European HSR and mail carrying

[lattasnip9]

I hate to ask this question within this forum because I might get torn apart but I couldn’t find any other place to ask it. But I seem to recall that before the federal government stripped the private railroads of their contract to carry mail, the revenues from carrying male did help many trains to keep in the black ink.

I also hear that many, if not all, of the HS railways in Europe are unable to have a profitable operating ratio, which is what keeps them, and the lines they run on, dependent on government subsidy. This is part of the major argument for saying that all public transportation is subsidized. But do these trains, and which of them, carry mail? Or is this type of service reserved for air or the road?

and please try keep your posts on topic- I won’t be happy when the subject turns to anything related to steam generators or stuff like that.

[Deggesty]

But I seem to recall that before the federal government stripped the private railroads of their contract to carry mail, the revenues from carrying male did help many trains to keep in the black ink.

Yes, it is true. There were many trains that carried far more revenue mail than revenue pasengers, and when the Post Office began using other forms of transport, the railroads were quick to petition for abandonment of those schedules. You can compare the passenger schedules of the early sixities with those of the late sixties and see that far fewer passenger trains were operated in the later years. However, I read, in the sixties, that there were some mail-carrying schedules that lost money for the railroads, and the railroads were subsidizing the Post Office. I cannot name any of these, though.

Johnny

[beaulieu]

The French, German, and Spanish, Intercity passenger businesses run a positive operating ratio. In all three countries regional services are operated by separate subsidiaries, so no cross subsidization. The only uncertainty is the pension fund, and how you apportion it between the divisions. Conversely it is the freight subsidiaries that have a hard time showing a profit in Europe. In France they operate La Poste TGVs, I believe there are two and a half, postal TGVs. The trainsets can be split in half for maintenance, so the extra half set allows two sets to cover the service.

[CSSHEGEWISCH]

Hauling the mail and a restrictive regulatory climate kept a lot of passenger schedules on the timetable that no longer served “the public convenience and necessity”. The relatively small financial loss incurred by continuing to run the train was considered to be easier to absorb compared the political and public relations disaster incurred by attempting to discontinue the train.

The demise of the RPO and HYPO were brought about in part by the increasing mechanization of mail sorting (The machinery is too large to be mobile). The Post Office paid a better rate for hauling an RPO than for hauling bulk storage mail so when the RPO was dropped, a tolerable loss became worse and since bulk storage mail could be moved on freight schedules, discontinuing the passenger schedule was no longer an issue for the Post Office.

[kbathgate]

Some mail is still carried by rail in Britain, and although the UK does not have any genuine domestic HSR lines the principal main lines are good for at least 100mph, which is the maximum speed of the mail trains.

The carriage of mail by rail in the UK has been in slow decline for some time – British Rail lost the Royal Mail Parcels contract in the 1980s, and the once important newspaper traffic died off at the same time due to new printing technology. The Royal Mail Letters business was still sufficiently buoyant in the 1990s to justify building new class 325 mail EMUs and class 67 diesel locomotives for TPO (travelling post office) work, but unfortunately the Royal Mail abandoned rail entirely in early 2004 due to cost cutting. They reintroduced mail trains on a limited scale at the end of the year, and the class 325s are back at work carrying letters on the East Coast and West Coast Main Lines, but they are not true TPOs in that no sorting takes place on board.

Whereas the Royal Mail traffic usually travelled on its own trains, British Rail used to have its own parcels delivery business called ‘Red Star Parcels’ which used ordinary passenger trains. However, it was a victim of the political vandalism of Britain’s railways in the 1990s – the fragmentation of the rail business and the indifference of the new privatised train operating companies to a ‘non-core’ a

[Anonymous]

The French, German, and Spanish, Intercity passenger businesses run a positive operating ratio. In all three countries regional services are operated by separate subsidiaries, so no cross subsidization. The only uncertainty is the pension fund, and how you apportion it between the divisions. Conversely it is the freight subsidiaries that have a hard time showing a profit in Europe. In France they operate La Poste TGVs, I believe there are two and a half, postal TGVs. The trainsets can be split in half for maintenance, so the extra half set allows two sets to cover the service.

Yep, in France the SNFC (total system) covers its operating expenses.

I could only find the company’s consolidate financial statements, which include a variety of transport activities, including trucking, airlines, etc. So I would be interested to know how you determined that the German, French, and Spanish intercity passenger railways, especially the TGV or other high speed services, cover their operating costs.

In France the trains, including the TGV, are operated by the SNFC (Société Nationale des Chemins de Fer Français). In 1997 the French Government set up another state company, the RFF (Réseau Ferré de France), to own and manage the railways.

From the outset the RFF assumed responsibility for the debt that had been on the operating company’s books. It amounted to FRF 134.2 billion. Had the debt remained on SNFC’s books, its financial picture would have been bleak as Amtrak’s.

RFF is subsidised by the French government to pay the interest on debt previously borne by the SNCF, pay-off the debt, and absorb the massive depreciation associated with the system.

The creation of the RFF structure was dismissed by political opponents and some economists as a move to li

[beaulieu]

[quote user=“Sam1”]

The French, German, and Spanish, Intercity passenger businesses run a positive operating ratio. In all three countries regional services are operated by separate subsidiaries, so no cross subsidization. The only uncertainty is the pension fund, and how you apportion it between the divisions. Conversely it is the freight subsidiaries that have a hard time showing a profit in Europe. In France they operate La Poste TGVs, I believe there are two and a half, postal TGVs. The trainsets can be split in half for maintenance, so the extra half set allows two sets to cover the service.

Yep, in France the SNFC (total system) covers its operating expenses.

I could only find the company’s consolidate financial statements, which include a variety of transport activities, including trucking, airlines, etc. So I would be interested to know how you determined that the German, French, and Spanish intercity passenger railways, especially the TGV or other high speed services, cover their operating costs.

In France the trains, including the TGV, are operated by the SNFC (Société Nationale des Chemins de Fer Français). In 1997 the French Government set up another state company, the RFF (Réseau Ferré de France), to own and manage the railways.

From the outset the RFF assumed responsibility for the debt that had been on the operating company’s books. It amounted to FRF 134.2 billion. Had the debt remained on SNFC’s books, its financial picture would have been bleak as Amtrak’s.

RFF is subsidised by the French government to pay the interest on debt previously borne by the SNCF, pay-off the debt, and absorb the massive depreciation associated with the system.

The creation of the RFF structure was dismissed by political opponents and some economists as a move to liberalise French railways at the taxpayer’s expense. Another criticism is that RFF’

[Anonymous]

[quote user=“beaulieu”]

[quote user=“Sam1”]

The French, German, and Spanish, Intercity passenger businesses run a positive operating ratio. In all three countries regional services are operated by separate subsidiaries, so no cross subsidization. The only uncertainty is the pension fund, and how you apportion it between the divisions. Conversely it is the freight subsidiaries that have a hard time showing a profit in Europe. In France they operate La Poste TGVs, I believe there are two and a half, postal TGVs. The trainsets can be split in half for maintenance, so the extra half set allows two sets to cover the service.

Yep, in France the SNFC (total system) covers its operating expenses.

I could only find the company’s consolidate financial statements, which include a variety of transport activities, including trucking, airlines, etc. So I would be interested to know how you determined that the German, French, and Spanish intercity passenger railways, especially the TGV or other high speed services, cover their operating costs.

In France the trains, including the TGV, are operated by the SNFC (Société Nationale des Chemins de Fer Français). In 1997 the French Government set up another state company, the RFF (Réseau Ferré de France), to own and manage the railways.

From the outset the RFF assumed responsibility for the debt that had been on the operating company’s books. It amounted to FRF 134.2 billion. Had the debt remained on SNFC’s books, its financial picture would have been bleak as Amtrak’s.

RFF is subsidised by the French government to pay the interest on debt previously borne by the SNCF, pay-off the debt, and absorb the massive depreciation associated with the system.

The creation of the RFF structure was dismissed by political opponents and some economists as a move to liberalise French railways at the tax

[passengerfan]

I just have one question how much of the .42 cent cost of postage goes to the air carrier?

Al - in - Stockton

[beaulieu]

Thanks for the references.

How do you know that RFF has some good people? Have you worked with them?

Two Gentlemen I dealt with as a subcontractor to SNECMA (GE/French aircraft engine JV) went to RFF. I have since lost touch with them, but I was favorably impressed with them compared to many of the French managers I had to deal with. As with many French State-owned Enterprises, top executives move around from company to company, as needed by the French Government, some are good, others are just well-connected. The current head of Airbus, Mr. Louis Gallois, was the CEO of SNCF. He seemed to do a good job reforming SNCF, but is struggling at Airbus. He was succeeded at SNCF by Anne-Marie Idrac, from RATP, the Paris Transit Agency, and now by Guillaume Pepys, a career railroader. Hopefully Mr. Pepys can get the Freight side of SNCF, in order. As you can see if you study the reports, freight is the biggest drag on SNCF. Within SNCF Fret, the political power of the Unions, and the archaic work rules are the source of the problems. Not that SNCF management hasn’t been a problem too.

[henry6]

Yes, mail was a main reason for the continuation of many passenger train service in the late 50’s into the 60’s. And, yes, as soon as the mail contract ran out and was not renewed, the train was cut. And mind you we are talking first class mail and not bulk mail. The zip code system with centeralized handling centers replaced the individual post offices, the RPO’s and the HYPO’s which sorted mail enroute. The new system, utilizing trucks from local post offices to the sorting centers and then back are more efficient and handle mail far better and cheaper than the old system of sorting enroute. So we are told. But…

Today a letter posted by 5pm someplace goes from the box or post office to a sorting center in Newark or Paterson then bulk dispatched to another central sorting center. Let’s say the letter is going to Ithaca, NY from NJ. The letter leaves Paterson goes to Syracuse via New York City and arrives in Ithaca after two to three days in transit. Dial back to 1961, for instance, when I was at Ithaca College and my mother would post a letter in the home mailbox in Denville, NJ,; the local carrier would take to the Post Office which pouched it for EL Train #7 and was place aboard a local train Denville to Dover and transferred to #7 by 9PM…sorted for Ithaca aboard the train it was handed off to the HYPO at Bingahmton by midnight, delivered to Ithaca Post Office by 2AM, and in my mailbox at the Ithaca College by 8AM. After the zip codes were introduced, the time stretched out to two to three days.a

So, my point is: what are we missing here? For both Amtrak and the United States Postal System? Perhaps returning to an enroute sorting instead of stationary sorting centers could indeedd prove more effecient while generating revenue? It could increase the value of Amtrak services or even subsidize lower ridership routes. The Postal Service could speed up some

[Anonymous]

Whether SNCF’s Passengers France Europe (PFE), which includes the TGV, turned an operating profit in 2007, as defined in the United States, which is important for comparative purposes, is questionable.

The SNCF 2007 Annual Report shows PFE external revenue of €5,786 million and internal revenue of €1,105 million. It shows a net operating profit of €891 and an operating profit of €900 million. The segment report does not show whether the external revenues include only ticket revenues or whether other revenues are mixed with the ticket revenues. Other revenues would not normally be classified as operating revenues.

The segment report shows depreciation and amortization, less the net charge to provisions and impairment losses, as well as gross investment less grants received. It does not provide a breakdown of the variable expenses, fix expenses, other charges, and extra-ordinary items by segment.

During the year SNCF received €1,190 from the French State and local authorities. They are classified as operating receivables, which probably means that operations gave rise to them, and they were probably credited to operating revenues. How much was credited to each segment is unknown. SNCF also received other state subsidies that appear to have been credited to operating revenues.

Whether some or all of the €1,190 was credited to PFE operating revenues is not shown. However, the €1,105 of internal revenues that is shown without description is €214 million more than the current operating profit. In other words, without these internal revenues, there would have been no current operating profit or operating profit as defined by SNCF.

SNCF had combined current operating profit of €1,547 and an operating profit of €1,644. Of these amounts, assuming the French State and local authorities operating rece

[beaulieu]

Whether SNCF’s Passengers France Europe (PFE), which includes the TGV, turned an operating profit in 2007, as defined in the United States, which is important for comparative purposes, is questionable.

The SNCF 2007 Annual Report shows PFE external revenue of €5,786 million and internal revenue of €1,105 million. It shows a net operating profit of €891 and an operating profit of €900 million. The segment report does not show whether the external revenues include only ticket revenues or whether other revenues are mixed with the ticket revenues. Other revenues would not normally be classified as operating revenues.

Internal Revenues is where your ticket sales for TGV, and Corail Teoz trains are. External Revenue, is where revenue from Eurostar, Lyria, Thalys, the German JV (can’t remember the name), Rail Europe, voyages-sncf.com, sales in the station first class lounges, and the biggy, rental of spaces in the main stations. Both categories include sales in the on train gift shops and restaraunt cars, as appropriate. Remember the European operators miss nothing for revenue.

The segment report shows depreciation and amortization, less the net charge to provisions and impairment losses, as well as gross investment less grants received. It does not provide a breakdown of the variable expenses, fix expenses, other charges, and extra-ordinary items by segment.

During the year SNCF received €1,190 from the French State and local authorities. They are classified as operating receivables, which probably means that operations gave rise to them, and they were probably credited to operating revenues. How much was credited to each segment is unknown. SNCF also received other state subsidies that appear to have been credited to operating revenues.

The Federal and provincial operating subsidies are to the Local Transport subsidiary which operates the commuter t

[carnej1]

So, my point is: what are we missing here? For both Amtrak and the United States Postal System? Perhaps returning to an enroute sorting instead of stationary sorting centers could indeedd prove more effecient while generating revenue? It could increase the value of Amtrak services or even subsidize lower ridership routes. The Postal Service could speed up some delivery schedules while eliminating or downsizing some costly distribution and sorting centers. I have not done the scrutenizing of dollers and cents needed to say this is a viable idea, but do advocate a look see at those numbers. If it is anyway possible, it could be a good program to bring down the costs of the Postal Service while supporting the cost of an Amtrak passenger train. And while I don’t believe the United States Postal Service sparks the same fears and respect that the United States Post Office did, I would believe that frieght railroads might also be more inclined to “move the mail” because of the sensitivity of the commodity.

Many of the major stops for RPOs were in urban areas that by the 1960’s had highly automated main post office hubs which sort enormous amounts of mail with relatively low staffing levels. So if you’re talking about pulling the plug on automated sorting and replacing it with well paid USPS labor, where would the savings be?

UPS and Fed Ex don’t sort en route…

[cogloadreturns]

The Boss of SNCF is on the record over here in the last RAIL magazine as stationg that the TGV margin is around 18%. No I dont know how that figure came about so I cannot comment beyond.

However - Eurostar is picking up the numbers nicely to France/ Belgium. It has thrashed the opposition in the London/ Paris Gare du Nord market and dominates to Brussels as well. The High Speed line in its design and construction also contributed to the design pool in terms of brain power in the country; the challenge is now to find them another line to build. Plus it just adds an intangible ummmphh; the pride in a proper railway…difficult to explain really.

A practical impact maybe as follows. Instead of taking the plane; take the Eurostar to Paris and then the overnight train to Venice for a summer of sun, sand, sea and…pasta eating (now where is Mrs Cogload…[:P] )

[Anonymous]

The Boss of SNCF is on the record over here in the last RAIL magazine as stationg that the TGV margin is around 18%. No I dont know how that figure came about so I cannot comment beyond.

The SNCF Group Annual Report does not contain sufficient information to determine if the high speed rail segment covers its operating costs. Although there is proper transparency with respect to revenue and cost detail for the group as a whole, the segment information is sketchy.

Gross profit and current operating profit are defined; gross profit consists of revenue and income less charges related directly to operations. Current operating profit includes mostly non-cash items. SNCF’s operating profits are determined similarly to those for U.S. companies.

External and internal revenues are not defined in the annual report. Thus, it is impossible for a reader to determine what they consist of. If the external and the internal revenues include first class lounge and gift shop sales, as well as station rentals, presumably for third party vendors, these would not be included in determining the operating margin in the U.S. However, this does not appear to be the case for train operations; it is true for the group as a whole.

Irrespective of whether the high speed rail in France or anywhere else for that matter covers its operating costs, it requires significant monies from the state to cover its total expenses, which include the hefty capital expenditures.

A recent report on high speed rail projects in the U.S., as well as overseas operations including France, released by the General Accounting Office, which is one of the most reputable auditing firms in the world, states the following regarding SNCF’s high speed rail: Prior to the creation of RFF in

[cogloadreturns]

And…Sorry Sam but it can get a touch repetitive. Form my experience over here all major infrastructure projects require pump priming to one degree or another from the state. Whether direct or indirect the state plays a role which is crucial.

However and this seems to be something which, with all due respect, you are not able to grasp. If the electorate of a country vote in a man/ party etc. on a platform which includes the building of said infrastructure in the knowledge that their taxpayers cash will be funelled in that direction then they have tactily complied in that programme.

It is then for the representatives of that electorate to make sure that their money is not spent elsewhere. And it is up to that electorate then to keep a beady eye on their representatives.

If you wish to return to a totally “private sector” non taxpaying solution; well not sure about the US but over here we may still be using donkeys. Hold on the Kings Highway required upkeep through local “taxation” - but in lieu as opposed to direct taxation…er…hold that for a minute…

Let me think of another solution…

[Anonymous]

And…Sorry Sam but it can get a touch repetitive. Form my experience over here all major infrastructure projects require pump priming to one degree or another from the state. Whether direct or indirect the state plays a role which is crucial.

However and this seems to be something which, with all due respect, you are not able to grasp. If the electorate of a country vote in a man/ party etc. on a platform which includes the building of said infrastructure in the knowledge that their taxpayers cash will be funelled in that direction then they have tactily complied in that programme.

It is then for the representatives of that electorate to make sure that their money is not spent elsewhere. And it is up to that electorate then to keep a beady eye on their representatives.

If you wish to return to a totally “private sector” non taxpaying solution; well not sure about the US but over here we may still be using donkeys. Hold on the Kings Highway required upkeep through local “taxation” - but in lieu as opposed to direct taxation…er…hold that for a minute…

Let me think of another solution…

Most of the public transport infrastructure in this country was jump started, at least, with government(s) raised or backed funds. One exception would be the eastern railroads, which were funded to a large extent by European capital. The government(s) made the investment with the expectation that the users would pay for the cost of the infrastructure. This has been largely true, although sometimes indirectly, with the exception of passenger rail since the inception of Amtrak. And it is likely to be even more so with the implementation of high speed rail, whatever that means, as pointed out in a recently released GAO report.

It is a nice political science theory to think that the electorate knows how transport infrastructure is fund

[beaulieu]

Most of the public transport infrastructure in this country was jump started, at least, with government(s) raised or backed funds. One exception would be the eastern railroads, which were funded to a large extent by European capital. The government(s) made the investment with the expectation that the users would pay for the cost of the infrastructure. This has been largely true, although sometimes indirectly, with the exception of passenger rail since the inception of Amtrak. And it is likely to be even more so with the implementation of high speed rail, whatever that means, as pointed out in a recently released GAO report.

You probably can’t even leave out the Eastern Railroads, the Pennsylvania Railroad had heavy involvement by the State of Pennsylvania, and the Baltimore & Ohio had heavy involvement by the City of Baltimore and the State of Maryland. I am not sure about the New York Central because of the put together nature of the company. The Boston and Maine had big involvement by the State of Massachusetts to finance the Hossac Tunnel, etc.

[quote]

It is a nice political science theory to think that the electorate knows how transport infrastructure is funded. In the U.S. very few people understand it, primarily because it is arcane and difficult to fathom. It took me months to figure it out. And I am a CPA. Most of the people who post to these forums don’t understand it. Therefore, they and their fellow citizens are poorly equipped to hold their elected officials accountable for how the dollars are spent.

I constantly run into people who have come back from Europe or Japan singing the praises of the trains that they rode whilst overseas. They want to know why we don’t have similar trains in the U.S. When I explain the funding scheme to them, i.e. the taxpayer’s pick-up a large part of the action, irrespective of whether they u