Crossties

SEP-OCT 2018

Crossties is published for users and producers of treated wood crossties.

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CONTACT RTA WEBSITE BECOME A MEMBER BECOME A MEMBER RTA WEBSITE CONTACT Cahaba Pressure Treated Forest Products Eagle Metal Products East Coast Railroad Gross & Janes Co. Hurdle Machine Works Koppers Inc. CROSSTIES • SEPTEMBER/OCTOBER 2018 12 MARKET OUTLOOK Table 3 - Short Line Survey Summary 2018 Tie Categories 2017 Usage 2018 Projected 2019 Projected 2020 Projected New 6" and 7" Ties 1,872,067 2,350,094 2,134,682 1,966,607 Relay 6" and 7" Ties 124,819 50,519 53,858 53,208 Grand Total All Wood Ties 1,996,887 2,400,613 2,188,541 2,019,815 Switch Ties 51,639 60,948 46,423 42,965 Bridge Timbers 48,201 70,629 59,431 60,775 Concrete Ties 434 0 8,673 0 Steel Ties 499 6,483 1,323 2,168 Composite/Plastic Ties 0 0 0 0 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Track Miles Reporting 21,908 26,900 23,232 20,620 24,964 25,391 18,217 21,116 26,696 15,116 14,966 28,516 19,924 17,663 30,648 29,913 23,883 Total Track Miles 47,500 51,584 51,584 51,584 51,584 51,584 51,584 51,584 50,859 50,859 50,859 50,000 50,000 47,889 50,000 50,000 45,002 % Reporting 46.12% 52.15% 45.04% 39.97% 48.39% 49.22% 35.3% 40.9% 52.5% 30% 29% 57% 40% 37% 61% 60% 53% Total Roads Reported 188 223 206 176 197 192 157 185 191 117 116 139 130 115 170 111 114 Total Short Lines 603 558 558 558 558 572 572 572 572 572 306 455 633 633 633 533 575 % Reporting 31.18% 39.96% 36.92% 31.54% 35.30% 33.57% 27.4% 32.3% 33.4% 20.5% 38% 31% 21% 18% 27% 21% 20% Table 2—Railway Tie Association Annual Survey Estimated Crosstie Requirements • Class I Railroads 2018-2020 Inclusive Authorized Crossties for 2018 District and Railroad Total Track New Wood Crossties Wood Relay New Non-Wood Crossties Switch Ties (Units) Bridge Timbers Mileage Hardwood Softwood Crossties Concrete Steel Other Wood Other Units Eastern U.S. 49,286 4,900,000 0 0 0 0 0 130,000 0 30,000 Western U.S. 98,723 7,200,000 300,000 25,000 425,000 15,000 1,000 290,000 125 70,000 Canada 32,500 3,550,000 0 0 80,000 1,000 0 85,000 0 18,500 TOTAL 180,509 15,650,000 300,000 25,000 505,000 16,000 1,000 505,000 125 118,500 Authorized Crossties for 2019 Total Track New Wood Crossties Wood Relay New Non-Wood Crossties Switch Ties (Units) Bridge Timbers Eastern U.S. 49,286 5,300,000 0 170,000 0 0 0 160,000 0 54,000 Western U.S. 98,723 6,970,000 400,000 25,000 425,000 5,000 5,000 180,000 125 45,000 Canada 32,500 3,600,000 0 0 70,000 1,000 0 90,000 0 20,000 TOTAL 180,509 15,870,000 400,000 195,000 495,000 6,000 5,000 430,000 125 119,000 Authorized Crossties for 2020 Total Track New Wood Crossties Wood Relay New Non-Wood Crossties Switch Ties (Units) Bridge Timbers Eastern U.S. 49,286 5,250,000 0 170,000 0 0 0 130,000 0 54,000 Western U.S. 98,723 6,920,000 400,000 25,000 425,000 5,000 5,000 180,000 125 45,000 Canada 32,500 3,600,000 0 0 77,500 1,000 0 90,000 0 20,000 TOTAL 180,509 15,770,000 400,000 195,000 502,500 6,000 5,000 400,000 125 119,000 may not give proper weight to the fact that supply woes will affect actual shipments of black ties—down the road. Simply said, you can't ship what you don't have (no matter the demand level) and that could be becoming more of a problem daily especially for the smaller customers. With markets remaining strong and lead times being extended, it adds to the longer- term pressures—will there be a 2013-2015 déjà vu moment ahead? The survey of the short lines (see Table 3), the largest part of what is commonly referred to as the commercial markets, offers a little, if incomplete, assistance. The same roads that show a projected 2.4 million tie demand for 2018 said they installed 2.0 million in 2017. That certainly reinforces the robust market reports. But, with demand for pallet material driv- ing prices to near all-time highs and other markets s uch as flooring and crane mats remaining strong, the squeeze is on from the other industrial timber markets and the lower end of the low-grade lumber market. Not only are 7-inch IG ties tight, pressure is also on 6-inch and reportedly growing. And there really isn't any place to hide for suppliers. The top end of the grade tie market isn't keeping pace already, so what do suppliers do? The answer is ship it later—that is, if and when possible.

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