WASHINGTON — Amtrak could see notable financial gains from even a relatively slight improvement in on-time performance and significant gains with more substantial improvements, according to a report the passenger railroad has welcomed as an indication of the costs it incurs when host railroads fail to give its trains operating priority.
The report by the Amtrak Office of Inspector General estimates the passenger carrier could see $12.1 million in benefits from just a 5% improvement in overall on-time performance, and at least $41.9 million annually if trains reached a 75% on-time rate.
In response, Amtrak’s Dennis Newman, executive vice president, strategy and planning, issued a statement saying the company appreciates the analysis of “the significant financial consequences of poor on-time performance … which is primarily driven by delays caused by host railroads that own most of the rail lines used by Amtrak trains. The Amtrak OIG Report provides important information and recommendations with which Amtrak Management agrees and will implement in a timely manner.”
Newman said the latest report, along with an earlier estimate from the U.S. Department of Transportation Office of Inspector General of possible annual gains of $136.6 million with better on-time performance in the Northeast Corridor, “illustrate the real financial impacts of late trains. Beyond that, they confirm late trains impact every aspect of our operations, from equipment usage and staffing, to trip-time competitiveness and reliability for our customers. Extrapolating the results over a five-year period, there is more than $1 billion denied to our state and federal investors because Amtrak customers are not getting the reliable service they deserve and are lawfully entitled to receive.”
The new report says that a 5% increase in on-time performance would bring $8.2 million in reduced costs — through reduced labor and fuel costs, and savings in the costs of hotel and food vouchers for passengers who missed connections – and an additional $3.9 million in ticket revenue resulting from increased reliability. The report estimates that $6.9 million of this financial benefit would come from Amtrak’s long distance trains, which had an on-time rate of just 46 percent in fiscal 2018.
The projected $41.9 million gain from improvement to at least a 75% on-time rate would come from an estimated $11.5 million savings from reducing the number of on-call conductors and engineers; $20.5 million in maintenance on excess equipment maintained to protect routes with poor on-time performance (as well as an estimated one-time savings of $336 in equipment replacement costs); reduced crew penalty payments for overtime work (which cost more than $430,000 in fiscal 2018); a reduction in the number of crew bases needed; ticket sales on the Northeast Corridor for four long-distance trains where such tickets are not currently offered because of poor on-time performance; and reduced schedule recovery time, which could increase revenues by at least $7.2 million by making schedules more competitive.
Other notable details from the report:
— Amtrak managers said that better on-time performance would allow them to run trainsets through Chicago from one route to another, allowing “seamless service between more cities.” [A Milwaukee-Chicago Hiawatha trainset, for example, might be able to continue to St. Louis as a Lincoln Service train, or to Quincy, Ill., as an Illinois Zephyr]. This would potentially allow for elimination of a set of equipment.
— Amtrak made 1,329 crew penalty payments last year on trains scheduled for trips of less than 6 hours; those trains can operate with a single engineer, but if trips extend beyond 6 hours, the company pays the engineer a penalty equal to an 8-hour shift in addition to his or her regular pay. A single route — that of the Illini and Saluki between Chicago and Carbondale, Ill, scheduled for 5 ½ hours — accounted for 811 of those penalties, or 61 percent.
— Improved on-time performance could mean the Silver Meteor, Crescent, California Zephyr, Empire Builder, Southwest Chief, and Texas Eagle all could have the possibility of eliminating one trainset while maintaining service.
— Data from Amtrak’s Finance department showed that in the first five months of fiscal 2018 — before the railroad significantly changed its rules for handling of private cars — that private-car moves led to delays averaging 21 minutes per move.
The report also calls on Amtrak to better measure financial impacts of poor on-time performance, saying it would help in discussing the issue with Congress and other affected parties.
The full report is available here.
