Passenger Trains > Amtrak finances

https://www.trains.com/trn/news-reviews/news-wire/amtrak-notches-ridership-and-revenue-record-for-fiscal-2024-analysis/

With federal funding tight next year Trains talks about advocacy needed for LD trains.

"The exact method in which expenses are derived and allocated is a murky area; members of the States for Passenger Rail Coalition continue to press Amtrak for clarity. There are no comparable advocates for long-distance trains to examine line items in accounting, including corporate overhead, that impact expenses that determine operating “earnings” or “loss.”"



Edited 1 time(s). Last edit at 11/25/24 04:17 by Flyer92122.

My hope for long distance trains lies in the fact  that they run through almost
every State -- and those States have a lot of Republican Congressmen, and Governors,
who will push back on the cost cutters---like Elon Musk--who is sure to call Amtrak--
"Wasteful Government Spending".

Allocation of shared expenses is a problem for many companies. Do you allocate shared expenses like new maintenance facilities or car washers by # of train routes served by the shop? Or passenger count? Or miles traveled by trains? Or a combination of the several?

Overhead of corporate expenses is even more difficult. Law Department? Government Relations? Mr Gardner's salary and bonus?

Auto-Train's direct expenses are a lot cleaner. Crews are assigned, the terminals serve only those two trains, washers serve only one facility. Revenue from SunRail work is clearly defined.

That's been a bone of contention for decades.

Possibly the most outrageous was the 'report' of snow removal expenses being allocated and prorated in such a method that it was shown as expense on Florida stations.

In my research, the only 'clean' revenue-expense I've ever seen was on the Downeaster.  Only one train, no through connections, no other stations on the route, pretty much dedicated crews and expenses, there's far fewer ways to get creative in that situation.   And when I looked at it, it was pretty impressive at the operating level, before corporate cost distribution.

As a trained accountant, I learned early and often how to 'work with management' to do cost allocations to pretty much promote or sink whatever was the project of the moment.  I've had multiple cost accounting jobs, none with railroads, but the impact is the same.  Lots of latitude, and non-accountants are just baffled, often deliberately.

And I became a marked man when I 'discovered' that our division was being allocated ALL the corporate vehicle expenses, when we didn't have any vehicles to use.   They wanted to prove our division was loosing money, that was one sure way to do it.   I ended up having to resign.

It's not just a problem with Amtrak.  'back in the day' in the final USRA 1974 system plan, station freight revenue was allocated non-directionally; i.e. any given station was assumed to be not directionally sensitive to interchanges.   So if all your traffic was headed west on a line segment to interchange with railroad A, and the line segment station was assigned to a different direction so that it was preserved east to railroad B, connection A (with no other traffic than overhead) got lost and marked for death.   Western connection abandoned, eastern preserved, traffic evaporated overnight to trucks.   



Edited 1 time(s). Last edit at 11/25/24 06:47 by randgust.

Are there any cost allocation practices used by private railroads that would provide a reasonable yardstick for Amtrak?  I assume Warren Buffett has an interest in knowing how some particular service affects the bottom line for BNSF.  

I just looked at Amtrak’s audited financials and they do not report segments. I think they should by at least NEC, LD, State Supported.

While internally reported management accounting can be quite arbitrary, audited statements are held to more rigorous accounting standards. Their auditors E&Y would then have to look at the allocations being used.

Right now E&Y has no basis to look at management accounting.

Amtrak does report profitability to the FRA by route on an avoidable and fully allocated basis. Probably similar to the old ICC basis. Say what you will about regulators one thing I do know from personal experience they don’t tolerate monkey business. If they find out about it. I suppose that might be the only question here.

Posted from iPhone

The Northern New England Rail Passenger Authority -- the three-state Downeaster route - takes their segement fairly seriously.

Remember south station doesn't connect to North Station, there are two shared stations with the T commuter trains, then you're on CSX/Guilford.  Equipment has to be ferried, crews don't switch, no other Amtrak trains, and there is no through ticketing.   So it's as clean a ledger as you'll find on a state subsidized route.   

And they publish their financials.

https://www.maine.gov/mdot/transit/docs/lcp/2024/Northern%20New%20England%20Passenger%20Rail%20Authority.pdf

 

randgust Wrote:
-------------------------------------------------------
> The Northern New England Rail Passenger Authority
> -- the three-state Downeaster route - takes their
> segement fairly seriously.
>
> Remember south station doesn't connect to North
> Station, there are two shared stations with the T
> commuter trains, then you're on CSX/Guilford. 
> Equipment has to be ferried, crews don't switch,
> no other Amtrak trains, and there is no through
> ticketing.   So it's as clean a ledger as you'll
> find on a state subsidized route.   
>
> And they publish their financials.
>
> https://www.maine.gov/mdot/transit/docs/lcp/2024/N
> orthern%20New%20England%20Passenger%20Rail%20Autho
> rity.pdf
>
>  

That’s a great first step. I wonder if other states do that?

Personally I think all trains should be state supported to some extent. Even long distance ones and the NEC. States should provide all station costs. No support? Then no stops in the state.

That’s what TEXRail did. No stops in towns that didn’t support it. Gives locals total control over what’s important. Makes for accountability.

Posted from iPhone

randgust Wrote:
-------------------------------------------------------
> The Northern New England Rail Passenger Authority
> -- the three-state Downeaster route - takes their
> segement fairly seriously.
>
> Remember south station doesn't connect to North
> Station, there are two shared stations with the T
> commuter trains, then you're on CSX/Guilford. 
> Equipment has to be ferried, crews don't switch,
> no other Amtrak trains, and there is no through
> ticketing.   So it's as clean a ledger as you'll
> find on a state subsidized route.   
>
> And they publish their financials.
>
> https://www.maine.gov/mdot/transit/docs/lcp/2024/N
> orthern%20New%20England%20Passenger%20Rail%20Autho
> rity.pdf
>
>  

That’s a great first step. I wonder if other states do that?

Personally I think all trains should be state supported to some extent. Even long distance ones and the NEC. States should provide all station costs. No support? Then no stops in the state.

That’s what TEXRail did. No stops in towns that didn’t support it. Gives locals total control over what’s important in their area. Makes for accountability.

Posted from iPhone