The non-profit group cites Amtrak’s rising costs as a leading factor in its decision to cancel the annual excursions. Society officials tell Trains News Wire the organization has received two price quotes this year for operating the New River Train. Amtrak provided its first quote in January, but just a couple of weeks ago, a revised quote was emailed to the organization with a 9.6 percent cost increase. The passenger railroad cited rising labor costs for the unexpected hike.
Chris Lockwood, the organization’s general manager, says these figures and Amtrak’s ability to implement new prices and policies with 60-days notice makes it financially impractical to plan and market excursion trains for the third and four weekends of October.
Cancelling 2019’s excursions dates builds upon an already troublesome 2018 excursion season when the New River Train suffered a financial loss of more than $100,000 due to Amtrak mid-season tariff hikes. Lockwood says the organization built its operating budget based on Amtrak’s Oct. 1, 2017 tariff increase, but new private car policies and a mid-season tariff hike in 2018 skewed the group’s budget. The group still has unpaid bills from last year.
News Wire asked the organization to explain the cost increase and if measures were taken to protect the organization from suffering a loss after learning of the rate increase.
Joe Rosenthal, the organization’s assistant general manager, is responsible for calculating operating costs, securing private cars from across the country, and coordinating those logistics and fees. He says there are two types of costs the society calculates.
First, the organization budgets for mileage costs in transporting all of the privately owned railcars to a central point, like Chicago or Washington, D.C., to be placed on a dedicated deadhead train to Huntington. Rosenthal says those cars travel from all across the nation.
When the organization was budgeting for its trips last year, the mileage rate was $2.90 per mile, as outlined in the passenger railroad’s Oct 1, 2017 addendum to the private car tariff. In May 2018, Amtrak increased the rate to $3.26 per mile. On Jan. 1, 2019, the rate became $3.67 per mile, an increase of more than 26 percent since October 2017.
Secondly, the organization requests a rate from Amtrak to move the equipment to Huntington and operate the four-day excursion using Amtrak locomotives and personnel. Amtrak’s charter and special movements office is responsible for calculating and issuing these rates.
Rosenthal says both mileage and the operating cost of the New River Train saw multiple layers of unexpected price increases in 2018. In addition, Amtrak cut Huntington as an intermediate stop where passenger cars could be added or dropped by the Cardinal. This forced the organization to accept Amtrak’s deadhead costs from Chicago, which were figured in the overall operating rate.
“We began adjusting our expenses by reducing food costs, supplies, and administrative expenses. These had minimal impact on our operation because of the significance of the operating cost increase,” Lockwood says.
The organization also had to spend more money advertising the excursions because its marketing schedule was delayed due to uncertainty with Amtrak’s new policies in early 2018.
“The lessons we’ve learned in 2018 and Amtrak’s ability to once again increase these costs – just like the 9.6 percent hike we’ve already seen once in 2019 – is bad business to move forward and try to continue this tradition despite its economic validity and value to southern West Virginia,” Lockwood says.
“We appreciate many people stepping forward to assist in this difficult time. We thank the office of U.S. Sen. Joe Manchin (D-W.Va.) for calling on Amtrak to explain its rate increases and try to reverse this trend. We gave it our best effort, but this is the only viable option now,” the organization said in a statement issued to its membership Tuesday night.
The New River Train was the country’s last-surviving and longest mainline passenger excursion train, hauling around 4,800 passengers annually during its four days of operation on CSX Transportation-owned tracks in southern West Virginia. The 30-car train was an economic boost for Hinton – a town that hosts a rail festival in recognition of the train’s annual runs. The organization says the New River Train’s overall impact to the West Virginia economy is roughly $8 million.
Since its inception 53 years ago, the New River Train has hosted several distinguished steam locomotives, including Nickel Plate Road No. 765, Milwaukee Road No. 261, Chesapeake & Ohio No. 614, and Pere Marquette No. 1225, among others. It is estimated the New River Train has hauled more than 300,000 passengers through the New River Gorge and southern West Virginia since the society’s inception.
“We don’t think this is the end of the New River Train– but it’s goodbye for now,” Lockwood says.
News Wire is reaching out to private car owners, local leaders, and Amtrak for comment on the organization’s Tuesday night decision.