The article in January 2013 lists “Private Failure, Public Success” as the story of Auto Train. It shows that the private effort was a losing effort, because it lost $10M or so in its first 7 years of operation. Then goes on to say that the Amtrak version is doing so much better. Yes, Amtrak is still running but subsidizes Auto Train to about $6M/year. Plus, it gets capital funds for free from Congress. Since 1/3 of the money Congress gives away these days is debt you could add another $2M/year to the cost of carrying the loss of Auto Train. If you gave me free money, I could easily run the train and lose only $8M/year.
In fact, the only years that Auto Train made money were under private ownership.
The article title should read: “Anything is possible with massive subsidy!”. Let’s not blame Mr.Garfield, he might have made it work were it not for some bad decisions and luck.
Is this sensational journalism, just to make me open the magazine and yell at the articles ?
I read the article to say that Amtrak’s Auto Train makes its expenses and a little more and does not draw from the Amtrak system’s money. But politics can read anything into Amtrak it wants.
On page 33 it says that ticket revenue is $52M and that is 88% of direct costs. That leaves another 12% unrecovered or about $6M/year. Auto Train does not cover its expenses. If private, it would be bankrupt. But it is unfair to call it “Public Success”.
Avid Amtrak supporter and rider. Let’s not lie about how much this costs and let’s have TRAINS at least get their facts straight. I don’t see any way out of our mobility crisis other than mass transit and rail. We have to understand what it costs and pay the price. I just hate when a writer accuses “private” enterprise of being unable to make money. Of course they cannot absorb massive losses, but that doesn’t mean that they bungled it. You cannot socialize everything, eventually someone has to make money to pay the taxes.
This is a variant on the thread entitled “Innacurate Newspaper Stories about Railroads” but is much worse in that we should expect TRAINS magazine or all sources to get the facts right.
The false headline sadly reflects the pro ATK bias of the editor. I let my subscription lapse years ago due to the excess material about, and fawning tone about, ATK that the current editor injects into the magazine. God I miss Morgan!
One would assume that if you are pro-Amtrak you would want all sorts of public/private cooperation just to keep the trains running. I guess this article is sub titled: “If you thought Amtrak was wasteful, Just look at this.”
I believe that all journalists should be held to the highest standard of accuracy. They don’t have to be objective (because there is no such thing). But at least if they start throwing around numbers, they should be facts.
What about the enormous amount we pay in taxes for our mid east wars to keep their oil flowing? And what about the lives lost for the same purpose? But for the fact we are an automobile (not to mention SUV) dependent society we wouldn’t need these expenditures of money and lives.
C’mon, you Amtrak nitpickers. It’s perfectly possible to be a private failure and a public success, given the magic ingredient of a public subsidy. I’d say 88-percent farebox recovery of direct costs is a huge success, as government programs go. Medicare, Medicaid and Social Security should do so well.
I, for one, like to see taxpayer dollars buying something besides subsistence living for selected parts of the population. If we truly can’t afford a few amenities like Auto Train (and Amtrak), then we should pack it in.
It is the same problem that AMTRAK has for all its long distance trains. Lack of equipment. !! ! At this time there is no forseeable year in the future when enough additional bi-level equipment will be built enabling displacement of some superliners to auto train. also additional auto carriers would be needed.
demand appears to be there with a little marketing as there is almost none needed at present ?
Of course demand is there. The subsidy makes it cheap to travel this way. Wouldn’t it be nice if when you filled up your gas tank, a nice government official showed up and handed you a $20 bill to help you pay the charge?
I think this subsidy is necessary to keep the passenger rail option open. My only objection is to call it a “private failure” when an entrepreneur attempts to create a business that has to compete against heavily subsidized alternatives.
Rail is the only transportation system that pays its way. Any private effort should be praised and admired.
Amtrak is a commercial enterprise. It is not a social welfare program. It competes against private airlines, bus companies, etc. It also competes against personal vehicles, which are the preferred mode of transport for most Americans. Comparing Amtrak to Medicare, Medicaid, and Social Security is mixing apples and oranges.
It is not about nitpicking. It is about directing scarce resources (dollars) to points where there is a real need and a potential payoff. For passenger trains in the U.S. this is relatively short, high density corridors where the cost of expanding the highways and airways is prohibitive.
Amtrak has lost more than $28 billion since it began operations in May 1971. Based on my analysis of the FY10 numbers, assuming the same ratios of total loss; approximately 80 per cent or $22.4 billion can be attributed to the long distance trains. This is for once a day trains (Silver Service being the one exception) that stop in many major markets in the middle of the night. Had these monies been directed to corridors where they have the potential for a substantial payoff, the nation would be better off.
Amtrak’s Auto Train lost $34.9 million in FY12 or 15.4 cents per passenger mile before depreciation, interest and other charges. These items probably add another $3 to $5 million to the loss. Whilst its losses per passenger mile were below the averages for the long distance trains, this is like saying that it is not as ugly as the other contestants in the ugly duckling contest. This information can be found on Page C-1 of the September 2012 Monthly Performance Report.
With a bit of a stretch one can argue that the long distance trains meet a valid social need, although I don’t buy it. A vacation train designed to move people and their vehicles from the Northeast to Florida is a public social need?
Trains speaks for an advocacy group. It spins many of its articles to garner support from its readers. If the editors advocated abolishing the long distance trains or privatizing Amtrak, what do you think would happen to the readership?
America’s airlines, bus companies, freight railroads, barge lines, etc. cover all their costs or go out of business. They are all stockholder enterprises.
One can argue that the airlines, bus companies, barge lines, etc. don’t pay their fair share of the infrastructure that they use. But one should also acknowledge that the freight railroads have received substantial government support. Had the federal government not bailed out the Penn Central and been instrumental in forming Conrail, there would be no freight rail system in the Northeast. Moreover, especially during the past 30 years, the nation’s freight railroads have received state and federal grants to improve their infrastructure. Norfolk Southern received substantial AARA funds to daylight or increase the hight of some of its tunnels in the Virginias.
I don’t see any reason for any transportation subsidies, with the exception of low cost government loans for projects that have a high probability of paying the interest and principal on them.
I agree that calling a public commercial activity that lost close to $40 million in FY12 a success is pandering.
Applying the profit/loss metric indiscriminately to all activities is frequently an inappropriate way of forming a judgement about its value. One could just as easily say that calling a public [Amtrak is not truly commercial ] activity that lost money a failure is pandering to another audience.
DPM was a great editor but also a great enthusiast about passenger rail worldwide, pre-ATK and on into the Amtrak era. The title of the magazine was and is, after all, notPrivate Trains of the United States. Now the only passenger trains that many of the contributors to threads in the Passenger Forum like ceased running 40-50 years ago. As for the fantastic new, advanced passenger services outside the US, indifference and even scorn.
But allthis ‘discussion’ still begs the question that was brought up initially – would a private version of Auto-Train, compensated for its losses bythe Government, cost the taxpayers much less than the present Amtrak service does? I for one would like to see a reasoned analysis of this, net of all cost, with all numbers adjusted to a common baseline (say, December 2012 dollars) and using modern equipment and maintenance costs. A certain amount of political opinion is probably unavoidable in this discussion… but I think it’s important to establish a common frame of reference, as objective as possible, and refrain from any of the flavors of ‘lying with statistics’ (in Huff’s sense). Be interesting to see what the capital and M&E cost of a ‘new’ private Auto-Train might be – perhaps starting with the Greenbrier Express consist if that project failsto thrive…
There is nothing indiscriminate about Amtrak’s numbers. Unless of course you believe that Amtrak, in the face of its external auditors, is cooking the books.
If the users will not pay for the service, someone else has to pay for it. And no this is not a political statement. It is an accounting, finance, and economic fact. Equally important, to call it a public success ignores the economics.
Moreover, a read of its annual report, as well as the accompanying financial statements, indicates that it is a commercial activity. In fact, it is a public stock company, although it has never been able to sell any of its stock in the open market because the market won’t support it.
Amtrak is the moniker for the National Railroad Passenger Corporation. The federal government owns all of the preferred shares ($10,939,669 thousand as of the end of FY11). It has also issued $93,857 thousand of common stock. The common stock is held by the railroads. It has every hallmark of a commercial enterprise, albeit a failed one.