Boardman: Amtrak Commits to End Food and Beverage Losses

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afigg

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This announcement from Boardman is going to stir things up, given how railfans argue about how to reduce F&B losses or complain about service cuts. Amtrak posted a news release today: Amtrak Commits to End Food and Beverage Losses (2 page PDF). Boardman is defining a bold goal of eliminating food service losses on the LD trains in 5 years by utilizing technology and getting more efficient. Obviously trying to head off cuts and damaging micro-management rules from Congress. If Amtrak management pulls it off, what will Mica do for Congressional hearing topics?

Content of the news release because there is much in it to discuss:

WASHINGTON Amtrak is moving forward with a plan to eliminate its food and beverage losses over five years. It builds on successful initiatives implemented since FY 2006 that have increased the cost recovery rate from 49 percent to 65 percent.

We have made steady and consistent progress, but it is time we commit ourselves to end food and beverage losses once and for all, said President and CEO Joe Boardman. Our plan will expand initiatives that have worked, add new elements and evolve as updated information and opportunities lead us to better solutions.

Amtrak Inspector General Ted Alves agrees improvements have been achieved and testified before Congress that over the last several years, Amtrak has taken action to reduce food and beverage losses and improve program management controls and these efforts have yielded benefits. We believe opportunities remain for further improvement.

In inflation adjusted dollars, the Amtrak food and beverage loss is down $31 million, from $105 million in FY 2006 to a projected $74 million in FY 2013or about a 30 percent move in the right direction.

Boardman explained that approximately 99 percent of the food and beverage loss is reported from the long-distance trains that Congress requires Amtrak to operate, specifically costs associated with the dining car service. Cafe car services across the system, on the other hand, essentially break even or make a positive contribution to the bottom line.

The centerpiece of the plan is an improved management structure that consolidates operations and accountability for food and beverage into a single department. This new organization also establishes a long-distance services general manager and route directors responsible for profit and loss of specific trains who will identify opportunities for further cost savings and efficiencies.

Some of those opportunities include: aligning dining car staffing with seasonal changes in customer demand; establishing metrics to assess service attendants onboard sales performance; reducing spoilage; closely tracking onboard stock levels; regularly refreshing menus; and exploring new pricing and revenue management options to align with customer needs and enhance cost recovery.

Further, Amtrak is using technology onboard trains aimed at improving customer service, automating financial and other reporting, and eliminating the error prone and time consuming method of manual data entry. Just this week, for example, Amtrak began a pilot on the Silver Meteor (New York-Miami) long-distance train to test a new touch-screen tablet-based solution that dining car service attendants use to take passenger orders and print customer receipts.

In 2014 Amtrak will roll out its Point of Sale (POS) system across its national network. Currently in operation on Acela Express and California trains, POS technology improves the customer experience by streamlining the check-out and receipt printing process in café and lounge cars, and allows onboard employees more time to focus on sales and customer service. It also provides real-time inventory status, better decision support and more flexibility to introduce targeted pricing and discounts, including value and combo meals.

Also in 2014 Amtrak plans to test cashless sales for food and beverage on certain routes. The elimination of cash reduces transaction time and significantly reduces accounting expenses and the risk of fraud or abuse. In addition, many venues that have pursued similar initiatives have seen increased sales. This model is very popular in the airline industry and has been seen as a favorable change by travelers.

I am confident Amtrak will succeed in this effort just as we have in other areas and across a wide range of financial and operating performance metrics, he said, noting records for ridership, ticket revenues, and on-time performance as well as significantly reducing corporate debt and the amount of federal operating support.

If Amtrak were to eliminate food and beverage services as some observers recommend, the railroad would actually lose more money because of the loss in associated ridership and ticket revenue, and thereby increase its dependence on federal support, he stated.
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Boy oh Boy, this won't end well for Amtrak pax. Whenever the words "align" and "enhance" are used in corporate speak someone is in for a hosing.
 
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So, on the whole, cafe cars are a break-even affair, while dining cars are the money-losers. Have we ever had confirmation that was the case in the past?
 
I, for one, look forward to how this plays out. Food quality should not suffer from this, in fact it may even improve and become more consistent (gasp!) I live and breathe "Single Point Ordering" in my career, and consolidating everything for food and beverage into a single department that has a clear organization for tracking the winners and losers will be very good. This goes for costs per unit (food item,) revenue per train and route, revenue/loss per employee tracked, and greater ease for the passenger.

Could you imagine a system of being able scroll through an interactive menu while riding your train, be able to order food items through a phone app, pay for them, get a e-reciept with a barcode that is used by the OBS to track an order, and simply pick-up your meal or even get it delivered to your seat? I know, incredibly far-fetched for Amtrak... Then again, in the past month we've seen the Company suddenly lurch into the 21st century quite massively, so nothing is too far-fetched.

I think it will cut down on the losses substantially, though it may not fully eliminate them. All quite good for Amtrak in the long-run, and by osmosis, good for the passenger because it helps insure that food service remains a staple amenity to us travelers.

Nostalgic as they may be, the hand-written paper order tickets for meals should have been scrapped 15 years ago.
 
Remember that meal was added to the cost of sleeping accommodation in the first place to make sure that enough money flowed into the Dining Car account from Sleeping Car passengers to try to save the Dining Car in the first place. I don;t think that calculus has changed any since then.
 
This won't make people happy here based on the discussions about Amtrak deserts.

I think they should be able to turn a profit in the cafe cars.
 
How do allocations work for the included meals for sleeper passengers? Is it based on what they order or is there a flat amount of the accommodation charge that goes to the diner revenue? For that matter, how are costs allocated for on-board staff taking meals in the car? Is that cost assigned to the diner or is there some benefit account that it's charged to? That would make the diner seem more cost-efficeint by moving that expense to labor benefits-which would make sense anyway since without the diner they still have to get food somehow.

In any case, digitalizing inventory makes loads of sense, as does cashless. Anyone know what the tablet mentioned on the Meteor is?
 
Over history Railroad Dining Cars have never made money and even the New York Central considered it a winning event whenever the 20th Century Limited Diners returned above 50 cents for every dollar spent.

Talk is one thing-results are another. And I hope this does not mean the quality of the Dining Car fare declines to slop.
 
OlympianHiawatha said:
Over history Railroad Dining Cars have never made money and even the New York Central considered it a winning event whenever the 20th Century Limited Diners returned above 50 cents for every dollar spent.

Talk is one thing-results are another. And I hope this does not mean the quality of the Dining Car fare declines to slop.
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that is also my understanding, dining cars never made money. good dining car service, especially for traveling business people, supposedly increased freight business by showing the road in a good light. since amtrak isn't in the dining car game to attract freight business the only way to break even is to get rid of diners and go to cafe cars for all food service. maybe an auto-mat diner like on the sunset limited when sp was trying to get rid of the train
 
I have no idea how to fix Amtrak's food issues, but charging $16.25 for what amounts to a little more than Barilla instant Mac & Cheese with a salad and a cold roll certainly doesn't help. Especially when the mac & cheese is available for about $10 LESS in the lounge car.....
 
The proof of the pudding is in the eating, so I guess we'll see. I'd think that there is a lot of room for technological improvements, given that present system breaks if you sign your chit with blue ink, and the poor LSA has to carry a ton of cash (something I always found nerve wracking). I can't imagine that any efficiencies will result in lower dining car prices. Instead, they will show that the inherent subsidy in running dining cars is reduced.

I just hope that the end result isn't instant oatmeal for breakfast. The two stalwarts of the Amtrak dining car menu, in my mind at least, are the old-fashioned oatmeal for breakfast, and the steak for supper.
 
Harvey House stops.

Vending machines (automat).

Food trucks.

One of the best meals I ever had was a sandwich. Sandwiches were brought on board in Wilmington because the diner had been shopped in New York (fumigated for mice) and there was no replacement. Good sandwich.

The worst meal I ever had was a tuna fish sandwich from one of the turbo trains. Thought I was going to die. Evidently, that baby had spent just a little bit too long in that refrigerated vending machine or else the train lost power for a while and the food started to spoil.

jb
 
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MiRider said:
Mr. Boardman is soliciting comments on this post of his on Amtrak's Blog.

You have to create an account to comment though.

IMPROVING OUR FOOD AND BEVERAGE SERVICE
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One of the comments has an interesting idea: offer a more expensive variety of coach ticket that includes meals.

I wonder what the financial performance of the Auto Train diners are. They could make Coach pay for food.

What is VIA's policy on complimentary meals for sleeping car passengers? Do they offer it to coach passengers on some runs?
 
I don't think Amtrak can necessarily get the diners to break-even, but if they could force three full seatings at dinner (and use of at least 44 of 48 seats on the single-level trains, and 68 of 72 seats on the bilevels) and some similar efforts (maybe an "all will be served" policy of some sort), they could probably take enough of a bite out of the losses there to let the cafes offset those losses, at least on a direct operating basis. Of course, I also expect some overhead shenanigans...

Train2104: I've wanted such a ticket (or something like that, maybe an intermediate accommodation class) for quite some time.
 
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"Also in 2014 Amtrak plans to test “cashless” sales for food and beverage on certain
routes. The elimination of cash reduces transaction time and significantly reduces
accounting expenses and the risk of fraud or abuse"
"This model is very popular in the airline industry and has
been seen as a favorable change by travelers."



I never been one for this whole push for going cashless, yeah I have cards, but that doesn't mean I always want to use them. I also don't get where there getting the idea that cashless cabins have been popular with airline passengers, they have probably just gotten used to it. I don't think going cashless would be all that well received on Amtrak.
 
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NorthCoastHiawatha said:
"Also in 2014 Amtrak plans to test “cashless” sales for food and beverage on certain

routes. The elimination of cash reduces transaction time and significantly reduces

accounting expenses and the risk of fraud or abuse"

"This model is very popular in the airline industry and has

been seen as a favorable change by travelers."

I never been one for this whole push for going cashless, yeah I have cards, but that doesn't mean I always want to use them. I also don't get where there getting the idea that cashless cabins have been popular with airline passengers, they have probably just gotten used to it. I don't think going cashless would be all that well received on Amtrak.

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They said it was popular with the airline industry, not passengers. If it's popular with the airline industry, that means the airlines have determined that the benefits of not accepting cash (i.e. reduced losses due to theft) outweigh whatever downsides there are of people not having credit cards. That said, it's almost a given that an airline passenger is going to have a credit card. The same may not be true of an Amtrak passenger.

But, on the other hand, the type of passenger who is likely to spend money in the dining car is probably more likely to have a credit card than the average LD passenger overall.
 
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Trogdor said:
NorthCoastHiawatha said:
"Also in 2014 Amtrak plans to test “cashless” sales for food and beverage on certain

routes. The elimination of cash reduces transaction time and significantly reduces

accounting expenses and the risk of fraud or abuse"

"This model is very popular in the airline industry and has

been seen as a favorable change by travelers."

I never been one for this whole push for going cashless, yeah I have cards, but that doesn't mean I always want to use them. I also don't get where there getting the idea that cashless cabins have been popular with airline passengers, they have probably just gotten used to it. I don't think going cashless would be all that well received on Amtrak.

Click to expand...
They said it was popular with the airline industry, not passengers. If it's popular with the airline industry, that means the airlines have determined that the benefits of not accepting cash (i.e. reduced losses due to theft) outweigh whatever downsides there are of people not having credit cards. That said, it's almost a given that an airline passenger is going to have a credit card. The same may not be true of an Amtrak passenger.
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The quote says "has been seen as a favorable change by travelers" but I agree not all Amtrak passengers may have a card.
 
There are three aspects to the Amtrak food experience:

  1. The food itself, together with preparation and presentation. Amtrak does pretty well here. Presentation of the desserts has gone downhill (see the other thread), but dining car food, and even some cafe food, is significantly better than anything one can find on airplanes. I am encouraged by the reference to "regularly refreshing menus," which is a good idea.
  2. Inventory, personnel and cash management. The press release suggests that a lot of Amtrak's efforts will be focused in these areas, which may be a good thing. Chain restaurants have perfected these systems without sacrificing quality (well, some of them have). The comments others have made about ditching Amtrak's antiquated paperwork and cash-handling systems are key. (I'm not too troubled by the idea of going "cashless," but that will take careful experimentation and planning.)
  3. "Front of the house" customer service and management. This is inconsistent at best and can be downright awful. If food-service staff can get rid of the time they waste dealing with the problems described in 2, they can focus on improving the comfort, friendliness and speed with which customers are served. Train riders will cheerfully pay reasonable prices if they know they'll get good meals, served in a friendly manner.
In the past, attempts to reduce food-service deficits have focused on item 1 -- substituting paper plates and whatnot -- and were not successful. The press release seems to suggest that this time, the focus will be on area 2, which could a good thing. But for the project to be successful, improvements to area 2 must be combined with efforts to improve area 3 as well.
 
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