We need a new study on if commuter rail can be profitble

rather then take blanket statements from certain eastern rail execs that commuter rail loses money even when it is subsidized though "Purchase of Service Contracts" Maybe this is all a  ruse because what would happen at the negotiating table with a commuter rail authority if they caught the president of a railroad say we like the profit margin on our contract  ? Its like the president  of a union saying that he is happy with the pay his workers get.

12 Replies

  • Do you work hard at being ignorant or does it just come naturally to you, "commoncarrier"?  You obviously are too lazy to really do any research, choosing instead to annoy those who do know something about railroading and transportation.  Commuter service, in fact all passenger service, loses money and exists only because citizens through their governments are willing to subsidize it.  In some places, it is done through a purchase of service contract.  That's a perfect normal way of providing a service.  The public authority does not have to invest in infrastructure and may or may not provide rolling stock and locomotives to the contracted operator.  In Southern California, the operation is performed by a U.S. subsidiary of a French company.  I'm sure if you had known that, you would have found something to *** about there.  You don't know anything about labor, either, as demonstrated by your stupid final comment.  As a matter of fact, when a contract agreement is reached, labor leaders invariably say they are happy with the terms of the new agreement.  Otherwise, their members might ask them why they agreed to a "bad" agreement.  I figure you must have been fired by a railroad in the past, "commoncarrier," because you always have anti-rail comments that demonstrate considerable animus.  You use various screen names to avoid having others know your true identity, nor do you have the courage to engage in real discussion at these forums.  Oh, I forgot, you sort of have to know something in order todiscuss.  That lets you out.

  • In reply to Larry Kaufman:

    Larry when have you been critical of railroad management? I love railroads and for instance I love CNs new website that has a pop-up that gets the customers info and the fact that BNSF works with commuter agency's because they know its a tit for tat game. We allow commuter rail and we get $$$$$ for infrastructure. I rode Northstar a couple of times last year and it showed me that Yes you can have Commuter Rail on a busy main line. The best part was that BNSF used its senior conductors who were the nicest guys you ever met. Commuter rail puts a face on the railroad and you can bet that resonates in the state capital there when legislation comes up. Now CSX is doing everything it can to piss off MARC Commuters on the Brunswick Line despite the fact that many of the riders work for the USDOT and on Capital Hill. You dont bite the hand that feeds you.

  • In reply to commoncarrier:

    Speaking of not biting the hand that feeds you, that's good advice that you should follow.  I don't much like you, because I don't apprciate ignoramuses who think they know everything coming along and telling those who are responsible for a venture how to do their jobs.  When did you get so much smarter than the people who actually get paid to run railroads?  BNSF used senior conductors?  You don't even know that crews bid assignments based on seniority.  There are a number of reasons why senior trainmen might want to work commuter runs.  One is that they can take a second job between the morning and evening rush hours.  That's just an example.  Another is that the work isn't at all strenuous.  The railroad does not have much, if anything, to do with who works what runs. 

    You don't read my work in professional publications.  I don't have to explain myself to you, "commoncarrier," but I have been critical of railroad management when I believe it has deserved critical comment.  You, on the other hand, come on a site like this one knowing virtually nothing about how a railroad really is organized and operates, and invariably, you assume you know more than railroad executives do and then you make stupid statements telling them how to do their jobs.  And you wonder why I don't like you? 

    Railroads are in the freight business.  They would be just as content if they did not have to operate commuter service, especially as they rarely are paid enough to give them a return on their investment.  So, you keep telling everyone what's wrong with commuter service.  Advocate all the "new studey on if commuter rail can be profitable" (and that is a really bad locution).  Meanwhile, that is an issue that is not a concern.  Everyone but "commoncarrier" seems to understand the economics and that commuter service is not profitable and absent a big dose of taxpayer money, will not become profitable.  Taxpayers do not like to pay higher taxes, in case you haven't noticed.  In fact, why don't you go to the various states and meet with public officials and persuade them first that you know what you are talking about, and second, that they should pony up millions for rail commuter operations.  That should be fun to watch.

  • In reply to Larry Kaufman:

    By the way, "commoncarrier," I note that you don't hesitate to address me by my first name.  You, on the other hand, are still hiding behind the moniker "commoncarrier."  I put my name on my work, as do all reputable journalists.  You, on the other hand, do not identify yourself.  Now which of us do you think has credibility with readers?  Of course, if I made as many stupid statements as you do, I'd probably not want others to know who I am, either.  Ta-ta.

  • In reply to Larry Kaufman:

    A common theme of Reagonomics is that private industry can do it better and cheaper. The Dullas Toll Road (http://dullesgreenway.com/) is one examplen that is often cited but you must also understand that this project could not have been built without huge concessions from the State of Virgina. Furthermore truckers and taxicab companys would be crying foul if only the Greenways Trucking and Taxicabs were allowed on this route and then charged exorbant fees. In the case of the MARC/CSX route to Brunswick CSX knows that they have the Maryland MTA over a barrel because the capital district is out of land and what land there is permits and easments would take years to get.

    The question then becomes--How much money would it take to build a heavy rail system from scratch in 2012 from Rockville(end of Metrorail) to Martinsburg WV vs paying whatever CSX wants to rent there tracks? The question also should be- Why should the State of Maryland fund another route when it underwrote the bonds that created the B&O in the first place way back in the 1800s for both passengers and freight? The State of MD granted the B&O (CSX) a charter to carry passengers and freight and if they cant do that the revoke the freaking charter! Mr Kaufman--Google Writ of Mandamus in Lexis Nexis or Findlaw and you will find ruling after ruling showing railroads to be subject to the same writ as other goverment entities. (A wrrit of mandamus is a  court order to a goverment agency or official to do his or her duty such as the DPW to fix a pothole) also you will find that railroads have been ruled to be "Public Works". Public Works that have been hijacked by private intrests that want to keep us in the dark about what is public and what we really own.

  • In reply to commoncarrier:

    Many commuter railroads in Europe earn healthy operating profits, and some even earn a good return on capital renewals. Cities are (generally) designed and planned to be more conducive to walking and public transit, there is better integration with buses and urban rail systems (trams, metros), there are higher taxes on gasoline, and parking is often more expensive. But the transit systems are also, often, operated more "commercially", with fares set closer to market demand, with train staff managed more efficiently and more productively, and with rolling stock bought on the international market.    

    It does suit inefficient public-sector operators to spread the myth that passenger rail never needs money, because living off subsidy from Government is an easier life than chasing passengers. But the data is conclusive. The British rail regulator now publishes financial information for different "routes" (which are really geographic zones. Easiest way to find this is to google "GB Rail Financial Information".  You need to do the long division yourself, but you can figure out the the average yield (fare revenue) ranges from £0.12 to £0.16 per km, while the average cost is in the range £0.16 to £0.24. The numbers almost match on the Wessex zone, which includes commuter lines into Waterloo Station. In fact there are many routes within that zone where average yields are higher and costs are lower, but for public service reasons the less profitable routes must continue to be operated. Certainly higher fares could be charged too, but they are kept down as a matter of public policy.

    Most train services in Europe are still operated by state owned operators, but there are now wholly private sector companies in Germany, Sweden, Britain, Italy, and the Czech Republic operating intercity passenger services with any subsidy at all. 

    It is perverse that development of passenger rail services in America  is retarded because of the view that such services always lose money, when this is often only because fares are set at a low level in a misguided effort to help the poor. Most peak hour rail passengers are commuters who have jobs. Lower fares can be charged in the off peak, to fill empty seats. 

    It may be possible to operate profitable passenger rail in the US today, if you could:

    - use rolling stock bought on the international market (probably made in China, not "Buy America")

    - charge market-based fares to maximise revenues, not votes

    - pay staff wages competitive with other industries, and manage them efficientily

    And of course it would help (but may not be necessary) if Government would

    - raise taxes on gasoline (which might help save the planet too)

    - restrict exurban sprawl (although collapse of the mortgage market may have done this already)

    - tax employee parking as a benefit (Canada already does this)

    The freight railroads might then discover that carrying passengers can be a very profitable business they would like to be in. 30 years ago most of them weren't interested in intermodal either.  Times change. 





  • In reply to michaelschabas:

    Commoncarrier has used up all my patience, so I shall not waste my time (or yours, dear readers) rebutting Michael Schabas point by point.  I will deal only with his contention that freight railroads, if they only were smarter, would underatand that there are huge profits to be made from passenger/commuter rail service. (my characterization of his locution).  I note that Mr. Schabas uses European terminology such as "capital renwals" while we in this country would refer to capital investment or capital expenditures.  They are not the same thing.  Subsidies are generally based on covering avoidable cost, those costs that a carier/operator would not have if it did not operate commuter service.  One problem Amtrak faces is that it doesn't have the funding to cover capital needs and there is no reimbursement for railroad operators to provide it for Amtrak without payment.  It is very possible that European operators, using European accounting standards, can report revenue above avoidable cost.  It may even be called "profit" in Europe, but it certainly is not profit under U.S. GAAP general accounting principles.  In earlier times in my life, I was a regular commuter on the Hudson Division, New Haven, and later NJ Transit.  My monthly commuter pass cost considerably less than purchase 20-some-odd round-trip tickets each month.  That was a method subsidizing the service.  I made sure to thank my fellow taxpayers who did not ride the trains into New York City or Hoboken (NJ Transit), for it was they who paid the additional taxes to provide the service.  Profitable?  No way. 

    As you can see, I'm back after taking a few weeks off.  Commoncarriage, or whoever you are, be advised.  I am refreshed and find you just as insufferable as before I left.  One of the annoying traits of your refusal to identify yourself is that readers have no knowledge of whether you are a student (a bad one, if so), a disgruntled former or even current rail worker, a foamer (I make it a practice to refer to rail fans and avoid the insulting term "foamer" but make an exception in your case, or some dilettante who just came across this site one day.  Knowing who and what you are would contribute to readers having better understanding of you and your credibility (none, as far as I can see.)  I shall continue to call you out on every stupid post/comment you make.  It's a dark and dirty job, but someone has got to do it.

  • In reply to Larry Kaufman:

    Larry Kaufman
    Commoncarrier has used up all my patience, so I shall not waste my time (or yours, dear readers) rebutting Michael Schabas point by point.  I will deal only with his contention that freight railroads, if they only were smarter, would underatand that there are huge profits to be made from passenger/commuter rail service.

    I don't think that's fair to Mr. Schabas; he seems to think we'd also need a smarter government (with the implication of smarter electorate.)

  • In reply to anmccaff:

    Neither I nor Mr. Schabas can do anything meaningful about the intelligence of our electorate or government.  I try, to the extent possible, to live in the world that is as opposed to the world I might prefer.  The former is real; the latter fanciful.  Obviously, conditions could be created that change the economics of transportation and make passenger service profitable (commuter service never was possible and was subsidized by the earnings of freight service until those earnings effectively were eliminated.)  Look at the current situation.  The House was quite willing to strip funding for transit from its version of the highway bill.  The same dunderheads were playing games with tax dollars, claiming they could fund infrastructure with revenue from increased oil and gas drilling.  That revenue, if it were to materialize, would not begin flowing until the act expired, nor was their any assured revenue stream for the Highway Trust Fund.  Oh, well, what are a few facts when our dogma is at stake.  The fact is, anmccaff, that government actions and policies impel business decisions.  We wouldn't have the commuter service that now exists nor the intercity passenger service if it were not for legislation that permits it if not stimulates it.  You could create an environment where the public absorbed more of the avoidable cost and even the fixed cost and that would drive the profitability of commuter and passenger service.  But would it?  I was around when Amtrak was created, having broken the Penn Central bankruptcy story in the pages of Business Week some two weeks before PC did file.  The most efficient solution to the passenger problem would have been to subsidize continued operation by the railroads.  That was politically undoable because the politcians already had made the railroads the "bad guys" who allegedly were conspiring to kill passenger rail, so the pols got bitten in the butt by their own intellectual dishonesty.

  • In reply to Larry Kaufman:

    Could it also be said that truckers and freight really pay the bills of Toll Roads like the NYS thruway and the Ohio Turnpike? That passenger

    car tolls are kept low for poltical reasons?

  • In reply to commoncarrier:


    Could it also be said that truckers and freight really pay the bills of Toll Roads like the NYS thruway and the Ohio Turnpike? That passenger

    car tolls are kept low for poltical reasons?


    The differential between damage caused is well over a thousand to one, climbing almost asymptotically at the high end.


    The difference between tolls is about 10 to one.


    So, no.   Not even close.


  • In reply to anmccaff:

    "commoncarrier" insists on displaying his ignorance in public.  Several independent cost responsibility studies have been done since the Interstate Highway System was created.  In all of them it was determined that heavy trucks - 18-wheelers for you "commoncarrier" do not pay their allocable share of the highways they use and consume.  So much for your cockamamie idea that they subsidize automobile users and that auto users get a subsidy for political reasons. 

    As you insist on hiding behind a stupid screen name and you refuse to engage in rational conversation, I have decided not to waste anymore time reasoning with you.  You are beyond reason, and as far as I'm concerned, you no longer exist.  If others wish to deal with you, that's up to them.  Goodbye.

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