Short Consists of Long Distance Trains

[neroden]

Can you provide an actual link to a document that provides actual numbers?

I'm not doing your homework for you. They've been posted here in years past, but digging up documents which were posted years ago is a lot of work. Try searching the forum for Boardman's presentation on the avoidable-costs numbers.

I don't think you understand how money or profit works.

That's a laugh. I'm a professional investor and I've made a lot of money because I understand how money and profit works. Don't ever try to invest until you get some humility and learn to listen to people who know what they're talking about.

Please cite anything that says this. And by cite I mean provide a link to a document, page, testimony, financials, anything.

Amtrak has deleted most of its documents and reports from previous years, or I'd link you to them. You might find them by searching this forum.

Amtrak has also obstreporously refused to publish the FRA-required marginal cost data, but it has been back-estimated by a number of people over the years. The results are pretty consistent. You can find most of it at this forum if you search.

And even then, do you know what every "marginal-cost profitable" business that can't pay its overhead costs is? Unprofitable, if not broke.

That's my entire point!

You don't seem to understand what you're saying.

Actually, the AT is a great example of a train that has been profitable running completely independently.

False.

It has its own resources for everything.

False.

It was a perfectly designed business.

False. It went bankrupt, anyway. Look it up.

Amtrak is not Walmart. It's not a business selling discounted widgets with low margins that makes up for it in bulk.

It's subtly different -- it depends on bulk ***far more*** than Walmart does -- but in terms of economies of scale, it is actually about the same. It's a capital-intensive infrastructure business and they're *all* like this. (Standing room on a train is perhaps the ultimate in discounted widgets, having no immediate marginal cost at all and being entirely a matter of volume sales. Seats on a train come close.)

Freight rail and passenger rail are also two completely different businesses.

Not really, but I see that you don't understand why they're similar.

The economies of scale in freight railroads have to do with physics. You can ship bulk products and containers for pennies on the dollar across the continent compared with other methods of transport. It just takes a lot longer.

The monopoly pressure on freight railroads has more to do with competition and access to networks. The economies of scale come into play with maintaining the rails themselves--something Amtrak doesn't do across it's LD network.

....you're starting to get it, maybe? First, do you realize that Amtrak actually is charged for the maintenance of the rails used by the trains on the LD network? That's a side note, anyway.

Second, more important, it's not just the rails which have economies of scale. It's also the freightyards -- the freight stations. There's a reason the railroads have consolidated them and run a smaller number of massive yards rather than lots and lots of little sidings like they used to.

And Amtrak, in a manner parallel to the upkeep of freight yards, pays for maintenance and upkeep and operations of passenger stations. About the same cost for a station if they're stopping one train a day at the station as if they're stopping 15 trains a day. (And yet these are still included as variable costs in most of the estimates of marginal profit for the trains.)

And the biggest economy of scale is the length of the trains. In both freight and passenger service. Running a train which is twice as long does NOT use twice as much fuel (it uses less), and does not use twice as many employees (it uses less) and does not double the maintenance costs (it's less locomotive maintenance). This is actually the core economy of scale in railroading.

I know this is confusing to people who don't understand accounting, but gross profit (before fixed expenses) is not the same as net profit (after fixed expenses) and it really doesn't matter if you can't cover your fixed expenses.

You seem to be a confused person who doesn't understand how to use accounting for business and investing decisions, but my *entire point* is that gross profit is different from net profit. And it has *massively* different business decision results.

If you have a product which doesn't make a gross profit, your business decision should be either to raise the price, cut the costs, or shut it down, stop making it.

If you have a product which makes a gross profit but your overall business doesn't make a net profit, you would be an ***** if you stopped making the product. You should instead sell more product.

Do you see why the difference is critical for business decisions? That's my *entire point*. The Lake Shore Limited is a gross-profit train. That means that the *correct action* if you want to make more money is to *make more of it*. Add cars to it, make it longer, run more trains per day on the same route.

If a single Starbucks doesn't cover it's expenses because it doesn't sell enough product, they close it.

You are still missing the point. Suppose a single Starbucks doesn't cover its expenses because it doesn't MANUFACTURE enough coffee. They only get enough coffee beans to make 15 cups of coffee a day. Let's say they make $5 profit on every cup of coffee, the customers are banging on the door, but nope, they can't pay the rent because *they aren't making enough coffee*.

Do you declare that the "cup of coffee is unprofitable"? Or do you realize that ***the cup of coffee is profitable and you need to order more beans***?

Because THAT is the situation Amtrak is in.

The Lake Shore Limited is one cup of coffee. It's a profitable cup of coffee. Amtrak is a Starbucks which isn't allowed to buy enough beans to sell more than 15 cups of coffee a day.

Now do you get it?

People are saying "Oh, the cup of coffee is unprofitable, let's close the Starbucks". That is a lie and that is nonsense. The Starbucks is only getting enough coffee beans to make 15 cups of coffee a day, and that's not enough to cover the rent, and *that* is the truth. They need to be making more coffee.

(Literally, the way Amtrak claims the LSL is unprofitable is the equivalent of taking the rent for the Starbucks location and dividing it amongst the 15 cups of coffee sold per day to claim that each cup of coffee is unprofitable. It is *nonsense*. And Amtrak is emphatically supply-limited, with trains selling out repeatedly at high prices -- so it is a matter of not having enough beans. It would be different if Amtrak were demand-limited and there just weren't enough people who wanted coffee, but *that is not the case*.)

Actually, thanks for the Starbucks analogy? This may help explain it to other people who are being really thick about this and don't understand why it's vital to look at the *marginal* profit of each product.

 

[neroden]

Oddly enough, though we (mostly rightly) dump on Amtrak about allocating costs, to some extent it is an unintended consequence of the Congress first requiring Amtrak to do overhead allocation on a per train basis and then not funding Amtrak enough so as to reduce the proportion that is accountd for as overhead. There is a lot in what Amtrak calls overhead that for example, no self respecting airline with a proper accounting system would call overhead. They are able to allocate at source rather than post facto as random proportions. It again has to do with the inadequacy of Amtrak's cost/expenditure tracking IT system and supporting infrastructure, something that we inevitably circle back to all the time.

Congress requiring Amtrak to do "allocated costs" was indeed a gross mistake. However, Congress then required Amtrak to report "avoidable costs" (marginal costs) too... and Amtrak just broke the law. There's a blank space in the FRA reports for the avoidable costs, saying "coming soon", and there has been for *13 years*.

I question why Amtrak's management went along with the edict of one Congress which wanted "fully allocated costs" and then refused to follow the edict of a later, smarter Congress when it (correctly) wanted "avoidable costs".

There is also, as you note, a surprising amount which really isn't overhead which Amtrak can't track properly at all and is just GUESSING on, including car maintenance costs. Most of the attempts to estimate marginal profit per route just accept Amtrak's guesses on those.

The states who fund state-supported routes got so annoyed by Amtrak's wild guesswork on car maintenance costs that most of them bought their own cars and got separate maintenance contracts for them.

 

[MARC Rider]

As I have mentioned before, the term "profitable" is so slippery, it's almost meaningless. I again recommend that folks google "Hollywood accounting." The example I read about was that the film Return of the Jedi did not make a profit. For some reason that didn't seem to stop investors from pouring lots of money into making three "prequels" and three sequels expanding the storyline.

It seems to me that government spending on passenger rail can provide a lot of financial benefits to the country that don't show up on the Amtrak balance sheets. It may even provide the benefits more efficiently than government spending on other forms of transportation. Expanding the passenger rail system helps enable the expansion of dense walkable cities and towns, something essential if we are going to deal with climate change. True, most of the benefits will come from shorter corridor service and commuter rail, but the long-distance trains play a role, too.

By the way, this nice little nugget from the Congressional Budget office:

Public Spending on Transportation and Water Infrastructure, 1956 to 2017 (cbo.gov)

In 2017, public spending on Highways was $177 billion, mass transit was $70 billion, and rail was $5 billion. There probably hasn't been a whole lot of relative change over the past 4 years. Obviously, these proportions need to change whatever the status of Amtrak "profitability.".

 

[Tlcooper44]

It's interesting how many people complain about the subsidy Amtrak gets ... when, in reality, ALL businesses get subsidy. The road system at the Federal, State, County and City level is all maintained by tax dollars. If we did not have the road system we have, most stores and other businesses we have today would not have the customer base they have.

The difference is, since the "free use" of the road system is not labeled as a subsidy, people don't view it as such.

Had the term "subsidy" not been used - who knows, we may still have longer consists and better passenger service just like the massive and impressive Interstate Highway System that survives on subsidies - even they don't use that term for roads.

Definitely agree with this.
Nobody complains about the billions that go towards other forms of travel. Somehow, the government “picked” road and air over rail, yet people complain about a measly 1.5 billion a year or so that goes towards Amtrak. The interstate highway systems gets close to 100 times that.

there’s a lot of smear that’s directed towards rail, as well as a general belief that rail is an outdated form of transportation. The word boondoggle gets used with rail more than anything else. No one ever called any airport project a boondoggle.

Before I became more knowledgeable about this stuff, my dad always would say that trains are outdated 100 year old tech, and we should replace all Acelas with high speed buses (I know, pretty silly). Now I think he sees how that’s wrong, but he certainly wasn’t alone. The Randall Otoole camp is quite big.
This is pretty off topic. Sorry.

 

[zephyr17]

The core reason we cannot run longer consists of LD trains is there simply isn't enough equipment in good operation to extend the consists.

Well, the consists were longer in daily operation in early 2020 prior to the pandemic. The Builder had two Seattle coaches, almost every Superliner train ran a transdorm year round, the exception to my certain knowledge being the Baby Builder between Spokane and Portland. The Capitol and Eagle had SSLs.

There was sufficient equipment just before COVID, there isn't now. And they are doing things like withdrawing the transdorm from the Starlight after the summer after having sold space in it.

So, if equipment shortage is the "core reason" what happened to the equipment over the last 18 months? Did it die of COVID?

 

[neroden]

The point of running the LD trains is not to make a profit and never has been. Amtrak was brought into existence by the US government to relieve railroads of their obligations to run these money-losing services.

And they're mostly money-making at this point.

This actually shouldn't be surprising, given the history. During the 1950s, when passenger trains were *far* less popular than they are now, the private railroads petitioned to get rid of one passenger train at a time, starting with the lowest-marginal-profit / highest-marginal-loss trains.

By the time Amtrak was formed, the survivors were the individual trains which were stubbornly continuing to make gross profits. Because that was ICC practice regarding what they permitted to be discontinued -- they allowed trains with gross losses to be discontinued, but not trains with gross profits. (Those gross profits were typically not enough to cover the overhead of having an entire infrastructure for passenger service -- stations, commissaries, maintenance bases, etc. etc. -- so many of the private railroads attempted to drive away customers to convince the ICC to let them discontinue them.) Amtrak chopped half of those gross-profit trains and kept the best performers. Then demand for passenger train service skyrocketed in the intervening 50 years, *and* rates were deregulated.

So of *course* routes like NYC-Chicago and NYC-Miami are making gross profits now.

To say the LD trains should be profitable is kind of like saying the Interstate Highway System or the United States Postal Service should run at a profit. Sure, both of these things could (and in certain situations have) run at a profit. However, trying to make these services run at a profit runs counter to why they exist in the first place: to provide essential infrastructure on which the rest of the economy and country moves.

I agree entirely. I don't think they should need to be profitable.

But I do think that claiming that they're losing money when, in fact, *they aren't* is incredibly misleading and leads to a "cutbacks" attitude from Congress when what's needed is an "economies of scale expansion" attitude.

(We have actually in the past seen similar problems in the Post Office, where there have in the past been pushes to shut down local post offices based on totally bogus "allocated cost" calculations. These are situations where the local post office actually makes a marginal profit -- the customers who use it instead of UPS or FedEx because it exists produce revenue exceeding the marginal cost of keeping it open -- and closing it will increase the need for Congressional subsidy. But using "allocated costs" the hatchetmen claimed that it was "money losing".)

The net cost to Congress of having all 15 long-distance trains -- as opposed to just having the NEC -- is under $30 million/year at this point, the bulk of which is the Sunset Limited (probably because it's tri-weekly, with lots of failures of economies of scale, and people unwilling to pay much for such inconvenient scheduling). I worked this out back in 2017 based on data primarily from Boardman's 2013 chart and the next 4 years of Amtrak financial reports (all disappeared from the web now, obviously).

It turns out it costs a billion dollars a year to keep the lights on at Amtrak, basically. They "allocate" half of this to the long-distance trains. If they discontinued the long-distance trains they'd just have to reallocate that $500 million to the NEC and Congress would keep paying for it. If they discontinued everything but the Auto Train, I suppose they might allocate all $500 million to the Auto Train, and it would then look very unprofitable.

Running an extra train on a route which already has stations is usually a positive-margin action -- profitable. If it costs a billion dollars a year to keep the lights on, but running extra trains on the same route actually makes a small marginal profit -- obviously we should run more trains on the same route, right? This is a message I've been trying to get through the heads of Congress.

But it seems very difficult. Because they don't understand the difference between fixed costs and variable costs, they say "Oh, the Starbucks is not profitable, that means if they sold more coffee they would be even less profitable", which is just wrong!

 

[Nick Farr]

So, if equipment shortage is the "core reason" what happened to the equipment over the last 18 months? Did it die of COVID?

First: Specific decisions on consists is subject to all sorts of weird irrational decision-making.

That being said, dying of COVID actually isn't terribly off-point. Once you mothball old transportation equipment, putting it back into service is difficult. They had a lot of problems with the vacuum sewage systems on the Superliners before COVID and that seems to have become much worse after pulling them back from COVID. There aren't that many techs who know how to patch up that system and a lot of them retired during COVID. You're not going to put a car whose toilets don't work back into service.

The other issue beyond the vacuum systems is that they're pulling a lot of Superliners out of service for their interior refresh.

The final thing is that equipment juggling isn't being done with much consideration for anything beyond the needs of the yard or what they think they can get away with. It's also unfortunate that demand for sleepers seems to be at an all-time high due to the pandemic.

All the Superliner I fleet should have been replaced by now...but the planned replacement ended up getting cancelled and we're now limping along with equipment well past its end of life.

 

[frequentflyer]

First: Specific decisions on consists is subject to all sorts of weird irrational decision-making.

That being said, dying of COVID actually isn't terribly off-point. Once you mothball old transportation equipment, putting it back into service is difficult. They had a lot of problems with the vacuum sewage systems on the Superliners before COVID and that seems to have become much worse after pulling them back from COVID. There aren't that many techs who know how to patch up that system and a lot of them retired during COVID. You're not going to put a car whose toilets don't work back into service.

The other issue beyond the vacuum systems is that they're pulling a lot of Superliners out of service for their interior refresh.

The final thing is that equipment juggling isn't being done with much consideration for anything beyond the needs of the yard or what they think they can get away with. It's also unfortunate that demand for sleepers seems to be at an all-time high due to the pandemic.

All the Superliner I fleet should have been replaced by now...but the planned replacement ended up getting cancelled and we're now limping along with equipment well past its end of life.

A testament to the workers of Pullman on how well they built their last product.

 

[neroden]

I will add that I heard rumors from some people who were involved in Congressional activity back in the 1970s, 1980s, and 1990s with respect to Amtrak -- what they said was that they engaged in this allocation because they were afraid that the NEC would get defunded, but they knew the long-distance trains wouldn't -- because of the then-current situation in the Senate -- so they shoved the allocated costs onto the long-distance trains to make the flyover-state Senators say that the funding was going to support "their" trains so that they could claim to their constituents that they weren't subsidizing the dreaded "East Coast elite" trains. (Of course, if those same Senators defunded the "East Coast elite" trains, they'd end up losing their own trains too, but that's not how they saw it at the time.)

This is not the current Congressional politics and I think this fiction doesn't make sense any more. Also I'm not sure whether I can trust those sources to have described the politics of the time correctly.

Bottom line is that it costs a billion dollars a year to keep the lights on at Amtrak, and once you've got the whole operation going, running more trains on the same routes tends to actually save money for Congress. Nowadays the number of Congressmen who want to zero out Amtrak completely is small and shrinking.

Among those Congressmembers who agree that Amtrak should exist *at all*, I think it would help if they had a better appreciation of the fact that adding additional trains ranges from costing a trivial amount to actually saving Congress money; they tend to think it will cost Lots and Lots to add an additional train and it's just not true. That's why I want them to understand the marginal profit status of the trains rather than looking at inflated allocated costs.

(That said, Amtrak actually needs a bundle more money to fix some of its "overhead" problems. Like the current deficient state of the IT systems. It may really cost more than a billion a year to keep the lights on *properly*.)

 

[Qapla]

They had a lot of problems with the vacuum sewage systems on the Superliners before COVID and that seems to have become much worse after pulling them back from COVID. There aren't that many techs who know how to patch up that system and a lot of them retired during COVID. You're not going to put a car whose toilets don't work back into service.

The other issue beyond the vacuum systems is that they're pulling a lot of Superliners out of service for their interior refresh.

How does that explain the shortened consists of the Silvers that travel between two very well traveled terminuses and use Viewliners?

 

[zephyr17]

First: Specific decisions on consists is subject to all sorts of weird irrational decision-making.

That being said, dying of COVID actually isn't terribly off-point. Once you mothball old transportation equipment, putting it back into service is difficult. They had a lot of problems with the vacuum sewage systems on the Superliners before COVID and that seems to have become much worse after pulling them back from COVID. There aren't that many techs who know how to patch up that system and a lot of them retired during COVID. You're not going to put a car whose toilets don't work back into service.

The other issue beyond the vacuum systems is that they're pulling a lot of Superliners out of service for their interior refresh.

The final thing is that equipment juggling isn't being done with much consideration for anything beyond the needs of the yard or what they think they can get away with. It's also unfortunate that demand for sleepers seems to be at an all-time high due to the pandemic.

All the Superliner I fleet should have been replaced by now...but the planned replacement ended up getting cancelled and we're now limping along with equipment well past its end of life.

All this points to a massive management failure.
1. Insufficient cross training on critical systems (vacuum toilets). "Loss of trained staff" is an excuse for poor planning by management.
2. Not maintaining temporarily sidelined equipment or rotating it into service under the triweekly schedule to maintain roadworthiness. Unless, of course, management intended the reductions to be permanent under the principle of "never let a crisis go to waste" but got their bluff called by Congress.
3. Until this year, I had never heard of Amtrak scheduling withdrawal of equipment in which accommodations had been sold when passengers could not be reaccommodated in like accommodations in the remaining equipment. That is new. I am talking about scheduled withdrawals, not last minute bad ordering a car.

As time goes by with these short consists for daily service, it is harder and harder to avoid subscribing to the "conspiracy theory" that Amtrak is trying to undermine current long distance services while technically adhering to the letter of Congress' mandate for daily service.

 

[neroden]

While I always try to apply Hanlon's Razor -- assume incompetence rather than malice -- (and boy, Amtrak does have a history of incompetence in several specific areas) -- there are times when I can't attribute it to anything *but* malice, including the wilful refusal to publish avoidable costs required by Congress. (Amtrak Management is apparently making a frivolous claim that the law, which is *still in force and part of the US Code*, somehow doesn't apply any more.)

I'm not the only one thinking frequently, in multiple contexts, about whether we're looking at good-faith actions or subversive dishonesty. Jim Mathews at RPA was thinking about this a month ago:

https://www.railpassengers.org/happening-now/news/blog/motives-matter-a-meditation-on-good-faith/

 

[Cal]

How does that explain the shortened consists of the Silvers that travel between two very well traveled terminuses and use Viewliners?

Well I believe some of the Illinois services are using Amfleet II's for whatever reason (can anyone back this up?), which takes away from the coaches available for Eastern trains. I believe most of the [eastern] trains are running with a normal amount of sleepers, maybe one less.

 

[jis]

So far I have heard a few reports of the Crescent running with one less Sleeper. AFAIK the Silvers and LSL are running with full complement of Sleepers but are short one or two Coaches. And of course the Cardinal does still have its single ,lonesome Sleeper.

 

[zephyr17]

Current motto:
"Amtrak! We Can't Even Keep the Toilets Working!"

 

[Cal]

Current motto:
"Amtrak! We Can't Even Keep the Toilets Working!"

I think that
"Amtrak! We promise to mess up your trip one way or another!"

would be better.

 

[zephyr17]

Or with a more serious tone:

"Our Amtrak Promise:

We'll f*ck something up. Your reservation, your connection, even your toilet."

There's Something About a Train That's Magic!*
*magical services provided by Voldemort

 

[Nick Farr]

I'm not the only one thinking frequently, in multiple contexts, about whether we're looking at good-faith actions or subversive dishonesty. Jim Mathews at RPA was thinking about this a month ago:

Jim Mathews was talking about Freight Railroads, who have a clear motive to lie and have been proven doing so in a slew of operational contexts. They have actively lobbied against enforcement of the law regarding on-time performance.

There's no proof that Amtrak has any clear motive other than its continued existence. Even that is a rebuttable presumption, given how often they work at cross-purposes.

Neglect of LD rail is...well, neglect. Neglect rarely has a clear motive.

 

[jis]

Neglect of LD rail is...well, neglect. Neglect rarely has a clear motive.

Unless certain religious or socio-cultural imperatives are involved of course

 

[Amtrakfflyer]

We can debate and bash each other endlessly on here. The fact of the matter is Amtrak management sucks. Whether it’s for incompetence, nefarious motives, or just not being savvy enough to deal with the hand they've been given, they need to be replaced. The time for benefit of the doubt has long since passed.

 

[Qapla]

A typical Silver consist as of June 2021 is:

• 1 ACS-64 engine (New York–Washington)
• 2 P42DC engines (Washington–Miami)
• 2-4 Amfleet II coaches
• Amfleet II Cafe
• 1 Viewliner Diner
• 2-3 Viewliner sleepers
• Viewliner Baggage car

This is a far cry from the 17 cars that used to make up the Silvers in times past. Before C-19 the trains ran with the longer consist more often than it does today - now they opt for the shorter consist.

The thing is, they could most likely fill a train twice the length of the current consist on this route.

 

[zephyr17]

I just can't help but think Amtrak management longstanding focus on costs and history ignoring revenue enhancement possibilities is at play here.

 

[MARC Rider]

A typical Silver consist as of June 2021 is:

• 1 ACS-64 engine (New York–Washington)
• 2 P42DC engines (Washington–Miami)
• 2-4 Amfleet II coaches
• Amfleet II Cafe
• 1 Viewliner Diner
• 2-3 Viewliner sleepers
• Viewliner Baggage car

This is a far cry from the 17 cars that used to make up the Silvers in times past. Before C-19 the trains ran with the longer consist more often than it does today - now they opt for the shorter consist.

The thing is, they could most likely fill a train twice the length of the current consist on this route.

That's a 7 - 10 car train. The typical Silver consist I remember seeing through my years of commuting about the same time the Silver Meteor comes through Baltimore southbound was about 10 cars. So a 7 car train (2 coaches and 2 sleepers) is a bit shorter than usual, but it is an improvement over versions of the Capitol Limited and Crescent that I rode last June that also had only 2 coaches and 2 sleepers, which had a combined lounge/diner "food service car."

 

[John819]

I expect that the Silvers may get more equipment when the Viewliner I renovations (superficial or more) get done. The same is true for the Superliners. But I wouldn't expect to see cars added until some time in 2022, probably around March.

 

[Just-Thinking-51]

I expect that the Silvers may get more equipment when the Viewliner I renovations (superficial or more) get done. The same is true for the Superliners. But I wouldn't expect to see cars added until some time in 2022, probably around March.

Other than the Viewliner equipment that was involved in a crash, which may or may not be rebuilt. What renovations are you referring to?