schlimmPerhaps you should remember that if you ever need brain surgery and your internist says he can take care of it.
Yes, but that's not 'apples to oranges' when all that's happening is talk about brain surgery or neuroscience on an Internet board. There, the internist may well know a great deal, or contribute a great deal, to a particular issue whether or not they have the full training, manual dexterity, patience, etc. needed to perform actual procedures professionally. I might add that I'd much rather have brain surgery actually programmed into a good da Vinci robot by someone knowledgeable in machine control than by even the most recognized current surgeons. (Note the different point between this and knowing 'what the procedure is supposed to accomplish', for which of course you still need distinctive medical and surgical experience.)
What's being bandied about -- and I am, believe it or not, more than a little sympathetic to your position -- is people who have magisterial opinions on topics, often express them in the sort of ex cathedra fashion infamous to (for example) East Coast "establishment" intellectuals, and start arguing with people who do have educational or professional 'chops'.
Again, though, this is an Internet board, not the faculty study, and as my grandmother said, sometimes "you can learn from the dumbest of people". On the other hand, ignorance may not be stupidity, but wilful protracted ignorance comes mighty close to it, and refusal to at least show that there has been careful listening and acknowledgement of other positions, in a civil manner and without the infamous 'yes, but' form of dismissal, is more than just poor thinking, it's poor manners.
Not that I am a particular paragon of these particular lessons, or entitled to lay down any sort of 'rules for discourse' here. Just saying that civility, and the sort of open-minded non-ad-hominem keeping to the actual issues that is representative of the real scientific method, would be a better approach than badminton nastiness.
D.CarletonEnron's numbers were audited too.
Not in any legal sense. Enron used the same Auditing firm that sold it Consulting Services and at times supplied it's business executives. Not only a conflict of interest existed there but a quid pro quo, give us a great audit report and we will expand our other business relationship. So legally one can make the argument they were not audited in the legal sense since the auditing firm was not independent of the business operation. And in fact the Enron Accounting Department warned of that conflict of interest repeatedly years before the collapse.
When you sign a Financial Statement as an Auditor the public presumes based on law that you are a independent auditor. If your a dependent auditor than your audit is open to questions of bias legally and ethically.
RMEcut off the increasing nastiness about accounting vs. engineering criteria for costing and the like.
Perhaps you should remember that if you ever need brain surgery and your internist says he can take care of it. There is a good reason people get and need extensive education and training/experience for certain occupational tasks. Eg., I took three or four accountancy classes as an undergrad, but I have never claimed I am an accountant or claimed I can do the tasks of that profession. And I doubt if engineers in any of their specialties would agree that a CPA is a good choice to design a bridge. I do not know what your field is, but the same applies there.
C&NW, CA&E, MILW, CGW and IC fan
matthewsaggieDon't forget the Donald Rumsfeld axiom regarding known knowns and known unknowns...
My question to all the philosophers here is a bit different:
My father, of blessed memory, loved Heineken. My mother called it the old Dutch philosopher, because after between 5 and 6 greenies he would start waxing eloquent over various aspects of life and wisdom. One of his better tidbits was 'you have to know what you know, and what you don't know, but you also have to deal with what you CAN'T know.' (This was not at all the same thing as Shakespeare's 'more things in heaven and earth' or James Whale's (?) "things that man was not meant to know").
Here we have people, sober, who acknowledge there are things we can't know, but are applying the tools of engineering cost allocation, etc. to them. There is a place for that (in hypersonic engineering, perhaps, or complex systems that push the edge of tech research) but perhaps not when second-guessing political accounting. There are very likely reasons why things are framed as they are in Amtrak's accounting, and perhaps a very real possibility that some of the data or its presentations are intentionally obfuscated.
I don't say that to stop speculation about things like the relative success or failure of the Star's dining-car 'experiment' -- only to cut off the increasing nastiness about accounting vs. engineering criteria for costing and the like.
As my daughter's song has it, you're all "better than that."
Dont forget the Donald Rumsfeld axiom regarding known knowns and known unknowns...... (Too tired to look the rest of it up tonight)
Dont forget the Donald Rumsfeld axiom regarding known knowns and known unknowns......
V.PayneLet me draw you a picture, engineering economics would be used to figure out the relative cost of say steam turbine generation and gas turbine generation so that the plants could be designed and operated. An accountant would only set up and monitor the accounts as a plant is built and operated and has limited ability to say what changes cost wise with design of the system.
Let me say two words: cost accounting. This is what you want for determining costs of an existing system, such as with Amtrak. You are giving the example of designs yet to be engineered, built and operating.
As you seem to be condescending in tone, let me show you the real picture:
He who knows not, and knows not that he knows not, is a fool - shun him.
He who knows not, and knows that he knows not, is a child - teach him.
He who knows, and knows not that he knows, is asleep - wake him.
He who knows, and knows that he knows, is a wise man - follow him.
Editor Emeritus, This Week at Amtrak
I suppose I should tell the CEO he has it set up wrong?
Let me draw you a picture, engineering economics would be used to figure out the relative cost of say steam turbine generation and gas turbine generation so that the plants could be designed and operated. An accountant would only set up and monitor the accounts as a plant is built and operated and has limited ability to say what changes cost wise with design of the system.
I don't believe there is anywhere to reassign the employees, likely they were paid a severance. The commissary is a warehouse essentially, it provides food and linens to the trackside, so it has fixed costs and variable costs.
I included the avoided maintenance costs, fuel, and running maintenance of the removed cars in my appendix above.
V.PayneHowever, if one does not understand that the only savings from a partial service change is the Direct Costs (no management was laid off after all right or commisary carts sidelined) silly decisions will be made when attempting to sell a continually declining product to the public as a result.
The biggest costs were crew labor, supplies and maintenance of diners. The workers were transferred to other trains; supplies no longer needed from commissary or outside; and maintenance of those cars costed to the trains that use them (or perhaps they were retired?). Why should any of those costs continue to be carried by the Silver Star?
Comparing the taking of one or two classes in engineering economy/economics with accountants and CPAs, who take many in accounting, economics, finance and business law, is rather fatuous. It's like saying a physician/internist who takes one or two classes in clinical psychology is comparable to a licensed clinical psychologist in depth of knowledge. He/she would never make such a claim.
Is the thought that it costs nothing to build or that contract documents have no cost analysis?
There are actually several classes taught in what is called engineering economics, which deal with fixed and variable costs, to determine the cost of production. I currently support a large international manufacturer where accountants are not used to figure out how much products cost internally or price them for the public, a mixture of engineers and product analysists do such, the accountants just reconcile the overall accounts.
The route level Total Costs are not audited anyway, look at the notes in the reports.
My theory on why the reported Total Costs showed such a large decline is that everything reported on the route level now has a large multiplier attached (around 80%) to the true cash or Direct Costs.
However, if one does not understand that the only savings from a partial service change is the Direct Costs (no management was laid off after all right or commisary carts sidelined) silly decisions will be made when attempting to sell a continually declining product to the public as a result.
But once again, none of these changes were part of any plan, particualarly the one required by Congress.
V.PayneI'm just a licensed engineer with a masters, and a bit of experience. Engineers are trained to understand things as systems and find errors.
True, but in only the various areas of engineering, not in corporate financial statements. For that, I'd prefer to rely on an experienced accountant for expert opinion.
D.Carleton V.Payne I'm just a licensed engineer with a masters, and a bit of experience. Engineers are trained to understand things as systems and find errors. I have no idea exactly how the $10+ million in reported costs savings was produced by the formula, but it is not all food service changes, as the previously reported cost of all food service (cafe and diner and commisary) is just $5.5 million. What really irks me is just 5 years ago this was not even an idea identified after the PRIIA studies. At some level Amtrak needs to be more transparent in the decision making as befits a government agency. So, getting back on topic, was this really an "experiment" or a rationalization of an action? Makes one wonder.
V.Payne I'm just a licensed engineer with a masters, and a bit of experience. Engineers are trained to understand things as systems and find errors. I have no idea exactly how the $10+ million in reported costs savings was produced by the formula, but it is not all food service changes, as the previously reported cost of all food service (cafe and diner and commisary) is just $5.5 million. What really irks me is just 5 years ago this was not even an idea identified after the PRIIA studies. At some level Amtrak needs to be more transparent in the decision making as befits a government agency.
I'm just a licensed engineer with a masters, and a bit of experience. Engineers are trained to understand things as systems and find errors.
I have no idea exactly how the $10+ million in reported costs savings was produced by the formula, but it is not all food service changes, as the previously reported cost of all food service (cafe and diner and commisary) is just $5.5 million.
What really irks me is just 5 years ago this was not even an idea identified after the PRIIA studies. At some level Amtrak needs to be more transparent in the decision making as befits a government agency.
So, getting back on topic, was this really an "experiment" or a rationalization of an action? Makes one wonder.
I feature it was a direct response to Mica and his antagonisms toward Amtrak as it was applied to a train serving Mica's district. With him having been defeated who knows what the future holds.
Never too old to have a happy childhood!
schlimm D.Carleton Just for the record: I am far more confident in Professor Payne's extrapolations than all of NRPC's financial statements. There is only one dollar number from Amtrak we can count on, what they charge for a ticket. After that, who knows? Academics (since when is Payne a professor?) use the best available data. Extrapolating numbers is about one step up from just making stuff up. Amtrak's numbers are audited. Insulting their accounting department's product is rather rich, coming from a (former for unspecified reasons) Amtrak employee.
D.Carleton Just for the record: I am far more confident in Professor Payne's extrapolations than all of NRPC's financial statements. There is only one dollar number from Amtrak we can count on, what they charge for a ticket. After that, who knows?
Academics (since when is Payne a professor?) use the best available data. Extrapolating numbers is about one step up from just making stuff up. Amtrak's numbers are audited. Insulting their accounting department's product is rather rich, coming from a (former for unspecified reasons) Amtrak employee.
As for myself, mainline passenger railroad employee? Yes, to this day. Amtrak employee? No, never nor have I claimed such. I know what the "real world" numbers are on a real railroad that has to answer to someone. By comparison I know NRPC's numbers are questionable at best. We owe a great debt to people like Professor Payne, and others, who wade into the minutia and attempt to extract at least some kernel of truth.
D.CarletonJust for the record: I am far more confident in Professor Payne's extrapolations than all of NRPC's financial statements. There is only one dollar number from Amtrak we can count on, what they charge for a ticket. After that, who knows?
Just for the record: I am far more confident in Professor Payne's extrapolations than all of NRPC's financial statements. There is only one dollar number from Amtrak we can count on, what they charge for a ticket. After that, who knows?
So let’s get this straight, anything spoken against the original post point of view is speculation, while the original post speculation is not speculation? The incomplete Viewliner II order itself is 6 years old, but a 5 year old report is too old to be relevant?
The entire direct Food and Beverage cost of the Silver Star food service (diner and café) is $5.5 Million per Amtrak OIG (Page 4). So cutting a portion of the staff cannot exceed that amount. It would appear my cost estimate is roughly correct, though I could tell that the OIG reported labor numbers have some management costs baked into them that likely did not disappear with the cut, so cost recovery would decline logically.
It has been said time and again, that the Total Cost numbers have no use in evaluating actual changes in service. They are allocations based upon dependent variables, and are in no way audited for accuracy. Further, Amtrak has stated they cannot provide Variable Cost route measurements in the monthly or even yearly reports, so why would they be able to do so now when Congress has required them by law to provide the results?
Recall that even with the current relatively poor labor utilization arrangement on long distance trains, nearly all of the OBS labor is being covered with revenue, the big issue is dividing up $59.8 million in nearly fixed commissary costs, which are strangely disproportionally assigned to long distance trains, though the commissaries are shared with all trains and managed by Aramark.
This all gets down to the reality that decreases in food service quality hurt ridership, up to 13%, based upon evidence when tried before in the early 1980’s. Degrading the service will not result in net savings.
V.Payne In the original post two primary errors were made: 1. Amtrak does not state that the reduction in costs are soley or even largely from the removal of the diner. $10+ Million in avoided costs for this action is nonsensical as shown by the back check above. It appears to be a dependent variable error. 2. Previous reports (PRIAA 2011) show that coach passengers make up about half of the diner patrons on the eastern long distance routes, whose preference for a diner is evidenced by the decline in coach revenue representing more than 2/3rds of the revenue decline. We as a nation pay for automobile operating costs, such as the serious medical costs of a drunken driver's accident, sometimes requiring decades of care, costing far and above any fuel taxes ever collected, but fresh toast and an omlet to induce that same person onto a safer train is off limits? We can't have anything nice as all the funds have to be sacrificied to the unquestionable automobility idol after all. The larger story is that the elimination of the Silver Star diner was not mentioned at all as a net revenue improvement in the studies under PRIIA while various activities proposed to increase revenues were not undertaken. It seems that the realistic cost avoidance is pretty close to the revenue drop, aka no apparent net improvement. Have we even talked about the costs of layoffs and bumps? So why are no actions taken to increase revenue or sensibly reduce costs such as by step-off food service staff agreements? Here were the benefits identified 5 YEARS AGO for the Viewliner II order that would improve this train far beyond the sillyness. Page 85 PRIIA 2011 Report "New dining cars on order will allow Amtrak to: o Operate long-distance trains at up to 125 miles per hour (mph) on the Northeast Corridor... o Implement cart-based galley equipment that increases operating and mechanical efficiency in the yard and commissary. o Improve accommodations for disabled customers. New sleeping cars on order will allow Amtrak to: o Increase sleeper capacity on single-level trains, which frequently sells out today, to accommodate demand and improve financial performance. o Improve accommodations for disabled customers. o Improve the economics of on-board food service by generating additional food and beverage revenue from a greater number of passengers carried."
In the original post two primary errors were made:
1. Amtrak does not state that the reduction in costs are soley or even largely from the removal of the diner. $10+ Million in avoided costs for this action is nonsensical as shown by the back check above. It appears to be a dependent variable error.
2. Previous reports (PRIAA 2011) show that coach passengers make up about half of the diner patrons on the eastern long distance routes, whose preference for a diner is evidenced by the decline in coach revenue representing more than 2/3rds of the revenue decline.
We as a nation pay for automobile operating costs, such as the serious medical costs of a drunken driver's accident, sometimes requiring decades of care, costing far and above any fuel taxes ever collected, but fresh toast and an omlet to induce that same person onto a safer train is off limits? We can't have anything nice as all the funds have to be sacrificied to the unquestionable automobility idol after all.
The larger story is that the elimination of the Silver Star diner was not mentioned at all as a net revenue improvement in the studies under PRIIA while various activities proposed to increase revenues were not undertaken. It seems that the realistic cost avoidance is pretty close to the revenue drop, aka no apparent net improvement. Have we even talked about the costs of layoffs and bumps?
So why are no actions taken to increase revenue or sensibly reduce costs such as by step-off food service staff agreements?
Here were the benefits identified 5 YEARS AGO for the Viewliner II order that would improve this train far beyond the sillyness.
Page 85 PRIIA 2011 Report
"New dining cars on order will allow Amtrak to:
o Operate long-distance trains at up to 125 miles per hour (mph) on the Northeast Corridor...
o Implement cart-based galley equipment that increases operating and mechanical efficiency in the yard and commissary.
o Improve accommodations for disabled customers.
New sleeping cars on order will allow Amtrak to:
o Increase sleeper capacity on single-level trains, which frequently sells out today, to accommodate demand and improve financial performance.
o Improve the economics of on-board food service by generating additional food and beverage revenue from a greater number of passengers carried."
The key change impacting the operating costs of the Silver Star between 2015 and 2016 was the removal of the dining car, accompanied by a reduction in the sleeping car fares. This is what we know.
Unless you can identify another major change in the Star's operating cost structure, it is fair to say that removal of the dining car, while maybe not the only change, was the biggie.
Five or more year old studies are ancient history for current operating and cost information. Unless you have access to Amtrak's books, you are speculating.
Rio Grande Valley, CFI,CFII
dakotafred I hear New Jersey. Without a diner, a LD train is just a bus on rails. No reason for its existence. There are already plenty of buses.
I hear New Jersey. Without a diner, a LD train is just a bus on rails. No reason for its existence. There are already plenty of buses.
A long distance train without food service is not workable. But most people don't appear to be advocating no food and beverage service; they are advocating scaling the service to the needs of most of the passengers and pricing it to recover the costs.
In 2016 the overwhelming majority of long distance passengers – 84.9 percent – rode coach. I suspect most of them would be happy with enhanced offerings in the lounge cars.
Amtrak's IG found that from 2006 through 2012, Amtrak's food and beverage service had $609 million in direct operating losses, or an average annual loss of $87 million. More than 85 per cent of the loss can be traced to the long distance trains.
What is the moral imperative for the taxpayers to underwrite the cost of train meals, especially for sleeping car passengers? They appear to be the majority of passengers in the dining cars, in large part because their high priced sleeping accommodation fares include meals in the dining car.
I can make a case for taxpayer subsidizes for passenger rail, including some long distance services. But justifying taxpayer subsidizes for food and beverages on the trains is not supportable.
On occasion I take the bus from El Paso to Tucson and vice versa. We stop in Lordsburg for a brief meal. The taxpayers are not picking up the tab for my meal at the bus stop.
While I think it's important for long-distance trains to have adequate food service options (i.e., more than a snack bar), I also like the idea of separating meal payments from sleeping care fares. Not only does this give passengers a choice, it would also make it easier to evaluate each service on its financial merits.
The largest cost reduction I could see from dropping the Heritage (Budd) diners was $4.560 Million a year if all (3) three diner staff members are displaced along with the physcial car (See Appendix).
The cost estimated is conservatively high however, and if the difference is only (2) two staff members, with another staff member augmenting the café assignment, there would likely only be $3.810 Million of cost avoidance. However, I suspect the large cost savings in the reports are an artifact of the assignment of cost by a dependent variable, either from the commissary or pool, not so much true efficiency.
The $3.846 Million revenue drop is close to a wash with what is likely the true $4ish Million cost savings from the elimination of the diner.
While the sleeper revenue declined by $0.964 Million, or about $47 per passenger, note that the overall coach revenue declined by $2.822 Million as well (perhaps with a portion of the coach revenue for sleeper passengers baked into the coach numbers).
So the elimination of the diner is hurting coach revenue as well, which makes sense as about half the diner patrons on longer runs like this are coach passengers. The flooding also had an effect if you care to filter that out by comparing the Meteor runs.
This all goes to show that there are limits to cutting as a way to improve financial performance. Increased passenger volume and segmentation of the market with higher price points for better amenities are typically better solutions.
Adding just (2) two all bedroom sleepers per each Meteor and Star trainset, pulling in $0.80/room-mile, would increase net revenue by $18 Million a year ($9 Million each) by my estimate for the pair of trains. It would also provide more traditional revenue (walks in that buy and then tip) for food and bar service, moving those services closer to break even. More volume supports better station services and rental car availability and then provides enough stock to sell true same week purchase high dollar fares.
Appendix – Check on Cost Savings claimed by NRPC for Silver Star FY16 vs. FY15:
Assuming the US average full time wage x 142 % the labor cost might be $1.815 Million a year (20 hours paid per one-way trip if correct).
Assuming $2000 per trip for the cost of goods sold for a cost of $1.461 Million a year.
Assuming that the staff is based from NYC the Miami layover cost might be $0.132 Million a year. If they were Miami based, then a step-off agreement near NYC would allow for a same day turn back.
Finding $1.151 Million a year in car related maintenance cost:
1. Using 0.2 gallons of diesel a car-mile from the Davis equation, acceleration energy, and HEP energy x $2 gallon (no road tax)
2. Using $0.35/car-mile for a prorating of overhauls and $0.27/car-mile for routine servicing and repairs.
As well as fewer passengers there is also a reduction of PM / TM
The Meteor is faster and has a better time slot in NYC causing it to more easily gather people from farther afield such as western New York and Boston. It is also great for the weekend for those who can work Friday morning, take the afternoon off, and get a head start on a vacation, to see family, or to go fishing, golfing, or whatever. Returning to NYC is also convenient. NYC to Orlando has the most passengers, use the most sleepers, and returns the most revenue. Washington DC to Orlando is #2, followed in revenue by NYC to: Jacksonville, Charleston, Miami, and Savannah,(2013 data, to includes to/from).
The Star gathers a lot of its passengers from Florida with the first 6 city pairs for ridership being Tampa to: Miami, West Palm Beach, Orlando, Fort Lauderdale, Hollywood, and Deerfield Beach in that order. This is followed by NYC to: Orlando, Richmond, and Tampa. However, the most revenue is received from NYC to Orlando, followed by NYC to Tampa. Tampa to Miami is#3, followed by NYC to: Richmond, Columbia, Raleigh, and Jacksonville in that order,(2013 data).
Activity by station in 2013 for the Meteor is Orlando 95,720, New York City 89,720, Jacksonville 52,437, Washington DC 45,977, Miami 38,627, Charleston 37,848, Savannah 34,664, West Palm Beach 31,517, Fort Lauderdale 26,356, Philadelphia 25,527, and Kissimmee 24,886. The Meteor steadily gained 84,400 passengers from 2007 to 2012 with a high of 368,300. Since then it has lost 26,300 passengers in 2015 with 342,000. Station activity has been lost in all of the cities above except for New York City with Philadelphia nearly steady.
The Star has some station activity different and some the same. The numbers in 2013 are Tampa 133,355, New York City 62,208, Orlando 58,567, Miami 42,132, Jacksonville 41,194, Raleigh 40,037, Washington DC 38,973, Columbia 35,878, West Palm Beach 31,405, Cary 27,906, Richmond 27,739, Fort Lauderdale 25,992, Philadelphia 22,918, Lakeland 22,621, and Kissimmee 20,020. For comparison purposes, Savannah is further down the list with 9,514. The Star steadily gained 95,100 passengers from 2007 to 2012 to a high of 416,800. Since then it has lost 38,000 passengers in 2015 with 378,800. Station activity has been lost in some of the above cities with gains for New York City, Richmond, Cary, and Raleigh, and with Philadelphia and West Palm Beach holding steady.
FY2016 has not changed the downward course for the Star or the Meteor, but the Star has made a significant overall financial improvement.
They both still operate, the meoter with a diner, the star with no diner. They both operate on slightly different routes. The star takes a little longer to make her entire NYC to Mia route due to the fact she goes to Tampa as well, stopping twice in Lakeland. The star operates NYC to TPA, then Tampa to Mia, thur the wye in Lakeland.
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