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 Used with permission Class 1 Freight Source: Association of American Railroads RailConnect Index Source: RMI 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 30 Trend lines in the four graphs below are 4 quarter moving averages. 12,500 13,000 13,500 14,000 14,500 15,000 15,500 16,000 16,500 17,000 17,500 18,000 18,500 19,000 2005 2Q 3Q 4Q 2006 2Q 3Q 4Q 2007 2Q 3Q 4Q 2008 2Q 3Q 4Q 2009 2Q 3Q 4Q 2010 2Q 3Q 4Q 2011 2Q 3Q 4Q 2012 2Q 3Q 4Q 2013 2Q 3Q 4Q 2014 2Q 3Q 4Q 2015 2Q 3Q 4Q 2016 2Q 3Q 4Q 2017 2Q 3Q 4Q 2018 2Q US Class 1 Freight (billions of ton-miles) Final estimate of the 2nd quarter GDP growth was 4.2%. In the third quarter of 2018 short line freight was up by 11.6 percent from year ago (estimate). Crosstie purchases were up 10.6 percent in the second quarter of 2018 versus last quarter. ties - BUSINESS TRENDS Real GDP (billions of chained 2012 dollars) Source: Surface Transportation Board. Revenue freight was up by 3.51% in the 2nd quarter versus last quarter, and was up 4.93 percent from year ago levels. 0 200 400 600 800 1,000 1,200 1,400 J F M A M J J A S O N D (000) YTD Housing starts are 6.6 percent higher than last year; permits are up 3.8 percent. 0 100 200 300 400 500 1/1/05 5/1/05 9/1/05 1/1/06 5/1/06 9/1/06 1/1/07 5/1/07 9/1/07 1/1/08 5/1/08 9/1/08 1/1/09 5/1/09 9/1/09 1/1/10 5/1/10 9/1/10 1/1/11 5/1/11 9/1/11 1/1/12 5/1/12 9/1/12 1/1/13 5/1/13 9/1/13 1/1/14 5/1/14 9/1/14 1/1/15 5/1/15 9/1/15 1/1/16 5/1/16 9/1/16 1/1/17 5/1/17 9/1/17 1/1/18 5/1/18 In September, diesel prices have increased by 17.1% from year ago levels. Normalization of interest rates is in progress as measured by LIBOR (interest rate). In September FOMC meeting 2018, the FED increased the FED funds by 25bp to 2.25%, and signaled one more hike this year. 0 1 2 3 4 5 6 1/1/05 5/1/05 9/1/05 1/1/06 5/1/06 9/1/06 1/1/07 5/1/07 9/1/07 1/1/08 5/1/08 9/1/08 1/1/09 5/1/09 9/1/09 1/1/10 5/1/10 9/1/10 1/1/11 5/1/11 9/1/11 1/1/12 5/1/12 9/1/12 1/1/13 5/1/13 9/1/13 1/1/14 5/1/14 9/1/14 1/1/15 5/1/15 9/1/15 1/1/16 5/1/16 9/1/16 1/1/17 5/1/17 9/1/17 1/1/18 5/1/18 percent 250 300 350 400 450 500 2005 Q2 Q3 Q4 2006 Q2 Q3 Q4 2007 Q2 Q3 Q4 2008 Q2 Q3 Q4 2009 Q2 Q3 Q4 2010 Q2 Q3 Q4 2011 Q2 Q3 Q4 2012 Q2 Q3 Q4 2013 Q2 Q3 Q4 2014 Q2 Q3 Q4 2015 Q2 Q3 Q4 2016 Q2 Q3 Q4 2017 Q2 Q3 Q4 2018 Q2 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 2005 2Q 3Q 4Q 2006 2Q 3Q 4Q 2007 2Q 3Q 4Q 2008 2Q 3Q 4Q 2009 2Q 3Q 4Q 2010 2Q 3Q 4Q 2011 2Q 3Q 4Q 2012 2Q 3Q 4Q 2013 2Q 3Q 4Q 2014 2Q 3Q 4Q 2015 2Q 3Q 4Q 2016 2Q 3Q 4Q 2017 2Q 3Q 4Q 2018 2Q 3Q 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2005 3Q 2006 3Q 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2017 Q3 2018 0 200 400 600 800 1,000 1,200 1,400 J F M A M J J A S O N D (000) Quarterly Tie Purchases RailConnect Freight Car Data - Carloads US Diesel Prices - cents per gallon LIBOR 30 Day US Housing Starts (saar) US Housing Permits (saar) 2015 2016 2017 2018 2015 2016 2017 2018

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