Can a LD Train NOT Lose Money?

[henryj]

The idea that LD trains can 'make money' is the problem. They can and should cover their operating costs, but poor management and marketing on Amtrak's part makes this impossible. There are cruise/vacation type trains that make it such as the Rocky Mountaineer's trains and the Alaska Railroad to name a couple and there have been other cruise operations that were profitable. It is difficult to get accurate numbers from Amtrak's reports because they load up the trains with all kinds of overhead and there is no detail offered to explain that or their actual operating costs so we are at the mercy of Amtrak there unless you happen to know the Controller personally. But, there have been numerous discussions on here about Amtrak loading up costs on the LD trains to make the NEC look good. So who knows. We know that Amtrak sells their coach space at bargain rates compared to Greyhound and airline coach prices. Train travel is a luxury experience and should be priced as such.

The LD trains, in any case, are a national asset and should be looked at as such and continued at any cost and there are a few routes that should be added and two that should be made daily. The current Amtrak statements about the LD trains is deeply disturbing.

Boardman is just a loser and should take his own buy out program and pursue other interests.

 

[Trogdor]

Does the post office make money? All are heavily subsidized with our tax money

Really? How much subsidy does the post office receive?

 

[saxman]

Here are some great easy reads on long distance trains...basically corridor trains put together, and to make things efficient, they use the same equipment. This is not from URPA either. From the Midwest High Speed Rail Association.

Long-distance trains are commonly thought to be a holdover from the past – a little-used, politically driven conveyance whose sole purpose is to maintain political support for the Northeast Corridor. Many refer to them as “cruise trains.” It is also a widely held belief that long-distance trains are the reason for Amtrak’s financial woes.
These perceptions are driving the political debate and may result in some long-distance routes being discontinued. Since the future of the Midwest system is linked to the future of long-distance trains, it is important to further understand what long-distance trains really are and what they can do.

http://midwesthsr.org/long-distance-trains

"Amtrak's Empire Builder:

Beware of “experts.” Wherever they look they find another bumblebee. Take the so-called “passenger train experts.” They claim Amtrak’s Chicago-Seattle Empire Builder shouldn’t work: its route is too long, its speed too slow and its territory too thinly settled to attract today’stravelers.
The Builder doesn’t know this, and so it’s the best performing train west of the Allegheny Mountains. Looking at what the Empire Builder actually does, not what its critics think it does, explains why.

Not your grandfather’s long-distance train

Technically, the critics are right on one point: The Builder starts its run in Chicago, and finishes up in Seattle, 2,210 miles and two time zones west after 43 hours and 10 minutes on the road. In that sense it is indeed a “Chicago-Seattle” train.

But that’s not the way its patrons use it. Only about 9 per cent of the Builder’s passengers travel the entire distance. The remaining 91 per cent of the Builder’s passengers are short- or medium-distance travelers. They ride between any and all combinations of Chicago, Seattle and 45 intermediate stations (A smaller section of the train branches off from the main train at Spokane, Wash., and finishes its run in Portland, Ore.).

http://midwesthsr.org/amtrak-empire-builder

And my favorite argument: the silly "per passenger subsidy." Presented here.

When passenger-train critics go after their favorite target they use their favorite argument—so-called “high costs per passenger.”
“The federal government is paying $300 in subsidies for every passenger on the Sunset Limited!” — the anti-train crowd wails. “Why, for that kind of money we could buy every passenger on that train a plane ticket.”

Forget for a moment that most city pairs served by the Sunset don’t have air service. The real question: is loss-per-passenger a meaningful metric?

The answer is no — and for several reasons.

Transportation “losses” ignore value

First, loss-per-passenger is meaningless when taken out of context because it does not identify value — especially value to the economy, which benefits whenever an individual travels.

Look at all that real-estate development around O’Hare: The airport itself loses money handling airplanes, and the Federal Aviation Administration requires huge subsidies to run the Air Traffic Control system and enforce safety regulations.

But government recovers all of those losses — and earns billions more — in the taxes paid by individuals and businesses that use air transportation to create new wealth. A “money-losing” government transportation activity — an airport or a highway — can be a powerful driver of business growth. In fact, that’s why the government subsidizes its transportation infrastructure. A “money-losing” passenger-train network can perform the same economic magic if given the same resources and rules.

http://midwesthsr.org/want-to-cut-passenger-train-costs-run-more-trains

There are a few more good articles on there. Very good reads at which I base many of my arguments on when it comes to long distance trains.

http://midwesthsr.org/resources

 

[henryj]

Thanks Saxman, and you should know as you have ridden them all. Here is the quote I liked best: "The Builder actually is a multi-tasking mobility machine that serves dozens of markets at once.” Which of course applies to all LD trains.

 

[saxman]

Thanks Saxman, and you should know as you have ridden them all. Here is the quote I liked best: "The Builder actually is a multi-tasking mobility machine that serves dozens of markets at once.” Which of course applies to all LD trains.

Thank you. And many of my LD train were not just for fun either. I lived along the Empire Builder route, in Grand Forks, for 5 years while I went to college. For 3 of those years I didn't have a car, and just used the university buses to get around campus, or I walked and rode my bike. For other errands, I took the city bus or just asked for rides from friends. Too often, it was much too expensive to fly in and out of Grand Forks. It was served only by Northwest Airlines at the time with about 6 or 7 flights to MSP. Usually it was more than $400, however every once in a while I found a cheaper ticket, but not very often. Amtrak was my saving grace to get to MSP, so I could fly home at a cheaper rate. Every once in a while I'd ride all the way to Milwaukee or Chicago, and fly from there. This notion that only rail-fans ride LD trains, or senior-citizens only ride sleeping cars for a "land cruise" is totally bogus. I probably rode that train a few dozen times to and from GFK and I almost always saw someone I knew or at least had seen at my college. Many rode to MSP, as they were from there. I had friend, even though he had a car, would always ride to Milwaukee just about every month it seemed for the weekend. He always said he preferred to take the train so he could sleep and not drive 10 or 12 hours. I knew another girl from Malta, MT and a guy from Havre, MT that always rode. For some reason, we had a bunch of students from the Pacific Northwest, and I'd see them take the 30 hour ride out there. They always liked going through Glacier Park, they told me.

It was amazing how many people I talked to in Grand Forks (pop. 50,000), that knew about the train. Maybe not all had ridden, or at least some had ridden once, but they all knew it served the town in the middle of the night. I come to my home town of Dallas-Fort Worth, and I'd say the percentage is much less here, that know we have daily service to Oklahoma City, San Antonio, and Chicago.

Next time you take a LD train, walk through the coach cars and look at everyone's seat check. I like to do this all the time, just to see where everyone is going. Of course it depends on where you are in the route, but look at all the people getting off at smaller towns, or just cities in the middle of the route. Do they look like rail-fans to you? Do they have timetables spread out on their table and have a scanner plugged in to their ear? Probably not. You might see a good handful of passengers going to the end point, such as Chicago. But you better believe that many of those are connecting to other Amtrak trains. Here in Dallas, it seems that we have lots of passengers going to and from Michigan. Of the people going to Chicago from here, it seems to be the most popular connection from there. Of course Amtrak doesn't publish that sort of data, and I wish they would. But I do know that the number of connecting passengers through places like Chicago, Los Angeles, and others is quite significant.

 

[dlagrua]

Does the post office make money? All are heavily subsidized with our tax money

Really? How much subsidy does the post office receive?

As far as I know, the post office pays no road use tax, no vehicle insurance and hence they are receiving a subsidy. The USPS does not receive direct government sunsidies BUT since they lost $5 billion in 2011 whos going to make up the losses? The American tax payer that who. Wait and see.

 

[Shanghai]

Does the post office make money? All are heavily subsidized with our tax money

Really? How much subsidy does the post office receive?

As far as I know, the post office pays no road use tax, no vehicle insurance and hence they are receiving a subsidy. The USPS does not receive direct government sunsidies BUT since they lost $5 billion in 2011 whos going to make up the losses? The American tax payer that who. Wait and see.

I think you are correct in that the taxpayers will eventually fund the losses. As I understand, their primary loss is the contribution to the employees pension funds that are presently required into a trust fund. They don't have the cash to make the contribution. I heard from an operating basis, they are doing reasonably well, but still at a loss.

 

[Anderson]

I think it is possible for an LD train to move into profitability...eventually. We're not in that position right now, though with some increases in capacity this might well get addressed. At the moment, the problem Amtrak faces in "fixing" LD losses is equipment shortages that cap capacity off at levels too low to make most LD trains break even at sellable prices. If demand keeps increasing, it does seem possible that Amtrak could get some routes in better shape if they can add cars to trains and make up at least some of the deficit through capacity increases instead of just fare increases.

 

[dlagrua]

Part of the problem with Amtrak is that they don't run the long efficient trains as they did back in the day. I saw a film on YouTube recently about the old PRR and it showed an 18 car consist on an LD train originating from NYP. Today the LD trains are only 7 or 8 cars in length thus limiting the ticket revenue. On some trains the sleeper space is so limited that skyrocketing prices and sold out status often occurs. Amtrak badly needs more equipment but they keep scraping heritage equipment rather than refurbishing it. Build the fleet. Keep everything.

 

[Gord]

Very unlikely that any long distance, passenger train for the general public in the US and Canbada will break even, when all costs are considered. If there were a decent profit to be made, the private sector would get back into it. The exception being long distance "luxury cruise" operations for the affluent such as the Royal Canadian Pacific and Rocky Mountaineer. These are making large profits.

Freight railroads are about the only form of motorized carrier which survive on almost no subsidy. Even they get some assistance with things such as corridor improvements, particularly if commuter and inter-city service expansion on the right of ways they own is needed.

Gord

 

[jis]

In the rather well researched tome Main Lines - Rebirth of North American Railroads 1970 - 2002, its author Richard Saunders, Jr. makes a reasonable case suggesting that after the second World War, in general Railroads did not make any money running passenger trains. There were two categories of trains that came close to covering their above the rail costs and sometimes make a small amount of money, and those were (a) commuter trains and (b) milk-runs, which made quite a bit of revenue from head end traffic. He categorically states that fleet leader luxury trains never made any significant profits and mostly ran at a loss, but they had marketing value. Situation got significantly worse with government funded highways and air transport coming starting in the 50s. And this was in a period when rail fares were in general held artificially low by decree of the ICC, leading eventually to the death spiral.

Given that, I view all claims about how passenger trains will become profitable for LD service with considerable amount of skepticism. Note though that I am not suggesting that therefore passenger rail is unimportant in that overall transportation mix. All that I am suggesting is that the economic model needs to be rethaught. For example in India and China - those terribly socialist places - they take into consideration taxable economic activity that is induced by the existence of rail or road and credit the taxes thus generated partly to justify the existence of those services which absent that credit look quite terrible economically.

Oddly enough, a similar statement can be made about airlines, in that overall they have not any significant money in their entire existence, though there are cases where over short periods of time some airlines have made money counting various tricks as fuel hedges and enormous amounts of tax breaks on fuel, which does not have anything to do with transportation per se.

This just suggests that overall trying to apply business principles that apply to manufacturing (specially of the mostly outsourced kind) and Mom and Pop shops does not apply to highly capital intensive ventures like large scale transportation. Hence the economic and business principles used to evaluate such need to be thought through carefully. Moreover a lot of the current Beltway approach to the whole issue is driven more by politics than by facts of the matter, and leads inevitable to undesirable results more often than not.

 

[Oldsmoboi]

Anything that increases the mobility of people and/or goods increases economic activity.

 

[CHamilton]

The problem, of course, is that Amtrak's competition—interstate highways and domestic airlines—isn't "profitable", either. Intercity travel of any kind has enormous fixed costs—purchasing or seizing land for airports or rights-of-way; building highways and railroad tracks; buying, fuelling and operating planes and trains. That's why governments have traditionally played a large role in air, rail and road travel.
Here are some better questions: what's the right balance of public- and private-sector involvement in these sorts of enterprises? How much, if anything, should governments continue to invest in air, rail and road infrastructure? If the government is going to invest in infrastructure (rather than simply let the market decide), what is the right balance of spending between those different modes of travel? And how much should the environmental consequences of various modes of travel be taken into account when making these decisions?

The Economist: The wrong question about Amtrak's profitability

 

[Anderson]

The problem, of course, is that Amtrak's competition—interstate highways and domestic airlines—isn't "profitable", either. Intercity travel of any kind has enormous fixed costs—purchasing or seizing land for airports or rights-of-way; building highways and railroad tracks; buying, fuelling and operating planes and trains. That's why governments have traditionally played a large role in air, rail and road travel.
Here are some better questions: what's the right balance of public- and private-sector involvement in these sorts of enterprises? How much, if anything, should governments continue to invest in air, rail and road infrastructure? If the government is going to invest in infrastructure (rather than simply let the market decide), what is the right balance of spending between those different modes of travel? And how much should the environmental consequences of various modes of travel be taken into account when making these decisions?

The Economist: The wrong question about Amtrak's profitability

Again, I'll say what I said before: The "profitability" question for the system as a whole isn't going to be resolved by getting 90% of trains to make money...if it's going to be resolved in favor of the system making money, it's going to be resolved by getting 10-20% of trains to be profitable (the Acelas, the NE Regionals, possibly some other corridors, and possibly the Auto Train), 70% of trains at least close to breaking even (other corridor trains and possibly one or two LD trains), and having the remaining 10-20% of trains lose a small enough amount of money that when combined with marginal losses on the majority of trains, the system is in the black (and with at least a few of these trains, there would be redeeming "network effect" benefits).

Mind you, this answer also assumes that the government or some other source is picking up a substantial share of the equipment cost and of capital maintenance. Such a system would have some flexibility in planning its own orders (such as Amtrak presently has with the Acela, albeit on a slightly larger, more in-depth scale) insofar as adding capacity that the government didn't want to fund, but an outside source would probably have to pick up at least some of the cost of equipment orders, to say nothing of capital maintenance issues.

 

[Shortline]

Long distance trains will never make money in this country with the current technology. We need to move towards high speed rail. For example Baltimore, MD to Charlotte, NC is probably about 600 miles, takes 9 hours which if you were able to drive would take you the same amount of time. If that was high speed and you can reduce the trip to half the time it would be alot better to travels. Even a direct flight between those points would be that much shorter considering other factors then taking the train.

An often overlooked factor is that fast trains not only get more passengers, but they are also cheaper to operate. A twice as fast train will have somewhat higher fuel costs, but taking half the time, staff costs, which are far the heaviest post on the budget, will be half and equipment costs will be almost half (you can run two runs with the same set, but have to take the wear and tear of double mileage into account).

So with the generally slow american trains, even the ones that do sell out are very hard to get profitable because it takes a lot of staff hours to get people to their destinations. The economic success of some of the European HSR's is due to large volume/many passengers as well as lower staff costs per passenger mile.

Direct TRAIN labor costs may go down-But, not under current pay rules which base pay by trip rates or mileage, not hours. Cutting a 9 hour job back to 6 hours, doesn't save any money at all. Not to mention, INDIRECT costs will skyrocket. Inspections of high speed trains take an army of workmen, and track maintenance costs go through the roof. Yes, theoretically if you get rid of the trip rate/mileage system of pay (not likely) you may save a bit on crew costs, but that savings will be eaten up and then some by a very large margin by the huge increase in mechanical/Maintenance of Way costs.

 

[trainviews]

Long distance trains will never make money in this country with the current technology. We need to move towards high speed rail. For example Baltimore, MD to Charlotte, NC is probably about 600 miles, takes 9 hours which if you were able to drive would take you the same amount of time. If that was high speed and you can reduce the trip to half the time it would be alot better to travels. Even a direct flight between those points would be that much shorter considering other factors then taking the train.

An often overlooked factor is that fast trains not only get more passengers, but they are also cheaper to operate. A twice as fast train will have somewhat higher fuel costs, but taking half the time, staff costs, which are far the heaviest post on the budget, will be half and equipment costs will be almost half (you can run two runs with the same set, but have to take the wear and tear of double mileage into account).

So with the generally slow american trains, even the ones that do sell out are very hard to get profitable because it takes a lot of staff hours to get people to their destinations. The economic success of some of the European HSR's is due to large volume/many passengers as well as lower staff costs per passenger mile.

Direct TRAIN labor costs may go down-But, not under current pay rules which base pay by trip rates or mileage, not hours. Cutting a 9 hour job back to 6 hours, doesn't save any money at all. Not to mention, INDIRECT costs will skyrocket. Inspections of high speed trains take an army of workmen, and track maintenance costs go through the roof. Yes, theoretically if you get rid of the trip rate/mileage system of pay (not likely) you may save a bit on crew costs, but that savings will be eaten up and then some by a very large margin by the huge increase in mechanical/Maintenance of Way costs.

Ok, that was a quirk of the American train labor market that I hadn't anticipated :unsure: . I bet Amtrak staff must be standing on eachother's backs to get to work the Acelas, as you would work much less hours for the same mileage than on the regionals or the LD's... (honestly, are you sure this is how it works? It makes sense if it is for the individual route, so you pay for the sceduled run plus some for an average delay, in order not to have to calculate every minute at the end of the month, but systemwide?)

If you are counting not just above the rail profitability, but capital costs and maintenance of track too, yes HSR is much more expensive, and it needs a high density corridor to be feasible. Still though the best of the TGV routes in France or Shinkansen in Japan have been able to pay for infrastructure too. I know that a whole lot of other factors are at play here too, but efficiency in therms of getting a lot of seat miles out of staff and equipment is one of them.

But staying on the CASM, and just regarding incemental upgrades like to 90 or 110 mph would substantially reduce the staff and equipment hours. That it would not result in any wage savings is a contract problem that honestly defies logic.

 

[OBS]

Long distance trains will never make money in this country with the current technology. We need to move towards high speed rail. For example Baltimore, MD to Charlotte, NC is probably about 600 miles, takes 9 hours which if you were able to drive would take you the same amount of time. If that was high speed and you can reduce the trip to half the time it would be alot better to travels. Even a direct flight between those points would be that much shorter considering other factors then taking the train.

An often overlooked factor is that fast trains not only get more passengers, but they are also cheaper to operate. A twice as fast train will have somewhat higher fuel costs, but taking half the time, staff costs, which are far the heaviest post on the budget, will be half and equipment costs will be almost half (you can run two runs with the same set, but have to take the wear and tear of double mileage into account).

So with the generally slow american trains, even the ones that do sell out are very hard to get profitable because it takes a lot of staff hours to get people to their destinations. The economic success of some of the European HSR's is due to large volume/many passengers as well as lower staff costs per passenger mile.

Direct TRAIN labor costs may go down-But, not under current pay rules which base pay by trip rates or mileage, not hours. Cutting a 9 hour job back to 6 hours, doesn't save any money at all. Not to mention, INDIRECT costs will skyrocket. Inspections of high speed trains take an army of workmen, and track maintenance costs go through the roof. Yes, theoretically if you get rid of the trip rate/mileage system of pay (not likely) you may save a bit on crew costs, but that savings will be eaten up and then some by a very large margin by the huge increase in mechanical/Maintenance of Way costs.

Amtrak T&E crews have been paid on an hourly basis for at least the last 20 years.

 

[jis]

Direct TRAIN labor costs may go down-But, not under current pay rules which base pay by trip rates or mileage, not hours. Cutting a 9 hour job back to 6 hours, doesn't save any money at all. Not to mention, INDIRECT costs will skyrocket. Inspections of high speed trains take an army of workmen, and track maintenance costs go through the roof. Yes, theoretically if you get rid of the trip rate/mileage system of pay (not likely) you may save a bit on crew costs, but that savings will be eaten up and then some by a very large margin by the huge increase in mechanical/Maintenance of Way costs.

Amtrak T&E crews have been paid on an hourly basis for at least the last 20 years.

Correct. It has been a long long time since Amtrak crew was paid by miles or trips. Otherwise Amtrak would have been completely out of business a long time back and even I would not support any subsidy for Amtrak.

Experience in the world outside the US shows that being able to run the same equipment twice the number of trips or twice the distance in a single day, more than compensates for any additional maintenance costs. But of course it is quite possible that the laws of work efficiency and even Physics are different from the rest of the world in the US

 

[Hotblack Desiato]

But of course it is quite possible that the laws of work efficiency and even Physics are different from the rest of the world in the US

Many in the US seem to think so.

 

[Short line]

Long distance trains will never make money in this country with the current technology. We need to move towards high speed rail. For example Baltimore, MD to Charlotte, NC is probably about 600 miles, takes 9 hours which if you were able to drive would take you the same amount of time. If that was high speed and you can reduce the trip to half the time it would be alot better to travels. Even a direct flight between those points would be that much shorter considering other factors then taking the train.

An often overlooked factor is that fast trains not only get more passengers, but they are also cheaper to operate. A twice as fast train will have somewhat higher fuel costs, but taking half the time, staff costs, which are far the heaviest post on the budget, will be half and equipment costs will be almost half (you can run two runs with the same set, but have to take the wear and tear of double mileage into account).

So with the generally slow american trains, even the ones that do sell out are very hard to get profitable because it takes a lot of staff hours to get people to their destinations. The economic success of some of the European HSR's is due to large volume/many passengers as well as lower staff costs per passenger mile.

Direct TRAIN labor costs may go down-But, not under current pay rules which base pay by trip rates or mileage, not hours. Cutting a 9 hour job back to 6 hours, doesn't save any money at all. Not to mention, INDIRECT costs will skyrocket. Inspections of high speed trains take an army of workmen, and track maintenance costs go through the roof. Yes, theoretically if you get rid of the trip rate/mileage system of pay (not likely) you may save a bit on crew costs, but that savings will be eaten up and then some by a very large margin by the huge increase in mechanical/Maintenance of Way costs.

Amtrak T&E crews have been paid on an hourly basis for at least the last 20 years.

You're right-but with a guarantee-so, let's change my example slightly...cut an 8 hour train to 4 hours. How much did you save on labor? $0 , everyone gets paid the same for a 4 hour trip or an 8 hour trip. And, if velocity were the answer, all trains running would run fast. It's just terribly expensive,

 

[jis]

You're right-but with a guarantee-so, let's change my example slightly...cut an 8 hour train to 4 hours. How much did you save on labor? $0 , everyone gets paid the same for a 4 hour trip or an 8 hour trip. And, if velocity were the answer, all trains running would run fast. It's just terribly expensive,

With the same labor cost you get them to run two 4 hour trips instead of one, so you get twice the revenue for the same labor cost.

Could you quantify what you mean by "just terribly expensive"? Is this just a guess or do you have actual figures?

Clearly no one will create an HS or even semi HS line to run just one train per day, so the cost gets amortized over multiple journeys, perhaps dozens.

I am still not convinced that you have a cogent argument. Sorry. And as I mentioned, experience elsewhere has proved that argument whatever it is, to be invalid in many cases.

 

[George Harris]

Train travel is a luxury experience . . .

No, it is not.

 

[Shortline]

1326891886[/url]' post='341507']

1326886280[/url]' post='341497']You're right-but with a guarantee-so, let's change my example slightly...cut an 8 hour train to 4 hours. How much did you save on labor? $0 , everyone gets paid the same for a 4 hour trip or an 8 hour trip. And, if velocity were the answer, all trains running would run fast. It's just terribly expensive,

With the same labor cost you get them to run two 4 hour trips instead of one, so you get twice the revenue for the same labor cost.

Could you quantify what you mean by "just terribly expensive"? Is this just a guess or do you have actual figures?

Clearly no one will create an HS or even semi HS line to run just one train per day, so the cost gets amortized over multiple journeys, perhaps dozens.

I am still not convinced that you have a cogent argument. Sorry. And as I mentioned, experience elsewhere has proved that argument whatever it is, to be invalid in many cases.

I don't want to turn this into an argument, but yes, have some numbers, will see what Ican come up with when I get back home. But, in the meantime here's an article that touches on it. http://economix.blogs.nytimes.com/2009/08/04/running-the-numbers-on-high-speed-trains/

 

[George Harris]

1326891886[/url]' post='341507']

1326886280[/url]' post='341497']You're right-but with a guarantee-so, let's change my example slightly...cut an 8 hour train to 4 hours. How much did you save on labor? $0 , everyone gets paid the same for a 4 hour trip or an 8 hour trip. And, if velocity were the answer, all trains running would run fast. It's just terribly expensive,

With the same labor cost you get them to run two 4 hour trips instead of one, so you get twice the revenue for the same labor cost.

Could you quantify what you mean by "just terribly expensive"? Is this just a guess or do you have actual figures?

Clearly no one will create an HS or even semi HS line to run just one train per day, so the cost gets amortized over multiple journeys, perhaps dozens.

I am still not convinced that you have a cogent argument. Sorry. And as I mentioned, experience elsewhere has proved that argument whatever it is, to be invalid in many cases.

I don't want to turn this into an argument, but yes, have some numbers, will see what Ican come up with when I get back home. But, in the meantime here's an article that touches on it. http://economix.blogs.nytimes.com/2009/08/04/running-the-numbers-on-high-speed-trains/

My brief comment on this is that either of the per miel maintenance numbers given in the article are probably much higher than they would be here. This comment based on the relationship prevailing between US and European track maintenance costs on railroads otherwise than high speed lines.

 

[jis]

I don't want to turn this into an argument, but yes, have some numbers, will see what Ican come up with when I get back home. But, in the meantime here's an article that touches on it. http://economix.blogs.nytimes.com/2009/08/04/running-the-numbers-on-high-speed-trains/

The good economist's analysis is lacking in several ways that skews the result unfavorably towards HSR. It focuses on costs and completely ignores potential benefits and the opportunity cost of not building a piece of infrastructure. It should be noted that using similar analysis one could argue that no part of the Interstate Highway system should have been built either.

He is also confused about how cost of T&E labor relates to passenger miles. What he claims is true if T&E labor productivity based on hourly fixed wages does not go up with additional service. But that demonstrably is not the case when you are able to extract double the revenues out of essentially the same T&E labor cost, by adding service in the same period of time using no additional equipment or T&E labor.

However much of that is somewhat irrelevant to the point I was originally making, which was, given that you have two railroads one on which trains take twice the time to cover the distance as compared to the other, the same labor cost would be able to potentially earn double the revenue on the faster railroad.

Furthermore since said railroad would not be running just one train a day, and is likely to be running several tens of them, the cost of track and equipment maintenance gets amortized across the multiple runs. Naturally maintenance costs would be higher for the faster train even in unit cost, but experience elsewhere shows that it does not overwhelm the labor productivity benefits and the added ridership obtained. The cost of track maintenance again while higher for the faster line, is not high enough to overwhelm the gains in labor productivity and ridership.

Of course poor management and ill conceived union contracts can negate all that. But surprisingly the French and the Japanese in spite of their relatively militant unions have been able to pull it off.

If that were not the case then LGV Sud-Est could not have possibly paid off its entire capital cost from fare box earnings. And most HSRs could not consistently cover their operating expenses and then some out of farebox earnings. Just fast service is not enough. It has to be fast and frequent service in a market that can actually benefit from such. And irrespective of what the detractors of HSR think there are many such corridors in the US. If there were not, no six lane highways would have been built in such corridors either.

Now whether this works in Texas I have no way of knowing.