Railway Track & Structures - October 2007 - (Page 25)

Wood remains king of the tie industry, while alternative products are continuing to see progress in specialized markets. by Mischa Wanek-Libman, assistant editor A RTA soft lumber market and tough real estate market are being closely watched for their impact on the tie side of the rail industry. However, demand is still strong and experts are calling 2007 another good year. Here’s a look at what’s new to the market, what the rest of 2007 may bring and what could be right around the corner in 2008. imbalances created,” Gauntt said. In October of 2006, Gauntt told Railway Track & Structures that 2007 would be a year for RTA members to catch their breath. That forecast is coming to fruition. “RTA’s exclusive industry surveys and econometric forecasting model predict that year-end totals for wood tie purchases will be 1.9 percent less than 2006, or 20.3 million ties. This is still a very healthy level for the tie industry to operate at. The situation we are experiencing is within the thresholds we have identified, outside of which could create major stress in the production side of the supply and demand equation. In fact, it could almost be said that it has given tie producers a little breathing room after the torrid pace of procurement last year,” said Gauntt. He continued, “Wood tie suppliers have been adding capacity over the past year or so in order to take advantage of the surging railroad market. Remember, just two years ago in 2005, railroads only purchased 18.8 million ties. With a 20plus-million wood tie market for the foreseeable future, some have used this opportunity to expand their production facilities or add new ones.” Gauntt points out that it’s not just the manufacturers who are expanding, RTA continues to grow as well. “We have added additional support staff this year to handle increased committee activities and new programs and services. Plus, many of our ongoing activities such as our tie grading seminar have taken on renewed importance with AAR’s M1003 standard requiring specific training for ‘key processes.’ We also have recently updated our Website and are now the industry’s most in-depth source for all tie-related research and technical publications.” Gauntt continued, “I counted the other day, there are more than 300 PDF documents available in our online publication archives.” Jim Gauntt, executive director of The Railway Tie Association says that the tie market is in the middle of another very good year. “Purchases are modestly softer in keeping with reduced rail traffic, but still the industry is experiencing excellent demand. As usual there are lots of interesting things going on in the world of tie production,” said Gauntt. “Probably the biggest challenge right now is at the sawmill level in some procuring regions. With the housing market very soft, materials produced when you cut a tie such as flooring and pallet lumber are not finding the demand necessary to prevent some inventory and working capital pressures from occurring. When you cut ties at record levels you also produce ancillary products at record levels. If the markets for these products take a big hit, sawmills can be squeezed pretty hard. Usually, these issues are only short-term, but if the U.S. economy doesn’t keep growing, at least at a moderate pace, or the housing market continues in the doldrums for an extended time, it could take awhile to work through the www.rtands.com RTA research Last year saw the completion of a major study that RTA conducted for the FRA on optimizing the ways in which NARSTCO’s steel ties installed on a Norfolk Southern line. Railway Track & Structures October 2007 25 http://www.rtands.com

Table of Contents Feed for the Digital Edition of Railway Track & Structures - October 2007

Railway Track & Structures - October 2007 Contents On Track Industry Today Supplier News AREMA News NRC News TTCI R&D Crossties by the Billions Provide Essentials for Full Support Modern Tools Manage Risk M/W Challenges: Better Management of Thermal Forces in CWR TTCI Celebrates 25 Years as Facility, 10 as Part of AAR Products and Literature People Calendar Sales Representatives Website Directory Advertisers Index Professional Directory Classified Advertising Chicago Perspective

Railway Track & Structures - October 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.