SVR General Discussion

Coal, water, oil, maintenance time, Fitter exam time, admin time for tickets, Guards time, cost of the cleaning materials, carriage batteries and the electric to charge them. The list could go on and on with what to include. Whilst coal is a large factor in the costs involved there are many other costs that dont immediately spring to mind.

A calculation was done pre covid for each loco and using a train length of 8 coaches. From memory a figure of £25 per mile on average was mentioned. Each coach came out at about £8 per mile.

7714 - 70 miles per day (LE movement from Bewdley - Kidderminster and return) = £1750
6 coaches - 64 miles per day = £512
Total cost £2262

Now that was done before coal and energy and other costs soared. I think it would be a worthwhile exercise to redo in current times.

 

The video doesn't go into the methodology, but uses the figure to highlight why running trains that are not profitable could quickly get a railway like the FR / WHR (or presumably others), into serious financial trouble.
The video is lengthy (25 mins), but it is time well spent if you can view it.

 

Very interesting, thanks for sharing.

I would suggest it is an essential exercise to complete (&/or update) - if you don't know what it costs to send out a train how can you hope to try and cover those costs at a minimum.
I would be very surprised if the SVR haven't done this, but the FR are being particularly candid in their situation.
I had a figure mentioned to me that it now costs a £1000 just to steam a (mainline) locomotive. I am not sure of its accuracy or how it was calculated, but I can believe it (if you bring both direct and indirect costs into the equation).

 

Without comment on the numbers, that logic sounds reasonable. However, I’d want to be cautious about too much focus on indirect costs. Focusing on those may blind a railway to opportunities to generate positive cashflow where direct costs are covered, but indirects not fully covered.

When so many of those indirect costs are (a) vast and (b) incurred before a mile is run, the effect of that focus may be to make it harder to run anything, as the focus comes onto running the fully profitable “core”.

At the same time, the importance of more than covering those indirect costs in peak season is enhanced - they don’t go away, and the solvency of the railway will depend on their being covered.


Sent from my iPad using Tapatalk

 

I agree. The elephant in the room on a line like the SVR (and plenty of others) is that there are very high fixed costs regardless of whether you ever run a train. The reductio ad absurdum of cutting unprofitable services is that you arrive at a point where every service has been cut - but your fixed cost base remains. The risk is that, because the direct train running costs are somewhat easy to quantify, they become an easy target for cost cutting.

The other trap to avoid is around marginal costs of additional mileage. The first loco round trip of the day is expensive (because of lighting up costs, and what remains on the grate at the end of the day) but the risk is that may not be adequately reflected in costs models if they are based on things like "total annual cost of coal divided by total annual mileage". If your average daily diagram is 60 miles, a loco coming out to run a single 30 mile diner costs you more than your average per mile figure in coal would suggest. But the corollary of that is that using the same loco for an additional passenger trip may actually have a disproportionately beneficial impact on the service relative to what the marginal cost of that extra trip costs in coal.

Overhaul costs also figure: when you overhaul loco, a significant part of the total ends up being time-based rather than mileage based. Yes, you need to do a p&v after about 25,000 miles regardless of whether that takes 3, 5 or 10 years to achieve. But if you have done a big boiler overhaul, you have to do another one 10 years later regardless of the miles run. So within reason, once you have overhauled a loco, yo want to get the most miles you can out of it. The flip side of that being that if you cut a planned running day because you think it won't be profitable, you haven't got rid of the same proportion of the boiler overhaul costs - you've just made every other service incrementally more expensive.

It's a difficult exercise, but my general starting point is that for railways with a high fixed cost of business, and which is dependent more than anything on cash flow, cutting services is not perhaps the financial panacea that is widely perceived.

Tom

 

Paul Lewin would agree with both comments regarding cutting services, indeed the FR have added more of them this year - however, the railway retains close control over expenditure.
I would direct you to the middle of the film where he explains how they have come up with the timetables this year, discusses the 'public' minimum service and 'in house' maximum version and also discusses the ability to utilise both railways for hop on / hop off still.

 

From a customer viewpoint after staying a week near Bridgnorth next to the railway just before Easter doesn,t feel SVR have yet found the right Formula. On the open weekend which we did other things it seemed a lot of the trains later on were pretty lightly loaded, as observed from our holiday cottage. We went to the Welshpool that weekend which was heaving, very welcoming and very keen volunteers with the Manager keeping a good eye on things! We went on the Thursday from Brignorth on the 1st steam which was pretty busy both ways and seemed quite a few joining at Bridgnorth although the top car park was not very full. Didn,t stop off because with the sparse timetable didn't work for us. Did get some good Bachmann bargains in the gift shops though! Volunteers seemed good but perhaps not quite as buoyed up as in the past. Just to note we like starting from Bridgnorth anyway as there are places to walk the dog first which Kiddiminster isn't so good for. Wonder as it was holidays what they missed by not running Mon to Wed though.

 

It is also worth noting based on those numbers. That at the current fares the Festiniog has to sell two third class coaches full of passengers on a Blaenau Festiniog train to break even. Typically the set has 7 third class saloons, 2 first class observation cars and a service coach. So if you sold every seat to an adult, the ticket income alone is around £13000 before you even get to on train catering. Obviously that doesn't happen every day but the trains are sufficiently full to be reasonably profitable. Keeping tight controls on costs is obviously important, but the FR also essentially doubled it's ticket prices overnight.

I'm also interested to see how many of these extra services actually happen. Last year they seemed very reluctant to add in extra trains even when they were all full.

 

That £1000 quickly looks inadequate if you think of loco hire/overhaul allowance of £700*+/day, a tonne of coal to go from cold** to in steam at £400+/tonne + insurance, boiler washouts, FTRs, casual repairs, oil, water all of which have to be paid for at some point. Add in a further couple of tons of coal for passenger hauling during the day & your loco costs alone are well north of £2000/day.

These are heritage railway type costings for say a cl4 or 5 loco. Mainline locos running on NR would be considerably more than this per day as they tend to run fewer days, have more inspections & gizmos to pay for and work harder when in use.

*That £700/day towards overhaul costs assumes some volunteer labour (getting more scarce), top up fund raising and a fairly routine overhaul not involving replacing big ticket items such as tyres or particularly major boiler work.

**One cost which may be being overlooked in the retreat from 7 days/week services is the effect that has on fuel required to bring locos into steam which have not been used in the previous days together with the increase in the number of hot to cold to hot cycles for boilers causing additional stress and greater eventual repair costs.

 

There are a lot of fixed costs to cover. You need a lot of trains full to the brim and not many empty ones to make sure of the biggest possible surplus. I would guess that unless you “know” or judge the extra service will at least double the investment needed to put it on, there’s no point.

 

A complexity of the SVR - and other lengthy lines with intermediate stops - is identifying how many people make the full line journey and how many travel between stations. AIUI although the SVR doesn't advertise the facility some travellers will start at one station, detrain at another then walk on local footpaths to rejoin the train at another intermediate station; this is a facility advertised by the ELR although I am aware of what level of income such operations generate. As noted Bridgnorth offers a town attraction (and market on Saturdays) hence is a visitor attraction in its own right whilst at the recent steam gala there were heavy crowds detraining at Highley with the Engine House providing an attraction in its own right. This raises the question of how much intermediate / part line journey travel generates and is it a market that can be exploited to generate further income ? Possible "walks" could be such as detrain at Bewdley walk to Northwood Lane for next train; detrain at Arley walk to either Highley or Northwood Lane for next train; detrain at Hampton Loade walk to Highley for next train; I am sure SVR marketing could improve on these and possibly even come to some arrangement with local pubs for "walk, dine and train" excursions to encourage people to sample the Severn Valley.

 

I think that logic is dangerous if taken to extremes. Fixed costs do need covering, and the ability to make a profit over the year is absolutely vital - which includes maximising patronage and yield* on the trains that are run. But at shoulder periods, there may be profit in running at a level where a profit is made on direct costs, but fixed costs are not fully covered, boosting profit over the year but accepting that on a specific date, profitability is reduced.

* - I note the common elision between load and yield. A train full to the brim may be significantly less profitable than an empty one if it is well laden with passengers on discounted tickets, membership freebies, etc. Again, and this is also only of limited value unless measured over an extended period, a measure like income per seat mile is much more meaningful as it allows for the vagaries of short journeys, fares structures, etc.

 

I lived the first 18 years of my life within earshot of the station at Kidderminster (and it opened when I was four) - my brother and his young family are still there.

As a local, I know (alright it's anecdote, but it's anecdote from a few decades of lived experience, including volunteering at Kidderminster station, and knowing a lot of current volunteers) that trips all the way to Bridgnorth are a special occasion/treat. There was a lot of going to Bewdley for an afternoon/evening out and coming back in a taxi; Kidderminster to Northwood then walk to Arley and back; Kidderminster - Arley return for lunch in the pub, etc. All those were 'going on the railway' but we rarely went north of Arley.*

I would just note that working with local pubs would count to some extent as an endorsement of that pub. I quite like 'basic, wet-led' pubs but you've got to know your market and have pubs along the route that you'd be confident coming to an arrangement with....


*I added it up once and my Kidderminster-Arley usage was well, well into three figures of occasions. Kidderminster to Bridgnorth is low double figures. Over nearly 40 years - and including over 10 years of volunteering!

 

Getting the short trip market back would be useful. It appears the prolonged pre-book only* period has led to a decline in this type of traffic. It also appears that some locals are under the impression that short singles and returns aren't available despite them being reintroduced fully September 2021.

The current timetable is a little poor for walking between as stations. Hopefully this will change soon.

On the even three set timetable of yesteryear, I could get off one train at Arley and walk to Hampton where I could catch either the train behind going to Bridgnorth or the set I got off going back to Kiddy. The service interval was also the right interval to walk between Arley and Bewdley.

*There was always tickets available on the day, but rarely advertised.

Sent from my moto g(7) play using Tapatalk

 

Like most things. To be taken in moderation. The shoulder periods are generally worth running to help cashflow more than anything. My view is that you have to have an eye on the surplus, but you watch the cashflow like a hawk!

 

I quite agree. My concern is about taking focus on total profit to excess, and overlooking how total profit can be contributed to despite some views making it look unprofitable because of weaknesses in how the fixed costs are apportioned.

 

Yes that is true, particularly and understandably from the viewpoint of the interested volunteer and unfortunately sometimes from the viewpoint of Trustees also. The cost of membership benefits is often very hard to quantify.

 

Re: the survival fund - I've made a donation however I have to admit that learning of the £130-some-odd a head dining train did make me question whether or not to bother (that sort of almost-elitist offering gets right up my nose - similar to the 'we want (however many) people to donate £1000 each' fundraisers for various newbuilds that give rise to my 'well you won't want my £20/month for the next 15 or 20 years then, will you?' response).

I won't be impressed if the begging bowl comes out again after this appeal.

 

I appreciate it’s the sort of thing that can be quite hard to hear, but given the size of the hole everyone’s money’s worth the same last time I checked.

3 seats was it remaining on the first of the £130 trains the other day? Not going to fill the hole by themselves those expensive dining services, but if they can fill trains with people prepared to pay it then I’ve got no problem with them running those and taking what (less) money I and other can afford to give as well.

On the other hand, don’t take the ‘elitist’ money and fail?

 

100% it will. That's not a glib comment, this is to keep the SVR in cash until spring 2024. The Bridgnorth Yard appeal had not yet reached its target. The Ct's next item was the Bewdley project. At pandemic Borle viaduct maintenance was deferred. Both Sterns and Alveley will need long-term repairs. There's much rolling stock with uncrystallised liabilities. The remaining 2016 shares issue projects (Bridgnorth Station and turntable) are unfunded etc.