Southwest Chief News & Future Operations

[cpotisch]

More riders = more losses.

Nope. That table clearly and correctly shows that more riders = fewer losses. The more riders there are, the lower the losses per rider (you just divide the losses by the number of riders), and that is accurately reflected on that table.

 

[cpotisch]

Some facts about the Southwest Chief:

Among Amtrak's 15 long-distance trains, the train is:

-7th in terms of ridership

-4th in ticket revenue

-2nd in seat miles

-2nd in passenger miles

It carries more passenger miles (length of trip) than any other Amtrak short-distance train outside of the Northeast Corridor and California's Pacific Surfliner trains.

At 63%, the train's load factor (percent of full seats) is higher than the 58% average for the long-distance trains and is higher than the Northeast Corridor's 57% average and the state corridor routes' 40%.

There's no rational reason for Amtrak's inept management to discontinue this vital route.

Source: Amtrak.

But the Southwest Chief is a long distance train, so it's irrelevant that it has higher ridership than some short distance routes. And even among the LD routes, it ranks 7th out of 15 in ridership, 14th out of 15th in monetary losses, and 13th out of 15th in losses per passenger. Those are not good numbers, and they don't look at all manipulated or warped. To be clear, i would hate to see the Chief dismantled and destroyed, but it does not hold up well against the other LDs.

 

[allanorn]

Some facts about the Southwest Chief:

Among Amtrak's 15 long-distance trains, the train is:

-7th in terms of ridership

-4th in ticket revenue

-2nd in seat miles

-2nd in passenger miles

It carries more passenger miles (length of trip) than any other Amtrak short-distance train outside of the Northeast Corridor and California's Pacific Surfliner trains.

At 63%, the train's load factor (percent of full seats) is higher than the 58% average for the long-distance trains and is higher than the Northeast Corridor's 57% average and the state corridor routes' 40%.

There's no rational reason for Amtrak's inept management to discontinue this vital route.

Source: Amtrak.

But the Southwest Chief is a long distance train, so it's irrelevant that it has higher ridership than some short distance routes. And even among the LD routes, it ranks 7th out of 15 in ridership, 14th out of 15th in monetary losses, and 13th out of 15th in losses per passenger. Those are not good numbers, and they don't look at all manipulated or warped. To be clear, i would hate to see the Chief dismantled and destroyed, but it does not hold up well against the other LDs.

This is pretty much it. Revenue, load factor, seat miles... doesn't matter so much if your break-even point is $300/rider and you're only pulling in $150 (as an example). At some point economics start to kick in and someone has to cover the loss, whether that be government or someone else. If not, the entity ceases operation when the cash runs out.

Inept management would be to keep status the quo and not to do anything different.

Granted, I don't know how Anderson's actions are going to play out. I think there's a lot of systemic and cultural issues (organizational, generational, and national) in play that he has to attend to. Amtrak's mission and vision likely need to be looked at in a broad scope because the entity is limping along and being kept together by gaffer tape.

 

[jebr]

I think there's a lot of systemic and cultural issues (organizational, generational, and national) in play that he has to attend to.

This is pretty much the biggest piece of the puzzle. It's hard to make trains work in areas where gas is cheap, roads are overbuilt and easy to drive on, and owning a car is somewhere between a huge leap in convenience and an absolute necessity. That describes...most of the US, including a large number of our major cities. When most people own cars, and the incentives are stacked towards driving that car, both economically and in terms of convenience, most people are going to drive a vehicle.

That leaves Amtrak currently as some mix of essential transportation for those who have no other option, people who simply enjoy riding the rails and don't have to worry about time much, and those who won't fly/drive for specific reasons (environment, medical, etc.) That's a market that is a lot narrower than in most European countries, and it'd take massive shifts in how we prioritize transportation spending and account for the effect of different modes on climate change for that calculus to change in any significant way. Until that happens, I don't see how Amtrak, especially the long distance network, becomes much more relevant than it is currently.

 

[allanorn]

I think there's a lot of systemic and cultural issues (organizational, generational, and national) in play that he has to attend to.

This is pretty much the biggest piece of the puzzle. It's hard to make trains work in areas where gas is cheap, roads are overbuilt and easy to drive on, and owning a car is somewhere between a huge leap in convenience and an absolute necessity. That describes...most of the US, including a large number of our major cities. When most people own cars, and the incentives are stacked towards driving that car, both economically and in terms of convenience, most people are going to drive a vehicle.

That leaves Amtrak currently as some mix of essential transportation for those who have no other option, people who simply enjoy riding the rails and don't have to worry about time much, and those who won't fly/drive for specific reasons (environment, medical, etc.) That's a market that is a lot narrower than in most European countries, and it'd take massive shifts in how we prioritize transportation spending and account for the effect of different modes on climate change for that calculus to change in any significant way. Until that happens, I don't see how Amtrak, especially the long distance network, becomes much more relevant than it is currently.

Not only that, target markets for long-distance trains have competition from the airlines, of which Mr. Anderson knows plenty about. I'm sure he's had to deal with Essential Air Service, which provides contracts to run commercial service to small rural airports where it wouldn't be economically feasible for an airline to do so on their own.

The LD train network does a pretty good job of providing reasonable non-driving transportation to those markets where flying or buses are either not available, too expensive, or logistically messy - but those aren't the markets that tend generate a lot of revenue either. Ideally, Amtrak needs to lead the conversations that asks the hard questions about what it's supposed to do so it can figure out how to best get those done. Unfortunately the focus on stopping the bleeding makes this a long ask in the short term, even though it has repercussions for the SWC and most of the Amtrak business model.

 

[ohle]

Like many suspected, Amtrak's numbers aren't trustworthy.

The RPA has blown the whistle on its faulty accounting.

https://www.railpassengers.org/happening-now/news/releases/amtraks-route-accounting-fatally-flawed-misleading-wrong/

The report blasts Amtrak's faulty accounting, which it says unfairly places more costs on the long-distance trains than they are responsible for.



RPA calls Amtrak’s route accounting system "catastrophically flawed" and contends it "grossly misrepresents – and exaggerates – the public cost of providing passenger trains as a mobility choice for the entire nation."

Take this inconsistency:

"....APT (Amtrak Performance Tracking) reported the same wide variation in the cost allocations of Yard & Equipment Moves to trains that originate and terminate in Chicago. For long distance routes, the cost varied considerably and inexplicably:



"....The City of New Orleans was just under $200,000, The Capitol Limited just over $200,000, The Texas Eagle just over $300,000, The Southwest Chief just over $400,000, The Empire Builder over $1.6 million and the California Zephyr nearly $1.8 million. If there is a reason for such wide variation, it is not obvious. The more likely explanation is that APT’s allocation rules do not reflect actual costs..."

I don't think anyone (myself included) can accurately assess costs/benefits on any of the routes using Amtrak's misleading data.
Their "statistics" are suspect.


There's a whole thread on this here, but I post this summary to warn against naively swallowing Amtrak's rigged "statistics."

 

[ohle]

I seriously doubt most passengers would willingly want to disembark a train mid-route and board a cramped bus for a 10-hour overnight ride.

Again, it shows CEO Anderson's contempt for his customers.

This "plan" was clearly designed to destroy one of Amtrak's most successful LD trains.

Ohle,

Here’s my take on what I think might’ve transpired there with the Chief. First of all, I am going to assume that Anderson did not understand the ground transportation market very well. Then, he was confronted with that perfectly dreadful wreck on the Cascades line. Kinda like “trial by blood”. He felt he had to do something to reassure the public so he stated unequivocally that Amtrak absolutely and utterly will NOT operate its trains over tracks where there is no PTC after Jan. 1st. He probably made an error in making such a strong statement.

So, this possible “error” in judgement became seriously problematic for the Chief. Either he would need to pull a “Trumpian” switch and claim he never said that or, more expedient yet, (he thought) just scotch the train.

What happened next was that all those communities pushed back against this and pushed back HARD. They attempted to make the case that the Chief was their only public transportation connection to the outside world. Well, O.K., lacking a good handle on ground transportation, Anderson thought he could understand that. He resolved to continue providing those communities with a public transportation option: A bus. It might’ve made perfect sense in his mind’s eye but for people more familiar with railroads it makes absolutely no sense, no sense whatsoever.

By the way, dozens upon dozens of American cities tried this at the local level. They turned to buses to replace the first generation of light rail lines. They thought they would save bookoo bucks. But what happened was that Americans abandoned public transportation altogether. Now Anderson is poised to make a similar error. But I’m optimistic that he will not succeed in pulling it off. Could I be wrong? Absolutely. But here’s hoping for the best.

-FMC

I suspect that could be the case.

Still, he's made so many wrongheaded decisions that will forever harm the cause of passenger rail, it's hard to see how anything he's doing will benefit anyone (except his beloved NEC).

 

[bretton88]

What I don't like is this request:

"The Rail Passengers Association asks Congress to require Amtrak immediately to halt all route, schedule and frequency reductions as well as recent on-board service modifications; then require Amtrak’s leadership team to explain to, and gain the approval of, the Congress, the states and stakeholders of its vision of the passenger train system and service they envision for the future."

Congressional micromanagement usually doesn't end well. What I would support is a call for an outside auditor to go through Amtrak's books and deliver a thorough report on the true accounting.

 

[ohle]

The request to halt proposals to discontinue trains and remove amenities seems reasonable.

After all, there's strong evidence Anderson and his cronies are working from false information to justify their harmful plans, which will damage Amtrak and passenger rail.

Yes, an outside audit, like the one conducted for RPA, would be necessary.

 

[fredmcain]

What I don't like is this request:

"The Rail Passengers Association asks Congress to require Amtrak immediately to halt all route, schedule and frequency reductions as well as recent on-board service modifications; then require Amtrak’s leadership team to explain to, and gain the approval of, the Congress, the states and stakeholders of its vision of the passenger train system and service they envision for the future."

Congressional micromanagement usually doesn't end well. What I would support is a call for an outside auditor to go through Amtrak's books and deliver a thorough report on the true accounting.

well, right, Congressmen don't even know as much about railroading as Anderson does and probably much less. I like your idea of an auditor but it would be of benefit if it were an auditor who was intimately familiar with railroading so we don't repeat the Downs nightmare. Once was enough.

One thing I have believed for years is that Congress has never made much of an indication or given Amtrak any direction as to what kind of a national system we should have. They provide just barely enough funding to keep the system on life support and that's it. I always thought that the long distance system wasn't too terribly bad before the 1978 cuts. But that has never been rectified. Perhaps what is needed is a Congressional committee that would come up with a system, fund it, then stick to it. But I have sadly given up that this will happen in my lifetime.

Regards,

FMC

 

[bretton88]

Well it brings back the core question for Amtrak, what is Amtrak? Are they just essential transportation or are they a true transportation alternative?

 

[west point]

Note this is just a WAG but some of our accounting experts can verify or disc as they see fit.

It seems that Amtrak is allocating all costs to passenger miles traveled. If that is true the % of miles traveled LD and SD and NEC might be closely related to published costs. If true we know those costs will have to be allocated to remaining trains if any are cancelled. With the SW chief has the longest revenue passenger miles but highest cost makes one wonder ?

 

[jis]

Note this is just a WAG but some of our accounting experts can verify or disc as they see fit.

It seems that Amtrak is allocating all costs to passenger miles traveled. If that is true the % of miles traveled LD and SD and NEC might be closely related to published costs. If true we know those costs will have to be allocated to remaining trains if any are cancelled. With the SW chief has the longest revenue passenger miles but highest cost makes one wonder ?

It is not that simple. You don;t have to WAG. Read this report for the gory details:

https://www.railpassengers.org/site/assets/files/7353/amtraks_route_accounting_-_fatally_flawed.pdf

 

[Palmetto]

Congress is the root cause of the problems we're having with long-distance passenger rail. The law they enacted in 2015 is the culprit. The more pressure to retract it, the better, it seems to me.

 

[jis]

Congress is the root cause of the problems we're having with long-distance passenger rail. The law they enacted in 2015 is the culprit. The more pressure to retract it, the better, it seems to me.

The problem predates 2015. Read the history in the document that I pointed to in the post above. Only the F&B part is new in 2015. The issues that are leading to threats to the LD network, other than the excuse of PTC all date back to the origins of Amtrak. And Congress is only part of the problem Volpe Center, the FRA and Amtrak have significant contributions to the problem and its festering over the years.

 

[allanorn]

The problem predates 2015. Read the history in the document that I pointed to in the post above. Only the F&B part is new in 2015. The issues that are leading to threats to the LD network, other than the excuse of PTC all date back to the origins of Amtrak. And Congress is only part of the problem Volpe Center, the FRA and Amtrak have significant contributions to the problem and its festering over the years.

Creative accounting is always a concern and I think it needs to be looked at. I tend to believe the ubiquity of automobiles and interstates, plus airline deregulation, has done more damage to Amtrak well before accounting was likely ever an issue.

Well it brings back the core question for Amtrak, what is Amtrak? Are they just essential transportation or are they a true transportation alternative?

Following on with this - I listened to a podcast on Strong Towns that had Jarrett Walker on (podcast here). He was discussing the role of infrastructure and transit goals. One of the points he made about transit service that I think correlates well with Amtrak is the distinction between ridership (e.g. getting more people on a train) vs. coverage (e.g. how much of a given area are you providing service to). Walker mentioned that there is a huge focus on ridership everywhere, but oftentimes coverage takes priority for reasons other than profit motive (i.e. political, equity issues, only at commute time, etc). Walker's point is that transit authorities have to make it clear what the money and/or infrastructure they are providing goes for, because they provide two separate frames of reference.

With that - is Amtrak these days about ridership or coverage? I think it's both: Ridership takes priority in the NEC, where the LD network is all about coverage. Regionals are muddled and are likely split depending on what their usage factors are. The fact that it's likely both, and they have a mission to at least break even on P&L, is why Amtrak is frequently roasted over the coals in mainstream media about grants and Federal subsidies. If everyone keeps thinking of Amtrak as needing more ridership to break even, subsidies start to look bad. However, subsidies may be absolutely necessary for coverage.

I have to read the RPA report in detail again but there may also be some link (probably weak if any) to the accounting. If Amtrak sees the NEC as ridership-based and the rest of the network as coverage-based, the fixed accounting method starts to make a little more sense (e.g. "we have to provide X service, we know it costed Y dollars in 19ZZ and our costs rose by R%/year, so adjust and move on"). I still want auditors to take a look to see how bad it is, if only to shed light on what's really avoidable vs. what's not and to get the numbers better. An explanation of how the avoidable vs. non-avoidable cost centers are allocated would have been nice (and I might have missed that in the appendices and/or footnotes).

Adding: At the risk of adding in another consideration and making this reply too long - the more I think about it, the SWC bustitution proposal from Anderson logically makes more sense if taken from a coverage standpoint in the face of potential safety liability concerns with lack of PTC and/or track upgrades. Keep in mind the average person in the public knows about PTC but not the details about dark track like we do, and has seen the news where Amtrak and/or other rail operators had accidents where PTC wasn't available and could have saved lives. However, I'm not saying that's 100% accurate or the right thing to do; it's just that I can see a line of reasoning there.

 

[bretton88]

The problem predates 2015. Read the history in the document that I pointed to in the post above. Only the F&B part is new in 2015. The issues that are leading to threats to the LD network, other than the excuse of PTC all date back to the origins of Amtrak. And Congress is only part of the problem Volpe Center, the FRA and Amtrak have significant contributions to the problem and its festering over the years.

Creative accounting is always a concern and I think it needs to be looked at. I tend to believe the ubiquity of automobiles and interstates, plus airline deregulation, has done more damage to Amtrak well before accounting was likely ever an issue.

Well it brings back the core question for Amtrak, what is Amtrak? Are they just essential transportation or are they a true transportation alternative?

Following on with this - I listened to a podcast on Strong Towns that had Jarrett Walker on (podcast here). He was discussing the role of infrastructure and transit goals. One of the points he made about transit service that I think correlates well with Amtrak is the distinction between ridership (e.g. getting more people on a train) vs. coverage (e.g. how much of a given area are you providing service to). Walker mentioned that there is a huge focus on ridership everywhere, but oftentimes coverage takes priority for reasons other than profit motive (i.e. political, equity issues, only at commute time, etc). Walker's point is that transit authorities have to make it clear what the money and/or infrastructure they are providing goes for, because they provide two separate frames of reference.

With that - is Amtrak these days about ridership or coverage? I think it's both: Ridership takes priority in the NEC, where the LD network is all about coverage. Regionals are muddled and are likely split depending on what their usage factors are. The fact that it's likely both, and they have a mission to at least break even on P&L, is why Amtrak is frequently roasted over the coals in mainstream media about grants and Federal subsidies. If everyone keeps thinking of Amtrak as needing more ridership to break even, subsidies start to look bad. However, subsidies may be absolutely necessary for coverage.

I have to read the RPA report in detail again but there may also be some link (probably weak if any) to the accounting. If Amtrak sees the NEC as ridership-based and the rest of the network as coverage-based, the fixed accounting method starts to make a little more sense (e.g. "we have to provide X service, we know it costed Y dollars in 19ZZ and our costs rose by R%/year, so adjust and move on"). I still want auditors to take a look to see how bad it is, if only to shed light on what's really avoidable vs. what's not and to get the numbers better. An explanation of how the avoidable vs. non-avoidable cost centers are allocated would have been nice (and I might have missed that in the appendices and/or footnotes).

Adding: At the risk of adding in another consideration and making this reply too long - the more I think about it, the SWC bustitution proposal from Anderson logically makes more sense if taken from a coverage standpoint in the face of potential safety liability concerns with lack of PTC and/or track upgrades. Keep in mind the average person in the public knows about PTC but not the details about dark track like we do, and has seen the news where Amtrak and/or other rail operators had accidents where PTC wasn't available and could have saved lives. However, I'm not saying that's 100% accurate or the right thing to do; it's just that I can see a line of reasoning there.

Liability is undoubtedly something that is on Amtrak's mind when making decisions like this. I call liability insurance no fun. The massive expense that liability insurance has become has killed off a lot of fun things, my favorite example is the collapse in small ski areas. We're starting to see it kill off things in the railroad industry now.On the coverage versus ridership, I think with the many forced train offs that Amtrak has had to do in it's history, the message has been clear to Amtrak. Focus on ridership over coverage, even on the LD system. Now whether Amtrak has kept the right trains to accomplish that is up for debate.

 

[neroden]

It's important to remember that Amtrak's cost accounting is essentially fraudulent. I've had a lot of experience trying to decode "creative accounting", and there's been enough information released over the years to get a decent sense (ballpark) of the actual avoidable cost structure. Recently the amount of data released has been reduced sufficiently that I haven't been able to back-calculate anything since Anderson's lackeys removed the crucial data from the monthly reports.

But anyway: the long-distance trains as a group are profitable. With the exception of the Sunset Limited, I am now quite sure every last one of them provides incremental profits to Amtrak; that is, incremental revenues including connecting revenue is greater than avoidable costs.

 

[neroden]

This from Amtrak's presentation to lawmakers to discontinue the SW Chief.

Note how the trains with the biggest ridership "lose" the most money (according to Amtrak's rigged accounting).

More riders = more losses.

No successful business runs like that.

Amtrak ridership.jpg

Yeah, that's because Amtrak accounting is lying through their teeth, as the RPA report has pointed out.

I'm glad they're finally being called on it.

 

[NW cannonball]

This from Amtrak's presentation to lawmakers to discontinue the SW Chief.

Note how the trains with the biggest ridership "lose" the most money (according to Amtrak's rigged accounting).

More riders = more losses.

No successful business runs like that.

Amtrak ridership.jpg

Yeah, that's because Amtrak accounting is lying through their teeth, as the RPA report has pointed out.

I'm glad they're finally being called on it.

Me too

 

[ehbowen]

It's important to remember that Amtrak's cost accounting is essentially fraudulent. I've had a lot of experience trying to decode "creative accounting", and there's been enough information released over the years to get a decent sense (ballpark) of the actual avoidable cost structure. Recently the amount of data released has been reduced sufficiently that I haven't been able to back-calculate anything since Anderson's lackeys removed the crucial data from the monthly reports.

But anyway: the long-distance trains as a group are profitable. With the exception of the Sunset Limited, I am now quite sure every last one of them provides incremental profits to Amtrak; that is, incremental revenues including connecting revenue is greater than avoidable costs.

And the Sunset Limited would very probably improve its net performance substantially if it could be made a daily train.

 

[GBNorman]

I wonder just how the general ridership of Amtrak feels about all of this, as compared to advocate's...meaning organization's like RPA et al, as well as forum's like AU?

That may be the ultimate measure of whether Anderson remains in office, or not. While it is all very much in our thoughts, how many 'ordinary' Amtrak passenger's know about what is going on, or how much they are really concerned about it?

It appeared this topic took on added life while I was overseas during the past two weeks. Lest we forget, WLAN mobile data "over there" costs "big time" - try $25 for 100 megs. That's enough to make one "think twice" before indulging.
But simply because riding passenger trains is a hobby and pastime for I'd dare say the majority around here, it is a means of economic and efficient movement from "Ehh to Bee" for the traveler Amtrak wishes to attract. That only occurs in markets where rail travel is time competitive with air, with frequencies allowing a passenger to go when convenient rather than the "one a day at Oh Dark Thirty", and provide sufficient amenities to accommodate a four or so hour trip.

All told, away from the hobby community, the passenger using rail travel today, simply could care less about what happens to the Chief, or for that matter, the others within that particular Tribe.

 

[fredmcain]

"All told, away from the hobby community, the passenger using rail travel today, simply could care less about what happens to the Chief, or for that matter, the others within that particular Tribe."

I'm not sure if I agree with that statement or not. It seems to me like everytime the national network has been threatened, the American public has rallied to "save Amtrak". It seems to me like there are an awful lot of people in our country who want to keep the intercity rail option open even though most of them do not use passenger trains on a regular basis. I could be wrong but I can already see this happening again.

Problem is, everytime this happens, the system gets "saved" but that's all - no extra money for improvements or expansion.

Regards,

Fred M. Cain

 

[CAMISSY55]

Agreed, Fred. The response from those most effected by Anderson's contemplated changes to the Chief was swift.

 

[Devil's Advocate]

It appeared this topic took on added life while I was overseas during the past two weeks. Lest we forget, WLAN mobile data "over there" costs "big time" - try $25 for 100 megs. That's enough to make one "think twice" before indulging.

Sounds like you took a locked US phone to a foreign country and paid a massive middleman fee to a US carrier with pricing plans from the 1990's. The vast majority of industrialized democracies have cheaper mobile plans than the US.

All told, away from the hobby community, the passenger using rail travel today, simply could care less about what happens to the Chief, or for that matter, the others within that particular Tribe.

What are you basing this upon? The people I met on my most recent Southwest Chief trip (earlier this month) seemed extremely concerned about the future of the route. If there was anything they could not care less about it was some indifferent armchair quarterback trying to speak on their behalf.