http://www.amtrak.com/ccurl/412/537/Amtrak-FY2015-Federal-Budget-Request-ATK-14-028,0.pdf
I think Boardman is being very astute. He's cutting Amtrak's critics off at the knees by not letting them point at the Sunset as the argument for selling the NEC. Brilliant!
He puts the ball for funding the LD trains squarely in Congress's court.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
It's a different ballgame now. The critics used to point to the Federal Highway Program as self-sustaining and add, "Why can't you do that?" The HIghway Trust Fund has been insolvent for the last 4-5 years. ALL Federal transportation schemes now depend on the General Fund to pay for upgrades and maintenance. The change came but not at Amtrak.
Editor Emeritus, This Week at Amtrak
Something for everyone. Putting LD services as separate from the rest of Amtrak, with its own subsidy and capital budget makes sense.
C&NW, CA&E, MILW, CGW and IC fan
I can't fault Boardman's argument, even as it puts the LD trains at risk. The NEC is a special case, is of unique importance to the country, and deserves to be able to put its operating profits to work on its own line, which needs them badly.
At the same time, Boardman was careful, I think, to make the case for the LD trains, and in eloquent terms, which I appreciate.
What I'm afraid of is that it will be too easy for Congress to simply cut the requested dollars for LD, and when Amtrak has to make some painful choices, be able to say, "Hey, we didn't tell them they had to cut the Empire Builder (or Chief or Cardinal)."
"it will be too easy for Congress to simply cut the requested dollars for LD"...
I think Mr. Boardman got himself into a trap with this one as he quoted the Fully Allocated Cost of the LD trains as the $618 million number that needs to be provided, or by inference could be cut.
But that number allocates a good amount of system overhead to the routes, by route mileage and revenue as far as I can tell. It seems like groups such as RailPAC ( check the reference to the letter to the Senator) and URPA agree. When you look at the disagreement between the FRA and Amtrak around 2000 over the "FRA Defined Cost" and now over the Long-Term Avoidable Operating Loss numbers that the 2008 PRIIA law required but still cannot be produced uhmmm... "Data for tables 1 and 3 will not be available until the avoidable costing methodology for the Amtrak Performance Tracking (APT) System has been completed" it appears the FRA agrees as well.
As far as I can tell the Long-Term Avoidable Operating Loss on LD service is $100-200 million at most to which you would add whatever equipment capital with a discount rate applied to get a true Long-Term Avoidable Total Loss. If you expanded the train consists the number would improve markedly.
The problem is that the system overhead will be difficult to cut as most of it is needed for the core NEC operations. Up to about $260 million a year can easily be defended for the LD network, as a comparable revenue shortage exists on a per passenger mile basis on the Interstate system.
I wish Mr. Boardman had just come clean on the need for $400 million, maybe $600 million with recapitalization, in infrastructure support for commuter operations by others over the NEC instead of blaming it on the LD trains. He could have just said that this is logically a FTA responsibility that Amtrak inherited, we will continue to fund it, but Congress should fully fund the commuter infrastructure responsibility, through the FTA.
BTW, the Highway Trust Fund is going to need $16 Billion a year just to stay afloat in the coming years, even should we increase the fuel tax to cover that gap, the leveraging from taxes on City roads not funded by the HTF to the HTF would mean that users would go from paying 14% to 18% of the Interstate costs incrementally through the fuel tax.
I don't know, V.P.; if Boardman did overstate the need, and Congress provided less, wouldn't that make it easier for Amtrak to avoid ruinous service cuts?
In other words, maybe Boardman is giving LD some negotiating room -- as when, putting your house on the market, you ask more for it than you have to have and can live with.
This could almost be a separate thread, but here goes. Suppose that a doomsday scenario takes place in which Congress and the administration agree to defund Amtrak, with possible exception to publically owned track maintenance like the NEC and the Michigan line. What, if anything, would survive?
1. Would portions of the western LD trains continue as a seasonal Rocky Mountaineer type operation?
2. Would a consortium of corporations like Disney and Marriot assume a reprivatized Auto Train operation?
3. Would the states that fund corridor services stay with Amtrak to run these trains, or go to another contract operator that currently operate commuter trains?
4. How many eastern LD trains would be left? Would Amtrak provide operating crews and leave on board services to be provided by someone like Ed Ellis's Pullman Rail?
A McIntosh2. Would a consortium of corporations like Disney and Marriot assume a reprivatized Auto Train operation?
How about Disney and Marriot as on-board service providers and terminal operators? Amtrak operates and maintains equipment and nothing more. Solves a lot of problems (like current food service cost issue) and creates opportunities, like vacation package deals, tie-ins, etc.
A McIntosh3. Would the states that fund corridor services stay with Amtrak to run these trains, or go to another contract operator that currently operate commuter trains?
I guess they could, but there are all sorts of issues around freight railroads not really wanting to deal with multiple entities and whether rights owned by Amtrak are transferrable to others.
A McIntosh4. How many eastern LD trains would be left? Would Amtrak provide operating crews and leave on board services to be provided by someone like Ed Ellis's Pullman Rail?
Or, flip and cut eastern LD routes into "corridor" day trains. Cut FL routes at Jacksonville and turn service south of there into corridor service for intra-state travel. FL is 4th largest state with lots and lots of folk who don't (or shouldn't!) drive much. Cut the Crescent at Atlanta and make it part of the Piedmont/NEC corridor extension. Cut the LSL and Capitol at Cleveland. Reconfigure into Cleveland-Chicago Corridor. Turn eastern half of Capitol into Cleveland -DC via Phila. Extend Pennsylvanian to Cleveland. Eastern half of LSL becomes extension of Empire Service.
V.PayneI think Mr. Boardman got himself into a trap with this one as he quoted the Fully Allocated Cost of the LD trains as the $618 million number that needs to be provided, or by inference could be cut.
You are assuming that Boardman doesn't know what his costs are or what can be cut. It's just as likely that whacking a portion of those "shared cost" areas could be done in any event. Amtrak's attempts at austerity in the past have been focused on creating political pain - not operating efficiency. There have been hints from Boardman in his public statements that he knows this and "wants to change the culture".
V.PayneI wish Mr. Boardman had just come clean on the need for $400 million, maybe $600 million with recapitalization, in infrastructure support for commuter operations by others over the NEC instead of blaming it on the LD trains.
There is a current effort to sort this out now, so maybe it's a bad idea to "stir this pot" now.
I don't think he's blaming the LD trains for anything. I also think he knows that, in the end, there is a near zero chance they don't get funded. It's just a "put up or shut up" moment.
And, you really don't want to get into the hidden subsidy the frt roads are paying to keep the LD trains running. $10 a train mile doesn't cover the cost of the capacity used. Just ask BNSF about that. There's a chance that ND doesn't melt down if the EB doesn't have to run. A single oil train grosses much more than $10 a mile and the EB is consuming multiple frt train slots.
oltmannd V.PayneI wish Mr. Boardman had just come clean on the need for $400 million, maybe $600 million with recapitalization, in infrastructure support for commuter operations by others over the NEC instead of blaming it on the LD trains. There is a current effort to sort this out now, so maybe it's a bad idea to "stir this pot" now. I don't think he's blaming the LD trains for anything. I also think he knows that, in the end, there is a near zero chance they don't get funded. It's just a "put up or shut up" moment. And, you really don't want to get into the hidden subsidy the frt roads are paying to keep the LD trains running. $10 a train mile doesn't cover the cost of the capacity used. Just ask BNSF about that. There's a chance that ND doesn't melt down if the EB doesn't have to run. A single oil train grosses much more than $10 a mile and the EB is consuming multiple frt train slots.
Here is an example from the Claytor years, the 1992 Annual Report, of what the annual budget presentation looked like. Note the Revenue to Short and Long-Term Avoidable Cost ratios (What is missing from the PRIIA reporting), back when the equipment wasn't very easy to maintain (there was also a recession in 1992). Note the ($2014) 1,164 million fixed difference being expressed between Revenues and Expenses.
This fixed gap is reality, stemming from the NEC infrastructure used by others, equipment purchases of that era, government agency costs, and just the high costs of owning infrastructure. What is not reality is trying to allocate this fixed amount onto various trains, dividing it by passenger miles, and then acting like you could save that amount if the train was discontinued. This is the problem of the Fully Allocated Costs Boardman cited. Claytor was well liked in Congress from what I have read, why can't we do the same type of reporting today?
Consider as well this example of the train density into New York Penn Station. Amtrak is a minority user of its own line, the rest being commuter trains. How you allocate a fixed infrastructure cost is a hard question, but given the ratio of users, I would lean toward the FTA being responsible for this line more than Amtrak's operations.
Finally, consider this GAO analysis of the Autotrain from 1985 and note a similar pattern of ratios. Since this route uses completely separate terminals, equipment, and crews it was a good way to check what the actual costs were to operate off Corridor.
How you allocate fixed costs and overhead is completely dependent on the question you are trying to answer.
In the case of Amtrak's budget, it's probably a pretty reasonable view of what the total cost of each type of service is - not a view of short term variable costs.
Certainly, the NEC is expensive to own and operate, and just as certainly, Amtrak could not be allocating NEC costs based on system pass-miles! That would be real, prosecutable fraud.
As for method of allocation, pass-miles is not a panacea, but it probably correlates well enough with train miles and car miles to make little difference at the end of the day.
Also, it is equally misleading for Congress to read the budget request as a "what if I sell the corridor to the states, then all I have to pay is XX for state and LD trains"
P.S. I would allocate Penn Station costs by total train time from the time the train enters the interlocking on each end of the station with a factor for train length.
From what I see, some of what Boardman says makes sense. But I see a glaring error in the statement that the NEC covers it's costs. Yes it might cover operating expenses, but what about capital expenses? Track isn't free, nor are bridges. True Boardman did say the excess from NEC can cover the interest on capital loans, but makes no mention of the principle on those loans.
It also makes no sense to allocate capital investement expenses to the LD trains, the only real infrastructure that Amtrak owns is the NEC. And most LD trains don't use it. True LD trains do have some capital expense (station buildings, yards and repair shops) but most track is rented, which normally is an operating expense.
After seeing how costs are "randomly" allocated and the inconsistant reporting, I have to wonder if Amtrak even knows what it spends and where the money really goes. I'd bet the NEC is actually the biggest single money loser (due to it's tremendous capital needs) and the :LD trains may be doing well. That's not to say any make profit, but the NEC certainly doesn't.
OTOH kudos for standing up and stating the fact that Amtrak needs to be properly funded, and to not do so will cause major greif.
I just feel that a true representation/accounting of the profit/loss for each train would go farther to getting the fundinig, rather than a feel good story about the star of the show.
Modeling the Cleveland and Pittsburgh during the PennCentral era starting on the Cleveland lakefront and ending in Mingo junction
If you have 100 cost accountants on a project, each will assure you that the other 99 are applying the wrong methodology to the project.
Never too old to have a happy childhood!
ruderunnerIt also makes no sense to allocate capital investement expenses to the LD trains, the only real infrastructure that Amtrak owns is the NEC.
The capital cost of the LD trains is most likey capital rebuilds of the existing equipment. If you put enough into it, a rebuild can be capitalized.
BaltACDIf you have 100 cost accountants on a project, each will assure you that the other 99 are applying the wrong methodology to the project.
...and they can all prove it!
ruderunner I'd bet the NEC is actually the biggest single money loser (due to it's tremendous capital needs)
How much (more) of the NEC capital should be paid by LIRR, NJT, VRE, MARC? If you do that "right", maybe the NEC is a winner?
If you count the hidden subisidy the LD trains are getting from the frt roads, maybe the LD trains are even worse losers?
At the end of the day, it's all money coming out of one of Uncle Sam's suit pockets. Does it really matter which one? The Amtrak budget is an explanation, not a menu, and it probably does a pretty fair job of what it set out to do....whether we like the "story" or quibble with the details.
OK I admit the oversight of equipment being a capital expense, but over the years hasn't Amtrak spent much more on NEC equipement than LD equipement?
And yes the freights aren't chargning LD what it should, but that's the contract. I'm not talking about how much things should cost, more what do they actually cost. It would be interesting to figure out what LD expenses woudl be if paying the proper amount for use of tracks. Might even be able to say "We can up our on time incentives since we are getting such a savings on track usage" That would make the freights happy for sure, or at least have less animosity to passenger trains.
And I wholeheartedly agree that the NEC users should pay their share, but that's the flipside to the freight subsidy. If Amtrak is allowed to charge full price, why can't the freights. And again that's a what might be, as opposed to what is.
What I'm having trouble with is why can't Amtrak just come out and say "this is what it cost to runthe Empire builder last year" and include things like, payroll for on train employees, maintaince charges for equipment from Beech Grove, track fees and the other expenses that are honestly attributable to that train, without watering it down with NEC expenses. It seems you need to know what things actualy cost before saying it makes or loses X amount every year. And after you know that, then you can got to the NEC users and say "this is what we need to charge for use of our tracks" Fully expecting some of that money will go to paying for track usage after the freights come to Amtrak and do the same.
ruderunnerWhat I'm having trouble with is why can't Amtrak just come out and say "this is what it cost to runthe Empire builder last year" and include things like, payroll for on train employees, maintaince charges for equipment from Beech Grove, track fees and the other expenses that are honestly attributable to that train, without watering it down with NEC expenses. It seems you need to know what things actualy cost before saying it makes or loses X amount every year. And after you know that, then you can got to the NEC users and say "this is what we need to charge for use of our tracks" Fully expecting some of that money will go to paying for track usage after the freights come to Amtrak and do the same.
Supposedly that precision is coming. But many of the charges are already allocated correctly. Overhead for administration has to be allocated on some formula. That is true in most endeavors, and always a source of irritation for those who feel they are carrying too much.
Oh I agree that there are various expenses that can't be pinned down directly to any sigle train. What I have trouble with is capital expenses of the NEC being sloughed off onto the LD trains. Amtrak makes it difficult to determine the actual costs of anything, which sems like they are trying to flimflam the holders of the purse strings.
And if I held those pursestrings, I'd be very leery of giving money to Amtrak too.
I have no impression that passenger rail will ever make profit, it will continue to need infusions of money from the govt. But I think it's time to come clean, show the facts and tell the govt in no uncertain terms "This is what it costs to do this, that and the other. Her is how much we get back from this, that and the other. And $X is what we need to cover the shortfall and that amount will go up yearly due to inflation etc." The claim that the NEC makes profit simply continues the lie that has saddled Amtrak from the begining. And keeps up the expectations that someday Amtrak will stand on it's own, we just need to cut costs (like food or tri weekely schedules)
Yes I know that their are politcians meddling in these areas.
An interesting side effect is that one would finally know just what the price of a trip should be in order to cover costs, not that it would mean much in the real world. OTOH that number is a good comparison to use to see if adding service to a certain route helps or if cutting service helps. I'm certain they already do this (or should anyways) so why not share that info? It's not like there's a lot of competetors wondering the secret to Amtraks sucess! It may also help to defuse the political meddling if say Amtrak wants to discontinue a train and a senator wants to keep it, tell them in no uncertain terms that their state is required to make up the shortfall.
But alas, I'm getting off into politics rather than the subject at hand.
ruderunnerI'm not talking about how much things should cost, more what do they actually cost.
Sounds simple... But:
Who owns how much of the "safety stock"?
Who owns the equipment dwell between runs at Chicago?
Who owns the fringe from the crews on the extra board?
How do you allocate equipment depreciation? Actual equipment? If so, when the new Viewliners come, the trains getting them will get hammered.
And, on the other side:
Do the freight railroads get to charge:
The incremental cost of providing a passenger "slot"?
The fully allocated cost of the slot?
The value of the slot?
oltmannd How much (more) of the NEC capital should be paid by LIRR, NJT, VRE, MARC? If you do that "right", maybe the NEC is a winner?
Don:
There appears to be no absolute way to allocate costs however just some items will use NJT as example but can apply to all carriers =============
Operational costs-----
1. Number of Axels that are operated. Freight trains would require a higher per axel charge as their axel load is higher. This would also apply to locos of passenger trains.
2. Per train charge.
3. train scheduled speed over segments of track. ie higher speeds would require more allocation.
4. Stations train counts. ex. local NJT stops ( no Amtrak ) 100% NJT.
5. Station dwell times Good idea.
6. ROW maintenance along lines of 1-3.
7. allocated power useage
Capital costs allocated among users.
11. CP upgrades to improve fluidity
12. ROW changes for one or another carrier.
13. The gateway & additional east river tunnels and how much each carrier will use. Probably over a 10 - 20 year span.
14. Additional yard storage space especially BOS, New haven, Sunnyside. PHL, WASH ivy city.
15. upgrading CAT power.
16. expansion for unplanned problems. ( ex Sandy )
17. Benefits for passenger destinations EX NYC.
ruderunnerWhat I have trouble with is capital expenses of the NEC being sloughed off onto the LD trains. Amtrak makes it difficult to determine the actual costs of anything, which sems like they are trying to flimflam the holders of the purse strings.
That statement keeps being made, but I see no evidence to support it. The capital costs of upgrading the NEC (new cat, etc.) are allocated to the NEC. Equipment capital costs (major refurbishments and new) should be easy to allocate and I have yet to see any evidence that the Acelas are charged against the LD sector. Someone thought most cars were for the NEC. The fleet of LD cars is huge because so many are needed because of the low sustained speeds.
If by safety stock you mean back up equipment, then allocate based on usage. That is if one train uses 10% of the backup equipment through the year then that train gets charged 10% of the cost. Wether that use is through planned maintainence or accident replacement of a certain car doesn't matter. That train used it and should be charged.
Equipement depreciation is pretty striaghtforward IF the new equipment is for a specific train then absolutely that train gets the charge. Why should say the Lake shore get whacked for an Acela cars cost? It doesn't make sense. If the equipment is for the general pool, then tracking and charging by useage shouldn't be difficult.
What percentage of manpower hours does a train use off the extra board? That train should be charged accordingly. There should be enough historical data to get a sense of that so one could make it an average charge, or just bill it as used. It may also help figure out if a train delays are causing an increased labor charge by having to bring in relief crews. That's a big expense that needs to be charged to that route/train, not averaged over all trains.
I'mm not saying that charges should be static from year to year, or even scheduled, but there should be enough data from the past to say "Here's the trend and now that we see the trend we can plan for next year"
Currently the freights only get to charge incrementally which is good for Amtrak. It's a steal actually. But keeping in mind an open market, why shouldn't the freghts get to chare Amtrak what they would charge another railroad for trackage rights? Basically the value of the slot. Again though charging by value is something that is not a current situation
Is the NEC paying for it's capital expenses? Or just the interest on loans? Or just the above rail costs? Do bridge replacements on the NEC get charged only to NEC or is it spread around? I just don't see how the NEC can claim a profit, meaniing it's self supporting. Unless maintaince or upgrades are being deferred so they don't have to show up on the balance sheet.
I need to go back and find the gross revenues of the NEC and compare it to the proposed costs of rehabbing the NEC, seems to me though the gross revenues don't cover the propsed costs of the infrastructure repairs (31 billion)
OK I took the numbers from the 2015 budget: Toatal system revenue 3.2billion (about half from NEC) plus total fed fundng 1.6b totals 4.8 billion in "gross revenue" for Amtrak. Using ALL of Amtraks gross revenue for the next 7 or 8 years will cover the NEC infrastructure needs/planned upgrades. Or using just NEC revenue (1.6b) you start to strecth out 20years. This leaves out any expenses at all for anything else, not even toilet paper.
ruderunnerIf by safety stock you mean back up equipment, then allocate based on usage.
Run time? Mileage? Include or exclude dwell at turn points?
Mileage seems to make the most sense to me, that's likely what puts the most wear and tear on equipment. And yes include dwell, it's an expense associated with running that train.
schlimm [. Someone thought most cars were for the NEC. The fleet of LD cars is huge because so many are needed because of the low sustained speeds.
[. Someone thought most cars were for the NEC. The fleet of LD cars is huge because so many are needed because of the low sustained speeds.
Not including Heritage cars, Amtrak owns 428 Superliners, 181 Viewliners, 95 Horizon cars, 618 Amfleet I and IIs, There are 20 Acela trainsets (120 cars), and 7 Talgo trainsets. So at a minimum 704 cars are used in LD service, plus some of the Amfleet cars.
Amtrak owns 63 electric locomotives for NEC and 268 diesels for other services. To claim that most of the capital equipment is for the NEC is not accurate.
Our community is FREE to join. To participate you must either login or register for an account.