neroden
Engineer
I've been poking around at the long-distance train financials again. Comparing 2012 "core contribution/loss" numbers to Boardman's presentation on a direct-costs basis, which it looks like is probably based on 2012 numbers, it looks as if the following amounts of overhead were allocated to each train:
Silver Star $38 million (44.1 - 6)
Cardinal $11 million (16.9 - 6)
Silver Meteor $38 million (36.9 + 1)
Empire Builder $45 million (56.0 - 11)
Capitol Limited $18 million (23.6 - 5.5)
California Zephyr $38 million (68.7 - 31)
Southwest Chief $38 million (65.2 - 27.5)
City of New Orleans $16 million (20.6 - 5)
Texas Eagle $19 million (33.1 - 14)
Sunset Limited $18 million (40.9 - 23)
Coast Starlight $37 million (53.8 - 17)
Lake Shore Limited $30 million (31.6 - 1.5)
Palmetto $15 million (10.9 + 4)
Crescent $33 million (40.6 - 8)
Auto Train $32 million (32.4 + 0)
I can't make much sense of this. Shared stations are part of this, but they certainly don't account for the entire pattern. It doesn't line up with rolling stock usage, either. Maybe it's partly train-mile-based allocation? And is it coincidence that the Star and Meteor have *exactly the same* allocated overhead?
Anyway, if I back out this 2012 level of allocated overhead from the August 2014 results, to try to derive direct-costs losses for YTD 2014, I find:
Silver Star $4 million surplus
Cardinal ($2 million loss)
Silver Meteor $12 million surplus
Empire Builder ($1 million loss)
Capitol Limited ($4 million loss)
California Zephyr ($18 million loss)
Southwest Chief ($17 million loss)
City of New Orleans ($6 million loss)
Texas Eagle ($9 million loss)
Sunset Limited ($15 million loss)
Coast Starlight ($10 million loss)
Lake Shore Limited $2 million surplus
Palmetto $6 million surplus
Crescent ($7 million loss)
Auto Train $31 million surplus
Now, these numbers still look close to the *right order* to me, just as the numbers in Boardman's presentation did. They seem to roughly correspond to online city size, ridership, train length, load factors, cost of operations, etc. in a way that other commonly referenced numbers do not.
(Using the August numbers will overstate the success of every train, because some of the overhead allocation will creep in in December, but the relative order should still hold, more or less. Using two-year-old overhead numbers for subtraction may understate the success of every train, because overhead has probably gone up some. Or it may overstate the success of every train because overhead may have been reallocated toward the NEC and state corridors, thanks to increased service there. Or overhead may actually have dropped. Who knows? There's also still probably something screwy in the Sunset Limited/Texas Eagle accounting. And I don't trust the Auto Train numbers because I suspect overhead allocation procedure on that has changed substantially between 2012 and 2014. However, the *relative order* of the trains is probably still *mostly* right.)
Make no mistake: there's a lot of overhead to cover. $416+ million. Some unknown amount of it is arguably "avoidable" or belongs in direct costs -- it's not clear how "shared stations" are treated, for example. Most of the overhead is not like that, though; it's unavoidable overhead. (There's also very likely to be overhead buried even in "direct costs", unfortunately.)
The entire premise of my calculation here, of course, is that allocated costs haven't changed, and that any drop in costs is a real drop in direct costs. I have no way of telling whether this is true, however, and I actually suspect that it isn't.
Revenues have been flat in most of the "long distance" department from 2012 to 2014, and actually down significantly on the Builder and Eagle (though way up on Auto Train thanks to the extra coach).
Costs for the "long distance business line" dropped by $39.8 million from 2012 to 2013, and by a further $91.6 million from August 2013 to August 2014. I am still suspicious that much of this change is overhead.
Costs in *every* business line dropped very substantially from August 2013 to August 2014, which might point to the elimination of large sources of overhead. (Delayed benefits from e-ticketing, perhaps? Such as downsizing or elimination of the center which processed the paper tickets?).
It's also worth noting that for the last several years Amtrak has been -- on a "fully allocated" basis, of course -- losing money on freight and commuter service and "ancillary customers". This "loss" is going up, so it's possible that overhead has been reallocated *there*. (Perhaps due to increased commuter service or something.)
Silver Star $38 million (44.1 - 6)
Cardinal $11 million (16.9 - 6)
Silver Meteor $38 million (36.9 + 1)
Empire Builder $45 million (56.0 - 11)
Capitol Limited $18 million (23.6 - 5.5)
California Zephyr $38 million (68.7 - 31)
Southwest Chief $38 million (65.2 - 27.5)
City of New Orleans $16 million (20.6 - 5)
Texas Eagle $19 million (33.1 - 14)
Sunset Limited $18 million (40.9 - 23)
Coast Starlight $37 million (53.8 - 17)
Lake Shore Limited $30 million (31.6 - 1.5)
Palmetto $15 million (10.9 + 4)
Crescent $33 million (40.6 - 8)
Auto Train $32 million (32.4 + 0)
I can't make much sense of this. Shared stations are part of this, but they certainly don't account for the entire pattern. It doesn't line up with rolling stock usage, either. Maybe it's partly train-mile-based allocation? And is it coincidence that the Star and Meteor have *exactly the same* allocated overhead?
Anyway, if I back out this 2012 level of allocated overhead from the August 2014 results, to try to derive direct-costs losses for YTD 2014, I find:
Silver Star $4 million surplus
Cardinal ($2 million loss)
Silver Meteor $12 million surplus
Empire Builder ($1 million loss)
Capitol Limited ($4 million loss)
California Zephyr ($18 million loss)
Southwest Chief ($17 million loss)
City of New Orleans ($6 million loss)
Texas Eagle ($9 million loss)
Sunset Limited ($15 million loss)
Coast Starlight ($10 million loss)
Lake Shore Limited $2 million surplus
Palmetto $6 million surplus
Crescent ($7 million loss)
Auto Train $31 million surplus
Now, these numbers still look close to the *right order* to me, just as the numbers in Boardman's presentation did. They seem to roughly correspond to online city size, ridership, train length, load factors, cost of operations, etc. in a way that other commonly referenced numbers do not.
(Using the August numbers will overstate the success of every train, because some of the overhead allocation will creep in in December, but the relative order should still hold, more or less. Using two-year-old overhead numbers for subtraction may understate the success of every train, because overhead has probably gone up some. Or it may overstate the success of every train because overhead may have been reallocated toward the NEC and state corridors, thanks to increased service there. Or overhead may actually have dropped. Who knows? There's also still probably something screwy in the Sunset Limited/Texas Eagle accounting. And I don't trust the Auto Train numbers because I suspect overhead allocation procedure on that has changed substantially between 2012 and 2014. However, the *relative order* of the trains is probably still *mostly* right.)
Make no mistake: there's a lot of overhead to cover. $416+ million. Some unknown amount of it is arguably "avoidable" or belongs in direct costs -- it's not clear how "shared stations" are treated, for example. Most of the overhead is not like that, though; it's unavoidable overhead. (There's also very likely to be overhead buried even in "direct costs", unfortunately.)
The entire premise of my calculation here, of course, is that allocated costs haven't changed, and that any drop in costs is a real drop in direct costs. I have no way of telling whether this is true, however, and I actually suspect that it isn't.
Revenues have been flat in most of the "long distance" department from 2012 to 2014, and actually down significantly on the Builder and Eagle (though way up on Auto Train thanks to the extra coach).
Costs for the "long distance business line" dropped by $39.8 million from 2012 to 2013, and by a further $91.6 million from August 2013 to August 2014. I am still suspicious that much of this change is overhead.
Costs in *every* business line dropped very substantially from August 2013 to August 2014, which might point to the elimination of large sources of overhead. (Delayed benefits from e-ticketing, perhaps? Such as downsizing or elimination of the center which processed the paper tickets?).
It's also worth noting that for the last several years Amtrak has been -- on a "fully allocated" basis, of course -- losing money on freight and commuter service and "ancillary customers". This "loss" is going up, so it's possible that overhead has been reallocated *there*. (Perhaps due to increased commuter service or something.)