Boardman: Amtrak Commits to End Food and Beverage Losses

[Anderson]

I'm not convinced that an automat-type car couldn't be done well. It might be impossible, but it seems possible that something could be done on that front...particularly if you used it as an augmentation to a cafe on a particularly long corridor train. For a quick example, I could see one having a place in the context of a 12-or-more-car Regional, since at that point you're facing three bad options: Add a second cafe (expensive), make BC passengers walk about 5 cars for their drinks (inconvenient), or start looking at 7-8 car walks for folks at the wrong end of the train. Both of the latter options also run the risk of an overwhelmed cafe.

I'd also point out two things: First, food (and vending) technology is a lot better now than it was in the 1950s/60s. Second, and possibly more importantly on the automat point, is that SP was specifically trying to wreck its passenger business and so likely gave them lousy food on purpose.

 

[cirdan]

Well, actually, maybe it can. The dining car staff spends a truly unreasonable amount of time on paperwork (both bills and inventory), just as the conductors spent an unreasonable amount of time on paperwork prior to "e-ticketing". If those hours can be spent serving customers instead, then for the same worker pay, Amtrak could generate quite significantly more revenue. Advance ordering could make sure that people get what they want (rather than running out) and that could improve customer satisfaction and thereby improve revenue as well -- and it could also reduce spoilage and wasted inventory at the same time.

Maybe not.

People do tend to want to eat at mealtimes. That's why they're called mealtimes. Keeping the dining car open from morning till night will not necessarily generate more revenue. If people want a snack or a drink in between, that's what the cafeteria car is for. Although there may be some potential in looking into joining these two functions into one.

I agree that the paperwork think isn't appropriate in the modern day and age where this could easily be automated. But the business case for making the change only really adds up if the staff can be employed elsewhere outside mealtimes. The risk is just that they will enjoy having less work without actually decreasing costs or creating additional revenue. And in that case the step isn't really worth it. On long-haul airlines, cabin staff will sell duty free items outside meal times, and so create a positive revenue stream for the airline. Is there a train equivelent for that? A casino maybe? I doubt that would work.

 

[Anderson]

Regarding cashless diners, it shouldn't be that hard to either do pre-payment in the cafe, or offer gift cards where the balance can be refunded from a ticket agent after the trip.

Also, if it wouldn't cost that much to stock different meals in the commissaries, offering a greater variety of selections for those willing to pre-order would be an interesting idea.

In addition, if trains could ever be guarenteed to be roughly on-time, would it be cheaper to eliminate dorm space for the crew by having them detrain at the end of the day (or sfift) for land-based lodging, then work the other direction?

The issue with the last point is that trains don't always have "days" that end at the same point. A good example here would be the Silver Meteor: Breakfast isn't going to start before Washington most days (arguing for a Richmond crew to allow for setup time), but dinner often runs right up to Richmond due to boardings in DC, arguing for putting the crew turn at Rocky Mount. The LSL is another example here: WB, you've got food service times that could argue for the crew disembarking at (or at least by) Buffalo, and the next one boarding at Cleveland or Toledo. EB, there's no real need for a crew until Cleveland...so what do you do there?

Moreover, schedules aren't static and occasionally go way off to one side (witness the Star over the next month), so to tinker with a schedule you'd have to move crews around.

 

[yarrow]

Second, and possibly more importantly on the automat point, is that SP was specifically trying to wreck its passenger business and so likely gave them lousy food on purpose.

well, there are those who would like to wreck amtrak's long distance passenger service both in congress and, i for one, am not too sanguine about smilin' joe's motives

 

[jphjaxfl]

I met an older gentleman years back who had retired from Espee as the head freight and passenger agent in a major city. Management would advise him to discourage passengers from buying passenger train tickets especially expensive Pullman Tickets. If they sold too many passenger train tickets, they were reprimanded. In a way Amtrak is doing the same thing by limiting Sleeping Car capacity and buying very little new equipment. Spartan dining service will kill the sleeping car business for anything except overnight.

 

[Ryan]

How does Amtrak "limit sleeping car capacity"?

I'm not sure that it's a fair comparison. Amtrak can't buy cars with money they don't have. If they were given the funding and the commitment from Congress to support LD train service, they'd be all over it.

 

[The Davy Crockett]

Eureka! Why didn't anyone think of this sooner? Use ebay to auction off overnight lounge car space to the highest bidding lounge lizards! :giggle:

 

[AmtrakBlue]

Eureka! Why didn't anyone think of this sooner? Use ebay to auction off overnight lounge car space to the highest bidding lounge lizards! :giggle:

I better not find you snoozing in the SSL on #30. h34r:

 

[The Davy Crockett]

Eureka! Why didn't anyone think of this sooner? Use ebay to auction off overnight lounge car space to the highest bidding lounge lizards! :giggle:

I better not find you snoozing in the SSL on #30. h34r:

Maybe some boozing - but no snoozing!

 

[afigg]

well, there are those who would like to wreck amtrak's long distance passenger service both in congress and, i for one, am not too sanguine about smilin' joe's motives

What damage or cutbacks to the LD trains has Boardman done during his tenure? His claim that with investments in IT and better management that Amtrak could eliminate losses from F&B sales in 5 years is clearly aimed at blocking defunding moves in Congress and protecting the LD trains. Odds are that Boardman won't be Amtrak President in 5 years, so the end of the 5 year period will fall on his successor. Who could blame Boardman for being too optimistic if Mica is still in a position to make trouble for Amtrak on F&B losses.
In 5 years, if the cafe cars on the busier corridor services are returning a solid surplus, the cafe and food services on the medium range and lower frequency corridor services are generally running at break-even or a small surplus (not counting state subsidies), and the diners on the LD trains still lose money but the losses have been greatly reduced, that will effectively block off a major avenue of attack on Amtrak funding. Easy for the politicians and press to take cheap shots at Amtrak on food service by holding up a burger and shouting how the taxpayer funded Amtrak loses so many dollars for every burger sold.

According to last week's news release, in inflation adjusted dollars, Amtrak lost $105 million on F&B sales in FY2006 and projects to lose $74 million in FY2013. If in 5 years, the total F&B loss is, to pick a number, down to $25 million, while the total ticket revenue is $2.5 billion, then the F&B losses would be 1% of ticket revenue. Small enough that it should be easy to brush off attacks on F&B sale losses.

 

[jphjaxfl]

How does Amtrak "limit sleeping car capacity"?

I'm not sure that it's a fair comparison. Amtrak can't buy cars with money they don't have. If they were given the funding and the commitment from Congress to support LD train service, they'd be all over it.

Compare the amount of sleeping car space available on Amtrak trains in 2013 with early 1990s and early 1970s. Yes, not enough new sleeping cars have been built to handle perceived demand. It may not be just Amtrak cutting capacity.... It's a combination of Amtrak management, Congress and even passengers not communicating with Congress asking for more service. I contact my Senators and Representative s every year, but it doesn't help because there is no strong lobby for passenger trains.

 

[Anderson]

well, there are those who would like to wreck amtrak's long distance passenger service both in congress and, i for one, am not too sanguine about smilin' joe's motives

What damage or cutbacks to the LD trains has Boardman done during his tenure? His claim that with investments in IT and better management that Amtrak could eliminate losses from F&B sales in 5 years is clearly aimed at blocking defunding moves in Congress and protecting the LD trains. Odds are that Boardman won't be Amtrak President in 5 years, so the end of the 5 year period will fall on his successor. Who could blame Boardman for being too optimistic if Mica is still in a position to make trouble for Amtrak on F&B losses.
In 5 years, if the cafe cars on the busier corridor services are returning a solid surplus, the cafe and food services on the medium range and lower frequency corridor services are generally running at break-even or a small surplus (not counting state subsidies), and the diners on the LD trains still lose money but the losses have been greatly reduced, that will effectively block off a major avenue of attack on Amtrak funding. Easy for the politicians and press to take cheap shots at Amtrak on food service by holding up a burger and shouting how the taxpayer funded Amtrak loses so many dollars for every burger sold.

According to last week's news release, in inflation adjusted dollars, Amtrak lost $105 million on F&B sales in FY2006 and projects to lose $74 million in FY2013. If in 5 years, the total F&B loss is, to pick a number, down to $25 million, while the total ticket revenue is $2.5 billion, then the F&B losses would be 1% of ticket revenue. Small enough that it should be easy to brush off attacks on F&B sale losses.

Moreover, in such a situation, let's take FY13's operating support requirement as $350m. Remove $50m in F&B losses and $80-100m in PRIIA 209 loss reductions (I assume that the capital charges will bring in a bit more in the medium term, though I also suspect that number will slide a bit as the multi-state bilevels come on line), and your annual operating losses are already in the $200-220m range. Add in the Viewliner IIs, which should help margins on the eastern LD trains at least somewhat, continued improvement on the NEC (both with freed-up cars from the Midwest and just the steady march of ticket sales), and hopefully some impending capacity bumps on the Acela front, and there's a good chance that Amtrak is either at or close to $0 in nominal operating losses.

 

[VentureForth]

A major problem is that they run out of food. If you're losing money and you run out of food, you've maxed out your revenue stream and cannot improve. There should NEVER be an excuse not to feed every single person in the diner who wants to eat there - especially paying coach passengers - and they should never run out of food in the Cafe car.

As for the diner, I think that the POS should improve this problem dramatically. Let people stay as long as they want to finish their meal. Most folks are reasonable. The problem comes when folks are sitting at the table still for 10, 15, 20 minutes after all consumption is complete and they are waiting for paperwork processing to complete. "Come at your will" vs seating times would help, too, as this would prevent all the stages of a meal happening at the exact same time.

How does Amtrak "limit sleeping car capacity"?

I'm not sure that it's a fair comparison. Amtrak can't buy cars with money they don't have. If they were given the funding and the commitment from Congress to support LD train service, they'd be all over it.

Compare the amount of sleeping car space available on Amtrak trains in 2013 with early 1990s and early 1970s. Yes, not enough new sleeping cars have been built to handle perceived demand. It may not be just Amtrak cutting capacity.... It's a combination of Amtrak management, Congress and even passengers not communicating with Congress asking for more service. I contact my Senators and Representative s every year, but it doesn't help because there is no strong lobby for passenger trains.

I dunno - but the sleepers are not ALWAYS selling out. They are hitting 100% capacity frequently, but I wonder if more sleeping cars would really make a huge dent in revenue. I would actually have to research the actual occupancy rate. Would it be worth hauling an additional sleeper for 30 nights per year if it goes empty for the other 330 days? What's the breaking point?

 

[Anderson]

On reservations, there are obviously a couple of options. I think doing reservations for sleeper passengers and come-at-will/wait listing for coach passengers would probably work best. The risk you run into without reservations is folks facing a 30-60 minute wait list at every meal, which is also a bad thing. Unreserved breakfast times can lead to a bit of a scramble-to-the-diner-early phenomenon (which, if I'm having a spot of trouble sleeping that night, usually means I'm getting up, going to breakfast, and crashing again).

I think it's fair for them to run out of some items, but when they're out of almost everything on a regular basis (i.e. not just on the day before Thanksgiving when the train is beyond capacity even with extra cars)? That's an issue.

 

[Anderson]

A major problem is that they run out of food. If you're losing money and you run out of food, you've maxed out your revenue stream and cannot improve. There should NEVER be an excuse not to feed every single person in the diner who wants to eat there - especially paying coach passengers - and they should never run out of food in the Cafe car.

As for the diner, I think that the POS should improve this problem dramatically. Let people stay as long as they want to finish their meal. Most folks are reasonable. The problem comes when folks are sitting at the table still for 10, 15, 20 minutes after all consumption is complete and they are waiting for paperwork processing to complete. "Come at your will" vs seating times would help, too, as this would prevent all the stages of a meal happening at the exact same time.

How does Amtrak "limit sleeping car capacity"?

I'm not sure that it's a fair comparison. Amtrak can't buy cars with money they don't have. If they were given the funding and the commitment from Congress to support LD train service, they'd be all over it.

Compare the amount of sleeping car space available on Amtrak trains in 2013 with early 1990s and early 1970s. Yes, not enough new sleeping cars have been built to handle perceived demand. It may not be just Amtrak cutting capacity.... It's a combination of Amtrak management, Congress and even passengers not communicating with Congress asking for more service. I contact my Senators and Representative s every year, but it doesn't help because there is no strong lobby for passenger trains.

I dunno - but the sleepers are not ALWAYS selling out. They are hitting 100% capacity frequently, but I wonder if more sleeping cars would really make a huge dent in revenue. I would actually have to research the actual occupancy rate. Would it be worth hauling an additional sleeper for 30 nights per year if it goes empty for the other 330 days? What's the breaking point?

It's not just "are they selling out" that you have to look at. Remember, there are five buckets for each type of accomodation. Some routes could probably move another full sleeper at one of the lower buckets but not at the high ones. In other cases (the Silvers come to mind, as does the LSL), you have enough traffic that you could probably add another sleeper and sell it out a fair share of the time at one of the higher buckets.

One thing to consider in this vein is that if Amtrak could sell the whole of coach at high bucket on some routes, you'd probably eradicate direct losses and then some. However, that sort of jump in PPR seems highly unlikely to play out well with the riding public.

 

[afigg]

Moreover, in such a situation, let's take FY13's operating support requirement as $350m. Remove $50m in F&B losses and $80-100m in PRIIA 209 loss reductions (I assume that the capital charges will bring in a bit more in the medium term, though I also suspect that number will slide a bit as the multi-state bilevels come on line), and your annual operating losses are already in the $200-220m range. Add in the Viewliner IIs, which should help margins on the eastern LD trains at least somewhat, continued improvement on the NEC (both with freed-up cars from the Midwest and just the steady march of ticket sales), and hopefully some impending capacity bumps on the Acela front, and there's a good chance that Amtrak is either at or close to $0 in nominal operating losses.

Don't get too carried away talking about approaching break-even overall in nominal operating losses. The surplus generated by the NE Regionals will have to cover the payments for the ACS-64s. Unless Congress provides a lot of funding to buy Acela IIs, the surplus from increased Acela revenues will end up going to pay for part or all of the Acela II costs. There are also significant outstanding capital needs such as single level corridor cars and any number of NEC projects. Congress may provide some funds for rolling stock purchases once we get past the austerity gridlock phase, but not enough to pay for all of what Amtrak needs to purchase over the next 10 years.
Since costs don't remain static either, Amtrak is not likely about to reach a nominal 100% cost recovery so long as it runs LD trains. But if Amtrak can reduce F&B losses and other losses to get the annual operating subsidy down to the $200 to $300 million range, that gets it down low enough so it is a very small part of the total discretionary budget and thus less of a target.

 

[yarrow]

Moreover, in such a situation, let's take FY13's operating support requirement as $350m. Remove $50m in F&B losses and $80-100m in PRIIA 209 loss reductions (I assume that the capital charges will bring in a bit more in the medium term, though I also suspect that number will slide a bit as the multi-state bilevels come on line), and your annual operating losses are already in the $200-220m range. Add in the Viewliner IIs, which should help margins on the eastern LD trains at least somewhat, continued improvement on the NEC (both with freed-up cars from the Midwest and just the steady march of ticket sales), and hopefully some impending capacity bumps on the Acela front, and there's a good chance that Amtrak is either at or close to $0 in nominal operating losses.

Don't get too carried away talking about approaching break-even overall in nominal operating losses. The surplus generated by the NE Regionals will have to cover the payments for the ACS-64s. Unless Congress provides a lot of funding to buy Acela IIs, the surplus from increased Acela revenues will end up going to pay for part or all of the Acela II costs. There are also significant outstanding capital needs such as single level corridor cars and any number of NEC projects. Congress may provide some funds for rolling stock purchases once we get past the austerity gridlock phase, but not enough to pay for all of what Amtrak needs to purchase over the next 10 years.
Since costs don't remain static either, Amtrak is not likely about to reach a nominal 100% cost recovery so long as it runs LD trains. But if Amtrak can reduce F&B losses and other losses to get the annual operating subsidy down to the $200 to $300 million range, that gets it down low enough so it is a very small part of the total discretionary budget and thus less of a target.

you guys actually seem to know something about the topic whereas i just opine. i hope you are right

 

[AlanB]

"Come at your will" vs seating times would help, too, as this would prevent all the stages of a meal happening at the exact same time.

If you wish to see the dining cars reduce losses, then "Come at your will" seating is a non-starter. As I showed several years ago in my analysis of the bad SDS program, the only way to maximize revenue is to fill the diner to capacity. Come at your will seating doesn't accomplish that and will leave revenue behind. Those tables need to be maximized to capacity in 3 seating's to achieve maximum revenue. Neither SDS nor Come at will can achieve that and it will only hurt attempts to cover costs.

 

[Anderson]

There are a couple of things that could help with nudging the diners to maximum performance.

-One thought would be to, for major stations being hit during or immediately before mealtimes (WAS on the NB Meteor, RVR on the Star both ways, ALB on the WB LSL, DEN on the Zephyr, etc.), to facilitate promoting mealtimes at the stations. This will be easier at any stations that end up with a lounge of some sort, but promoting it in general wouldn't be a bad idea. A follow-on to this would be to promote mealtimes in WAS and CHI in the waiting areas or, as discussed, to make some options available online for that and a few other trains for meals served shortly after departure.

-Promote carry-out orders and/or the placement of meal orders via the cafe car. I will at least speak for myself: As much as I enjoy the conversations I've had in diners over the years (I have made some friends there, met truly fascinating people...I really need to put my mealtime stories up somewhere), I also recognize that for a lot of folks the key is having a "proper" hot meal, and that if they're served the food in the cafe car or are allowed to take it back to their seat, that would be acceptable as well. Especially if you go to a POS system that could transmit orders between neighboring cars, it wouldn't be hard to slap a diner menu up in the cafe alongside the existing menus and put orders in during mealtimes.

--The main question is one of kitchen capacity vs. seating capacity (I'm setting aside on-board storage issues for now). I suspect you can probably get more out of the kitchen than you can out of the seats in the diner...part of this is suboptimal seat use that likely can't be smoothly rectified (witness some of the Heritage diners only having 32-ish seats used, for example), part of it is the fact that with certain patterns of seating scheduling the kitchen will end up with a pulse of orders and then downtime, part the fact that even with community seating you can't always utilize all the seats optimally, part people not eating at the "right" pace...you get the idea.

 

[cirdan]

I dunno - but the sleepers are not ALWAYS selling out. They are hitting 100% capacity frequently, but I wonder if more sleeping cars would really make a huge dent in revenue. I would actually have to research the actual occupancy rate. Would it be worth hauling an additional sleeper for 30 nights per year if it goes empty for the other 330 days? What's the breaking point?

Many trains are already being varied sesonally to match different demand levels. Adding a sleeper on days that you can easily sell most of its capacity isn't the same as adding it all year round and just moving cold air from one end of the country to the other. Maintenance can be organized seasonally around demand patterns. If you do that properly you can actually provide more capacity with fewer cars.

 

[The Davy Crockett]

A major problem is that they run out of food. If you're losing money and you run out of food, you've maxed out your revenue stream and cannot improve. There should NEVER be an excuse not to feed every single person in the diner who wants to eat there - especially paying coach passengers - and they should never run out of food in the Cafe car.

The problem here is spoilage. If you throw food away its a complete loss. So how much do you stock? Enough to serve an additional meal if the train is running seriously late? Yes, one can stock based on ticket sales, but even if there were the same number of passengers on every run, and every run ran on time, some runs would sell more food than others, and different foods would sell on different runs. Its a balancing act.

 

[Anderson]

A major problem is that they run out of food. If you're losing money and you run out of food, you've maxed out your revenue stream and cannot improve. There should NEVER be an excuse not to feed every single person in the diner who wants to eat there - especially paying coach passengers - and they should never run out of food in the Cafe car.

The problem here is spoilage. If you throw food away its a complete loss. So how much do you stock? Enough to serve an additional meal if the train is running seriously late? Yes, one can stock based on ticket sales, but even if there were the same number of passengers on every run, and every run ran on time, some runs would sell more food than others, and different foods would sell on different runs. Its a balancing act.

True, though there are more complexities than that. I'm not sure how long food can keep, but for a quick example I'm pretty sure that the Western trains restock at each end of the trip. With every train but the Zephyr, it would likely be feasible to stock an extra meals' worth of food druring "problem seasons" (let's face it, there are times when Amtrak ought to know that one or two trains are screwed up six ways from Sunday because of track work or lousy weather) and simply adjust what is picked up at the "other end" of the trip accordingly. I'm not sure how the supply chain works and I know everything is always more complicated than it seems on paper, but I would think there'd be some tinkering with those chains that would be feasible.

Edit: With cafes in some cases, I'd argue that the issue is "not even trying". For a quick example, the Adirondack has been salad-free far north of Albany more times than I can count. With some data mining, Amtrak ought to be able to figure out based on sales a day or two out, within at least some margin, how much food will be needed for a round trip on routes like that and adjust the supplies provided at the relevant commissary accordingly.

 

[Nathanael]

A major problem is that they run out of food. If you're losing money and you run out of food, you've maxed out your revenue stream and cannot improve. There should NEVER be an excuse not to feed every single person in the diner who wants to eat there - especially paying coach passengers - and they should never run out of food in the Cafe car.

The problem here is spoilage. If you throw food away its a complete loss. So how much do you stock? Enough to serve an additional meal if the train is running seriously late? Yes, one can stock based on ticket sales, but even if there were the same number of passengers on every run, and every run ran on time, some runs would sell more food than others, and different foods would sell on different runs. Its a balancing act.

Hence the "order before the trip" idea. Not everyone would want to do so, but enough people would do so to make it much easier to predict usage.

 

[Nathanael]

All told, I could imagine very significant improvements in the diner "bottom line" if the dining car staff spent all their time (except for their breaks) serving customers, rather than closing the dining car more than half the day in order to do paperwork and inventory. I don't know whether that would be enough to break even, but it might be enough that the cafe car profits would cancel it out.

The dining car is not closed half the day. On most LD trains the hours of service are as follows;

breakfast - 6:30am - 10:00am

lunch - 11:30am-3:00pm

dinner - 5:00pm - 9:30pm

So that's open for 11.5 hours during the day and closed for cleanup, setup and breaks only 3.5 hours.

Not actually the way it works. Sorry -- have you *been* on many LD trains? The number of seatings for lunch and dinner is usually significantly fewer than it would be if the diner were *actually* open that long on all the trains. With the exception of some eager-beaver crews, as I have noted before, who do an excellent job. Breakfast really does seem to run from 6:30-10:00 on most trains, though, that's true.
3.5 hours of closure is actually egregiously large in any case, given that mandated breaks amount to less than 2 hours, and "cleanup/setup" is already done on an ongoing basis during meals. An awful lot of that 3.5 hours must be paperwork.

 

[Nathanael]

I know that I don't fly anywhere near as often as you do, but in my experience with cashless flights (American and Southwest, mostly) I rarely pay the flight attendant before I get my drink. Occasionally I don't end up paying at all, which is why I notice this.

Well, that will simplify the money handling, won't it! Back to the era of free meals. ;-)