EFFECTS OF AMTRAK’S POOR ON-TIME 

PERFORMANCE 

Federal Railroad Administration 

Report Number: CR-2008-047 

Date Issued: March 28, 2008
U.S. Department of 

Memorandum

Transportation 

Office of the Secretary 

of Transportation 

Office of Inspector General 

Subject: INFORMATION: Report on the Audit of the 

Effects of Amtrak’s Poor On-Time Performance 

Federal Railroad Administration 

Report Number CR-2008-047 

Date: March 28, 2008 

From: David Tornquist 

Assistant Inspector General 

 for Rail and Maritime Program Audits 

 and Economic Analysis 

Reply to 

Attn. of: JA-50 

To: Federal Railroad Administrator 

This report presents the results of our audit of the effects of Amtrak’s poor on-time 

performance (OTP). This audit was requested by the Surface Transportation 

Subcommittee of the Senate Committee on Commerce, Science, and 

Transportation. The objective of this audit was to produce a quantitative 

assessment of the financial impact of Amtrak’s poor OTP.1

 More specifically, we 

estimated both the impact on revenues and costs as a consequence of Amtrak’s 

poor OTP. 

Amtrak’s poor OTP significantly undermines the viability of intercity passenger 

rail as an option for travelers and weakens Amtrak’s financial position by reducing 

its revenues and increasing its operating costs. Between Fiscal Year (FY) 2003 

and FY 2007, Amtrak’s OTP off the Northeast Corridor (NEC)2

 for long-distance 

routes3

 fell from an average of only 51 percent to 42 percent, and OTP for nonNEC corridor routes4

 fell from an average of 76 percent to 66 percent. The need to 

improve mobility, relieve congestion, and reduce oil consumption makes Amtrak’s 

performance and financial health a national concern. 

 

1

 Our office is also conducting an audit on the causes of Amtrak’s poor OTP at the request of the Senate 

Transportation Appropriations Subcommittee. 2

 The NEC is the route connecting Boston, MA and Washington, DC by way of New York, NY, plus the Springfield, 

MA-New Haven, CT and Harrisburg, Pa-Philadelphia, PA branch lines. 3

 Routes over 750 miles in length are considered long-distance. Routes shorter than 750 miles are called short-distance 

or corridor routes. 4

 NEC routes have not exhibited the poor and declining OTP characteristic of the non-NEC routes. 
2

We performed this audit in accordance with the generally accepted Government 

Auditing Standards prescribed by the Comptroller General of the United States. 

Exhibit A more fully describes our scope and methodology. 

ON-TIME PERFORMANCE AFFECTS AMTRAK’S FINANCES 

Amtrak is unable to generate sufficient revenues from ticket sales and other 

sources to cover its operating costs or pay any of its debt or capital costs. As a 

result, in FY 2008, Amtrak will receive a Federal subsidy of $1.3 billion, 

including $475 million in operating subsidies. Poor OTP reduces ridership on 

Amtrak trains because potential passengers cannot predict when their train will 

arrive. It also increases costs, primarily by extending shifts, increasing staffing 

requirements, and utilizing more fuel. Improving OTP could significantly improve 

Amtrak’s finances. It would generate funds Amtrak could use to increase the 

incentives to host railroads5

 both to improve the performance of Amtrak trains 

operating on their tracks or reduce its reliance on Federal operating subsidies. 

In FY 2006, average OTP across Amtrak’s long-distance routes was only 

30 percent. For Amtrak’s corridor routes, average OTP was much higher, but still 

only 67 percent (excluding the NEC). In FY 2007, the OTP of a number of longdistance routes increased substantially, but only enough to raise the average for 

long-distance routes to 42 percent. The reliability and timeliness of passenger rail 

largely determines its viability as an alternative means of transportation. Poor 

OTP has significant negative impacts on Amtrak’s financial condition and may 

undermine Amtrak’s ability to retain and grow ridership. 

 

5

 Host railroads own the track over which Amtrak operates, and are primarily comprised of the six Class 1 railroads. 
3

Figure 1. Average On-Time Performance of Amtrak Routes 

0%

20%

40%

60%

80%

100%

2001 2002 2003 2004 2005 2006 2007

Fiscal Year

 NEC Long-Distance Non-NEC Corridor

OTP

Source: Amtrak data. 

Outside the NEC, where the issue of poor OTP is by far the most apparent, 

Amtrak owns approximately 100 miles of track and primarily runs on rail lines 

owned and dispatched by freight railroads. Amtrak has a statutory right to not 

only operate over the tracks of these host railroads, but has also been granted 

preference over host transportation in using a rail line, junction, or crossing. 

However, although there is disagreement between Amtrak and the host railroads as 

to the exact meaning of this provision, based on its statutory right Amtrak has 

entered into negotiated agreements with the host railroads that specify the terms of 

Amtrak’s operations over host tracks, which include public train schedules, when 

scheduled track maintenance can take place, operating speeds, and the level of 

track infrastructure. These agreements also incorporate the concept of performance 

payments and penalties. Performance payments are made by Amtrak to the host 

railroads when certain OTP or delay outcomes are achieved. Host railroads may 

pay performance penalties to Amtrak when OTP or delays fail to meet certain 

thresholds. 
4

RESULTS IN BRIEF 

Achieving reliable OTP would substantially improve Amtrak’s finances. We 

estimate, for example, that an 85 percent OTP off the NEC in FY 2006 would 

have reduced Amtrak’s operating loss by 30 percent or $136.6 million (see 

figure 2).6

 Amtrak’s revenues would increase by $111.4 million as more travelers 

would choose to take the train if they become more confident that it will arrive on 

time. Amtrak’s expenses would be reduced by $39.3 million mostly due to less 

required overtime as a result of fewer late trains, and lower fuel costs as a result of 

less time spent idling and less frequent accelerations and decelerations. The 

improved OTP also would require an increase in net performance payments paid 

to the host railroads of $14.1 million.7, 8

Working with the host railroads to achieve an 85 percent OTP off the NEC would 

be a difficult task. However, Amtrak may be able to utilize a portion of the 

projected benefits to further incentivize the host railroads to provide this enhanced 

level of service. 

Figure 2. Calculation of Net Effects at 85 Percent OTP 

Source: OIG analysis. 

 Net Perform.

Payments 

 ($14.1) 

million 

NET GAINS 

$136.6 million 

$50 million $100 million $150 million 

Cost Savings 

$39.3 million 

Numbers may not add up 

due to rounding. 

Additional Revenues

$111.4 million 

 

6

 The portion of the reductions in operating losses associated with state-supported routes would largely reduce state 

payments to Amtrak, and would not generally impact Amtrak’s finances. This portion amounts to $21.5 million for 

the 85 percent scenario. 7

 Our estimates of performance payments for OTP rates below 100 percent are somewhat understated. They do not 

take into account factors that would make trains on-time for the purpose of making payments under contractual 

allowances that would not contribute to improving route OTP. Exhibit A includes a detailed discussion of this issue. 8

 We estimated the impact of OTP on revenues using a set of econometric models. Our estimates of costs savings were 

developed through the construction of detailed models of staff schedules. We estimated the effects on performance 

payments using data at the level of individual checkpoints along the routes. Exhibit A provides a more detailed 

discussion of our approach. 
5

Achieving reliable OTP would substantially improve Amtrak’s finances. We 

found that if Amtrak had achieved a 75 percent OTP in FY 2006, it would have 

experienced an estimated reduction in its operating loss of $122.1 million. As 

previously discussed, an OTP of 85 percent across its routes outside the NEC in 

FY 2006, would have resulted in a $136.6 million net gain. Improvement to 

100 percent OTP would slightly reduce this figure to $136.4 million (see figure 3). 

As OTP approaches 100 percent, the large additional revenue gains would be more 

than offset by marked growth in performance payments paid to the host railroads 

as a result of the improved OTP, while cost savings would not rise significantly. 

Figure 3. Fiscal Effects of Improved OTP for FY 2006 

$0

$25

$50

$75

$100

$125

$150

(5.8) (14.1 (48.0

$75

$50

$25

 

 $137 $136 $122 



All figures are expressed in millions of dollars. Numbers may not add up due to rounding. 

Source: OIG analysis. 

Long-distance routes would generate the greatest gains from achieving 

reliable OTP because their current performance is so poor. In FY 2006, 

average OTP across Amtrak’s long-distance routes was only 30 percent compared 

to an average OTP of 67 percent on its short-distance routes. As a result, bringing 

the long-distance trains up to an 85 percent OTP, an average increase in OTP of 

Revenues Cost Savings Net Performance Payments  Total Effect 

 $91 $37 $111 $143 $39 $41 

 $14 $48 $6 

 75% OTP 85% OTP 100% OTP
6

55 percentage points, led to larger changes in revenues and costs than the increase 

in OTP of only 18 percentage points for short-distance routes. Figure 4 displays a 

breakdown of results by long-distance versus short-distance routes for the 

85 percent OTP scenario. 

Figure 4. Results by Route Type for 85 Percent OTP Scenario 

$0

$20

$40

$60

$80

$100

$120

$20



 $109 

 

 $28 

Long- Distance Short-Distance 

 $4 

 $5 $27 

 $10 

 $85 $34 

Revenues Cost Savings Net Performance Payments  Total Effect

All figures are expressed in millions of dollars. Numbers may not add up due to rounding. 

Source: OIG analysis. 

Revenue increases would account for the largest share of the improvement in 

Amtrak finances resulting from achievement of reliable OTP. Travelers who 

have the option to choose among transportation modes can readily choose to take 

the train if they become more confident that it will arrive on time. This makes 

revenues relatively responsive to changes in OTP. In contrast, Amtrak’s operating 

cost structures, particularly those related to labor, incorporate significant rigidities 

as a consequence of safety regulations and negotiated agreements. As a result, the 

variation in Amtrak’s operating costs associated with changes in OTP would be 

moderate by comparison. 
7

Future increases in fuel and labor costs would only increase the financial 

importance to Amtrak of achieving reliable OTP. Fuel prices in FY 2006 were 

much lower than they are currently. Since we found that better OTP generally 

reduces fuel consumption, the recent price growth would increase the estimated 

cost savings from better OTP. In addition, Amtrak recently reached a tentative 

labor agreement with several of its unions, which includes an increase in wages. 

This may set a pattern for other labor negotiations. Since better OTP reduces 

labor hours for some workers, any new agreements which stipulate an increase in 

wages for those workers would translate into greater cost savings from improved 

OTP. 

FINDINGS 

Achieving Reliable OTP Would Substantially Improve Amtrak’s 

Finances 

Achieving reliable and improved OTP would increase Amtrak’s ridership and 

therefore its revenues and reduce its operating costs. Travelers who have the 

option to choose among transportation modes can readily choose to take the train 

if they become more confident that it will arrive on time. This makes revenues 

relatively responsive to changes in OTP. The results of our econometric analysis 

estimated that Amtrak’s FY 2006 revenues would have increased by 

$111.4 million at an 85 percent OTP level. On the cost side, Amtrak’s labor 

expenses would be reduced mostly due to less required overtime as a result of late 

trains. Fuel costs would also be cut as a result of less time spent idling and less 

frequent accelerations and decelerations than would otherwise be required. Our 

analysis concluded that $39.2 million in cost savings would have been accrued in 

FY 2006 had Amtrak achieved an 85 percent OTP off the NEC. Finally, an 

increase in OTP to 85 percent in FY 2006 would have increased the net 

performance payments paid to the host railroads by an estimated $14.1 million due 

to the improved performance. 

When these components are added together, if Amtrak were to have operated at an 

85 percent OTP off the NEC in FY 2006, its operating loss would have been 

reduced by a total of $136.6 million. These potential returns from reliable OTP 

could offset a significant share of Amtrak’s recent annual cash losses. For 

example, our estimate of Amtrak’s savings had it reached an 85 percent OTP off 

the NEC in FY 2006 amounts to 30 percent of Amtrak’s cash loss in FY 2006 of 

$452.4 million. 

The finding of substantial returns as a result of reliable OTP holds over a range of 

OTP rates. Our analysis indicated that OTP rates of 75 percent and 100 percent 

would result in net gains of $122.1 million and $136.4 million, respectively. Both 
8

revenues and net performance payments change considerably over the range of 

OTP examined, offsetting each other to some extent, while costs fluctuate to a far 

lesser extent 

Long-Distance Routes Would Generate the Greatest Gains from Achieving 

Reliable OTP Because Their Current Performance is so Poor 

Across the OTP scenarios examined, the net gains associated with the longdistance routes are almost four times greater than those realized from the shortdistance routes. Tables 1 and 2 provide a breakdown of results by route type for 

the 75 and 100 percent OTP scenarios (figure 4 on page 6 provides similar 

information for an 85 percent OTP rate). 

Table 1. Results by Route Type for 75% OTP Scenario 

Categories of Effects LongDistance 

ShortDistance 

Incremental Revenues $69.5 $21.1 

Cost Savings 

 On-Board Services $13.0 $0.9 

 Trainmen & Enginemen $15.3 N/A 

 Fuel $3.9 $4.3 

Total Cost Savings $32.2 $5.1 

Incremental Net Performance Payments ($3.2) ($2.7) 

TOTAL $98.5 $23.6 

All figures are expressed in millions of dollars. Numbers may not add due to rounding. 

Source: OIG analysis. 
9

Table 2. Results by Route Type for 100% OTP Scenario 

Categories of Effects LongDistance 

ShortDistance 

Incremental Revenues $107.8 $35.1 

Cost Savings 

 On-Board Services $14.6 $1.0 

 Trainmen & Enginemen $17.5 N/A 

 Fuel $4.0 $4.4 

Total Cost Savings $36.1 $5.3 

Incremental Net Performance Payments ($36.6) ($11.3) 

TOTAL $107.3 $29.1 

All figures are expressed in millions of dollars. Numbers may not add due to rounding. 

Source: OIG analysis. 

Improvements in OTP on long-distance trains generated greater benefits in every 

category of effects considered – revenues, costs, and net performance payments – 

than improvements in OTP on short-distance routes. The primary reason for this 

is that the poorer OTP of long-distance (30 percent in FY 2006) as compared with 

short-distance routes (67 percent in FY 2006) translates into a comparatively 

larger gap between FY 2006 actual OTP rates and target OTP rates for the longdistance routes. As a result, bringing the long-distance trains up to target OTP 

rates led to larger changes in revenues and costs than the increase in OTP for short 

distance routes. 

There are also more specific reasons for this finding with respect to the two largest 

categories of Amtrak’s labor costs: (1) trainmen and enginemen (T&E), who run 

the train; and (2) on board service (OBS) staff, who are dedicated to passenger 

care. T&E crews are guaranteed eight hours pay per shift, which is longer than the 

travel times on almost all short-distance routes As a result, if a short-distance train 

runs late, it may not result in extra pay for these employees.9

 In addition, many 

short-distance trains have only a single OBS staffer. In contrast, long-distance 

trains usually carry several types of cars, such as dining cars, lounge cars, and 

 

9

 There were a handful of short-distance routes on which savings related to T&E would likely have accrued in 

FY 2006 from improved OTP. However, all of those routes shared crews among multiple trains, which made 

modeling T&E crew scheduling on them impractical. 
10

sleeper cars that require additional, specialized OBS personnel.10 Therefore, any 

percentage reduction in labor hours reduces costs to a greater extent on the longdistance routes, due to their much larger OBS staffing base. 

Revenue Increases Would Account for the Largest Share of the Gains 

from Achieving a Reliable OTP 

Travelers who have the option to choose among transportation modes can readily 

choose to take the train if they become more confident that it will arrive on time. 

This makes revenues relatively responsive to changes in OTP. In contrast, 

Amtrak’s operating cost structures, particularly those related to labor, incorporate 

significant rigidities as a consequence of safety regulations and negotiated 

agreements. As a result, the variation in Amtrak’s operating costs associated with 

changes in OTP would be moderate by comparison. Table 3 illustrates this for the 

85 percent OTP scenario. 

Table 3. FY 2006 Actual Values and Estimates for Improved OTP

Categories of Effects Actual

Estimated 

@85 Percent 

OTP 

Percent 

Change 

Revenues $589.1 $700.5 18.9% 

Costs 

 On-Board Services $92.6 $77.9 (15.9%) 

 Trainmen & Enginemen $97.7 $81.7 (16.4%) 

 Fuel C$100.8 $92.6 (8.1%) 

Total Costs $291.1 $252.2 (13.6%) 

Net Performance Payments $15.3 $29.5 92.8% 

All figures are expressed in millions of dollars. 

Source: OIG analysis. 

The greater responsiveness of revenues implies that travelers have greater 

flexibility in choosing their mode of travel than Amtrak has in adjusting its cost 

structures. If travelers have options, and rail travel is unreliable, they can choose 

to make their trips by modes other than rail. Should rail travel increase in 

reliability, then the number of passengers can grow to the extent that travelers 

previously using other modes choose to take the train. 

 

10 Staffing on the Auto Train is an exception to this statement, since Auto Train OBS staff function interchangeably. 
11

Labor and Fuel Costs Would be Moderately Affected by Changes in OTP 

We determined that the primary cost categories that would be affected by changes 

in OTP are labor -- T&E and OBS labor in particular11 -- and fuel. Both T&E and 

OBS staff can incur overtime when trains run late. In addition, Amtrak builds two 

hours of leeway into the daily schedules of many T&E crews to reduce the 

likelihood that delays will cause a crew to run up against its maximum hours of 

service.12 Delays increase fuel consumption by increasing the time spent idling. 

They also result in more frequent accelerations and decelerations than would 

otherwise be required. 

The extent to which labor costs would change as a consequence of improved OTP 

is limited by a variety of significant constraints. Some of these are a consequence 

of safety regulations. For example, regulations specify the number of hours 

enginemen can work in a single shift. Others derive from negotiated agreements. 

For example, during each shift a T&E crew can only work within a single, 

predefined geographic area, the boundaries of which are set through labor 

negotiations. Consequently, the labor cost savings are relatively moderate. 

Even though improved OTP would lead to a reduction in some very fuel-intensive 

activities, the percentage change in fuel consumption that would result from 

improved OTP is also limited. Fuel consumption is primarily driven by the 

amounts required to pull a given amount of tonnage over a certain distance, which 

improved OTP would not affect. 

Net Performance Payments Would Vary Substantially Over the Range of 

OTP Considered 

Net performance payments would rise should OTP improve from FY 2006 rates to 

any of the target rates considered, as, at a minimum, performance penalties would 

no longer be collected. Net performance payments are projected to increase to 

$5.8 million at the 75 percent OTP scenario primarily because of penalties no 

longer received or used to offset payments to host railroads.13 

The penalties collected are not as large as might be expected given the poor OTP 

characterizing so many routes because in many agreements a host railroad’s 

liability for penalties is capped at the level of the performance payments received 

 

11 We also considered the impacts on mechanical workers, but could not independently estimate them. Amtrak’s 

calculations of the increments in these labor costs due to poor OTP are imprecise and relatively small, $0.5 million to 

$1.7 million in FY 2006. 12 When a T&E crew reaches its maximum hours of service, it must cease operations, and the train it was running 

cannot start up again until a relief crew arrives. The original crew continues to be paid until it is dropped off at its 

destination. 13 Most of Amtrak’s agreements with the host railroads call for performance penalties to be assessed when OTP falls 

below 70 percent, and require performance payments to begin when OTP rises above 80 percent. 
12

by that host in the previous year. This significantly reduces the penalties for 

continual poor performance. About $41.5 million in penalties was excused in 

FY 2006 as a consequence of capping provisions. 

At the higher target OTP levels, Amtrak would make additional performance 

payments to the host railroads. Achieving an 85 percent OTP in FY 2006 would 

have caused net performance payments to host railroads to grow by $14.1 million. 

We further found that performance payments would have grown by $47.9 million 

in the 100 percent OTP scenario. The finding of financial benefits from reaching 

better OTP rates far in excess of the associated changes in net performance 

payments raises the possibility of further incentivizing host railroads to support 

improved OTP. 

Increases in Fuel and Labor Costs Would Only Increase the Financial 

Importance to Amtrak of Achieving Reliable OTP 

Our estimates of the fuel cost savings generated from achieving reliable OTP 

would rise in proportion with the cost of fuel per gallon. In FY 2006, Amtrak paid 

an average of $1.63 per gallon of fuel. More recently, in January 2008, the average 

fuel price paid by Amtrak reached $2.20. Therefore, if Amtrak had faced that price 

throughout FY 2006, our fuel cost savings estimates would have risen 

35.0 percent. 

Amtrak has reached a tentative agreement with its T&E workers that incorporates 

higher wages, and its labor agreement with its OBS workers has expired. Since 

better OTP generally reduces labor hours for T&E and OBS workers, and 

overtime hours in particular, any new agreement that stipulates an increase in their 

wages above those paid in FY 2006 would translate into greater cost savings from 

improved OTP than those projected in this report. 

CONCLUSION 

Achieving reliable OTP would substantially improve Amtrak’s finances. We 

estimated, for example, that reaching an 85 percent OTP off the NEC in FY 2006 

would have provided Amtrak with an additional $136.6 million. In addition to the 

financial benefits for Amtrak, the estimated increase in riders indicates that 

improving OTP is an important element in making rail a more viable alternative 

for travelers. A large number of travelers who had previously used other modes 

would choose to travel by rail if it was reliably on-time. This has implications for 

reducing congestion on airways and roads. Working with the host railroads to 

achieve an 85 percent OTP off the NEC would be a difficult task. However, 

Amtrak may be able to utilize a portion of the projected benefits to further 

incentivize the host railroads to provide this enhanced level of service. That is, 
13

Amtrak could increase its performance payments to host railroads to encourage 

them to improve the performance of Amtrak trains operating on their tracks. 

We appreciate the courtesies and cooperation of Amtrak representatives during the 

preparation of this audit. For any questions concerning this report, please call me 

at (202) 366-1981 or Betty Krier, the Project Manager, at (202) 366-1422. 

# 

cc: Audit Liaison, OST, M-1 

 Audit Liaison, FRA, RAD-43 

 Amtrak Liaison 
14

EXHIBIT A. SCOPE AND METHODOLOGY 

SCOPE 

This audit was requested in February 2007, by the Subcommittee on Surface 

Transportation of the Senate Committee on Commerce, Science, and 

Transportation. The objective of the audit was to estimate quantitatively the 

effects of Amtrak’s poor OTP on its “bottom line”. This required estimation of 

the effects of poor OTP on Amtrak’s revenues, costs and net performance 

payments. CRA International (CRA) calculated the revenue gains from improved 

OTP. We produced the results for the costs and net performance payments. 

Routes on Amtrak’s Northeast Corridor were excluded from the analyses because 

they did not exhibit the poor and declining OTP characterizing the rest of the 

system. Specifically, we excluded the Acela, Metroliner, Regional, and Keystone 

routes. 

We performed this audit in accordance with generally accepted Government 

Auditing Standards prescribed by the Comptroller General of the United States. 

METHODOLOGY 

Pending legislation14 would impose penalties on host railroads should Amtrak 

OTP fall below 80 percent due to reasons within a host railroad’s control. In 

recognition of this, we focused our analysis on an OTP of 85 percent because it 

represents a limited improvement over the 80 percent OTP threshold. We chose 

OTP rates of 100 percent and 75 percent to represent the upper and the lower 

bounds, respectively, of reliable OTP. We derived our results by modeling what 

revenues, costs and net performance payments would have been in FY 2006 at 

each of the target OTP rates, and then taking the difference between our modeling 

estimates and actual values. We conducted checks of all the data used in the 

analyses to assess reasonableness and concluded that the data was sufficient to 

support our conclusions. 

Revenues 

First, CRA estimated the impact on Amtrak ridership from changes in minutes of 

delay. CRA expected that delays would only affect ridership if they persisted for 

some time. CRA further expected that reputational effects and the variability of 

delay would also matter. The measure of delay used in the econometric model of 

the relationship between ridership and minutes of delay incorporated all of these 

 

14 S.294 – The Passenger Rail Investment and Improvement Act of 2007, Sec. 209. 

Exhibit A. Scope and Methodology 
15

considerations. That measure was the accumulated delay for all trains arriving and 

departing from the point of origin for the given trip divided by its standard 

deviation. Other independent variables entering into the estimation accounted for 

the relative attractiveness of other travel modes and economic growth. 

Second, in order to convert the ridership-delay relationship to the delay-OTP 

relationship, CRA estimated current standardized delay as a function of OTP. 

Third, the relationship between ridership and changes in OTP was derived from 

the results obtained in the previous stages. Fourth, the ridership associated with 

improved OTP multiplied by Amtrak’s average yields provided the revenues at the 

OTP targets. Finally, CRA generated the revenue gains by comparing the 

revenues at the target OTP rates with actual FY 2006 revenues. The data used for 

all the estimations covered FY 2001 through FY 2006. 

Costs 

We identified cost items that varied with on-time performance through interviews 

with Amtrak staff and a line-by-line examination of the costs in Amtrak’s Route 

Profitability System (RPS) for FY 2006. These cost items were: three types of 

labor (OBS, T&E, and Maintenance) and fuel. We limited our cost analyses to 

routes with an OTP less than 75 percent for FY 2006 because we did not expect 

significant cost savings from small increases in OTP for these routes. (This 

criterion excluded one long-distance and two corridor routes.) We interviewed 

Amtrak staff to determine the most appropriate means of modeling the cost items. 

 

We developed our cost models based on Amtrak schedules from the System 

Timetable for Spring-Fall, 2006. The 100 percent OTP scenario was modeled 

exactly to schedule. We calculated the increase in run-times associated with the 

75 and 85 percent OTP rates by analyzing six years of monthly delay data for all 

Amtrak trains. We isolated the observations with OTP rates similar to the target 

rates, and derived an average increase in run-time for each scenario. For example, 

an OTP rate of 85 percent was associated with an average increase in run-time of 

1.99 percent for long-distance routes and 4.59 percent for corridor routes. We 

adjusted schedule times for each model using these parameters. 

On-Board Service Labor 

OBS staff in FY 2006 included chefs, food specialists, and lead service attendants. 

It also included lounge, parlor, coach car, and sleeping car attendants. All of these 

positions are subject to labor agreements that guarantee a minimum of 180 hours 

per employee. On long-distance routes, most Amtrak OBS staff works on a train 

as it travels from the initial departing station to the terminal station, and then 

returns to the initial station by working the same route back after a scheduled 

break. The OBS staff also consists of “extraboard” employees that work when 

Exhibit A. Scope and Methodology 
16

full-time employees are unavailable. Our long-distance OBS models incorporated 

all of these considerations, as well as information on break times from actual 

Amtrak staff schedules. Our final headcount estimates were compared to Amtrak’s 

actual headcount by route for FY 2006, when possible, to check for 

reasonableness. 

For corridor routes, OBS staff can work on several different routes during a trip, 

which made it difficult for us to calculate monthly labor requirements. Instead, we 

used information from Amtrak on the monthly number of hours scheduled and the 

headcount for each position for each route. This information was based on 

planned route schedules and therefore was a good estimate of the number of hours 

of labor required to operate Amtrak corridor routes at 100 percent OTP. Since the 

savings in OBS costs from achieving target OTP rates amounted to a relatively 

small percentage of existing OBS costs, we limited our OBS analyses to those 

routes that had at least $0.5 million in OBS expenses in FY 2006. This meant we 

excluded 14 out of the 20 corridor routes from our analyses. 

Trainmen and Enginemen Labor 

Trainmen and enginemen (T&E) schedules on Amtrak trains are largely 

determined by labor agreements and federal regulations, and these largely shaped 

our modeling of these costs. The basic T&E crew for a long-distance train is 

composed of a passenger engineer (engineman), a passenger conductor (trainman) 

and an assistant passenger conductor (trainman). A second passenger engineer is 

required for all shifts longer than six hours. Amtrak also incorporates padding into 

its trainmen and enginemen schedules in response to poor OTP on its longdistance routes. Specifically, Amtrak adds two hours of holdover in scheduling 

many T&E crews. We concluded that this padding could be reduced to one hour 

for the improved OTP scenarios used in our analyses. 

The first step of our analysis was to calculate the cost of a crew for a single run of 

each route using the most cost-effective crew configuration. We used five 

different crew configurations for our analysis, all of which complied with federal 

regulations and labor agreements. Once the most cost-effective crew configuration 

was chosen for each route, we multiplied the frequency of roundtrips by the crew 

costs per roundtrip and derived the total labor costs for T&E crews. 

There were only a handful of corridor routes to which T&E savings would likely 

accrue from improved OTP, because travel times on most corridor routes are less 

than the hours guaranteed for T&E per shift. However, the sharing of T&E crews 

servicing in those two routes with other routes made isolating their costs 

impractical. 

Exhibit A. Scope and Methodology 
17

Maintenance Staff Labor 

We interviewed Amtrak staff to determine a method for modeling labor costs for 

maintenance staff that would vary with different levels of OTP. At each route 

endpoint, Amtrak performs turnaround servicing on its trains. When trains run 

late, maintenance staff may incur overtime waiting for them. However, Amtrak 

does not currently precisely track the number of labor hours associated with trains 

running late. Amtrak provided us with an estimated range of overtime costs 

attributable to poor on-time performance in FY 2006 of $0.5 to $1.7 million. Due 

to the imprecision and low value of the estimate, along with our inability to verify 

it, we decided not to factor the potential savings from maintenance costs into our 

estimates. 

Fuel 

We used Amtrak’s methodology for estimating fuel use by train as the basis of our 

model and then adjusted the fuel use to account for better OTP. Amtrak divides 

fuel use into four major components, as follows: locomotive fuel, which is the fuel 

required for the locomotive to pull itself; car fuel, which is the fuel required for the 

locomotive to pull the cars behind it in the train; hotel fuel which encompasses 

the fuel to run the train’s amenities, such as HVAC, whether the train is moving, 

stopped, or delayed; and idle fuel, which is the fuel used by a locomotive to idle in 

a yard or terminal. We modeled each of these to derive total fuel usage at each of 

the target OTP rates. 

Net Performance Payments 

Performance incentives and penalties are typically determined on a monthly basis 

at the level of dozens of individual check points. Amtrak provided performance 

incentives and penalties data for FY 2006 at the individual check point level. We 

used this data to model performance incentives and penalties at the target OTP 

rates for a set of host railroads that together accounted for 95 percent of potential 

performance incentives off the NEC. We also used this data to determine the 

actual performance payments and penalties paid in FY 2006. 

In practice, there are discrepancies between the OTP used for the purposes of 

calculating net performance payments and the OTP reported at the route level. 

They derive from there being factors that affect OTP that are beyond the host 

railroads’ control, such as weather or an Amtrak equipment failure. Trains affected 

by these factors are excluded from the calculation of OTP for the purposes of net 

performance payments, but are included in the calculation of route OTP. Exact 

determination of the net performance payments required at a certain route OTP 

necessitates accounting for the excluded trains. 

Exhibit A. Scope and Methodology 
18

We were able to incorporate the additional payments needed if some of the 

excluded trains were to be made to be on-time. Those trains are tracked in the 

Amtrak data as “do not count” or “did not operate”, and largely represent those 

whose OTP is beyond the host railroads’ control due to weather or third party 

actions. However, there were two other sources of trains that would be considered 

on time for payment but not for route purposes that we did not account for. The 

first of these are trains that are considered to be “on-time due to allowances”. 

These trains largely represent those whose performance is beyond host railroads’ 

control due to problems originating with Amtrak. The second are trains that are 

on-time within the tolerance for each checkpoint (generally 10 minutes on the 

long-distance routes), but are late within the tolerance of the route. Amtrak does 

not maintain data on the numbers of trains in either category. Our lack of 

accounting for these factors means that our estimates of net performance payments 

required for the 75 percent and 85 percent OTP scenarios were somewhat 

understated. Our estimates for the 100 percent OTP scenario were not affected by 

these factors. 

Exhibit A. Scope and Methodology 
19

EXHIBIT B. MAJOR CONTRIBUTORS TO THIS REPORT 

THE FOLLOWING INDIVIDUALS CONTRIBUTED TO THIS REPORT. 

Name Title 

David Tornquist Assistant Inspector General for 

Rail and Maritime Program 

Audits and Economic Analysis 

Mitchell Behm Program Director 

Betty Krier Supervisory Economist/Project 

Manager 

Jerrod Sharpe Economist 

Jovanny Roque Economist 

Keith Klindworth Economist 

Chia-Mei Liu Economist 

Exhibit B. Major Contributors to This Report 
The following pages contain textual versions of the graphs and charts found in this 

document. These pages were not in the original document but have been added 

here to accommodate assistive technology. 
Effects of Amtrak’s Poor On-Time Performance 

Section 508 Compliant Presentation 

Figure 1. Average On-Time Performance of Amtrak Routes 

(percent) 

 Fiscal Year 

 2001 2002 2003 2004 2005 2006 2007

NEC 83.76 85.52 79.29 75.78 78.17 81.00 85.51

Long-Distance 54.38 49.51 50.84 42.56 41.38 29.99 41.60

Non-NEC Corriodor 73.25 75.49 75.65 73.51 70.44 67.33 65.50

Figure 2. Calculation of Net Effects at 85 Percent

Additional Revenues + Cost Savings - Performance Payments = Net Gains 

 $111.4 million $39.3 million $14.1 million $136.6 million 

 

 

 

Figure 3. Fiscal Effects of Improved OTP for FY 2006

 

Categories of Effects 75 percent 85 percent 100 percent 

 

Revenues $90.6 $111.4 $142.9 

Cost Savings 

 On-Board Services $13.9 $14.7 $15.6 

 Trainmen & Enginemen $15.3 $16.0 $17.5 

 Fuel $8.2 $8.2 $8.4 

 Total Cost Savings $37.3 $38.9 $41.4 

 

Net Performance Payments ($5.9) ($14.2) ($47.9)

 

TOTAL $122.0 $136.1 $136.4 
Figure 4. Results by Route Type for 85 Percent 

OTP Scenario 

(in millions) 

Categories of Effect Long-distance Short-distance 

Revenues $ 85 $ 27 

Costs 

 On-Board Services 14 1 

 Trainmen & Enginemen 16 N/A 

 Fuel 4 4 

Subtotal $ 34 $ 5 

Performance Payments ($ 10) ($ 4) 

Total $ 109 $ 28