Actually my point was similar to one you made long ago. No matter how good the management, Amtrak is stuck with wages + benefits far in excess of what is paid in the market for food staffing in a low end to middle range restaurant, so it cannot come close to covering costs.
C&NW, CA&E, MILW, CGW and IC fan
V.Payne“Skoropowski, Managing Director of the Capitol Corridor JPA, says…The availability of food and beverages is one of the reasons our trains are attracting a growing number of riders… Skoropowski considers it as a cost of doing business, just like well-maintained equipment, on-time performance and clean bathrooms… along the 170 mile Capitol Corridor… Ticket sales would drop more than that if we eliminated the food and beverage… Financially we’re better off with food service than without it. In terms of its impact on our overall fare box recovery, food and beverage service is a major, positive contributing factor…” I am sure everybody is familiar with this gentleman, he is currently helping out with FEC’s Brightline/AAF project the only private corridor project going in North American. Do you think they are concerned about net revenue? What he is saying is counting a portion of food service as a joint cost is necessary as net revenue decreases otherwise.
Have you read the Amtrak Food Service experiments in the lastest issue of Trains, they seem to counter his belief in part. Holding the fares of the sleeping car steady on the Silver Star without a Dining Car while letting the fares of the Silver Meteor rise with no cap. Silver Star has a better sleeping car booking rate. Revenue per passenger is higher on the Silver Meteor. Unfortunately it did not say in Trains which train was recovering more of it's cost.
Whats interesting is the exact same passenger behavior was discovered by American Airlines chief Robert Crandall (you need to watch some of his youtube videos). He clearly states that: "passengers only complain about bad or scarce food service BUT what they really want is the cheapest fare and most reliable service......they do not give one whit about food or beverage service". He also stated: "Passengers will switch carriers over bad on-time service or high fares BUT they won't necessarily switch over food or beverage service". Crandall has said that again and again via Congressional Testimony and it is on more than one youtube video.
Last but not least, agree with schlimm you cannot compare Amtrak management with private sector management. Private sector management will hire a very compent manager for food and beverage service.......Amtrak generally will not. FEC's Manager will have to meet targets or he/she will lose their job. Amtrak's manager will have suggestions and maybe a shrug of the shoulders if a bad outcome. Too different management philosophies and the difference between government as your partner and stockholders as your partner.
I have to meet targets as part of my job or I will be out on the street looking for another. Its how my employer incents me to keep me competitive in the marketplace. Without incenting me towards competitiveness, I become in effect a wasting asset with my utility to the company slowly fading away as my skills become dated. Where is such a program on Amtrak?
Two words in regard the AAF and food service vs Amtrak's mess: Labor costs.
"Do the math..." 24 hours - 19 hours run time = 5 hours for servicing, one set of equipment per direction.
Is there a reference to be cited with cost data for 500 mile competiveness with automobiles, the largest part of the market. There is truth to this in airline versus HSR, but those are different market dynamics with neither commercial air service nor HSR calling at many of the cities on Long Distance routes anytime soon. (Some Edits here since posted)
Auto Train has a scheduled arrival of 9 AM and a scheduled departure of 4 PM at both terminals. When the train is running in it's 'On Time Window', the scheduled departure time is achieved with little difficulty.
When Auto Train is running seriously late - 4 to 5 hours is the observed best turnaround time - of course that time, in addition to servicing and restocking the passenger equipment includes unloading and reloading the autoracks.
Because of lack of equipment, Auto Train has no option except trying to run itself back on time. The only other option is to cancel a trip - this option has been exercised when both equipment sets are operating seriously late.
Never too old to have a happy childhood!
Do the math for a 950 mile route taking 19 hours. Leave Chicago at 5:00 pm Monday, arrive NYP 1:00 pm Tuesday. Leave NYP 3:00 pm, arrive CHI 9:00 am Wednesday. You need multiple trainsets each direction. Your variable and fixed costs go up to a level much like Amtrak reports. Only with much higher speeds can you get better equipment utilization. Almost everyone recognizes that 500 miles is about the limit for competitive services, i.e. many trains throughout the day. Sleepers are very inefficient and do not come close to covering costs. A one overnight deluxe coach train (like the old El Capitan) might work on the 700-950 mile routes, albeit with 60 mph speeds as the old 20th Century and Broadway used to manage.
The City of New Orleans used to be turned like this all the time on the old schedules. In fact any modern piece of equipment better be able to be turned in just 2 hours if not much better. But why would a corporate have the incentive to do otherwise if they do not understand variable costs. So equipment just sits around. If you have serious delays, just run a bus bridge near the end and turn the train short.
A suggested 3:00 PM to 9:30 AM are pretty good endpoint times as you spend most of the time on the train doing things done during the down times of the day.
The values are similar to several published sources, a 1968 ICC study, a Transmark consulting study from 1978, and a late 2000's Colorado Railcar study and IDOT study.
V.PayneTo run a single sleeper car 350 days a year (same day turns) on an 925 mile existing train route costs about $3.2/carmile, inclusive of operations and capital at market rates not government debt rates. NRPC doesn't like same day turns so they don't do these and costs go up.
Your statement is unclear. The route is 925 miles and you expect a sleeper to make a one way trip and be serviced and on its way back in 24 hours? At a 50 mph average speed that would take 18.5 hours one way. The LSL running a 959 mile route at 50 mph average does not do it. The endpoint times would be inconvenient.
And your data source for making these claims?
dakotafred(Hey, you guys aren't watching the Super Bore either, eh?)
I watch it once every 20 years when the Green Bay Packers make it there. Otherwise I won't waste my time on watching second rate teams.
To run a single sleeper car 350 days a year (same day turns) on an 925 mile existing train route costs about $3.2/carmile, inclusive of operations and capital at market rates not government debt rates. NRPC doesn't like same day turns so they don't do these and costs go up.
That would equal to at most 9 roomettes on most routes out of 21 total rooms of similar or greater price. The out-of-date comments are borne from a lack of understanding of variable costs. Once you pay the variable cost to add capacity then you look to use the fixed cost functions more efficiently. Two cars per attendent would be $2.7/carmile.
This is how any business is run and how Congress directly Amtrak to report costs in PRIIA but they declined to do so. Why, perhaps some of the reported actions by the CEO this month explain the situation.
Damn fine defensive game and as a result, sloppy offenses.
schlimm There are also unsupported contentions that Amtrak's food service is wearing too much of the overhead or that the LD sleeper service is profitable or that LD service wears much of the overhead of the NEC. Apparently anything goes to try to justifyan out-of-date, inefficient LD service that serves few even with an enormous subsidy to reduce the cost of tickets below what would be required to break even. The labor costs (including generous benefits) for fairly low-skilled jobs are high, not at all comparable to the market.
There are also unsupported contentions that Amtrak's food service is wearing too much of the overhead or that the LD sleeper service is profitable or that LD service wears much of the overhead of the NEC. Apparently anything goes to try to justifyan out-of-date, inefficient LD service that serves few even with an enormous subsidy to reduce the cost of tickets below what would be required to break even. The labor costs (including generous benefits) for fairly low-skilled jobs are high, not at all comparable to the market.
Given what the competition charges I think they are losing their proverbial shirts on the long distance sleeper service. I've said before that is underpriced as well and I am not seeing a whole lot of yield management fare increases whenever I use it nor do I see much of an effort by the Conductor to sell empty compartments on board when they exist. Same deal with the Dining Car service, as it is run now..........no doubt it is costing them a bundle.
I think they should try better LD Coach service, perhaps borrowing some ideas from the Airlines with fares and types of coach seating. Amtrak should have more than one coach fare for LD service. They differentiate between Accela and regular Northeast Direct with pricing but refuse to find ways to price tier the LD routes....it's kind of shortsighted. I think they should experiment with all coach overnight trains with lie flat seating and a snack car. See where that takes their expenses. It would free up more sleepers for the trains that run 2 nights.
CMStPnP schlimm from the Denver Zephyr 1962 dinner menu http://findingaids.library.northwestern.edu/catalog/inu-ead-archon-1380: Broiler Special: Broiled Sirloin Steak (12 oz.), Button Mushrooms, French Fried Potatoes, Bon Ton Salad (Choice of Dressing), Hot Rolls, Coffee or Tea or Milk ($4.50). Likely served on a tablecloth, with fresh flowers and silverplate. That would be $35.32 in 2015 money. What would something comparable cost on Amtrak now? http://www.usinflationcalculator.com/ I doubt if Amtrak charges anything close to that, if they serve decent steak. They do serve black angus steak and charge $25 for it. See what I mean? They have not even compared their pricing to what was charged in the past and in my view they are lowballing on their menu pricing except for basic entrees like Hot Dogs and Hamburgers............where they are high balling the price a bit. I cannot look at a Amtrak menu rationally and figure out HOW they came up with the prices. I am not CPA either but the prices on Amtraks menu just leap off the page as being wildly not based on cost or revenue.
schlimm from the Denver Zephyr 1962 dinner menu http://findingaids.library.northwestern.edu/catalog/inu-ead-archon-1380: Broiler Special: Broiled Sirloin Steak (12 oz.), Button Mushrooms, French Fried Potatoes, Bon Ton Salad (Choice of Dressing), Hot Rolls, Coffee or Tea or Milk ($4.50). Likely served on a tablecloth, with fresh flowers and silverplate. That would be $35.32 in 2015 money. What would something comparable cost on Amtrak now? http://www.usinflationcalculator.com/ I doubt if Amtrak charges anything close to that, if they serve decent steak.
from the Denver Zephyr 1962 dinner menu http://findingaids.library.northwestern.edu/catalog/inu-ead-archon-1380:
Broiler Special: Broiled Sirloin Steak (12 oz.), Button Mushrooms, French Fried Potatoes, Bon Ton Salad (Choice of Dressing), Hot Rolls, Coffee or Tea or Milk ($4.50).
Likely served on a tablecloth, with fresh flowers and silverplate.
That would be $35.32 in 2015 money. What would something comparable cost on Amtrak now? http://www.usinflationcalculator.com/
I doubt if Amtrak charges anything close to that, if they serve decent steak.
They do serve black angus steak and charge $25 for it. See what I mean? They have not even compared their pricing to what was charged in the past and in my view they are lowballing on their menu pricing except for basic entrees like Hot Dogs and Hamburgers............where they are high balling the price a bit.
I cannot look at a Amtrak menu rationally and figure out HOW they came up with the prices. I am not CPA either but the prices on Amtraks menu just leap off the page as being wildly not based on cost or revenue.
This is written with respect for Milw's restaurant experience.
Believe me, fellows, Amtrak's "steak" is a gouge at any price. I won't touch it, earning funny looks and remarks from my tablemates when I order something like the mac and cheese. (I make up the calories in wine.)
I have no idea what Amtrak pays for it, but I suspect the correction for inflation we're talking here -- what they should be charging -- does not apply.
(Hey, you guys aren't watching the Super Bore either, eh?)
CMStPnP Then you have to ask so why then have the meals be free for Sleeping Car passengers instead of charging a suppliment? The answer is because that is how it was done in the past. Well thats fine, in the past the deficits were lower because people ate three meals a day in the past traditionally, also a LOT more people were riding the passenger train than are riding now.
I will assume you mean back pre-Amtrak, back in the 50s-60s. AFAIR, meals were NOT included in the price of a sleeper.
V.PayneWho says they actually save that much by partially scalling back diners if the commisary costs are large and fixed?
I would agree that the large commissaries are a large contributing factor unless Amtrak forsees a quadrupling of it's current network..........way too many commissaries for too few passenger trains.
On the other hand, you cannot ignore the food costs on the train itself. Look at what they serve on the menu and at what price. Each item should cost in ingredients (food costs) 22-30% max of the charged price, at most labor should be not more than 33-40% with the rest being split between expenses and profit margin. Apply those percentages to the Amtrak menu. Then calculate the average check for each service Breakfest, Lunch and Dinner. Figure maybe 3 seatings on a Dining car with the 3rd seating being only partial......this is what it is basically on the Texas Eagle and they only use half the Superliner Diner......so approx a little less than 1.5 seatings of a full Diner. Then try to obtain or guess the passenger count on the train for Long Distance (at least one meal or that will consume all meals).
There is no way they will ever make a profit.........ever. The most they can hope for is closing the deficit gap. Which they have not even made a real effort to do.
Compare Amtrak to Dinner trains in your area if any. Most of them run 2-3 cars full of passengers that want to order a meal, average check is far north of $50 per person when alchol is included. They also have amenities like tablecloths, appetizers, etc.....which Amtrak has stripped away on some if not all trains. So on the raising the price of a meal........no way will Amtrak do that becuase it runs against it's sleeper and coach pricing model. Then you have to ask so why then have the meals be free for Sleeping Car passengers instead of charging a suppliment? The answer is because that is how it was done in the past. Well thats fine, in the past the deficits were lower because people ate three meals a day in the past traditionally, also a LOT more people were riding the passenger train than are riding now. So the conclusion is Amtrak failing to adapt to realities of today vs how things were done yesterday. Can they afford to do that when they are under legal mandate to cut dining car costs?
BTW, most Dinner trains fail for a reason beyond nostalgia, in that they are not profitable over the long term. Restaurant business is a very slim margin business you really have to be on your toes as a manager to manage it (BTDT). Even a cook in the lower level of the dining car assign 1 oz too much in portion size has a impact on food costs. When you go into fast food or fast casual restaurants like Jimmy Johns, Jersey Mikes, Fuddruckers..........see that food scale on the counter.........they always have one. It is to teach new employees portion sizes because a untrained new employee can spike food costs over $1500+ during one 8 hour shift by giving out slightly larger portions. I'm sure Amtraks sloppy operation is not even as careful when monitoring portions but it doesn't need to make money either. This is just one example, btw of managing the food business.
Also, another way to compare yesterday to today. Take an old dining car menu from the 1940's or 1950's and inflate the costs on the menu using yearly inflation rates to get what they would charge in todays dollars. Your going to find the Amtrak menu is lower in cost of the entres on average. Why is that?
It was/is also public law that NRPC was supposed to publish variable costs and they simply failed after 7 years. If they cannot calculate variable costs, how do they even know what costs them what and if they have the revenue to cover such?
So the up-to-date proposal must be to be rid of the entire ridership base of the Long Distance network (people who use the network like the grandmother traveling to see her grandchildren I met recently), as the average trip length is about 500 miles, which needs about a 900 mile long route at least to support this average trip length over the various Origin-Destination pairs.
It is not an up to date plan, but forcing the real market to conform to a theory unless there is a massive amount of capital available for increased line speeds, which is the other part of the short distance plan not being considered.
Remember average travel speeds along interstate highways decline the longer you go as rest stops multiply. With just plain old 79 mph max speeds there is a balancing point between access cost/time to the stations and trip time. The short distance model falls short of finding that optimum balance point.
P.S. Don't hang your hat too much on the 1981 law, my understanding was that the argument was made to the subcommittee then that a passenger revenue transfer was appropriate to fund food service as otherwise you would truly loose more revenue above variable costs (net revenue), than you would save by eliminating the food service involved.
This transfer exists to this day, but it seems the issue is a gradual loss of focus in running the business as would occur without variable cost data, as the off -train commisary costs (which are fixed) and the self-imposed low levels of throughput onboard have become more prominent.
Who says they actually save that much by partially scalling back diners if the commisary costs are large and fixed?
Nothing personal, just seeking truth. It was a public law.
To me, an up-to-date Amtrak should focus on developing primarily ~500 mile corridors (some longer), with fas,t frequent reliable services, not necessarily HSR. That is contemporary passenger railroading. LD trains are a relic that should survive only as long as votes are needed in Congress. It should not be thought of as a major transportation mission.
"You really like to play fast and loose with the truth. Do not put your words in others' mouths. My words were a comment on Amtrak getting away with breaking a law for 33 years. Your remarks are disingenuous. My goal is not to end Amtrak. Never was. Your goal?"
Sorry--I'll accept this is your observation, and not your wish. Mine is to see Amtrak run in a fashion that embraces opportunity and optimism, and not institutionalized pessimism. I do not regret the money spent on Amtrak. I think Amtrak has done a lot to reduce food service expenses--sometimes as in the case of 91/92 too much.
My view of Amtrak's history does not duplicate yours, which does not make it an obfuscation. Quite probably neither of us is entirely right. I think we need to end this string.
I have not claimed you are misrepresenting anything, and I hope I've made my openly stated opinions clear to you, and that I don't agree with your perspective. I've tried to explain why.
I do genuinely respect your right to your views and tried to discuss them on this thread. As we can only agree to disagree I think that must be the end of it.
Carl Fowler
RailvtAnd if his policies survive you may get your goal stated above of an end to Amtrak as well. Carl Fowler
You really like to play fast and loose with the truth. Do not put your words in others' mouths. My words were a comment on Amtrak getting away with breaking a law for 33 years. Your remarks are disingenuous. My goal is not to end Amtrak. Never was. Your goal?
wanswheel Reps. Shuster and Denham want next Amtrak CEO to be a ‘visionary leader.’ http://transportation.house.gov/uploadedfiles/2016-02-02-shuster-denham-amtrak-board.pdf
Congressmen wanting a 'visionary leader', what a joke. The vision will end when it becomes necessary to invest money to realize that vision.
Well I guess we must again look for commonality where there largely isn't any. As I noted above Amtrak has been under various Congressional "objectives, goals, direections" etc for over 20 years to eliminate diner "losses", but somehow year by year the language varied, often one house or the other of the Congress modified it, but more importantly no one enforced it. What has now changed with Boardman's 2013 promise was Amtrak explictely commiting to it and by a date certain--FY19. This will not happen, because it never has and Boardman knows it. What then? Who knows in DC?
I indeed am not a Boardman admirer. For several other examples why read Don Phillips column in the new TRAINS. Fortunately the clock is ticking down on his tenure.
And if his policies survive you may get your goal stated above of an end to Amtrak as well.
My point is that it is a federal law since 1982, not Boardman's whim and not Mica's law. Fowler has some personal agenda against Boardman.
schlimm Carl Fowler: Please stop obfuscating and distorting reality. In 1981 (S. 1199 97th: Amtrak Improvement Act of 1981, enacted in Aug. 1981 as P.L. 97-35) the US Congress mandated Amtrak food services break even (not make a profit) by 1982. 30+ years and well over one billion dollars in losses later (paid by taxpayers, few of whom ever eat Amtrak food) since, nothing has been done. Amtrak is lucky it was not shut down long ago.
Carl Fowler: Please stop obfuscating and distorting reality.
Aw, Schlimm. It's also true that few of us taxpayers have ever enjoyed a meal courtesy of one of the endless "nutrition" programs offered by Washington, including to many who are well above the already-generous poverty line.
These cost billions. Why strain at a few million for Amtrak diners? Take a pill, consider diners one of the Democrats' beloved nutrition programs, and forget it. Why pal up with John Mica?
Mica does have a point on the Angus Burger though. It's $7.25 here:
https://www.amtrak.com/ccurl/198/849/National-Cafe-Menu-0515.pdf
And $11.50 here (lunch menu):
https://www.amtrak.com/ccurl/587/963/Texas-Eagle-Dining-Car-Menu-0515.pdf
Dining car overhead, a dill pickle and chips increases the cost by $4.25 (lol).
Puleeese.
Food costs should be no more than 30% of gross price to the client and that is at the steep end. A good food cost is closer to 22%. If that is the case here. Where is all that extra money going? It's going to cover only a small part of the LABOR costs and nothing more. The costs to operate the car are not even being covered.
You can't pay people 22-30,000 a year to serve hot dogs and hamburgers to clients.........its a sure fire way to bankruptcy. You need much higher margins. Nothing in that Dining Car should be under $25 for an entree for starters. And the average check should be North of $50 per adult served.
“Moving forward with a plan to eliminate” losses isn’t really a promise of anything except to move forward with a plan.
https://www.amtrak.com/ccurl/196/210/Amtrak-Commits-End-Food-Beverage-Losses-ATK-13-115.pdf
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