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Rail News: Rail Industry Trends

RTA report: Tie purchases plummet, production rises in December


Crosstie purchases and production didn’t follow the norm in December. Although purchases declined 10 percent to 1.4 million units compared with November’s level, they “demonstrated seasonal strength” by accounting for 6.7 percent of annual purchases vs. a more typical 5.9 percent, according to the Railway Tie Association’s (RTA) monthly crosstie market report.

And production that traditionally drops off in December instead rose 11 percent to 1.9 million units vs. November’s production. Inventories increased by about 500,000 ties.

In the fourth quarter, inventories surged by 1.4 million ties primarily because production increased 9 percent to 5.7 million units and purchases plummeted 18 percent to 4.3 million units compared with third-quarter totals.

“Purchases fell from a very strong third quarter to a level consistent with the average of fourth quarters from the past five years,” RTA officials said in the report.

Twelve-month rolling data shows production decreased 1 percent to 20.2 million units and purchases rose 3 percent to 20.9 million units compared with totals from the previous 12-month period.

“Inventories experienced a mid-year dip, but recovered by year end, such that the inventory-to-sales ratio reached 0.77 compared to 0.81, which represents the average of the past five years,” RTA said.

Contact Progressive Railroading editorial staff.

More News from 1/23/2009