Class 1 Passenger Service

[ehbowen]

Hauling freight, be it commodities, merchandise, stacks, auto racks or whatever, is a specialized business, just like hauling passengers is a specialized business. It's why Fedex doesn't fly pax with their cargo, and Southwest doesn't fly cargo with their pax.

Actually, a Southwest Airlines employee once told me that SW's business model is to break even on mail and air cargo, and all their passenger revenue is pure profit.

 

[ehbowen]

If you want the Class 1s to take a second look at passenger service these days, how about offering them a complete exemption from all state and local taxes on any of their lines which host a qualifying passenger service. "Qualifying" meaning that it has to meet certain capacity (no running a single rider coach behind a TOFC hotshot three days a week and claiming the exemption between NY and CHI) and performance (on-time) standards, but otherwise offer maximum freedom to run the service as they see fit. The results could be interesting.

 

[henryj]

If you want the Class 1s to take a second look at passenger service these days, how about offering them a complete exemption from all state and local taxes on any of their lines which host a qualifying passenger service. "Qualifying" meaning that it has to meet certain capacity (no running a single rider coach behind a TOFC hotshot three days a week and claiming the exemption between NY and CHI) and performance (on-time) standards, but otherwise offer maximum freedom to run the service as they see fit. The results could be interesting.

To get back to the question posed, the Class 1's are never going to get back into the passenger business. Even if you offered them the incentives you propose or subsidized the operation they would just outsource the operation to someone like Veolia that has the expertise. The freight railroads are concentrating on freight, not passengers. They are not going to set up whole departments dedicated to passenger train operations. The best scenario is to just fund Amtrak with some kind of dedicated funding. Put it under the DOT and fund it with the fuel tax or whatever. Get better cooperation from the Class 1's with incentive payments of some kind. If you want to keep the LD type trains then legislate which routes Amtrak is to keep as permanent and what new routes you want them to explore. Instead of throwing the burden of corridor trains to the states, use Federal funding similar to what is provided for highways as incentives for more and better service. The Feds built the Interstate Highway system, they can do the same with passenger rail.

 

[rusty spike]

Hauling freight, be it commodities, merchandise, stacks, auto racks or whatever, is a specialized business, just like hauling passengers is a specialized business. It's why Fedex doesn't fly pax with their cargo, and Southwest doesn't fly cargo with their pax.

Actually, a Southwest Airlines employee once told me that SW's business model is to break even on mail and air cargo, and all their passenger revenue is pure profit.

IINM, their passenger revenue last year was almost $15 Billion, freight $139 Million. With less than 10% of their reveunue derived from cargo, I wouldn't consider them "specialized" in the cargo business, let alone the fact that cargo revenue could cover the nut for their entire pax business.

 

[Swadian Hardcore]

That your friends chose to take an accomodation train when the Super Chief/El Cap was available to the same points, I cannot speak to.

I must emphasize I speak from first-hand experience riding Santa Fe, not stuff I heard.

These guys are not my friends! I don't even know who they are in the book. I reaa the book a long time ago, I don't remeber the name of the book, but it was written i the 1980s, hence people saying "ATSF trains in 1969ish were not as good as Amtrak trains today (1980s)."

I've never taken those trains, I don't know if the book is right or not, I just wrote what I remembered! Then again, the train might have been the Grand Canyon, I don't remember/know anymore.

Gosh, chill out!

 

[Swadian Hardcore]

Passenger trains do not lose as much as Amtrak says they do. Amtrak just loads them up with it's bloated overhead.

Ugghhh get over yourself and contribute something useful to the discussion.

Well little Johnny, I did the research and looked at the costs and that is my conclusion. You can do the same and see what you come up with. In my humble opinion there is no way that 15 LD trains lose 530 million dollars a year. As for contributing something, I believe I did. I explained to you why no for profit freight railroad would have anything to do with passenger trains. If you want to stay in your little fantasy world that is your business.

Well, Henry J., I've done my own calculations, too, and I found that the LSL would cost $50,000,000-$60,000,000 a year to operate. That may be lower than Amtrak's own reports, which probably include overhead, but it's still pretty. high. At Amtrak's prices, the LSL would still lose money according to my calculations. I have included such costs as fuel, wages, maintainence, etc..

Passenger trains do not lose as much as Amtrak says they do. Amtrak just loads them up with it's bloated overhead.

Ugghhh get over yourself and contribute something useful to the discussion.

Seconded. Until you can actually name some of those "bloated overhead" costs and how they could effectively be reduced, you're just making noise. There's a whole thread filled with open questions if you want to talk about Amtrak accounting.

Well Ryan, apparently you are living in that same fantasy world.

You still have not showed us your own accouting. What costs are you talking about and how much do you think Amtrak would need to operate, for example, the LSL for one year without overhea? You have not showed us any numbers at all. And, no, I'm not living in the "fantasy world" because I have done the calculations myself!

 

[Ispolkom]

If you want the Class 1s to take a second look at passenger service these days, how about offering them a complete exemption from all state and local taxes on any of their lines which host a qualifying passenger service. "Qualifying" meaning that it has to meet certain capacity (no running a single rider coach behind a TOFC hotshot three days a week and claiming the exemption between NY and CHI) and performance (on-time) standards, but otherwise offer maximum freedom to run the service as they see fit. The results could be interesting.

But then you have an interstate train subsidized by tax exemptions from counties that might not derive any advantage from it. I'd be irritated if my property taxes went up to benefit a train that didn't stop in my county.

 

[PRR 60]

Obviously, any firm running passenger trains will require subsidy in almost all cases (FEC to be determined). But that does not mean the only option for a subsidized service is a public authority or Amtrak. Union Pacific and BNSF operate passenger trains today. They run METRA lines in the Chicago area. Both Class I’s and 100% private. They get paid to do it by METRA.

I’ve said this before, but lets try it again. Lets say, for discussion sake, Amtrak’s annual loss on the operation of the Southwest Chief is $25 million (made up number). Given that assumption, effectively, $25 million of Amtrak’s federal subsidy goes to running the SWC. Now, let’s say BNSF were asked how much subsidy they would need to run the SWC, and they came back and said they could do it with BNSF engineers, conductors, and BNSF-hired service staff (contractor or otherwise) for $20 million. Amtrak would give-up the SWC and it’s $25 million subsidy. BNSF would run the train and get paid $20 million by DOT. That is a $5 million saving. Wouldn’t this be a good thing?

Would BNSF even want to do this? I have no idea. However, operating trains is their business. I’m not sure that for the right price they wouldn’t. After all, they run passenger trains for METRA, why not a run train that is almost exclusively on their own tracks with available crew and support staff all along the route?

Amtrak has been involved in two open bidding competitions for continuation of commuter operation – VRE and Caltrain – and lost both, badly to private operators. Both VRE and Caltrain found that simply handing the work to Amtrak, as had been SOP for years, had been costing them money. Amtrak was shocked and angry when they lost the VRE work, and had a hissy-fit about it publically. They seemingly assumed the bidding process was a sham. It wasn’t. After cooler heads prevailed, they made winning the Caltrain bidding a top priority, and pulled out all stops to retain the work. Despite their best efforts, they still lost, and were not even close to the winning bidder in either price or quality scoring. Amtrak found that they are not competitive with private firms and, to their credit, they are trying to do something about that.

So, VRE and Caltrain are privatized. The trains are running at less cost to the taxpayer than had been the case with Amtrak. Both are doing fine. Isn’t it the trains that are important? What does it matter who is actually running the trains and signing the paychecks? Why this assumption that Amtrak is the one and only possible operator of intercity trains?

 

[Ryan]

Passenger trains do not lose as much as Amtrak says they do. Amtrak just loads them up with it's bloated overhead.

Ugghhh get over yourself and contribute something useful to the discussion.

Seconded. Until you can actually name some of those "bloated overhead" costs and how they could effectively be reduced, you're just making noise. There's a whole thread filled with open questions if you want to talk about Amtrak accounting.

Well Ryan, apparently you are living in that same fantasy world.

One of us is, that's for sure.

 

[rrdude]

The class 1's will run passenger trains as soon as they make money. Maybe. I don't know what the formation of Amtrak required and if it allows a participating railroad to run their own passenger train.

FEC is a Class 1 ready to pioneer into pax rail after a 50 year hiatus. Well, I think FEC is Class 1. They will be after their trackage overhaul. But they quit pax before Amtrak, so I'm sure they are immune to any participant laws.

FEC is not a Class 1 railroad. The designation is based on revenue, not on how good their tracks are.

But they can still pioneer passenger rail just the same, sometimes Class 1s look to there little brethren for some examples on how to do things.

Um, "No, they don't".

 

[Ispolkom]

Why this assumption that Amtrak is the one and only possible operator of intercity trains?

Well, in my case it's mostly my AGR points talking.

 

[haolerider]

Passenger trains do not lose as much as Amtrak says they do. Amtrak just loads them up with it's bloated overhead. However, passenger trains never really made that much even in the good old days. Now there is no way a class one would invest the billions of dollars it would cost to start up service, not to mention the added liability and the added burden of staffing a passenger department and stations and on and on for a service that might break even at best. FEC is publicizing there proposed service, but I will believe it when I see it. And it's a short corridor type service, not a LD train. But it still requires billions in investment dollars to start it up. I think they did that to stall Amtrak from trying to use their tracks and ultimately they will seek state and federal help. Europe has some private operators, but the tracks and basic infrastructure are still state owned and maintained and it's mostly a passenger operation whereas the US tracks are mostly privately owned and the traffic is primarily freight oriented.

Here we are, back with the bloated overhead issue again. Exactly where does it come from and do you have figures to back up your comments......and I mean real figures, not assumptions or guesses!

 

[henryj]

Passenger trains do not lose as much as Amtrak says they do. Amtrak just loads them up with it's bloated overhead.

Ugghhh get over yourself and contribute something useful to the discussion.

Well little Johnny, I did the research and looked at the costs and that is my conclusion. You can do the same and see what you come up with. In my humble opinion there is no way that 15 LD trains lose 530 million dollars a year. As for contributing something, I believe I did. I explained to you why no for profit freight railroad would have anything to do with passenger trains. If you want to stay in your little fantasy world that is your business.

Well, Henry J., I've done my own calculations, too, and I found that the LSL would cost $50,000,000-$60,000,000 a year to operate. That may be lower than Amtrak's own reports, which probably include overhead, but it's still pretty. high. At Amtrak's prices, the LSL would still lose money according to my calculations. I have included such costs as fuel, wages, maintainence, etc..

Passenger trains do not lose as much as Amtrak says they do. Amtrak just loads them up with it's bloated overhead.

Ugghhh get over yourself and contribute something useful to the discussion.

Seconded. Until you can actually name some of those "bloated overhead" costs and how they could effectively be reduced, you're just making noise. There's a whole thread filled with open questions if you want to talk about Amtrak accounting.

Well Ryan, apparently you are living in that same fantasy world.

You still have not showed us your own accouting. What costs are you talking about and how much do you think Amtrak would need to operate, for example, the LSL for one year without overhea? You have not showed us any numbers at all. And, no, I'm not living in the "fantasy world" because I have done the calculations myself!

Swadian, I have been interested mainly in the western trains, particularly the Eagle and the Sunset. I will work up figures for the Lake Shore if you can give me some stats. How many cars and what type are on the train when it leaves Chicago? How many of those and what type go to Boston? I assumed the Boston section has one sleeper and two coaches plus the lounge with the rest going to NY. Are there coaches that only travel between Albany and Boston? How many? How many OBS staff are on each train. I assume one per sleeper, four in the diner, one in the lounge and one for every two coaches. Is that even close? The T&E crews I assume are four per train. What are the switching charges related to each section? Station costs I just estimate. There are just five manned stations that are not shared with eastern corridor trains and three of those are shared with the Capitol. Buffalo to NY are all shared with corridor trains. I still got around 50mil for basic operating costs. Greyhound coach fare Chi-NY is from $78 to 129 in Nov. Amtrak shows $97. Chi-BOS Greyhound shows $109-164. Amtrak is $101. I used a base coach fare of $150. Roomette charge of $330 and bedroom charge of $800. Overall the train misses covering it's operating costs by $4-5 million. Amtrak says it's costs for 2011 were $71mil and the train lost around $39mil with fully allocated costs. I am still working on it, but that is where I am right now.

 

[Ryan]

You don't even know the consist of the train and claim to have better numbers than Amtrak's accounting department.

I'm sure the numbers you're making up are far more credible than what Amtrak reports.

 

[johnny.menhennet]

You don't even know the consist of the train and claim to have better numbers than Amtrak's accounting department.

I'm sure the numbers you're making up are far more credible than what Amtrak reports.

+ 100

 

[Donctor]

There is a thread that lists current consists.

 

[BNSFboy]

The class 1's will run passenger trains as soon as they make money. Maybe. I don't know what the formation of Amtrak required and if it allows a participating railroad to run their own passenger train.

FEC is a Class 1 ready to pioneer into pax rail after a 50 year hiatus. Well, I think FEC is Class 1. They will be after their trackage overhaul. But they quit pax before Amtrak, so I'm sure they are immune to any participant laws.

FEC is not a Class 1 railroad. The designation is based on revenue, not on how good their tracks are.

But they can still pioneer passenger rail just the same, sometimes Class 1s look to there little brethren for some examples on how to do things.

Um, "No, they don't".

Class ones don't know everything, some times even though you are a giant you have to lot to a little railroad for an idea.

 

[haolerider]

Passenger trains do not lose as much as Amtrak says they do. Amtrak just loads them up with it's bloated overhead.

Ugghhh get over yourself and contribute something useful to the discussion.

Well little Johnny, I did the research and looked at the costs and that is my conclusion. You can do the same and see what you come up with. In my humble opinion there is no way that 15 LD trains lose 530 million dollars a year. As for contributing something, I believe I did. I explained to you why no for profit freight railroad would have anything to do with passenger trains. If you want to stay in your little fantasy world that is your business.

Well, Henry J., I've done my own calculations, too, and I found that the LSL would cost $50,000,000-$60,000,000 a year to operate. That may be lower than Amtrak's own reports, which probably include overhead, but it's still pretty. high. At Amtrak's prices, the LSL would still lose money according to my calculations. I have included such costs as fuel, wages, maintainence, etc..

Passenger trains do not lose as much as Amtrak says they do. Amtrak just loads them up with it's bloated overhead.

Ugghhh get over yourself and contribute something useful to the discussion.

Seconded. Until you can actually name some of those "bloated overhead" costs and how they could effectively be reduced, you're just making noise. There's a whole thread filled with open questions if you want to talk about Amtrak accounting.

Well Ryan, apparently you are living in that same fantasy world.

You still have not showed us your own accouting. What costs are you talking about and how much do you think Amtrak would need to operate, for example, the LSL for one year without overhea? You have not showed us any numbers at all. And, no, I'm not living in the "fantasy world" because I have done the calculations myself!

Swadian, I have been interested mainly in the western trains, particularly the Eagle and the Sunset. I will work up figures for the Lake Shore if you can give me some stats. How many cars and what type are on the train when it leaves Chicago? How many of those and what type go to Boston? I assumed the Boston section has one sleeper and two coaches plus the lounge with the rest going to NY. Are there coaches that only travel between Albany and Boston? How many? How many OBS staff are on each train. I assume one per sleeper, four in the diner, one in the lounge and one for every two coaches. Is that even close? The T&E crews I assume are four per train. What are the switching charges related to each section? Station costs I just estimate. There are just five manned stations that are not shared with eastern corridor trains and three of those are shared with the Capitol. Buffalo to NY are all shared with corridor trains. I still got around 50mil for basic operating costs. Greyhound coach fare Chi-NY is from $78 to 129 in Nov. Amtrak shows $97. Chi-BOS Greyhound shows $109-164. Amtrak is $101. I used a base coach fare of $150. Roomette charge of $330 and bedroom charge of $800. Overall the train misses covering it's operating costs by $4-5 million. Amtrak says it's costs for 2011 were $71mil and the train lost around $39mil with fully allocated costs. I am still working on it, but that is where I am right now.

I would be curious as to what line items you include in your overhead calxulations. Can you list them individually?

 

[jphjaxfl]

I think trying to critique Amtrak's accounting is meaningless and pure guess on anyone who has not been associated with Amtrak. There is a high operating cost for trains that operate once a day or less because so much gets charged to them compared to a corridor where certain expenses can be spread over several trains. An example would be comparing The Sunset Limited to the Silver Service corridor.

 

[Ryan]

For reference, here is the last time we had this conversation:

http://discuss.amtraktrains.com/index.php?/topic/48406-do-long-distance-trains-really-lose-money/page__p__371924#entry371924

Perhaps we can keep the discussion of Amtrak overhead and accounting in that recent thread, leaving this one for talking about the potential for the Class I's to reenter the passenger business?

 

[henryj]

For reference, here is the last time we had this conversation:

http://discuss.amtraktrains.com/index.php?/topic/48406-do-long-distance-trains-really-lose-money/page__p__371924#entry371924

Perhaps we can keep the discussion of Amtrak overhead and accounting in that recent thread, leaving this one for talking about the potential for the Class I's to reenter the passenger business?

The potential for the Class I's to reenter the passenger business is less than 0.

 

[henryj]

I would be curious as to what line items you include in your overhead calxulations. Can you list them individually?

Sure. I did this because I was just curious as to whether these trains even covered their basic operating costs. I include Fuel at $4/gal, track rent at $5/train mile, switching costs, maintenance at $1 per car mile, OBS labor at $50/hr, T&E labor at $115/hr, diner or commissary costs, station op costs and station agent costs. The rest of the costs,such as insurance, the reservation system, accounting, security, management and other G&A are shared costs and just part of overhead. So I was just looking at what costs might disapear if the train was eliminated. It's not perfect, but it gives you a 'ball park' number as to what these trains actually cost to operate. When the Class I's ran these trains they were happy if the train just covered their basic costs and made some contribution to overhead. This worked ok in the west where the physical plant was maintained for freight traffic. But the eastern roads had to maintain a much larger physical plant in order to run the traffic density they had so passenger trains had to cover the costs of all that extra plant which of course they eventually did not. In looking at train after train the answer comes up basically the same. For these trains(LD) to make it they have to increase capacity and raise the base coach fare at least above Greyhound. Corridor type trains have lower costs and higher base fares so they can actually break even or even make a small profit.

 

[Ispolkom]

Class ones don't know everything,

Of course they don't know everything. But does any Class 1 railroad pay attention to what a short line does?

 

[BNSFboy]

Class ones don't know everything,

Of course they don't know everything. But does any Class 1 railroad pay attention to what a short line does?

I didn't mean short lines, I live next to one and I hope no Class 1 looks at it for an idea. I was just saying like The Alaska Railroad and other large non-Class 1.

 

[Ryan]

For reference, here is the last time we had this conversation:

http://discuss.amtraktrains.com/index.php?/topic/48406-do-long-distance-trains-really-lose-money/page__p__371924#entry371924

Perhaps we can keep the discussion of Amtrak overhead and accounting in that recent thread, leaving this one for talking about the potential for the Class I's to reenter the passenger business?

The potential for the Class I's to reenter the passenger business is less than 0.

On that you and I are in 100% agreement. Which is a powerful statement when you and I agree on something!