FP&A In Transit:

How Virginia Railway Express Reached
New Heights With Synario.

5 min Read

FP&A In Transit:
The Virginia Railway Express Story

Virginia Railway Express (VRE), is the 12th largest commuter rail in the US and serves travelers from across Northern Virginia and the Washington DC region. Pre-pandemic, the path of ridership was growing, carrying about 19,000 riders a day – along with this growth came expansion plans. However, the pandemic brought this to an unexpected halt, forcing VRE to confront a new reality of lower ridership and uncertain financial horizons. VRE faced these uncertain times with lateral thinking and went to work to ensure they could maintain the level of service their customers had come to expect.

Chugging Through Adversity

Before the pandemic, VRE was a picture of sustainability. Ridership numbers were dependable and constant. Its operating model, as a tenant on host railroads, presented both challenges and opportunities but was a stable way to do business. While it kept costs lower, it also limited VRE’s control over infrastructure and schedules. Nonetheless, with its ambitious expansion plans, VRE looked poised for continued growth. Part of this growth came through Transforming Rail in Virginia (TRV) – an initiative that would infuse billions into intercity and commuter rail across the Commonwealth. This initiative would help VRE provide more frequent and reliable service due to freight and passenger traffic having their own dedicated spaces with less congestion.

Then came the pandemic. Weekly ridership dropped by a staggering 90%, mirroring and surpassing the national trend for commuter rail. The future became shrouded in uncertainty. VRE and its CFO, Mark Schofield, refused to be derailed. Through strategic financial modeling initiatives, the transit agency went to work on ensuring a sustainable future.

The Right Tool For The Job

Synario’s financial modeling platform proved to be a valuable tool when it came to preparing for the future. It allowed VRE to test different ridership scenarios, from optimistic to pessimistic, and analyze their financial implications.

This data-driven approach enabled VRE to make informed decisions about service levels, resource allocation, and cost optimization.

With Synario, VRE could:

  • Model ridership based on telework trends:
    By analyzing telework trends and existing ridership recovery metrics, VRE could visualize and prepare for different ridership scenarios.
  • Communicate effectively:
    The Synario platform was key in modeling a demonstration for funding needs. Its insights and visuals helped to create a plan for fund usage and a pitch for funding needs. This was presented in the state’s capital Richmond. The initiative was successful in lobbying for dedicated funding, and the impact of the procurement went beyond just cash infusion. These monies would be used to further support VRE and the TRV program.
  • Visualize inflationary impact:
    While rates may be slowing, modeling for inflation still presents a tangible fiscal impact, raising construction and real estate costs with a capital project impact of as much as 50%, not only affecting current costs but requiring cost overruns to be accounted for (an FTA mandate).
  • Analyze & adjust fare structure:
    VRE uses Synario to help determine internal and policy-based decisions, using historical data and trends to inform decisions on fare structuring and rate changes.
  • Allocate resources efficiently:
    By understanding the financial impact of different resource allocation decisions, VRE could prioritize investments and maximize its limited budget.
  • Test service level concepts:
    As part of its role in the Transforming Rail in Virginia initiative, VRE has been asked to expand its service. This evolution away from a commuter railroad and toward a regional railroad starts with testing a Saturday service model. Doing so cost-effectively amidst ridership changes has been a task that needs a creative outlook to overcome. To combat operational overspending VRE is looking into a strategy of reducing the number of cars on the rails during the week, roughly one car of the seven or eight usually on the train. This reduction carries a staff reduction with it, and these resources can be reallocated toward weekend use.
  • Accurately assess
    jurisdictional funding asks:

    The funding VRE receives from municipalities plays a part in improving the operating margin. Synario has helped VRE to determine what level of funding to ask for and what gap may be left after this funding is issued.
  • Present more confidently
    to board members:

    Synario helps to provide confidence in presented figures and easily digestible visuals to illustrate the impact of their scenario and long-term financial analysis.
  • Analyze with agility, internally:
    At the management level, VRE uses Synario to test scenarios and compare the results, answering what-if questions, and performing sensitivity analysis and stress testing in real-time.
  • Model pandemic relief fund usage:
    Modeling pandemic relief fund usage is instrumental in the financial sustainability of any industry that saw a drastic decline in 2020 – knowing and allocating those funds as smartly as possible is key to making sure that there’s no waste. It also reassures the powers that be that when relief funds are issued, they will be used adeptly, giving more credibility to the agency.

Laying down track
for a sustainable future

VRE’s recovery plan, informed by its data-driven models, has shown promising results. While ridership has not fully rebounded, it is on an upward trajectory. VRE is now able to make strategic decisions about service expansion. In using the scenario analysis tools available in Synario VRE has surmised that they’d see growth in factors like passenger revenue, and more reimbursement from the state to compensate for additional host railroad use. Expanding the service would also incur additional costs and would hasten the use of pandemic relief funds. Finally, VRE plans for capital projects and infrastructure upgrades with confidence, knowing they have the financial data to back them up.

One way VRE keeps its model conservative through recent upticks in ridership is scenario analysis. VRE compares different levels of ridership change against its operating margin, levels of service, and how those variables may impact its funding and capital projects. Regardless of whether or not there is a large spike in ridership in the the near future, rest assured that VRE will be prepared for any situation.

Conclusion

This case study demonstrates the power of FP&A for transit agencies. VRE’s story serves as an inspiration for other agencies facing similar challenges, proving that with the right tools and a commitment to innovation, even the most challenging journeys can lead to successful destinations.

See what Synario can do for you

When it comes to managing the financial future of your business, you do not want to leave things up to chance or outdated methods of data management and projection. You need solutions your business can rely on, and financial planning and projection features that can guide you towards greater success in the long-term, rather than leave you struggling to plan more than a year or two in advance.

We started Synario because we were tired of struggling with spreadsheets and their shortcomings. We needed a solution that was dynamic, adaptable, and promoted cross-team collaboration. To answer this need, we created Synario: the agile modeling platform that organizations from all corners rely on to forecast and visualize their financial futures.

Are you ready to see for yourself what Synario can do for you? 

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