The Poor Economic Model of Passenger Rail

Posted by PITHOCRATES - November 25th, 2013

Economics 101

The Amtrak Crescent is about a 1,300 Mile 30 Hour Trip between New Orleans and New York City

An Amtrak train derailed this morning west of Spartanburg, South Carolina.  Thankfully, the cars remained upright.  And no one was seriously injured (see Amtrak Crescent with 218 aboard derails in SC by AP posted 11/25/2013 on Yahoo! News).

There were no serious injuries, Amtrak said of the 207 passengers and 11 crew members aboard when the cars derailed shortly after midnight in the countryside on a frosty night with 20-degree readings from a cold front sweeping the Southeast.

This is the Amtrak Crescent.  About a 30 hour trip one way.  It runs between New Orleans and New York City.  Approximately 1,300 miles of track.  Not Amtrak track.  They just lease track rights from other railroads.  Freight railroads.  Railroads that can make a profit.  Which is hard to do on a train traveling 1,300 miles with only 207 revenue-paying passengers.

People may board and leave the train throughout this route.  But if we assume the average for this whole trip was 207 and they were onboard from New Orleans to New York City we can get some revenue numbers from the Amtrak website.   We’ll assume a roundtrip.  They each have to pay for a seat which runs approximately $294.  Being that this is a long trip we’ll assume 20 of these people also paid an additional $572 for a room with a bed and a private toilet.  Bringing the total revenue for this train to approximately $72,298.  Not too shabby.  Now let’s look at the costs of this train.

Diesel Trains consume about 3-4 Gallons of Fuel per Mile

If you search online for track costs you will find a few figures.  All of them very costly.  We’ll assume new track costs approximately $1.3 million per mile of track.  This includes land.  Rights of way.  Grading.  Bridges.  Ballast.  Ties.  Rail.  Switches.  Signals.  Etc.  So for 1,300 miles that comes to $1.69 billion.  Track and ties take a beating and have to be replaced often.  Let’s say they replace this track every 7 years.  So that’s an annual depreciation cost of $241 million.  Or $663,265 per day.  Assuming 12 trains travel this rail each day that comes to about $55,272 per train.

Once built they have to maintain it.  Which includes replacing worn out rail and ties.  Repairing washouts.  Repairing track, switches and signals vandalized or damaged in train derailments and accidents.  This work is ongoing every day.  For there are always sections of the road under repair.  It’s not as costly as building new track but it is costly.  And comes to approximately $300,000 per mile.  For the 1,300 miles of track between New Orleans and New York City the annual maintenance costs come to $390 million.  Or $1 million per day.  Assuming 12 trains travel this rail each day that comes to about $89,286 per train.

Diesel trains consume about 3-4 gallons of fuel per mile.  Because passenger trains are lighter than freight trains we’ll assume a fuel consumption of 3 gallons per mile.  For a 1,300 mile trip that comes to 3,900 gallons of diesel.  Assuming a diesel price of $3 per gallon the fuel costs for this trip comes to $11,700.  The train had a crew of 11.  Assuming an annual payroll for engineer, conductor, porter, food service, etc., the crew costs are approximately $705,000.  Or approximately $1,937 per day.  Finally, trains don’t have steering wheels.  They are carefully dispatched through blocks from New Orleans all the way to New York.  Safely keeping one train in one block at a time.  Assuming the annual payroll for all the people along the way that safely route traffic comes to about $1 million.  Adding another $2,967 per day.

Politicians love High-Speed Rail because it’s like National Health Care on Wheels

If you add all of this up the cost of the Amtrak Crescent one way is approximately $161,162.  If we subtract this from half of the roundtrip revenue (to match the one-way costs) we get a loss of $88,864.  So the losses are greater than the fare charged the travelling public.  And this with the freight railroads picking up the bulk of the overhead.  Which is why Amtrak cannot survive without government subsidies.  Too few trains are travelling with too few people aboard.  If Amtrak charged enough just to break even on the Crescent they would raise the single seat price from $294 to $723.  An increase of 146%.

Of course Amtrak can’t charge these prices.  Traveling by train is a great and unique experience.  But is it worth paying 80% more for a trip that takes over 7 times as long as flying?  That is a steep premium to pay.  And one only the most avid and rich train enthusiast will likely pay.  Which begs the question why are we subsidizing passenger rail when it’s such a poor economic model that there is no private passenger rail?  Because of all those costs.  Congress loves spending money.  And they love making a lot of costly jobs.  And that’s one thing railroads offer.  Lots of costly jobs.  For it takes a lot of people to build, maintain and operate a railroad.

Which is why all politicians want to build high-speed rail.  For it doesn’t get more costly than that.  These are dedicated roads.  And they’re electric.  Which makes the infrastructure the most costly of all rail.  Because of the high speeds there are no grade crossings.  Crossing traffic goes under.  Or over.  But never across.  And they don’t share the road with anyone.  There are no profitable freight trains running on high-speed lines to share the costs.  No.  Fewer trains must cover greater costs.  Making the losses greater.  And the subsidies higher.  Which is why politicians love high-speed rail.  It’s like national health care on wheels.

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Steam Locomotive

Posted by PITHOCRATES - November 13th, 2013

Technology 101

The Steam Locomotive was one of the Few Technologies that wasn’t replaced by a Superior Technology 

Man first used stone tools about two and a half million years ago.  We first controlled fire for our use about a million years ago.  We first domesticated animals and began farming a little over 10,000 years ago.  The Egyptians were moving goods by boats some 5,000 years ago.  The Greeks and Romans first used the water wheel for power about 2,500 years ago. The Industrial Revolution began about 250 years ago.  James Watt improved the steam engine about 230 years ago.  England introduced the first steam locomotive into rail service about 210 years ago. 

In the first half of the 1800s the United States started building its railroads.  Helping the North to win the Civil War.  And completing the transcontinental railroad in 1869.  By 1890 there were about 130,000 miles of track crisscrossing the United States.  With the stream locomotives growing faster.  And more powerful.  These massive marvels of engineering helped the United States to become the number one economic power in the world.  As her vast resources and manufacturing centers were all connected by rail.  These powerful steam locomotives raced people across the continent.  And pulled ever longer—and heavier—freight trains.

We built bigger and bigger steam locomotives.  That had the power to pull freight across mountains.  To race across the Great Plains.  And into our cities.  With the chugging sound and the mournful steam whistle filling many a childhood memories.  But by the end of World War II the era of steam was over.  After little more than a century.  Barely a blip in the historical record.  Yet it advanced mankind in that century like few other technological advances.   Transforming the Industrial Revolution into the Second Industrial Revolution.  Or the Technological Revolution.  That gave us the steel that built America.  Electric Power.  Mass production.  And the production line.  None of which would have happened without the steam locomotive.  It was one of the few technologies that wasn’t replaced by a superior technology.  For the steam locomotive was more powerful than the diesel-electric that replaced it.  But the diesel-electric was far more cost-efficient than the steam locomotive. Even if you had to lash up 5 diesels to do the job of one steam locomotive.

The Hot Gases from the Firebox pass through the Boiler Tubes to Boil Water into Steam

The steam engine is an external combustion engine.  Unlike the internal combustion engine the burning of fuel did not move a piston.  Instead burning fuel produced steam.  And the expansion energy in steam moved the piston.  The steam locomotive is a large but compact boiler on wheels.  At one end is a firebox that typically burned wood, coal or oil.  At the other end is the smokebox.  Where the hot gases from the firebox ultimately vent out into the atmosphere through the smokestack.  In between the firebox and the smokebox are a bundle of long pipes.  Boiler tubes.  The longer the locomotive the longer the boiler tubes. 

To start a fire the fireman lights something to burn with a torch and places it on the grating in the firebox.  As this burns he may place some pieces of wood on it to build the fire bigger.  Once the fire is strong he will start shoveling in coal.  Slowly but surely the fire grows hotter.  The hot gases pass through the boiler tubes and into the smokebox.  And up the smoke stack.  Water surrounds the boiler tubes.  The hot gases in the boiler tubes heat the water around the tubes.  Boiling it into steam.  Slowly but surely the amount of water boiled into steam grows.  Increasing the steam pressure in the boiler.  At the top of the boiler over the boiler tubes is a steam dome.  A high point in the boiler where steam under pressure collects looking for a way out of the boiler.  Turned up into the steam dome is a pipe that runs down and splits into two.  Running to the valve chest above each steam cylinder.  Where the steam pushes a piston back and forth.  Which connects to the drive wheels via a connecting rod.

When the engineer moves the throttle level it operates a variable valve in the steam dome.  The more he opens this valve the more steam flows out of the boiler and into the valve chests.  And the greater the speed.  The valve in the valve chest moved back and forth.  When it moved to one side it opened a port into the piston cylinder behind the piston to push it one way.  Then the valve moved the other way.  Opening a port on the other side of the piston cylinder to allow steam to flow in front of the piston.  To push it back the other way.  As the steam expanded in the cylinder to push the piston the spent steam exhausted into the smoke stack and up into the atmosphere.  Creating a draft that helped pull the hot gases from the firebox through the boiler tubes, into the smokebox and out the smoke stack.  Creating the chugging sound from our childhood memories.

The Challenger and the Big Boy were the Superstars of Steam Locomotives

To keep the locomotive moving required two things.  A continuous supply of fuel and water.  Stored in the tender trailing the locomotive.  The fireman shoveled coal from the tender into the firebox.  What space the coal wasn’t occupying in the tender was filled with water.  The only limit on speed and power was the size of the boiler.  The bigger the firebox the hotter the fire.  And the hungrier it was for fuel.  The bigger locomotives required a mechanized coal feeder into the firebox as a person couldn’t shovel the coal fast enough.  Also, the bigger the engine the greater the weight.  The greater the weight the greater the wear and tear on the rail.  Like trucks on the highway railroads had a limit of weight per axel.  So as the engines got bigger the more wheels there were ahead of the drive wheels and trailing the drive wheels.  For example, the Hudson 4-6-4 had two axels (with four wheels) ahead of the drive wheels.  Three axles (with 6 wheels) connected to the pistons that powered the train.  And two axels (with four wheels) trailing the drive wheels to help support the weight of the firebox.

To achieve ever higher speeds and power over grades required ever larger boilers.  For higher speeds used a lot of steam.  Requiring a huge firebox to keep boiling water into steam to maintain those higher speeds.  But greater lengths and heavier boilers required more wheels.  And more wheels did not turn well in curves.  Leading to more wear and tear on the rails.  Enter the 4-6-6-4 Challenger.  The pinnacle of steam locomotive design.  To accommodate this behemoth on curves the designers reintroduced the articulating locomotive.  They split up the 12 drive wheels of the then most powerful locomotive in service into two sets of 6.  Each with their own set of pistons.  While the long boiler was a solid piece the frame underneath wasn’t.  It had a pivot point.  The first set of drive wheels and the four wheels in front of them were in front of this pivot.  And the second set of drive wheels and the trailing 4 wheels that carried the weight of the massive boiler on the Challenger were behind this pivot.  So instead of having one 4-6-6-4 struggling through curves there was one 4-6 trailing one 6-4.  Allowing it to negotiate curves easier and at greater speeds.

The Challenger was fast.  And powerful.  It could handle just about any track in America.  Except that over the Wasatch Range between Green River, Wyoming and Ogden, Utah.  Here even the Challenger couldn’t negotiate those grades on its own.  These trains required double-heading.  Two Challengers with two crews (unlike lashing up diesels today where one crew operates multiple units from one cab).  And helper locomotives.  This took a lot of time.  And cost a lot of money.  So to negotiate these steep grades Union Pacific built the 4-8-8-4 articulated Big Boy.  Basically the Challenger on steroids.  The Big Boy could pull anything anywhere.  The Challenger and the Big Boy were the superstars of steam locomotives.  But these massive boilers on wheels required an enormous amount of maintenance.  Which is why they lasted but 20 years in service.  Replaced by tiny little diesel-electric locomotives.  That revolutionized railroading.  Because they were so less costly to maintain and operate.  Even if you had to use 7 of them to do what one Big Boy could do.

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