TheCrescent
OBS Chief
- Joined
- Jun 24, 2020
- Messages
- 562
If I am understanding railroad economics correctly (which may not be the case):
Railroads have huge overhead, such as expenses for tracks, stations, dispatching, equipment and back-office operations. Once those overhead costs are covered, revenues from operating trains quickly turn into profits.
Fuel and power are also large expenses, so maximizing the revenues generated from a dollar spent on fuel/power is a way to earn profits.
Thus freight railroads run long trains, maximizing revenues per train, and maximizing the revenue per dollar spent on fuel, even if the marginal revenue per car on the train isn't that much. E.g., a long train hauling junk for a low price per ton of junk can be profitable, but a shorter train wouldn't be.
So if freight railroads run long trains hauling low-budget products, why doesn't Amtrak run very long trains full of passengers, even if most of the cars are filled with passengers who pay low ticket prices?
For example, the Crescent currently has 3 coaches and 2 sleeping cars. Wouldn't the train perform much better financially if Amtrak tacked on maybe 5 more cars, even if the cars are full of high-density seats and customers paying low ticket prices?
So wouldn't Amtrak be better off by buying a bunch of aging NJ Transit Comet cars, tacking them onto its trains, and significantly expanding its ridership per train, even if those additional cars are a budget class of travel, with very low ticket prices?
Railroads have huge overhead, such as expenses for tracks, stations, dispatching, equipment and back-office operations. Once those overhead costs are covered, revenues from operating trains quickly turn into profits.
Fuel and power are also large expenses, so maximizing the revenues generated from a dollar spent on fuel/power is a way to earn profits.
Thus freight railroads run long trains, maximizing revenues per train, and maximizing the revenue per dollar spent on fuel, even if the marginal revenue per car on the train isn't that much. E.g., a long train hauling junk for a low price per ton of junk can be profitable, but a shorter train wouldn't be.
So if freight railroads run long trains hauling low-budget products, why doesn't Amtrak run very long trains full of passengers, even if most of the cars are filled with passengers who pay low ticket prices?
For example, the Crescent currently has 3 coaches and 2 sleeping cars. Wouldn't the train perform much better financially if Amtrak tacked on maybe 5 more cars, even if the cars are full of high-density seats and customers paying low ticket prices?
So wouldn't Amtrak be better off by buying a bunch of aging NJ Transit Comet cars, tacking them onto its trains, and significantly expanding its ridership per train, even if those additional cars are a budget class of travel, with very low ticket prices?