Oh, I am sure Amtrak 'cooks the books' lol. They allocate 80% of their costs. They can make up any numbers they want. Most industry standards are around 20% of costs allocated.
This is an economic feature of railroads.
It's actually a feature of any highly capital intensive business; any fixed-cost-intensive business; and any business with network effects, and railroads are *all three*. Since my grandmother and mother were both invested in railroad stocks, we got quite used to this. Railroads are famous for "manipulating the books" in legal ways, because standard accounting can't handle the nature of the business very well. You have to look at a whole bunch of stuff other than the standard "profit and loss" sheets to understand a railroad.
Railroads are *extremely* capital intensive, and they're fixed-cost-intensive on multiple different levels (more complicated than just "capital" vs. "operating"). You have to build a central dispatch system, but it scales over any number of lines. You have to build tracks and maintain them, very expensive... then running more trains over the tracks costs a relatively insigificant amount. You have to run a train, rather expensive... but then running a longer train costs an insigificant amount. When you run a second train you may use your crew more efficiently, and so the "cost of crew" per train goes down with volume as well. The usage of the train cars and locomotives also becomes more efficient as you add more services. The cost of adding a passenger to a train which isn't full is, essentially, 0 -- pure unadulterated ticket revenue -- while the cost of adding a passenger to a train which is full is the cost of adding a train car... You can skimp on maintenance and make the bottom line look better... but you're just incurring future maintenance costs. You can beef up on quality to reduce maintenance costs... and then your bottom line looks worse, but it'll probably look better in 10 years. Adding a line to a network doesn't just add passengers (or freight!) on that line, it adds them on all the connecting lines. Et cetera.
So the vast majority of costs for anything in a railroad are big upfront overhead costs. Very little of it is incremental operating costs. It's not at all like your traditional raw-material-intensive, labor-intensive factory, where variable operating costs dominate over fixed costs and capital costs; on the railroad, fixed costs dominate and capital costs dominate. The railroad therefore needs a different mode of analysis.
jis said:
Congress should insist they report operating costs and avoidable costs as they are different.
I would certainly like to see the true "avoidable cost" numbers myself. (If Amtrak even has all of them! I just remember the mess the Milwaukee Road made of their accounting, a mess which drove the company into bankruptcy -- we shouldn't assume Amtrak actually knows.) Apart from that one presentation from Boardman, however, we can only guess.
The LSL revenues are only $35.2 vs the Meteor's $42.4 and the Star's $37.8 so I would question his comments on those trains.
The Meteor and Star have 4 trainsets each (vs. 3 for LSL), and worse crew utilization. With comparable revenues, this accounts for the Star having worse results on a "direct costs" basis than the LSL. (The Meteor has a better result than the LSL, remember.)
Also, the Star has several unique stations which could be shuttered if that train quit running, which are very likely to count as direct costs, with Tampa in particular being staffing-intensive. This alone could give the Star a worst "direct costs" result than the LSL. For the LSL, there are only two stations which could be shuttered if it stopped running, Erie and Bryan, neither of which is staffed.
Avoidable and marginal costs are tricky and subtle things. I do *not* agree with Paulus's baseless assertion that none of the LD trains cover their avoidable costs. There are no meaningful avoidable costs for ending the Palmetto alone other than the direct costs for the Palmetto, for example.
However, if you jointly look at the Palmetto, the Silver Meteor, and the Silver Star... suddenly there are a huge bunch of costs which are avoidable if you end all *three* of them. "Go big or go home." This shows that you have to consider more scenarios than just each train in isolation in order to see what's going on.
For the Auto Train, *both* of its stations could be shuttered if it stopped running, they're large and expensive to operate, it probably has much higher fuel costs than the trains which aren't carrying autos, and finally, all maintenance on those autoracks could be stopped if the Auto Train ceased -- so that's a lot of direct costs. (Note that it would seem to make sense to operate a second Auto Train utilizing one of the same stations, in order to leverage the fixed costs over more routes, if demand warranted. But this didn't work out for the Auto-Train Corporation due to track deterioration on their second route, and there's still no suitably fast Chicago-Florida route.)
For a conclusion to what is becoming a long essay, ^_^ there is a reason why Amtrak has pooh-poohed suggestions of restarting one-a-day services over very long routes of unique track, like the Desert Wind and the North Coast Hiawatha and the Pioneer. This is not how you make money in railroading. The way you make money in railroading is to run an intensive service of long trains over the routes you run, leveraging the same fixed track and station costs over many many trains, and the same fixed costs of train operations over many many cars.
So, in regards to Amtrak's lack of vision, I would say that a suitable near-term vision for the federally funded services -- one with good potential -- is a vision of longer trains with more frequencies per day running faster and more on-time over much the same routes, with only very small expansions in the track traversed (such as running one of the Chicago-NY frequencies via Detroit and Toledo).
It's all about leveraging those fixed costs -- if there's enough demand for more service, even at high prices, you can eventually get to the point where you can cover the fixed costs. Some of the Western routes may simply not have enough demand under any circumstances; some of the Eastern "long distance" routes probably do have enough demand, if they can arrive on time.
