“An Ode to the Northeast Corridor, the Rail Line That Keeps Amtrak Alive”
“…The new book The Northeast Corridor traces the history of passenger trains from Boston to DC and explains why the current service is so essential — and so frustrating…” By David Zipper
FTA:"After seeing ridership collapse during the Covid pandemic, Amtrak’s Northeast Corridor is now roaring back to life. Passenger counts on the high-end Acela service soared 38% in its last fiscal year (which ended in September), and overall ridership along the coastal line is above
Is it the NEC that keeps Amtrak alive? Or is it the rest of the Amtrak system that keeps the NEC alive? Remember, within Amtrak it’s known as the “Nothing Else Counts.”
It seems that Amtrak is putting all its eggs into the basket of doubling ridership ( numer of passengers ) by increasing the number of riders almost exclusively on the NEC? Now IMO doubling ridership means doubling revenue passenger miles not just doubling riders.
In FY24 the NEC had Adjusted Operating Earnings (AOE) of $267.8 million. The State Supported Trains had an AOE loss of $251.5 million, and the Long-Distance Trains had an AOE loss of $635.1 million.
For the four years ended FY24 the NEC’s AOE was $136.7 million, while the AOE loss for the State Supported Trains was $773.9 million and $2,264.1 million for the Long-Distance Trains. Seven of the State Supported Trains had a positive AOE; the Auto Train was the only Long-Distance Train to record a positive AOE.
Over the same period, excluding certain ancillary and infrastructure costs, the NEC absorbed 39.7 percent of the system’s fixed costs, which consisted largely of depreciation expense, while the State Supported Trains wore 28.7 percent and the Long-Distance Trains incurred 31.6 percent of the depreciation expense.
Based on the financials, the NEC is Amtrak’s heartbeat. With the exception of the Auto Train, the long-distance trains are the company’s biggest financial drag. If it were not for the politics, a competent management team would drop the long-distance trains.
Last time I checked the maintenance backlog for the Nothing Else Counts is somewhere where in the neighborhood of $50 billion. That’s one very expensive heart surgery.
The NEC will require significant capital expenditures over time. The key phrase is over time, which means the monies will not need to be laid out in one fell swoop. Accordingly, Amtrak will be able to adjust its fares along the NEC to cover most but probably not all of the depreciation expense arising from the amortization of the capital expenditures.
I wish Amtrak included depreciation in operating costs. Airlines do. So do all publicly traded companies. But your % breakdowns are enlightening. Fixed costs on the LD trains is nearly the same as the NEC.
Biggest problem with the LD trains is that they don’t cover even their train level variable costs. Fuel crew maintenance. So adding service causes even larger losses. NEC is the opposite, adding trains cuts losses.
Amtrak owns 363 of the 457 NEC route miles. It also owns the 104.2-route-mile segment of track between Philadelphia and Harrisburg, Pa.
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Amtrak owns 95.6 miles in Michigan and 60.5 miles from New Haven to Springfield.
Approximately 70% of the miles traveled by Amtrak’s trains in FY24 were on host railroads. The rentals paid by Amtrak were approximately $248 million.
According to Amtrak’s Asset Plan FY24-29, for the five years ended FY29, Amtrak plans to spend approximately $16.3 billion on NEC capital improvements. Of this amount, $3.9 billion will be for rolling stock, $9.4 billion for infrastructure, $2.4 billion for stations, and the remainder for Transportation, National Assets and Corporate Services.
I spent several years in the corporate planning department of a Fortune 200 Corporation. Other than some high-level numbers for major capital outlays, we limited our estimates of capital expenditures to two or three years. Anything beyond that, in our opinion, was just a guess.
The short answer is yes. I believe they run at night mostly between DC and Jersey City. There may be others. The railroader’s that post to these forums probably have a better answer.
The freight carriers pay Amtrak to use its portion of the NEC, Amtrak pays the commuter railroads that own a portion of the NEC to use their tracks; the commuter railroads pay Amtrak if their trains run on the portions owned by Amtrak.
Thanks to all the billing and cross billing, the NEC is a disguised accountant’s workfare program. Did I mention that I am a retired CPA?
In FY24 Amtrak had other revenues of $586 million. Some of this probably were rentals paid by others to use the NEC. To get the exact amounts, one would have to have access to the company’s revenue subledgers.
Thanks PJS1. (Though not a railroad company) The company I worked for were keen on letting people know the expenses they had to pay. Then not mentioning the large amount of money coming in from other companies borrowing equipment etc…
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Is there more revenue on the NEC because fares are higher per mile?
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One of the timeless topics here for a while was the contribution of the ‘high speed’ Acela premium fares when there really wasn’t much of an impressive speed premium over previous Amfleet-Metroliner and “Amtrak Regional” trains. I’ve thought for many years that many of the corridor services could, and should, benefit from special-class cars or trains to take advantage of the ‘snob factor’ – that might include the re-introduction of group-subsidized ‘bar’ or ‘parlor car’ service where “government-sponsored amenities” might be seen as subsidization of the wealthy.
I don’t know if ‘revenue’ for the LD trains is decremented by the amount of ‘rental’ to the host railroads involved – Amtrak may be totting up the maintenance expenses of the NEC separately from operations revenue (since they own much of the Corridor) but considers the ‘below the rail’ share of cost to be an expense otherwise. (PJS1 would probably know or be able to determine…)