Passenger Trains > Food Service Break-Even

Since Mr. Boardman wants to achieve break-even status on food and beverage service (F&B), I have a general question in regards to this.

Let's set aside from the discussion the fact that Amtrak's inventory control system on F&B is antiquated - on long and short distance trains - and let's also not consider the fact that employees need to shut down the diner or cafe car to perform "inventory control" and other accounting procedures related to F&B when arriving into a certain destination. We've probably all been on trains when you have the "last call."

So here goes my question, and this is not meant to be a trick question.

If you have the full service long distance dining crew (or cafe LSA) ONBOARD during a meal time, overall, is it perhaps "cheaper" in the long run for Amtrak not to offer a meal service - be it breakfast, lunch, or dinner?

And let's say that Amtrak has enough customers where it could fill the diner 75% full. So Amtrak has the staff already onboard, has the food, has a captive audience. Do the economics favor not providing meal service? I can think of some pros and cons as well as logistics, but I'd say ignore that for the time being. Obviously this *may* apply to a long distance train scenario better......but curious.....

Somehow Amtrak has to bring in incremental revenue from its F&B service or totally adjust its approach to staffing. Increase your revenues, increase your gross profit (margins) or decrease your costs.....

Perhaps I just created a second question/debate but really want to focus on the first.

I don't think I understand your proposition.

If you have a dining car crew or LSA on a train, they are getting paid, whether they work or not. Yes, they get paid until the train arrives at the end point, plus a few extra minutes for the employee-in-charge to give over the inventory and remit their cash receipts and give up their paperwork. They don't get paid when it is an overnight train and they the eight hour overnight rest period.

So, if they are on the train, getting paid, whatever revenue they can earn, and service they can provide is their reason for being on a train.

As a retired dining car steward, we served on #41 to Gary, IN, which gave us the best possible revenue figures.

MEKoch Wrote:
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> I don't think I understand your proposition.
>
> If you have a dining car crew or LSA on a train,
> they are getting paid, whether they work or not.
> Yes, they get paid until the train arrives at the
> end point, plus a few extra minutes for the
> employee-in-charge to give over the inventory and
> remit their cash receipts and give up their
> paperwork. They don't get paid when it is an
> overnight train and they the eight hour overnight
> rest period.
>
> So, if they are on the train, getting paid,
> whatever revenue they can earn, and service they
> can provide is their reason for being on a train.
>
>
> As a retired dining car steward, we served on #41
> to Gary, IN, which gave us the best possible
> revenue figures.

So then is it economical for Amtrak to provide breakfast aboard the CA Zephyr (train 6) when it leaves the Bay Area if they can fill the diner 75%? Conversely, why only have just ONE call for some meals aboard long distance trains when arrival is THREE HOURS away after everyone has completed eating? There are other examples I could cite, but I know some would create some logistical issues (dinner on train 48 coming into NYC) - however they seem to be able to do it on the Crescent when it's arrival is also after the 6 pm hour......



Edited 1 time(s). Last edit at 10/19/14 12:54 by jp1822.

What are your credentials that you can say that F&B service
is antiquated?...

RD10747 Wrote:
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> What are your credentials that you can say that
> F&B service
> is antiquated?...

I think Amtrak would even welcome something more automated, and they have said as much in some reports that have come out. Seeing the process it's truly a laborious one. I've also worked in the food business.

In a typical restaurant, from McDonalds to the $200/plate variety, the employees get paid only for the time they are working, then they go home. So, in addition to paying the staff and food, typical overhead expenses include rent/mortgage/taxes, maintenance, utilities (water/sewer/electric/phone), and accouting, legal and advertising expenses. Franchise fees apply to most fast food restaurants as well.

But on Amtrak, the staff is paid for longer hours, and, they have to be 'housed' overnight as well. So, a portion of the cost of operating a sleeper car has to be added in to the dining car charges. And as anyone who has maintained a railroad car will attest, it is definitely not cheap! While restaurants have their supplies delivered to large refrigerators and freezers in the back room, Amtrak has to transport one or more days supplies from storage to the dining car, and has to transport the unused food back to the refrigerators and freezers and the end of a run. More costs attributable solely to dining car operations.

And for whatever reason, it has only been within the last year or so that a cash register has been in use in lounge cars, as unbelievable as that may seem. But even more incredible to me, at least, is the complete lack of any bar code scanning, eg, automated Point Of Sale (POS) equipment. As a result, the determination of what was sold is based only on the remaining inventory at the end of a run, and the corresponding amount in the cash bag. Instead, the service person has to key in each item and amount, slowing down the process compared to a simple bar code scanner, which would provide instant inventory information as well.

Yes, compared to the rest of the food and beverage industry that isn't on wheels, Amtraks' dining and lounge car services are 'archaic'. But, they also have perhaps 30-100% more overhead expenses to deal with that does stationary facilities. So, could it be run at a profit? Unless they charge considerably more for food and drink than what is charged at major league sports stadiums, I highly doubt they could be profitable.



Edited 1 time(s). Last edit at 10/19/14 13:26 by BRAtkinson.

So with crew aboard.....shouldn't Amtrak F&B staff look for any and all ways to maximize onboard meal service?

I know removing onboard staff was likely no incentive, but should Amtrak look to make some meal times longer (if feasible) and see what meals could be added?

I gave two examples - westbound train 6 used to offer breakfast leaving Emeryville. Typically it was 50 to 75% full. On the Lake Shore Limited, many people bail out at the Albany train station to pick up what will become dinner along the Hudson. Amtrak does offer a "brunch" on the Capitol Limited, which I thought was genius! Typically it was just breakfast or a breakfast and then abbreviated lunch. I think the "brunch" has worked well. Train 5 into The Bay Area has been offering ONE sitting for lunch, when the train is hours from final destination. Instead of starting lunch at 12 noon how about 11:00 am if it is going to be early over the Sierra Nevada Mtns. The ONE sitting often goes to a wait list, but that could be a little inconvenient and misleading. Again, I am sure there are other examples.

This is such a political hot potato. Studies the Micas et al cite showing the losses also show that without food service the loss would be even greater, owing to people opting not to ride the trains.

Diners, since their inception, have never made money. I think it's arguable that neither have railroad lunchrooms. Even the vaunted Fred Harvey company would not have made money had not the Santa Fe provided the land, buildings, and free transportation for the employees and provisions.

Our politicians need to get over the notion that the food service, or for that matter, Amtrak, needs to break even.

Let's see what happens to our economy if all the federal highways suddenly became toll roads, with tolls gauged to make them break even.

Let's see what happens to our economy if airlines were forced to charge fares that fully reflected the costs of the federal grants and subsidies they take advantage of.

calzephyr48 Wrote:
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> This is such a political hot potato. Studies the
> Micas et al cite showing the losses also show that
> without food service the loss would be even
> greater, owing to people opting not to ride the
> trains.
>
> Diners, since their inception, have never made
> money. I think it's arguable that neither have
> railroad lunchrooms. Even the vaunted Fred Harvey
> company would not have made money had not the
> Santa Fe provided the land, buildings, and free
> transportation for the employees and provisions.
>
> Our politicians need to get over the notion that
> the food service, or for that matter, Amtrak,
> needs to break even.
>
> Let's see what happens to our economy if all the
> federal highways suddenly became toll roads, with
> tolls gauged to make them break even.
>
> Let's see what happens to our economy if airlines
> were forced to charge fares that fully reflected
> the costs of the federal grants and subsidies they
> take advantage of.

For the record, I completely agree that this "break-even" goal for food and beverage service is ridiculous and that this will never be truly accomplished if the right accounting guidelines are followed etc. for example, Amtrak loves to say Acela Express is profitable, but put that in better context and it is not when fully allocated all it's costs. They even say they come close for the "Auto Train." The later might be a little more believable/true. Just a matter of how you slice and dice it! And I have never read that ANY passenger rail service made a profit on food and beverage service alone....it's a convenience to entice the rider to travel - at least in my opinion. This whole thing has been a political football and nightmare - plastic ware to china to the latest disposable whatever.

But unfortunately Boardman made this ridiculous goal, and now the traveling public are stuck with a myriad of crazy cutbacks (as I will call them) and rules.

Still - is there opportunity and why not offer additional meals if staff is aboard and it makes sense.....

You make it sound like Boardman arbitrarily decided to set a "break even" goal for Amtrak. He's simply reacting to the endless carping, attacks and B.S. from Mica. There are many in Congress that want to see Amtrak killed/die. Imposing impossible goals is part of that process, drive the customers away and there's no justification.

Well the bottom line would be better if the price of meals was included in the ticket. Everyone would get basic meals and be charged, used or not. Everyone could see how rediculas the price of a meal would have to be to break even,
RB

up833 Wrote:
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> Well the bottom line would be better if the price
> of meals was included in the ticket. Everyone
> would get basic meals and be charged, used or not.
> Everyone could see how rediculas the price of a
> meal would have to be to break even,
> RB

That's how some air service is handled. The price of the meal (and alcohol on international flights) is included in your ticket. On many domestic flights, the cost has been unbundled, so if you want a sandwich or food box, you pay for it. If you don't want it, you don't pay for it. And, cash is often not accepted. You pay by credit card or pre-purchased drink tickets. No cash at all.

ETA: It seems Amtrak's commissary system and contractors can't spread their costs over enough trains / mouths. The cost of having multiple prep facilities for a handful of trains is a very expensive way to do business.

Most airlines buy their meal packages from the same suppliers at each hub. I don't know the current numbers, but the cost used to be about $3 per meal delivered to the plane, and less than a buck in prep, distribution, and disposal. Figure $5 per person.



Edited 1 time(s). Last edit at 10/20/14 15:12 by Lackawanna484.