A Look at the Department of Transportation 1994 Annual Report By Dennis Larson One thing missing in the financial argument to save Amtrak are facts, hard facts, from reliable sources. The Department of Transportation has released their 1994 annual in early February 1995, something over 200 pages long. The report has a fair amount of information on it, much which can compare Amtrak to other modes of transport. After several days of scrutiny, here are some of my findings and a few of my opinions. The first item on everyone's mind these days are costs and subsidies. Most of Amtrak's additional funding to make up for shortfalls comes from the federal government, and Amtrak pays for approximately 85 - 89 percent of its costs. This amounts to a federal subsidy of about 1 billion dollars annually. Much of the funding is concentrated in one area, the North East Corridor (NEC), at well over 200 million per year just for capital improvements. The DOT report says Amtrak operates 220 trains nationwide. Of this approximately 120 or so operate in the NEC only 457 miles long. The balance of service is parcelled out among the other 24,000 miles. The 89 percent cost recovery rate is one of the best recovery rates in the world for rail oriented passenger transport, even though the system is pretty clunky compared to other developed nations. Only a portion of the subsidies that go for highway, air, water and pipeline transportation come from the federal government with most of it coming from local, regional and state governments. So the federal outlays are rather modest in comparison to the total subsidies the air, highway, water and pipeline transport modes get. Federal, State and Local Transportation Expenditures and Revenues By Mode For Fiscal Year 1991 in BILLIONS of Dollars as Reported On Pages 122 and 123 by the DOT. Expenditures Revenues Shortfall Revenue to Expenditure Ratio FY 91 Transit 20.792 8.778 12.014 42 Highways* 66.480 53.838 12.642 81 Air 13.879 11.924 1.955 86 Water 5.728 2.860 2.868 50 Pipeline .026 .010 .016 39 ------ ------ ------ -- Totals 106.905 77.41 29.495 72 *Highways include parking receipts. Revenues are derived from fare surcharges, excise and user taxes, license fees. Shortfalls are made up from general tax funds, the same source of revenue that makes up the Amtrak subsidy. Although the other systems require much higher subsidies than Amtrak from general funds at over 29 billion dollars, the cost of subsidy per passenger mile is much higher on Amtrak. Many people have criticized my use of passenger miles for measurement of performance but DOT uses passenger miles as a measurement almost exclusively. "Ultimately it is the miles of travel generated by the trip makers that affects the ability of the transport system to serve demand. The `more than 2000 mile range' (involving only 9 percent of all trips) accounts for a very high proportion of all travel miles." -DOT page 57 The same scenario occurs in a comparison between the Northeast Corridor and the Long Distance services. Passenger Miles (1993) from Trains Magazine Northeast Corridor - 1,429,227,000 23 percent Short Distance - 784,084,000 13 percent Long Distance - 3,971,039,000 64 percent Amtrak however likes to tout its boardings figures as this enhances the perceived value of its shuttle services they provide. Passenger Miles Generated in 1991 (Millions) Amtrak 6,274 Intercity Bus 23,500 Transit (all modes) 40,860 Scheduled Air- Major 318,624 National 13,104 Large Regionals 786 Medium Regionals 52 Non Scheduled Air- 5,544 General Aviation- 12,600 Passenger Car (all trips) 2,484,542 Motorcycle (all trips) 12,574 Route Miles Amtrak operates over 25,000 route miles, serves 523 stations, and 53.7 percent of the Metropolitan Statistical Areas (MSA) in the U.S. Of the route miles, Amtrak owns 700. Of the remaining 24,300 miles, Amtrak operates over privately operated railroads that pay taxes on every mile of right-of-way. The highway system has 155,000 route miles of main arterials, 45,280 Interstate route miles and a total of nearly 4 million miles of roadway. The Interstate System serves 87 percent of all MSA's. The highway route mile system, as outlined above, needs another 12 billion in general tax revenues which does not include the loss of property taxes if the highway system were operated privately. The U.S. railroads Amtrak operates on pay taxes on every mile of right-of-way. This portion of Amtrak's use fees paid to railroads are not calculated anywhere. After looking through the entire report, the only mode of transport I could find that was 100 percent self sustaining was rail freight. All other modes, air, highway, water, rail- passenger and pipeline required substantial amounts of subsidy to operate. Not only are U.S. freight railroads 100 percent self sustaining, they are as a whole profitable, tax paying enterprises. One surprise to me was the heavy subsidies required for mass transit systems, with the lowest ratio of revenues to expenditures. Also the subsidized cost per passenger mile, as compared to all other modes of transport, is enormous. Automobile, Rail, Bus and Air Costs "Although the cost of operating an automobile has grown 7.7 percent a year over the last two decades, scheduled air transportation fares have increased at one-third this rate. Moreover, the cost of traveling an airline passenger mile has risen only about 1/2 as fast as intercity rail and bus travel over the last three decades." -DOT Automobile Operating Costs in Cents Per Mile 1993 Gas and Oil 6.0 Maintenance 2.4 Tires 0.9 Fixed Costs 44.9 ----- Total 54.2 Measures of Average Passenger Revenue per Passenger Mile 1991 Airline 13.24 Amtrak 12.83 Commuter Rail 12.46 Intercity Bus 12.03 Average Passenger Fare Per Trip Airline 106.69 Amtrak 36.68 Commuter Rail 3.76 Intercity Bus 21.86 Local Transit .70 Compare Amtrak's average fare to Denver's airport tax. Each passenger departing or arriving (not connecting) at Denver's airport pay $20 or $40 for both. Energy Usage Per Passenger Mile in BTU's 1991 General Aviation 9,194 Domestic Air 4,647 Bus Transit 3,771 Rail Transit 3,710 Passenger Car 3,558 Amtrak 1,975 Intercity Bus 997 Surface transport (highway travel) embraced by the U.S. is one of the most costly in terms of BTU's and the most dangerous in terms of safety. Freight Modes at BTU's per ton-Mile 1991 Single unit (Straight Truck) 17,517.8 Truck 2-axle/4-tire 8,632.0 Air 4,529.9 Combination (Semi-Tlr-Truck) 3,137.1 Water 402.0 Rail 388.0 In 1981 rail freight required 567 BTU's and water freight required 360 BTU's to move one ton-mile. Intercity Travel by Purpose 1991 Visit Friends and Relatives - 38 percent Entertainment - 25 percent Outdoor Recreation - 13 percent Business/Convention - 16 percent Other - 8 percent The mode of choice for all travel, business and pleasure is by Auto/Truck. "If the auto and air patterns are examined in terms of percentages of trips by length the pattern is increasingly clear. More than 60 percent of trips made by auto are less than 500 miles round trip, with an average trip length of 577 miles. Only 10 percent of intercity air-travel trips are less than 500 miles in length, and average trip-length is roughly 2,200 miles. Only 3 percent of auto travel occurs in the more than 2,000 mile category in contrast to 40 percent of air travel. In comparison, Amtrak's average one-way trip length, as measured by Amtrak sources, is about 290 miles, and intercity bus is about 140 miles." -DOT page 56 The trip length of an average Amtrak passenger is nearly identical to that of the highway traveler, (290 x 2 = 580 miles). Average trip lengths of long distance train rail travlers are much longer with a Southwest Chief passenger traveling 1213.8 miles and at an average fare of $103.70. The popular school of thought, which Amtrak also embraces, is that the niche for the passenger train is in the high speed carriage of business travelers. More specifically Amtrak concentrates its efforts between a few urban population centers in the east. But the above figures supplied by DOT show business travel accounts for only 16 percent with personal travel accounting for all the rest. In addition to this, most of the intercity travel by a wide margin is accomplished by surface transport. But Amtrak thinks its future is in the short-haul-business traffic that usually flies. As a result, Amtrak is after the high cost, high fare, short haul, air business traveler that is in the minority and exists only in selected areas. Based on the figures presented, the transportation market to go after is the highway traveler, not the air traveler. The business traveler, as cited by many sources, is very sensitive to time, the pleasure traveler not as much so but looks at the cost/quality/time/reliability factor. Amtrak fares seem to be competitive but quality, time and reliability without question need improvement. Intercity trips for pleasure are accomplished with the Auto/Truck 85 percent of the time and by air about 12 percent. Train, bus and other modes account for the rest. Business intercity travel is accomplished by Auto/Truck about 56 percent of the time and by air about 39 percent of the time. Other modes account for the rest. The percentage of rail usage is slightly higher by business travelers than pleasure travelers. But in both categories rail usage is insignificant. Amtrak On time performance 1991 Short Distance 82 percent Long Distance 58 percent Systemwide 77 percent Figures shown before 1991 are very similar and figures after 1991, as reported by other journals, show a steep decline in on- time performance for long distance services. Figures after 1991 showed declines in performance in the 30 percent range with some routes operating as low as 5 percent on time. Quality of on board service on long distance services has also been a major area of complaint. "Many analysts contend that recent shifts in transportation mode usage are driven by speed and reliability rather than by price. Their views are anecdotally supported by the enormous growth in express parcel delivery services and countless articles on just- in-time delivery. Members of households often express a similar demand for speed or comfort when they travel by air or rail rather than car for intercity trips. The recent emphasis on safety features in automobile advertisements also suggests a perceptible concern among consumers with quality as well as price." DOT (page 111-112) Purchased and User Operated Transportation There are two classes of personal transportation, user operated and purchased. By any measure user operated personal transportation is the over whelming choice in the United States for local and intercity travel. Purchased transportation was the highest in the east and west but lowest in the south and midwest. Vehicle purchases were also the lowest in the east along with gas and oil expense. "The behavior of the `Purchased Transportation' category is revealing. The East is higher because of greater transit spending; while the West is higher because of greater air travel expenditures." -DOT (page 4) The enplanements listed on page 75 are more revealing yet. The busiest airports in terms of boardings are highest in the middle and western areas of the U.S. in spite of the fact the highest concentration of population is in the east. 1991 figures Chicago - 28,816,463 Dallas/Ft. Worth - 25,448,951 LA/Burbank/Long Beach - 23,348,631 Atlanta - 17,691,130 New York, NY - 17,439,839 San Francisco/Oakland - 16,987,581 Miami/Ft Lauderdale - 12,761,352 Denver - 12,313,733 Houston, TX - 11,585,160 Washington, D.C. - 11,340,673 Looking at total aircraft operations, the numbers look similar. The airports in the NYC area are busy but Dallas/Ft Worth International has twice as many operations as New York's busiest airport. If you have read this far, most likely the report suggests two directions to take. 1. Rail transport is so insignificant it should be eliminated. 2. Rail transport has a large market potential to tap and should be expanded. With only a five percent share of air travel, rail travel would more than double. With a one percent share of surface transport growth would be equally dramatic. The rest of the world has expanded rail's advantages, so far the U.S. has not.