why are LD trains such heavy money losses?

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They are the most expensive to operate and they aren't utilized well enough to take advantage of economies of scale that @neroden is so fond of mentioning. Therefore, they will continue to bleed money as long as the costs associated with the operation of a train are specific to one train.

Then, of course, there are the questionable allocations...:confused:
 
There is a long-running debate as to whether they are heavy money losers or not. For example, back when Amtrak routinely published statistics on individual routes, some long-distance runs cost less per mile in subsidy than some regional/corridor services, but because their routes were longer they showed greater dollar amounts of losses. Economic efficiency is often ignored in favor of dollar budget amounts. Popular media and politicians usually focus on the budget cost.
 
It would be interesting to know what it actually costs for each route ...

How much does it actually cost to run the SM from MIA to NYP?

There are shared expenses between different trains/routes. These do have an impact on the bottom line for Amtrak as a whole. Some of these would include the crews involved in maintenance and turning the trains, Station costs, training costs for the train crews.

For the individual train, how much does the fuel cost to run the route? Pay the employees on THAT train. Pay for the use of the track. Any other expenses, not counting food, that the individual train incurs when running from termination to termination?

If we had a breakdown of these expenses it might be easier to see just where the money goes and what steps might make the most sense to fix the problem. After all, cutting the wrong expenses does not increase profits.
 
That's the thing ...
  • The Secret Service does not make a profit
  • The Military does not make a profit
  • The US Highway System does not make a profit
  • The Senate does not make a profit
  • Congress does not make a profit
  • The White House does not make a profit
  • Many Government Programs (like those for the poor) do not make a profit
Why are the Post Office and Amtrak singled out and expected to make a profit when they are also Government Services?
 
The simple answer is Politics. The Highway Lobby group and airlines want more money for it's members, so if there are no pasenger trains, people MUST drive or fly. (How much airline stock does Amtrak's CEO still own????)

In 2006, the Republican controlled House, Senate and White House passed and signed a law to overburden the Post Office with unrealiatic fees. The law states the Post Office MUST fully-fund its pensions 70 years in ADVANCE!! Therefore, since most People retire between 60 and 67 years old, the politicians required the Post Office to provide pay every year fully-funded pensions for people who HAVE NOT YET BEEN BORN!!!!! (FedEx, UPS, and other private companies don't have to do this).
 
Touché to Anderson for getting us to ask questions that may or may not be true to fit his agenda. Moorman and Boardman along with the RPA all claim the network comes close to break even. I trust them more than Anderson and that’s an understatement.

Amtrak’s accounting is garbage and outright deceitful at this point. Recent numbers released by Amtrak (listed on other forum) show the tri weeklies have some of the best financial numbers in the entire LD network. Yes the Sunset Limited and Cardinal!
Makes me think they are cooking up something bad for the coming year.
 
Qapla said:
Why are the Post Office and Amtrak singled out and expected to make a profit when they are also Government Services?
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I single out the Post Office for two reasons. First, from the USPS perspective I'm little more than a passive product they can sell to junk mail advertisers with or without my consent. The second issue is that by law no private enterprise is allowed to undercut their ludicrously inefficient parcel shipping. Private companies are still free to undercut Amtrak with better service at lower prices without running afoul of the law, so I even if I hated passenger rail I wouldn't have the same ideological issues with Amtrak as I do with the USPS.
 
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DSS&A said:
The law states the Post Office MUST fully-fund its pensions 70 years in ADVANCE!! Therefore, since most People retire between 60 and 67 years old, the politicians required the Post Office to provide pay every year fully-funded pensions for people who HAVE NOT YET BEEN BORN!!!!! (FedEx, UPS, and other private companies don't have to do this).
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This was done because Congress didn't want a situation where the often-mismanaged US Postal Service would ignore their pension obligations in order to "balance the books" and show a rosier financial status to the extent that the government would be called upon to bail out their pension fund.

One can argue about the propriety for making the requirement or the amount required (ie, based on time frame), but requiring an independent agency with often questionable practices to become more responsible isn't a bad thing. Of interest is that just last week FedEx asked to be released from the burden of providing pensions for future hires (in other words, they will set up their own retirement plan, presumably with a fair amount of employee involvement).
Devil's Advocate said:
I single out the post office because they force absurd amounts of physical junk mail on me (you are not a customer of the USPS, you are the product they sell to others) and by law no private enterprise is allowed to undercut their ludicrously inefficient pricing. Other companies are still free to undercut Amtrak with lower prices and better service without running afoul of the law.
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The US Postal Service isn't really a good example of an government entity for the purposes of this discussion. It operates as a private company with government oversight and monopolistic business practices. Then there's the issue with its overall function as an origination-to-destination courier, which many in logistics say is outmoded as well as inefficient.
 
RSG said:
The US Postal Service isn't really a good example of an government entity for the purposes of this discussion. It operates as a private company with government oversight and monopolistic business practices. Then there's the issue with its overall function as an origination-to-destination courier, which many in logistics say is outmoded as well as inefficient
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This is sarcasm right? You pretty much described Amtrak!
 
What scares me about the 75 year pension thing with the Post office is A: it makes the post office look like it’s inept and loosing millions both of which are untrue. B: the same people that wrote the pension law want the post office privatized. There’s a big bag of employees money (some of which haven’t been born as previously noted) that’s prime to be looted by new owners.

Similar to Amtrak no private company would want the USPS mission. It’s for the common good a stamp costs 50 something cents to Bethel, AK or Miami and everywhere in between.
 
If you want to look at the track record of privatization, look at the UK. The Royal Post Office was sold off at a fraction of it's value and the new owners immediately tripled stamp prices. Their railways have largely not faired any better, especially outside of London. Even some of the train companies around London suck. I've heard Southern Rail be compared to NJ Transit unfavorably. The difference being is NJ Transit is cheaper comparatively. If we did privatize the post office and Amtrak, what we would get is worse service and higher costs in the few areas they'd survive in. All while workers get their pensions raided and pay likely cut.
 
sttom said:
If we did privatize the post office and Amtrak, what we would get is worse service and higher costs in the few areas they'd survive in. All while workers get their pensions raided and pay likely cut.
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Not that I am in favor of making any serious changes in Amtrak without setting up a governance framework to govern and regulate passenger railroads first, but there is a bit of hyperbole going on here.

Amtrak is already structured as and to quite an extent run more as a private enterprise than a government department and we are already getting some of the blowback from it. Either way it will need continued funding from the government.

I doubt that Amtrak as a pure private company like the rest of the railroad industry will be able to escape the clutches of the Railroad Retirement System in the US, so pensions won't go away anywhere, unless somehow that fate befalls the entire railroad industry. It would be an as earthshaking a change as Social Security disappearing. It could happen to the entire industry, but unlikely to happen just to Amtrak.
 
jis said:
Not that I am in favor of making any serious changes in Amtrak without setting up a governance framework to govern and regulate passenger railroads first, but there is a bit of hyperbole going on here.

Amtrak is already structured as and to quite an extent run more as a private enterprise than a government department and we are already getting some of the blowback from it. Either way it will need continued funding from the government.

I doubt that Amtrak as a pure private company like the rest of the railroad industry will be able to escape the clutches of the Railroad Retirement System in the US, so pensions won't go away anywhere, unless somehow that fate befalls the entire railroad industry. It would be an as earthshaking a change as Social Security disappearing. It could happen to the entire industry, but unlikely to happen just to Amtrak.
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I did say *and* Amtrak. Either way privatization would not go well for either of the two and it would lead to higher costs to the public, worse and patchy service, and if we're really lucky, more subsidies for....reasons.

Also I'm not hyperbolic, I'm cynical and a bit sarcastic.
 
To say that a Gov't agency needs a Gov't "bailout" is a bit of an oxymoron ...

When the Navy needs a new ship or the Air Force needs new planes or Congress "needs" offices remodeled - no one calls it a "bailout" or says they need to show a "profit ... why should Amtrak be any different? It IS a Gov't agency and should have the same budget consideration the other Gov't agencies get.

What if the CDC were required to turn a profit .. or the Air Traffic Control system - or the Secret Service
 
(1) The accounting is essentially fraudulent. The long-distance trains are almost all profitable, in reality. However, they are "allocated" a disproportionately large share of Amtrak's fixed overhead costs (stuff like the central reservations office, etc.)
(2) They lack economies of scale. When you run one train a day, it has to cover the costs of all the stations along the route. Three trains a day, and suddenly the same station costs are spread out over three trains. This is why they are substanitally *less* profitable than the "corridor" trains which have more frequencies per day. (The one-a-day corridor trains are actually even less profitable than the LD trains, and typically lose money.)
 
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Qapla said:
It would be interesting to know what it actually costs for each route ...

How much does it actually cost to run the SM from MIA to NYP?

There are shared expenses between different trains/routes. These do have an impact on the bottom line for Amtrak as a whole. Some of these would include the crews involved in maintenance and turning the trains, Station costs, training costs for the train crews.

For the individual train, how much does the fuel cost to run the route? Pay the employees on THAT train. Pay for the use of the track. Any other expenses, not counting food, that the individual train incurs when running from termination to termination?

If we had a breakdown of these expenses it might be easier to see just where the money goes and what steps might make the most sense to fix the problem. After all, cutting the wrong expenses does not increase profits.
Click to expand...

Congress mandated the reporting of these actual costs, known as "avoidable costs", in the 2008 PRIIA law. Amtrak has violated the law for ten years now and failed to report the costs. Complete scofflaw behavior.
 
Amtrakfflyer said:
Similar to Amtrak no private company would want the USPS mission.
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I'd imagine there are plenty of private companies that would be happy to take over the job of stuffing my poor mailbox with endless advertising. That being said, in the case of a private company a city-to-city letter might cost as little as 10¢ for overnight delivery while a rural-to-rural letter might require a $10 stamp for delivery in two weeks. That's bad news for 20% of Americans but good news for the other 80%.
 
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Qapla said:
That's the thing ...
  • The Secret Service does not make a profit
  • The Military does not make a profit
  • The US Highway System does not make a profit
  • The Senate does not make a profit
  • Congress does not make a profit
  • The White House does not make a profit
  • Many Government Programs (like those for the poor) do not make a profit
Why are the Post Office and Amtrak singled out and expected to make a profit when they are also Government Services?
Click to expand...
fgalse analogy. Amtrakcompetes with other transportation modes. Those don't.
 
only partially false - Amtrak is supposed to be gov't funded ... it is part of the Gov't, not a private business. Are you sure the CDC does not compete with any other research/medical labs?
 

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