearest my Yeshiva has no service between 6:35pm and the last bus at 11:35pm. Don't ask why. But I am usually the only passenger on the 11:35pm bus which takes me to the University, where I can catch the 11:45pm, the last 68 bus, to the stop near my apartment. Sometimes a soldier for the camp is on the bus to get off at the camp's intermediate stop, sometimes one boards, but both are rare occasions. And sometimes the 48's driver is extra friendly and takes me directly to my stop on his way to the garage-yard. But on Monday evenings, for several years, one of the teachers, whose class from 10pmm to 11pm I usually attend, drives me home on the way to his home.
Last evening he had other plans, and i thus planned on taking the bus. it did not show up. I waited 11:25-11:45pm.
So it is with those in rural America who know corridor travelers are subsidized to make cities work, and some corridor travelers are as wealthy as any sleeper passenger, and have no plans to use Amtrak, but want it there in case they need to use it. Like my Monday evening bus that I never used.
Quite true. Until our last trip, taken when my wife needed help to stand and could no longer walk, we always traveled in ordinary bedrooms. Only when she had to use a wheelchair did we make use of room H.
Johnny
Sorry, but the justifications for subsidized food and subsidized sleepers are largely irrelevant and illogical. Hard luck cases are suggested, but you would have to show that to be true. They could receive a discounted fare based on documentation. Handicapped cases? Since very few of the sleeper spaces are for the handicapped, that is no argument. The larger, accessible space is provided but otherwise. they should pay the sleeper cost, just like the others. Seniors already receive a discount on the basic fare. The point that I and others who favor subsidized passenger transportation service make is to do just that: provide competitive transportation where rail makes sense, not subsidized meals and overnight rooms. Seniors who want subsidized dining should look to restaurants that give an "early bird" rate. And of course I am simply saying Amtrak should start complying with federal law.
Schlimm: First of all, subsidazation for the handicapped and elderly is across the board in the USA. When you go to a movie or threatre to pay for special services, handicapped elevators and ramps, hearing asistance, that you don't use but they do. And a good proportion of sleeper passengers are elderly nd handicapped, many of whom cannot fly and cannot spend more than several hours in an auto even if they wished to do so. Second, if the sleeper passengers were not riding, and by far the majoritiy would not ride coach, the loss in revenue would be greater than the reduction in expenses. Third, you and I and anyone else do not have any figures that prove that sleeper passengers are subsidized more than coach passengers, in general, on a per-mile-per-person basis.
Most of the eastern long distance trains operate at direct loss rates per passenger mile that are less than what the government and others than those traveling statistically pick up for automobile accidents alone.
In the end analysis a dollar is fungible.
Apples and oranges. I see no reason why the taxpayer should pay for your meal or lodging, whether on a train or not. Of course if you are indigent, then you should receive appropriate government assistance. However, the folks who use sleepers (many of them seniors) are not indigent and therefore do not need financial assistance.
CMStPnP schlimm No. "As to sleepers, they should pay the full cost of their superior accommodations, above the charge for a coach ticket." To state it more correctly, patrons of sleepers should purchase the subsidized base coach fare, as now. Whatever they choose for sleeper accommodations, they should cover the actual cost of that. My point is that transportation only should be subsidized. The coaches are offered and patronized on LD trains. If someone wants an upgrade, they should pay what it costs to operate. We do not subsidize the hotel accommodations of highway travelers, so why should the Amtrak patrons receive one for their beds/ Perhaps if sleepers were outsourced, they could be run more efficiently. Ditto with the food service. Simply eliminating those large subsidies might allow Amtrak to offer more LD services on the same budget. So I am curious what you think of the Federal Government via the WPA financing the new Milwaukee Road Hiawatha in the 1930's. Certainly runs against your government subsidy model but.........look at how many people rode it. It was considered a luxury train as well.
schlimm No. "As to sleepers, they should pay the full cost of their superior accommodations, above the charge for a coach ticket." To state it more correctly, patrons of sleepers should purchase the subsidized base coach fare, as now. Whatever they choose for sleeper accommodations, they should cover the actual cost of that. My point is that transportation only should be subsidized. The coaches are offered and patronized on LD trains. If someone wants an upgrade, they should pay what it costs to operate. We do not subsidize the hotel accommodations of highway travelers, so why should the Amtrak patrons receive one for their beds/ Perhaps if sleepers were outsourced, they could be run more efficiently. Ditto with the food service. Simply eliminating those large subsidies might allow Amtrak to offer more LD services on the same budget.
No. "As to sleepers, they should pay the full cost of their superior accommodations, above the charge for a coach ticket." To state it more correctly, patrons of sleepers should purchase the subsidized base coach fare, as now. Whatever they choose for sleeper accommodations, they should cover the actual cost of that. My point is that transportation only should be subsidized. The coaches are offered and patronized on LD trains. If someone wants an upgrade, they should pay what it costs to operate. We do not subsidize the hotel accommodations of highway travelers, so why should the Amtrak patrons receive one for their beds/
Perhaps if sleepers were outsourced, they could be run more efficiently. Ditto with the food service. Simply eliminating those large subsidies might allow Amtrak to offer more LD services on the same budget.
Or what about the Federal Government funding airplane research and development so that manufacturers can manufacture commercial airliners? Or funding the traffic control system for all air traffic. Or funding lighting and runway improvements for airports? Or the highways the buses run on and the terminals they operate to and from? And the locks and dams on waterways so barges can be moved? None of that stuff gets paid for out of the budgets or bottom lines of any of the airplane, bus, truck, or barge companies nor their shippers or passengers?
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.
daveklepper Schlimm: Arre you saying coach passengers shoujld be subsidized but not sleeping-car passengers?
Schlimm: Arre you saying coach passengers shoujld be subsidized but not sleeping-car passengers?
oltmannd daveklepper Schlimm: Arre you saying coach passengers shoujld be subsidized but not sleeping-car passengers? I'll add another question to this. Do you think Ed Ellis's operation on the City of New Orleans would have more or fewer passengers if the train did not carry Amtrak sleepers?
I'll add another question to this. Do you think Ed Ellis's operation on the City of New Orleans would have more or fewer passengers if the train did not carry Amtrak sleepers?
And I'll add yet another question: If a private operation can even partially subsidize Amtrak's cost to run coach service ... or even the Amtrak version of sleeper service, which in the absence of 'premium services' would have less effect on the 'take rate' for AOE or Ellis Pullman-level 'cruise' or luxury sleeper service) ,,, might Amtrak be prepared to run their service over segments they would otherwise have to avoid? A Harrisburg-Pittsburgh section for a particular example? Or be less opposed to something like Ross Rowland's proposed Greenbrier Express?
(And there might be some incentive, even if only related to certain economies of scale, in the private company providing 'sussies' to the Amtrak passengers, say at their marginal cost... ;-} )
henry6 2. You do not understand loss-leader concept in retailing. It is used to attract customers at a loss so they will buy other, profitable items. The rest of the operation makes a profit so that the net is an increase in profit. Food and beverage service is primarily on long distance and only increases the LD loss. The point here is that you've got to provide the amenities to attract and hold customers. Eliminating sleeping cars and dinning cars sets American passenger rail even further back than it already is. Greyound bus's and the first Erie train from Piermont to Dunkirk had to stop every couple of hours to feed the people and at dark to allow them a hotel room to sleep in! For God's sake this in 2014 not 1849!
2. You do not understand loss-leader concept in retailing. It is used to attract customers at a loss so they will buy other, profitable items. The rest of the operation makes a profit so that the net is an increase in profit. Food and beverage service is primarily on long distance and only increases the LD loss.
The point here is that you've got to provide the amenities to attract and hold customers. Eliminating sleeping cars and dinning cars sets American passenger rail even further back than it already is. Greyound bus's and the first Erie train from Piermont to Dunkirk had to stop every couple of hours to feed the people and at dark to allow them a hotel room to sleep in! For God's sake this in 2014 not 1849!
You do not have a clue about the concept. If LD trains require a highly subsidized food service to attract customers, then perhaps we do not need those trains at all. As to sleepers, they should pay the full cost of their superior accommodations, above the charge for a coach ticket. Apparently the coach patrons didn't get your message. As to modernity, this is 2014, not 1950.
What a great point in this thread!
Question: What do you suppose the tips are like in the US Capitol restaurants?
Our community is FREE to join. To participate you must either login or register for an account.