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Rail News Home Rail Industry Trends

10/31/2007



Rail News: Rail Industry Trends

Tie production plummets 25 percent in September, RTA says


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Crosstie suppliers typically experience a production drop-off in September after railroads complete a majority of their trackwork in summer. But the drop-off that happened last month was anything but typical.

Crosstie production plummeted 25 percent to 1.6 million units compared with August production totals, according to the Railway Tie Association's (RTA) monthly crosstie market report.

"This year's reduction went below the seasonal norm," RTA officials said in the report. "Production has been erratic since July."

However, September's crosstie purchases totaling 1.8 million units declined 5 percent from August's total — or well within seasonal norms, RTA said. The tie inventory declined slightly to 16.4 million units.

In the third quarter, production decreased 2 percent to 5.3 million units while purchases increased 8.6 percent to 5.7 million units compared with second-quarter totals. Through 2007's first nine months, production totaled 15.5 million units and purchases totaled 15.8 million units.

"Year-to-date production lags last year by 10.6 percent, while purchases are behind by about 5 percent," RTA said. "Purchases are beginning to outpace production."

Meanwhile, 12-month rolling data shows production has slowed to 20.6 million ties — an adjustment bringing it in line with purchases, which totaled 20.5 million units, according to RTA. The inventory-to-sales ratio inched up from 0.78 in September 2006 to 0.80.


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