Tuesday, June 17, 2014

A modest proposal for RailPac

Lately, it feels like almost every single update from RailPac has to do with the long distance train network. To a certain degree this makes sense; there is a question of interconnection with the national network and the long distance Coast Starlight is currently the only passenger train between Northern and Southern California (though not at terribly good times for anyone wishing to actually make such a journey), and of course the long distance trains are always under attack when Congress is putting together a budget. But the emphasis has gotten quite out of hand with so many messages and calls to action regarding the long distance trains: It calls into question whether RailPac is actually attempting to represent the rail passengers of California or whether they’re simply advocates for long distance trains who happen to be located in California. 91.7% of all the boardings and alightings within the state of California are on the state supported trains with an additional 4.7% coming from the Coast Starlight; the emphasis shown to the Sunset Limited and to the long distance trains in general is downright unseemly on that basis.

It does not help that they continue to endorse a conspiracy take on the Northeast Corridor, blaming it for all of Amtrak’s financial woes and the occasional claim of cooking the books as regards the long distance trains. That they continue to approvingly quote Andrew Selden is a strong mark against them, given his habit of lying, either by omission or commission, to distort the truth about long distance trains and the Northeast Corridor. Take, for example, RailPac President Paul Dyson’s recent post, in which he uses some figures provided by Andrew Selden to claim that “Amtrak’s early management was able to use its experience to operate at a moderate deficit. That deficit tripled as soon as the NEC was absorbed and has grown ever since.” I’m a bit surprised that he required Selden’s help to find those figures since they’re available a short google search away, but be that as it may, those reports very clearly show Andrew Selden to have deliberately misused numbers and misrepresented the numbers that he did use. Very simply, the numbers used for 1973 are not from the same set of numbers used for 1978 (in fact, Amtrak does not appear to use them again after 1973) and the numbers which are used for 1978 contain with them a breakdown of expenses which makes it clear that the rise in expenses is not due to Amtrak taking over the Northeast Corridor.  Here follow the actual compatible numbers for 1973-1978, followed again by the breakdown of expenses from 1972-1978

Year Revenue Expenses Deficit
1973
$202,093.00
$345,310.00
-$143,217.00
1974
$256,910.00
$497,699.00
-$240,789.00
1975
$252,697.00
$566,983.00
-$314,286.00
1976
$277,769.00
$665,794.00
-$388,025.00
1977
$311,272.00
$784,244.00
-$472,972.00
1978
$313,002.00
$830,132.00
-$517,130.00


1972
1973
1974
1975
1976
1977
1978
Percentage change 1972-1978 Absolute change 1972-1978
Maintenance of Way
$4,958
$4,495
$10,421
$12,185
$21,692
$45,053
$53,054
1,070.07%
$48,096
Maintenance of Equipment
$60,001
$65,515
$98,862
$134,964
$177,102
$216,207
$235,591
392.65%
$175,590
Traffic
$20,142
$26,517
$34,604
$26,480
$35,471
$42,203
$43,332
215.13%
$23,190
Transportation
$129,403
$158,244
$198,151
$224,784
$245,763
$266,340
$289,188
223.48%
$159,785
Dining and buffet
$28,030
$33,285
$52,146
$50,450
$52,599
$60,886
$62,069
221.44%
$34,039
General
$37,038
$30,456
$53,958
$65,272
$68,931
$67,558
$54,202
146.34%
$17,164
Taxes
$15,727
$21,604
$40,782
$46,139
$57,968
$81,557
$89,164
566.95%
$73,437
Equipment rents
$5,798
$5,194
$8,775
$6,349
$6,268
$4,440
$3,532
60.92%
-$2,266

The large increase in expenses was not due to the absorption of the Northeast Corridor and its maintenance costs, though it did have the largest percentage change and was responsible for some increase in expense. It would be rather mind boggling if track maintenance, which, even with the old tunnels and bridges of the Northeast Corridor, is quite cheap, were to be the the cause of such a large increase. Instead, as the 1977 Annual Report notes: "Besides inflation and the ownership and operation of the Northeast Corridor, the increase in expenses, which led to the higher deficit, resulted from addition of new routes and services, and continuing increases in direct labor costs and the cost of equipment maintenance and overhaul." (Emphasis added).

But perhaps it might be too much to ask for that RailPac cease associating with a liar and promoting his distortions of the truth or that it cease to continue spreading what is, I admit, a quite popular, if grievously mistaken, view of Amtrak's finances. Instead, I offer up a modest proposal to RailPac, that they might actually represent the rail passengers of California: Balance.

For every call to legislative action to support the Sunset Limited, there should be a call to legislative action to support the introduction of the Coachella Valley rail service. Already the Thruway route from Indio to Fullerton has 20% of the Sunset Limited's entire ridership. Similarly, for every other call to action on other long distance trains, there should be a call to action for the Coast Daylight, for the San Joaquin extension to Redding, and expansion of the Capitol Corridor. For every post detailing a trip made on a long distance train outside of California, there ought to be a post detailing connections that can be made within California via the Thruway network. From the standpoint of California riders, both actual and potential, Solvang or Yosemite are far more relevant than is Tucson and it is such destinations that RailPac ought to be highlighting.

5 comments:

  1. Add sleepers, reduce coaches and use existing crew to generate high-yielding fares. Low revenue coach seats are frequently empty. High revenue sleepers are frequently sold out. An LD train with four sleepers and two coaches will generate a lot more revenue than one with two sleepers and four coaches, using the same amount of labor and overhead.

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    1. Except that it simply isn't true that coach seats are frequently empty, unless the sleepers are as well. Coach generates three times as many seat-miles and almost six times the number of passengers than sleepers. Furthermore, Amtrak's long distance trains operate with about one coach attendant per two coach cars and one sleeper attendant for every sleeper car; going from 4C2S to 4S2C results in an increase in crew numbers and expenses.

      The only reason that sleepers are "frequently sold out" is that there's hardly any space in them once you account for all the crew requirements on the long distance trains; crew requirements that are dictated largely by the existence of sleeper cars.

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    2. That should be passenger-miles rather than seat-miles.

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    3. Paul, I have to call you out on a particular piece of misinformation you keep spreading. Stop blaming the sleeping cars for the sins of the dining cars.

      The crew requirements have nothing to do with the sleeper cars. Each sleeper car has 1 attendant. On most of the routes, most times of year, the incremental revenues from the sleeper car (vs. a coach) more than cover the costs of that attendant; in short, adding a sleeper car is profitable (at least before depreciation).

      The crew requirements which are eating up revenue space in the sleeping cars are largely about the dining cars and cafe cars. These are required whether or not you run sleeping cars. People who are travelling more than a certain number of hours want to be able to get food. *Yes, even in coach*. People travelling more than another larger number of hours, where they need to eat multiple meals, get sick of the cheap cafe food and want a sit-down meal. *Yes, even in coach*.

      I was in coach on the Lake Shore Limited last week, and large numbers of the coach passengers (including me) were getting dinner in the dining car.

      On the Lake Shore Limited, 47% of the dining car patronage was from coach (as documented in the PIP) -- and that patronage is limited by the number of table spaces and "seatings" available, which often run out, or are down to a very limited number of time options, before all the coach passengers have been offered reservations. At the time I got my reservation, 5:30 and 8:30 were the only options remaining. There were still nearly two cars full of people for the attendant to get reservations from; some probably lost out and were involuntarily deprived of a meal.

      My conclusion from this: The dining cars are losing revenue due to archaic operating practices and lack of table space. If they could figure out how to turn more tables faster -- and be open for service during more hours -- they would clear a lot more revenue, at about the same cost.

      Amtrak has already figured out some of this, and in the PIPs, Amtrak singled out the large amount of time when the dining car is closed because the employees are doing paperwork rather than serving customers -- but Amtrak hasn't *fixed* any of that. And none of the eastern trains except Auto Train has gotten a "table car" to allow more people to be served at one time.

      Now, I realize that the LSL has among the highest coach patronage of dining cars out of all the long-distance trains. However, lower coach patronage of the dining car on other trains is probably partly due to the dining car patronage being limited by capacity, and the sleeper patrons being given reservations first.

      It is passengers travelling for many hours who demand food service -- whether they are in coach or sleeper. More of passengers travelling for many hours choose to pay for sleepers, of course, than the passengers travelling for few hours. However, if you eliminated the sleepers and all those passengers instead travelled in coach, *they'd still demand food*.

      The food service should be made more efficient. The ultimate way to make it more efficient is to run the trains faster -- so people are on the train for fewer hours, and therefore don't need as many meals on the train. But barring that, there should be quite a lot of ways of improving on the current archaic dining car operations.

      Some of the crew space in the sleeping cars is also due to the *coach attendants*, who have negotiated sleeping space in their contracts. This is, again, a consequence of trains which run for too many hours; I'm not sure exactly how the staffing works on the Palmetto, but I doubt you could get the union to agree to coach attendants without sleeping quarters on a route which runs more hours than that.

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  2. Interesting 1973-1978 numbers. The primary aspect is, obviously, inflation.

    While expenses went up faster than CPI, for Amtrak's expenses you should use PPI, and PPI was way ahead of CPI for the 1973-1975 period. I haven't found a PPI calculator, but it looks to me like PPI-inflating the 1973 expenses to 1978 should get you *roughly* $600,000.

    The skyrocketing cost of equipment maintenance accounts for most of the remainder of the additional expenses. This was probably unavoidable, due to the clapped-out equipment Amtrak had inherited. Also, bizarrely, Amtrak's taxes went way up -- which is not cool.

    The primary *problem* Amtrak had is that revenues were tracking CPI and costs were tracking PPI, which was higher. Ouch. The only solution was to leverage economies of scale.

    By the way, the reason PPI was exceeding CPI was the oil crisis; constrained oil supplies are going to hit PPI, especially construction, much harder than CPI.

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