2018 SPECIAL CONFERENCE @RTAHQ SEPTEMBER/OCTOBER 2018 For Live SHOWCASE Twitter Updates ISSUE #RTA100th
THE MAGAZINE FOR PRODUCERS & USERS OF TREATED WOOD CROSSTIES & RELATED PRODUCTS
SPECIAL REPORTS: Tie Graders Learn, Compete Industry Updates, Plant News & Excel At 2018 Seminar & More Market Outlook: Tie Forecast For 2018 & Beyond Annual RTA Conference: Presenters, Award Winners & More Be In The Know With Conference App:
Focus On Sawmills & Safety Monthly Tie Trends & Insights From The Field
RTA's Tie Grading Seminar winners include Eric Baughman of Stella Jones, left; Sean Woody of Norfolk Southern, top left; and Johnny Allison of Koppers Inc., above right. CROSSTIES TO YOUR SPECIFICATIONS
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BUILDING GREAT LINES FROM THE GROUND UP.™
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2 CROSSTIES • SEPTEMBER/OCTOBER 2018
Koppers-Crossties-Ad-1.18 final.indd 1 1/12/18 11:24 AM CONTENTS Volume 99, Number 4 • September/October 2018 On The Cover: Pg. 14 Participants in RTA’s Annual Tie Grading Seminar took a “hands-on” approach during the intensive three-day event. Hosted by Koppers Inc., the seminar was held in Peoria, Ill., Published jointly by: CROSSTIES and at the Koppers plant in Galesburg, Ill. See a play-by-play Covey Communications Corp. photo description of the event starting on page 14. P. O. Box 2267 Gulf Shores, AL 36547 (251) 968-5300 • FAX (251) 968-4532 TO YOUR SPECIFICATIONS & The Railway Tie Association 115 Commerce Dr., Ste. C Fayetteville, GA 30214 (770) 460-5553 • FAX (770) 460-5573 SPECIAL REPORTS www.rta.org • [email protected] WE DELIVER THE QUALITY Railway Supply Institute Study Showcases Power Of Rail Industry Products 6 RTA was among several industry associations that partnered on a study quantifying the economic and workforce impact of the products and services produced by the J. Talty O’Connor YOU EXPECT... EVERY TIME railway supply industry. Publisher • Safety Minute: iPhone Users, How To Say 'No' To Distracted Driving Kristen S. McIntosh 8 In a new Crossties column called “Safety Minute,” we learn how to enable the Editor Do Not Disturb function on iPhones. • Market Outlook For Ties For 2018 & Beyond Tanya Hughes 10 RTA’s exclusive tie demand survey, coupled with data from AAR and ASLRRA, Graphic Designer explains the demand expectations for wood ties this year and into the future. • Stephanie Eckman Sawmill Focus Advertising Traffic Coordinator Accurate, Measurable and Repeatable 19 See hardwood procurement trends as reported by RTA members in the field. Also, learn more about the meetings held on Capitol Hill by representatives of the Hardwood Federation. Talks focused primarily on trade and the Farm Bill. Railway Tie Association Preservative Retention Levels Executive Committee
Our patented Tru-Core® dual pressure treatment process CONFERENCE SHOWCASE PRESIDENT Timothy R. Ries ensures that the retention levels of Borate and Creosote Learn More About RTA Conference Presenters Koppers Inc. Petroleum Solution that you specify for your crossties, are 20 A field of outstanding industry experts has been lined up to make presentations during • the Annual RTA Technical Conference & Symposium. Here’s a sneak peek. VICE PRESIDENT achieved and verifiable. Koppers delivers quality you can rely William L. Behan RTA Award Winners To Be Honored At Convention Gross & Janes Co. on for every decay zone. 22 Four wood tie industry veterans have been named RTA’s annual award winners for • 2018. Learn more about those who will be honored at the convention for their contri- David A. Koch II butions to the industry. Wheeler Lumber • Deserving Students To Receive RTA Scholarships Kenneth E. Dailey Koppers Benefits 24 Three students have been selected as winners of RTA’s John Mabry Forestry Stella-Jones Corp. Scholarships. Get to know each of the students and their aspirations for working in the • n forest products industry. Richard A. Gibson Nine strategically located treatment facilities in Appalachian Timber Services North America Conference Play-By-Play • 26 Refer to this agenda to see the details of the upcoming RTA Symposium & Technical Frank (Skipper) S. Beal. n Creosote Petroleum Solution (CPS) pressure treated Beal Lumber Co., Inc. ®1 Conference. You’ll see who is scheduled to speak at what time and learn more about ties or patented Tru-Core dual treated Borate and the networking opportunities and fun activities for guests. • CPS ties for extended life in the harshest decay zones Kristine N. Storm Genesee & Wyoming n U.S. Treatment plants are AAR M-1003, • ISO 14001 and RC14001 certified Regular Departments Kevin D. Hicks News Scope...... 4 Tie Trends...... 28 Union Pacific Railroad • Sawmill Focus...... 19 EXECUTIVE DIRECTOR James C. Gauntt • BUILDING GREAT LINES FROM THE GROUND UP.™ ADMINISTRATOR CROSSTIES (ISSN S0097-4536) (USPS# 949600) is published bi-monthly (six times per year) by Covey Commu nica tions Corp. in association Deborah L. Corallo with the Railway Tie Association (RTA). All rights reserved. Neither RTA nor Covey Communications Corp. assume any responsi bility for state • ments made or opinions expressed by members or others in articles appearing in this publication. CROSSTIES readers include all active members WEBSITE & COMMITTEE COORDINATOR www.koppers.com of RTA plus other individuals and institutions interested in the treated wood crosstie and related industries. Individual subscriptions are available for $35 per year. Subscriptions, advertising rates and other data can be obtained by writing or calling Covey Commu nica tions Corp., P. O. Box 2267, Barbara L. Stacey 1-888-567-8437 Gulf Shores, AL 36547, (251) 968-5300. Information on membership in RTA is available by contacting the Railway Tie Association, 115 Commerce Dr., Ste. C, Fayetteville, GA 30214, (770) 460-5553. Periodical Postage paid at Gulf Shores, AL and other entry locations. Copyright 2018. 1 Tru-Core® is manufactured under license from Kop-Coat Inc. POSTMASTER: Please send change of address form #3579 to the Railway Tie Association, 115 Commerce Dr., Ste. C, Fayetteville, GA 30214.
CROSSTIES • SEPTEMBER/OCTOBER 2018 3
Koppers-Crossties-Ad-1.18 final.indd 1 1/12/18 11:24 AM XXXINDUSTRY NEWS
virtual reality, collaborative robotics, addi- In his new role, Lish will develop and NEWS Scope tive manufacturing, current workforce digi- employ capital projects and initiatives tal readiness, cybersecurity, M4.0 cultures while delivering operational excellence in a and organizational models. socially responsible and ethical manner. Industry in “This acquisition adds another strong portfolio of services to the association,” said NC Awards Short Line RR Grants the Spotlight NAM President and CEO Jay Timmons. RALEIGH , N.C.—Fourteen short line rail- “It complements our existing Leading Edge roads will soon be making improvements to NAM Acquires Manufacturing thought leadership programming that you their infrastructure thanks to approximately Leadership Council have come to know—and it will create more $7 million in matching grant funds being The National Association of Manufacturers value not only for our members but also awarded as part of the N.C. Department of (NAM) announced the successful acqui- partner organizations and for their members Transportation’s Short Line Improvement sition of the Manufacturing Leadership as well.” Program. Council (MLC), which provides industry- “We look forward to seeing the positive leading best practices, data and insights on Koppers’ Steve Lish Takes impact these grant funds have on North Manufacturing 4.0 (M4.0). On New Role Carolina’s short line rail infrastructure, Across the country, manufacturing profes- PITTSUBURGH—Koppers Inc. has which plays a key role in our economy,” sionals from operations, plant management, appointed Steve Lish as vice president, said Julie White, NCDOT Deputy Secretary supply chain and information technology Recovery Services for M.A. Energy for Multimodal Transportation. “These fields turn to the MLC for real-world knowl- Resources (MAER) business group of improvements not only spur economic edge via their peers, in-depth factory tours, Koppers Railroad Products and Services. development, but also enhance the safety an annual three-day conference, webinars, a Lish joined Koppers in 1989 and has held and reliability of rail operations across the bimonthly journal, case studies and exclu- various leadership roles in operations within state.” sive survey research on subject matters such both the Railroad Products and Services and The Short Line Improvement Program as advanced analytics and artificial intel- Carbon Materials and Chemicals (CMC) supports short line rail infrastructure health ligence, predictive maintenance, augmented/ business units. and performance throughout the state, enabling NCDOT to partner with short line rail companies on rail improvement projects. This partnership helps the short lines meet customer needs in an efficient and cost- effective manner while also preparing them for growing service demands and partner- ships with potential customers. Since 2014, over $28 million in match- ing Short Line Improvement Program funds have been provided toward 66 rail improve- ment projects.
Preserved Wood Brotherhood
RTA shirts are showing up on the “Left Coast.” Two fellow RTA guys, Butch Bernhardt, left, and Dallin Brooks of Western Wood Preservers Institute, found themselves coming to work wearing the same RTA gear in early September. Rock on, WWPI peeps! See you soon!
4 CROSSTIES • SEPTEMBER/OCTOBER 2018 ELIMINATE STACK BURN IN MIXED HARDWOODS WITH
Dip-treating with Cellu-Treat creates a stronger tie, prevents mold growth and penetrates to the heartwood.
Cellu-Treat saves on splitting. We were “seeing 10% of our ties splitting during air season. After we started dipping with Cellu‑Treat, splitting is now down to 1%. Ties are also drying a month or two sooner. That surprised us, and we actually tested three times to confirm. Dipping prior to air season is definitely better. Now we can keep ties in the air longer if needed. We have fewer season checks and ties look new after seasoning.
Doug Mellott, Vice President Mellott Wood Preserving | Needmore, PA
CONTACT Cellu-Treat and Nisus Corporation are registered trademarks of Nisus Corporation. ©2018 Nisus Corporation #CT-JA2018 KEN LAUGHLIN Divisional Vice President, Wood Preservation 520-631-1084 • [email protected]
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Rail Supply Industry Study Shows Economic Power, Workforce Impacts Of Its Products, Services
WASHINGTON—The Railway Supply industry is also essential to the national wider economy meaning that 650,000 jobs Institute (RSI), partnering with the Railway economy—generating value, stimulating across America can be tied to a railway Engineering-Maintenance Suppliers jobs, and paying taxes. The economic supplier, their supply chain or spending of Association (REMSA), Railway Systems contribution of the railway supply industry those employed by these firms. Suppliers Inc. (RSSI) and Railway Tie in 2017 amounted to more than $74.2 “For years, the economic value that rail- Association (RTA), announced the results billion in gross domestic product (GDP). roads deliver to our nation has been well of a major study quantifying the economic Suppliers paid $16.9 billion in taxes to documented. This study is the first of its and workforce impact of the products and local, state and federal governments. kind to reveal the power and contribution services produced by the railway supply Workers in the industry are highly pro- of the railway supply industry that is driven industry. This report highlights the impor- ductive and well paid with annual wages by investment in our nation’s railroads,” tance of the industry to the U.S. economy of $78,800, on average, placing them +42 said Mike O’Malley, RSI president. “The in terms of jobs, tax revenue, and gross percent above the U.S. average income*. results tell a powerful story highlighting domestic product (GDP) on both the state Railway suppliers directly employ more the benefit of public policies that support and national level. than 125,000 people in manufacturing, continued growth in both the freight and Beyond their critical support for a rail- repair, maintenance and leasing, among passenger rail sector.” road system comprising more than 1.6 others. In addition, for each worker directly million railcars, 38,000 locomotives, and employed by the railway supply industry, The report, completed by Oxford Economics, 140,000 miles of track, the railway supply a further 4.2 jobs are supported in the is available at www.rsiweb.org.
AAR Names Jefferies American Railroads (AAR) has selected his duties on Jan. 1, 2019. President, CEO Ian Jefferies as the organization’s next Jefferies honed the skills and expertise WASHINGTON—The Association of president and CEO. Jefferies will begin necessary to steer AAR during his tenure as AAR’s senior vice president of government affairs and as a senior policy advisor on TUFF-TIE ™ IS MEETING ITS PROMISE Capitol Hill. “For years, we have known that Ian OF STRENGTH AND LONGEVITY! understands the policy and priorities of the rail industry, and he has been a proven advocate for our issues,” said Jim Squires, AAR board of directors chair and Norfolk Southern Corp. chair- man, president and CEO. “Ian will extend a legacy of vision, leadership and
energy to write an exciting Jefferies new chapter for the AAR while ensuring that it remains a clear and trusted voice in Tuff Tie™ was the early industry leader in Washington.” Borate Pre-Treated Ties. Tests conducted by the Class 1 railroads now show that Borate treated ties are living up to their CORRECTION: In an article in promise of greater strength and longevity. Don’t wait any longer… the July/August issue of Crossties contact us today and make the commitment to extend your showcasing the new Genesee Arch crosstie performance! Bridge, it was incorrectly stated that Nisus Corp. provided ties to Norfolk Southern for the project when in fact Find out more at www.grossjanes.com Mellott Wood Preserving Company was the chosen supplier for the treated material. NS specified Nisus Corp.'s Premier Green Crosstie Provider to Cellutreat Liquid DOT and QNAP Class 1 Railroads technology for the bridge.
6 CROSSTIES • SEPTEMBER/OCTOBER 2018 Quality Products From A Name You Can Trust With 50+ years of wood preservative treatment experience, we o er Mainline, Branch Line and Industrial Grade crossties with creosote or creosote/borate dual treatment. We also have CCA, CuNap and Penta treatments available should the need arise. Combining this with dependable service and a commitment to quality throughout each process creates crossties you can rely on.
Jefferies
Cahaba Press re Treated Forest Prod cts, Inc. is bac in the crosstie b siness, and in a big way Already the largest single plant prod cer o wood poles, Cahaba is now a ma or s pplier o hardwood crossties. New processing e ipment, new borate dip tan , new tie storage areas, b t we ept the same hardwor ing dedication b ilt on orty years o man act ring e cellence. O r team is here or yo . Contact s today or more in ormation. Visit our website, www.CahabaPressure.com, and give us the opportunity to build a long-term relationship to help you Stay On Track! 205-926-9888 • 12755 Montevallo Rd. Brierfield, AL 35035 • www.cahabapressure.com SAFETY MINUTE iPhone Users: Avoid Distracted Driving With ‘Do Not Disturb’ Feature istracted driving claimed 3,450 senses you might be driving, it shows a D lives in 2016 alone, according to description of the “Do Not Disturb” while SAFETY MINUTE the National Highway Traffic Safety driving feature after you stop. (This descrip- is a new Crossties column that is Administration. Although this number rep- tion appears only in certain countries; if it provided by RTA’s Safety & Material resents a decline of 2.2 percent since 2015, doesn’t appear, follow the steps below to Processing Committee (SMP) it is important enable the feature.) designed to assist RTA members to avoid texting Tap “Turn On While Driving,” and it will in improving safety in all aspects while driving, turn on automatically when your iPhone of their lives. Committee Liaison & one of the big- connects to your car via Bluetooth1 or when RTA VP Bill Behan, president of gest causes of your iPhone senses driving motion. You Gross & Janes Co, provided this month’s column. distracted driv- can change the method your iPhone uses to ing. determine whether you’re driving, or turn type the word “urgent” to make sure that The follow- the feature on manually. you receive a notification. Then, you can ing instructions pull over to read their important message come from Turn The Feature On & Off or ask Siri to read it to you. various Apple In Control Center 2. iPhone delivers some notifications, resources and You can let “Do Not Disturb” while driv- such as emergency alerts, timers provide details ing turn on automatically, or you can add and alarms. on how to acti- it to Control Center for convenient manual 3. iPhone calls are delivered using the vate your “Do access: same conditions as standard “Do Not Not Disturb” 1. Go to Settings > Control Center > Disturb.” You can allow calls only from while driving Customize Controls.
Photo Courtesy Apple Support your favorites, and allow calls to come feature, which 2. Tap “Add Control” to Control Center through if the same person calls twice prevents text next to “Do Not Disturb While Driving.” in a row. If your iPhone connects to messages from coming through on your Now you can swipe from the bottom of your car via Bluetooth, calls will come iPhone when motion is detected. The info your screen and tap “Do Not Disturb” while through as usual, and you can use your below is provided for iPhone users with the driving icon to turn the feature on or off. car’s buttons, microphones, and speakers iOS 11 operating system. to take your call. The “Do Not Disturb” while driving What To Expect While It’s Active 4. If you use Maps to navigate, your iPhone feature is also available on Android phones Here’s what to expect when “Do Not still shows lock-screen navigation help through the use of a free app called “Driving Disturb” while driving is turned on. You can and gives turn-by-turn instructions. Detective,” which allows you to customize a customize many of these features in settings. 5. If you’re a passenger and you try to use variety of preferences. 1. Your iPhone stays silent and the screen stays dark. If someone sends you a mes- your iPhone while the feature is active, Do Not Disturb Senses sage, they receive an automatic reply you must tap “I’m Not Driving” to turn When You Are Driving letting them know that you’re driving. If it off. The first time your iPhone running iOS 11 the message is important, the sender can Use Restrictions To Keep It On Are you the parent of a young driver? You can prevent changes to “Do Not Disturb” while driving to make sure that it remains a part of their safe driving habits 1. On your child’s iPhone, go to Settings > General > Restrictions. 2. If you haven’t used restrictions before, enter a new passcode. Remember this passcode for any Richard O’Mara • Dave McCarthy • Pamela Nikolovski future changes. 3. Under Allow Changes, tap “Do Not Disturb While Driving.” 4. Select “Don’t Allow Changes.”
8 CROSSTIES • SEPTEMBER/OCTOBER 2018 !""#$#%&'()*#&+ !"#$%&'"#$%(")*+'",% !"#$%&'()!#(*+'%$,-.)!'%-$/! " !"#$%&'()0-,$/!#$%#!#&%'()*&#!+,#$*-#!./,'0!*1/&2+,3#$4 " 5/672)*+/&/3!1,(/(')(-.,-(/4 " 23")451#%0',6)6""'(#/!8/%'!'*'2(#*)!)&*3-9#,*'4 " :.,6,#;!#*!+#(*+'%$()7#%1()8)9):)$,(/!%#!#$/!(%8/!#,8/ <'*!'//3!#*!(/)%&%#/=4 " ;4%-.()',-()/,1()1,<(-/,"-!,'!%!8%##/&!*7!8,'-#/(4 " >$%'0/!)&/2)6%#/!)6%'!+,#$!-")1"3-$,<(!<(%8/!.%(/=4 " >$%'0/!#,/!)6%#/!)6%'!<.%(/!(,?/=!3,$4,-)=>)<,-0$(/4 •" >&*((Crosstie2#,/!)&/ pre-plate2)6%#/!%))%&%#-( apparatus USA!@%#/'#!A*4 Patent No.!B5! 8,844,786CCDDECF!GH • Canadian Patent No. 2,782,321 ?$4(#)@(#A,6(/) " I%,6&*%3!#,/!&/8*1%6!J!3,()*(%6 " K'2$*-(/!)&/2)6%#/!9&*((#,/( " @%'/6,?/!#&%9L " I/6%;!I%,6&*%3!M,/!J!I/6%;!I%,6!5%6/(! " @-'9$!#,/!)6%#/( " >&-($/3!>*'9&/#/!N!OPM!:))&*1/3!I/96%,8/3!Q%#/&,%6
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CROSSTIES333CD%/$;"%/$B%,'#"%1@(#A,6(/C6"< • SEPTEMBER/OCTOBER 2018 9 8=)E#.(-,")F#,A(G!A/+!R,'3(*&S!AT!!UHVVW!!"! Prologue During that same time period, the year (August purchases up by 16.8 percent Mother Nature and a 3T (topsy-turvy-tariff) 12-month moving average (12MMA) of tie over July, for example), inventories seem world have created an environment eerily purchases moved only a little bit. The tie likely to continue their descent. familiar yet seemingly impossible given the purchases annual rate is down only 1.9 per- The same 2018 surveys predict that 2019 pains that 2013-2014 visited upon the tie cent based on 12MMA. installs will exceed this year to 15.9 mil- community and railroads. Even with demand declining some, ISR at lion, bolstered mainly by expected increases Readers may recall between 2013 and 0.66, is now within shouting distance of his- from Canada. Plus, there could also be some 2015 ties were in such short supply that toric lows—lows not seen since 1997. increase in the eastern U.S.—but only if many problems arose. Why then does the One reason behind this, 2016 and early supply can match up. industry find itself facing the same (if not 2017 saw too much white and black tie Stories from the field and the surveys worse) inventory-to-purchases imbalance inventory built. Tie procurement and treat- suggest that the western roads final 2019 just 3 years hence? ing remained at a torrid pace beyond the programs are fluid. That’s not to suggest Before getting to the surveys, a review of point in 2015 when the market became indecisiveness, only that an inflection point RTA member-reported data (see sidebar on sated. Couple that with a lower normalized could be on the horizon, even if it is only exciting changes coming to the format of the level of demand and ISR skyrocketed to temporary. Maybe by the time of the RTA’s monthly reports) for production and inven- 0.99 in March of 2017—a level seen only 100th Annual Conference, modifications, if tory sets the table for what may be served twice in the last 30 years. any, will come more into focus. up next. So, it stands to reason an adjustment Given the state of inventory, however, RTA members’ reported monthly inven- was in store. But has the adjustment gone it’s only a coin-toss if increased installs tory and production data is used to calculate too far? Or rather, perhaps asking how the can occur. Final increased tallies in installa- a ‘purchases estimate’ and an Inventory-to- adjustments were implemented is a better Sales Ratio (ISR). This is done by measur- question. If action had been taken earlier, ing the change in inventory from month-to- would the result have led to a softer landing month vs. the incoming production of ties sooner for the railroads, suppliers and tie RTA Updates Look at treating plants, concentration yards and inventories? railroads. Water under the bridge. Of Statistical Since 2016, RTA has calculated the However, the fear now is that inven- Reports purchases and ISR from the change in the tory has swung past a tipping point and the three-month moving average (3MMA) of industry may have found itself right back in As RTA looks to step into its inventory levels. This is done to smooth the middle of a 2013-2014 like crisis, pursu- second century of service to the the data plus account for any inventory ing material from a sawmill base less pre- treated hardwood crosstie industry adjustments that may arise from quarterly pared to be quite so resilient this time. This and its suppliers and customers, physical counts. Although there shouldn’t worry is hard to quantify. It’s dicey, though, our Economic Team is hard at work preparing a refresh of its statistical be much variance from these counts, when to count on ties springing forth with a flick reports. it does happen it skews interpretation of the of a switch under the current circumstances Commentary and graphical month-to-month data. A 3MMA helps those mills now face. representation of the data will reviewing the data not get caught up in So how could future demand expectations receive a significant makeover and micro-analysis. affect the situation? will be available in PDF format for Resolving that concern, however, also download. The underlying data will Tie Demand Expectations requires readers to assess the information be still available as an Excel file, from a slightly different perspective. In the 2017 surveys, Class 1s predicted though, possibly, slightly reshaped Since April 2017, RTA has reported 17 that 2018 new wood installs would be format for readability. consecutive months of negative inventory 15,250,000. It’s encouraging that in this Look for a preview of the first change (through August 2018 data). With year’s survey (see Table 2) results indicated edition in the November/December this in mind, think about how inventory 2018 will end up with installs of 15,650,000. issue of Crossties. The full report change is calculated using a 3MMA, and Even this small increase in demand will be available as a separate then consider the effect on ISR based on could add to tie inventory angst. And, with link on RTA.org/statistics as soon that moving average. With so many inven- improved economic activity, and suppliers as the October monthly data is tory drawdown months, it’s hard to imagine enjoying a better second half in shipments received from producers. how ISR won’t continue edging down. than they did in the first two quarters of this 10 CROSSTIES • SEPTEMBER/OCTOBER 2018 MARKET OUTLOOK tions will only accrue if supply matches One of these is increasing traffic and the speculated. The questions for railroads sur- the need—2019 installs could thus be a demand for future maintenance needs this rounding tariffs and NAFTA impacts could wash versus 2018 due to supply woes portends. AAR reported that August traf- further moderate any decision to announce once again. fic was up 4.5 percent compared to August increases in programs. A review of August data provides addi- 2017. Overall, Class 1s are up 2 percent Yet, if traffic is on a sustainable path tional fodder for this concern. Not only YTD and short lines report a 2.7 percent of slow and steady growth, it would be did actual inventories decline 250,000 YTD increase through the end of August. a precursor for increasing maintenance ties, but also the 3MMA is down another Add to this that the AAR monthly traffic demands, with the potential for further 552,000 ties. data table (Figure 1) shows every month pressure on supply. In addition, if black tie shipments con- in 2018 rail traffic increased over the same tinue to increase throughout the fall, and months in 2017. And growth in shipments Commercial Markets with only a couple of more ideal months appears to be accelerating. The words are robust to very robust. The of procurement ahead, a real inventory and This most recent jump in traffic could be only drag on demand right now is supply, concurrent 3MMA slide seems to have fur- the result of the “front-loading” effect of the recurring theme here. It’s interesting ther to go. already imposed and future potential tariffs. to note that some buyers who don’t review And that doesn’t even take into Because of this, it is fair to note that ship- the complete data set in context and rely consideration multiple other factors that ments could moderate and freight traffic only on snippets of information, executive play their part. growth decelerate into 2019 as some have summaries or headlines for understanding, Figure 1 Country Canada United States Commodities (All) Chemicals Coal Farm and Food Products Forest Products Grain Metallic Ores and Metals Motor Vehicles and Parts Nonmetallic Minerals and Products Other Petroleum and Petroleum Products Total Carloads Carloads and/or Intermodal Units (in thousands) Intermodal Carloads and/or Total Carloads & Intermodal Total Intermodal Units Source: Association of American Railroads Table 1 Crossties Laid In Replacement Track Operated by Rail Laid In Replacement Or in Addition - 2017 Reporting RR Or In Addition - 2016 New Ties Second-Hand District & New (Other than Ties Miles Crossties Avg. Spend New Rail Laid Relay Rail Laid Avg. Weight Railroad Wood Ties Wood) (All Types) Occupied Per Mile Per Tie* (Tons) (Tons) Rail (lbs/yd) Eastern District CSX Transportation 2,908,131 62,824 0 29,786 99.7 $110.5 121,985 4,487 135.9 Grand Trunk Corp. (CN) 753,254 164 997 9,275 81.3 144.0 37,037 17,141 135.1 Norfolk Southern 2,250,034 38,388 143,270 28,471 85.4 112.3 110,120 13,480 136.0 Total Eastern Dist. 5,911,419 101,376 144,267 67,532 91.2 115.3 269,142 35,108 136.0 Western District BNSF 3,683,460 138,933 0 40,140 95.2 $117.1 190,338 2,160 135.2 KCS 488,438 30,404 0 4,043 128.3 165.3 14,950 805 134.0 Soo Line Corp. (CP) 311,508 0 0 4,478 69.6 180.7 7,445 4,172 132.0 UP 4,064,245 418,502 15,695 43,454 103.5 128.2 178,189 22,597 136.0 Total Western Dist. 8,547,651 587,839 15,695 92,115 99.3 127.5 390,922 29,734 135.4 Total U.S. 14,459,070 689,215 159,962 159,647 95.9 122.6 660,064 64,842 135.6 Source: Association of American Railroads * Installed Costs CROSSTIES • SEPTEMBER/OCTOBER 2018 11 MARKET OUTLOOK may not give proper weight to the fact that The survey of the short lines (see Table remaining strong, the squeeze is on from supply woes will affect actual shipments of 3), the largest part of what is commonly the other industrial timber markets and the black ties—down the road. referred to as the commercial markets, lower end of the low-grade lumber market. Simply said, you can’t ship what you offers a little, if incomplete, assistance. Not only are 7-inch IG ties tight, pressure don’t have (no matter the demand level) and The same roads that show a projected is also on 6-inch and reportedly growing. that could be becoming more of a problem 2.4 million tie demand for 2018 said they And there really isn’t any place to hide daily especially for the smaller customers. installed 2.0 million in 2017. That certainly for suppliers. The top end of the grade tie With markets remaining strong and lead reinforces the robust market reports. market isn’t keeping pace already, times being extended, it adds to the longer- But, with demand for pallet material driv- so what do suppliers do? The answer is term pressures—will there be a 2013-2015 ing prices to near all-time highs and other ship it later—that is, if and when déjà vu moment ahead? markets such as flooring and crane mats possible. Table 2—Railway Tie Association Annual Survey Estimated Crosstie Requirements • Class I Railroads 2018-2020 Inclusive Authorized Crossties for 2018 Bridge Total Track New Wood Crossties Wood Relay New Non-Wood Crossties Switch Ties (Units) Timbers District and Railroad 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 Bridge Total Track New Wood Crossties Wood Relay New Non-Wood Crossties Switch Ties (Units) 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 Bridge Total Track New Wood Crossties Wood Relay New Non-Wood Crossties Switch Ties (Units) 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 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% 12 CROSSTIES • SEPTEMBER/OCTOBER 2018 MARKET OUTLOOK The Weather Channel any length of time, it’s going to be a inventories reach target levels, the interest If the above isn’t enough to think about, long winter and very tight spring for and ability to purchase lumber displaced by have you been watching the Weather tie buyers. the Chinese marketplace will diminish, if Channel lately? not cease. Gordon soaked a number of tie produc- And The Biggest Worry For The One recent conversation with an analyst ing states. Florence hit a part of the eastern Hardwood Industry? suggested that not only will some capacity tie production regions that Gordon missed. China. No, not logs to China. With the be idled but also some capacity could Flo’s effects have yet to be fully felt in log tariffs and phytosanitary requirements, that’s evaporate. Lenders are rather keen on being procurement as rain continues to march old news. paid back. Capital borrowed for capacity across all these regions. The Chinese economy is slowing. Not and facility upgrades is capital (plus In addition to the Atlantic, if the Gulf only is hardwood lumber demand softening interest) that comes due. If the money isn’t of Mexico storm machine activates further, for that reason, but also as much as 20-30 there, then it’s uncertain what may become worry, not just about the coast, but also the percent of the value of U.S. hardwood of less fortunate mills. inland effects on tie procurement. lumber exported there has been sucked out Idled or non-existing capacity can’t be Why is this important? Figure 2 illustrates of that market since spring. With mills now tapped for building air-dry tie inventories. that after August, the two largest procure- facing proposed 25 percent tariffs effective ment months for green ties are historically Oct. 1, what’s next? Conclusion September and October. If that holds true, Higher-grade lumber is what pays the The potential silver lining, and it’s a thin but Eastern sawmills log decks zero out for bills for U.S. hardwood sawmills. Given the one, is if the world is really flat for tie sharp declines in hardwood lumber sales demand, as the surveys suggest, inventories Figure 2 volumes and values to China, as well as the may stabilize a little sooner. That is not only Average Monthly Pattern Of Production potential effects from the impending tariffs, in doubt, but also doesn’t provide much business health and resiliency is at further solace even if true. January 8.0% July 8.3% risk for hardwood sawmills. One recent ISR and inventories are likely to decrease February 7.5% August 9.3% mill equipment sale came about because the further. Plus, sawmills seem likely to face owner was simply fed-up with the entire further disruption by competing products, March 8.4% September 8.8% business model. log availability, sawmill output capacity Apr 8.0% October 9.2% U.S. flooring manufacturers are still and timber acquisition at a price that makes buying lumber in a few regions, and their sense. The effects of tropical events, and May 8.3% November 7.9% business outlook for product demand seems the weather in general, from September favorable even if their market share in U.S. throughout the winter is an unexpected wild June 8.65% December 7.6% homes continues to decline. This market card, which if played at an inopportune time sector has absorbed some of the volume for mills, increases the potential turbulence. pushed back from China. But only some. Flat does not mean there won’t be 100.0% As these remaining lumber customers' waves. CROSSTIES • SEPTEMBER/OCTOBER 2018 13 TIE GRADING SEMINAR seminar, a three-day hands-on experience 2018 Tie Grading Seminar. If you haven’t is designed to teach students engineering joined RTA for one before, make plans now Top-Notch principles, wood identification and to attend next year’s seminar. anatomy, defects, inspecting, fungi, drying, Tie Grading procurement and more as the concepts relate to wood ties. Seminar instructors taught students how Students to spot defects that could limit tie life and also addressed manufacturing plant hygiene. “Students learned wood treatment practices Raise The Bar and how a wood preservation facility works,” said RTA Education Committee In Illinois Chairman Marshall L. Allen. “We very much appreciate that so many from the The Railway Tie Association’s (RTA) Koppers team were on hand to share their Annual Tie Grading Seminar took students, knowledge with our students.” Watch RTA.org for more information instructors and RTA representatives to the Enjoy the next few pages of photos and as it becomes available on next year's Koppers Inc. plant in Galesburg, Ill. The captions explaining the ins and outs of the Tie Grading Seminar. After enjoying a Koppers Inc.-sponsored reception on Monday, attendees get down to business on Tuesday. Union Pacific’s Kevin Hicks joined us this year to present an introduction to railroad engineering principles. Then it’s into the DAY 1 nitty gritty of wood species identification with Dr. Terry Conners of the University of Kentucky. Thomas the Tank Engine Kevin Hicks begins the morn- offers some wisdom to begin ing with coffee and engineer- Koppers generously sponsored the kick-off Education Committee Chairman the Tie Grading Seminar. ing principles. His delivery reception on Monday. Good food and great Marshall Allen starts us off right “A train is only as good as its sparked great questions from conversation! with a safety briefing. track.” the class. Instructors, loupes, and knives Stella-Jones’ Jeffrey Benson dis- all make wood identification a Norfolk Southern’s Kevin Conn covers that red oak is porous. Terry Conners begins the basics of wood little easier. Rufus Fontenot of cuts into a block to look more Dipped in bubble solution, it adds ID, condensing his usual semester-long Stella-Jones takes a closer look closely at species characteristics. a bit of fun to the steep learning class into a few hours. at Douglas Fir. curve. 14 CROSSTIES • SEPTEMBER/OCTOBER 2018 CROSSTIES CONGRATULATES RTA ON A 100-YEAR MILESTONE Covey Communications Corp., publisher of Crossties magazine, joins with Railway Tie Association members in a biennial celebration of 100 years of service to the North American railroad community with the cost-effective and environmentally sound use of treated wood crossties. As RTA enters its next century continuing its mission to improve the life-cycle performance of the treated wood crosstie, while enhancing its members' potential for market penetration and business opportunities, let us be the first to offer congratulations now and best wishes for the next 100 years. Keep up the great work providing valuable, independent resources for market statistics, research and product development pathways, plus educational events that help connect the vast network of treated wood tie producers, their customers and their suppliers. Congratulations from Covey Communications Corp., your friends, associates and partners in publishing RTA's Crossties magazine since 1992. RTA.org • [email protected] 770-460-5553 TIE GRADING SEMINAR After a full day of classroom work, attendees enjoy a reception spon- RTA President Tim Ries of Koppers Inc. enjoys the reception with sored by Brewco’s Mike Goldston, pictured here with UP’s Nate Irby and Norfolk Southern’s Kevin Conn and Koppers’ Mary Kay Walker and Joe Stella-Jones’ Kenny Dailey. Rosenberg. Species ID gets a wrap-up and then it’s on to Defects 101 with Stella-Jones’ Robert Pearce. Students get a look at cut tie ends and take a tie grading test. Then, it’s off to the Koppers’ Galesburg plant for some hands-on with DAY 2 full-sized ties. Eric Baughman of Stella-Jones is the winner of the first of three Amazon gift cards. He was first to correctly identify the species of the full- Instructors are on hand to help with species ID sized tie in the classroom breaking a three-way and defects in this practice test. Here, Nate Irby Robert Pearce (L) helps students understand tie between Eric, Stella Jones’ Jeffrey Benson, helps Eric Baughman of Stella-Jones and Clay what defects look like. Marshall Allen (R) is on and voestalpine Nortrak’s Shawn Bryant. Skinner of Koppers with a question. hand for discussion. Students concentrate on species and defects as they consider the ties at the plant. Norfolk Southern’s Courtney Watts smiles as she discovers Terry Conners discusses a split tie with Koppers’ Neal Galford. the species and decides if this tie is grade, IG, or cull. 16 CROSSTIES • SEPTEMBER/OCTOBER 2018 TIE GRADING SEMINAR Robert Pearce, right, discusses tie characteris- Greg Voysey of Koppers Ashcroft wins tics with Stella Jones’ Jeffrey Benson and Rufus Lightning & thunder drove the class inside for the the practice test. Bragging rights only for Fontenot, and CP’s Wade Ostrander. answers to the practice tie grading derby. this win! Students get right down to species ID with the Big Block test and a chance at another Amazon gift card. A treating demonstration follows a discussion about insects, fungi, and air-drying. Then it’s off to Galesburg to tour the plant DAY 3 and the final Tie Grading Derby. Cheryl Ponticello of Applied Testing & Norfolk Southern’s Sean Woody is the Big UK’s Jim Ringe gets into the basics of air-dry- Geosicences, a new RTA member, considers Block winner and gets the second Amazon ing and how insects and fungi can complicate species in the Big Block test. gift card. the process of producing a railroad tie. Terry Conners uses his magical mystical pickle …to demonstrate the pressure CP’s Wade Ostrander, UK’s Chad Niman, and Applied Testing and Geoscience’s juice… treating process. Craig Joss watch the grading process from the booth at the plant. CROSSTIES • SEPTEMBER/OCTOBER 2018 17 TIE GRADING SEMINAR A few more examples of ties before the test begins. Nate A unique and effective way Irby goes over what we’ve to display the ties for the Tie learned so far with Stella-Jones’ Grading Derby is to put them The Tie Grading Derby winner is Plant Manager Jim Evans leads the Quincy Borderlon and Robert on rails. It’s usually the other Johnny Allison of Koppers with the class on a plant tour. Chapman. way around! highest score in memory. Hats Off To The Tie Grading Crew! Special thanks are in order for the TIE Michael Embry, Neal Galford, Caleb Corp.; Shawn Bryant, Brantley McClendon and GRADING INSTRUCTORS AND OTHER Hutcheson, Joe Rosenberg, Marcus Sandman, Richard Payne of voestalpine Nortrak; Craig REPRESENTATIVES: Marshall Allen, Terry Mark Siemsglusz, Clay Skinner, Bryan Stout, Joss and Cheryl Ponticello of Applied Testing Conners, Kevin Hicks, Nate Irby, Robert Jim Thompson, and Mary Kay Walker of & Geosciences; Chad Niman of University Pearce, Jim Ringe, Tim Ries, Ted Woerle and Koppers Inc.; Eric Baughman, Jeffrey Benson, of Kentucky; Wade Ostrander of Canadian Barbara Stacey. Quincy Borderlon, Doug Bryant, Robert Pacific Railway; John Swearengin of Dudley Chapman, Craig Cook, Rufus Fontenot, Kendall Hardwoods; Greg Voysey of Koppers Ashcroft RTA TIE GRADING STUDENTS INCLUDE Greer, Shaun Hollander, William Sensabaugh, Inc.; and Courtney Watts and Sean Woody of Johnny Allison, Karl Born, Milford Bryant, Ronnie Travis, and Brad Vaught of Stella Jones Norfolk Southern. 18 CROSSTIES • SEPTEMBER/OCTOBER 2018 SAWMILL FOCUS Hardwood Procurement Trends Eastern Half U.S. Hardwood Federation Fly-In – August 2018 The gauges below representStable "snapshot in time" opinions of in-the-field wood tie buyers who procure untreated crossties Focuses On Trade, Farm Bill 3 Dana Lee Cole from sawmills in their regions. RTA does 4 not warrant nor accept2 responsibility for the accuracy of the data generated. See ach September, industry leaders visit having a negative impact on U.S. hardwood more on rtastats.org. 5 our nation’s capital to join in our ef- companies, workers and consumers and Min 1 Max Current forts on behalf of hardwood businesses would cause long-term damage to interna-Max 5 E .... across the country during the Hardwood tional markets. Following the Fly-In, China Crosstie Balanced Previous 4 Issue Scroll on graph to zoom inCompetitiveness Federation’s annual Fly-In to Washington, and the United States both dialed back a bit vs. Other Stable 3 3 Hardwood D.C. This year, industry leaders showed up on tariff levels and announced 5-10 percent 4 Products 2 Max 5 in record numbers. This year, 83 hardwood tariffs on the flow of exports betweenLumber the 2(#2 & #3) Min 4 representatives attended a record 123 meet- two countries, at least until the end of the 1 5 Poorest 1 Stable Best Oct Jan Apr Jul Oct J ings with members of Congress and staff, as year. However, there remains the threatStable of 2016 2017 2017 2017 2017 20 3 Current Stable well as important administration meetings. higher, mutual tariffs in 2019. We will be Demand For 3 2 4 Pallet Lumber 2 As in years past, the Hardwood closely watching to see how markets Scrollrespond on graph to zoom in 3 Min 4 1 2 Federation PAC sponsored social events to a more certain trading terms. Oct Jan Apr Jul Oct J 2016 2017 2017 5 2017 2017 20 Min 1 Max for Republicans and Democrats during the Best 5 Paper (Chips) 5 Fly-in, with 35 Republican members attend- Farm Bill Min 1 Max 4 ing our Wednesday evening reception. The The Farm Bill is an equally complicated is- Current Stable BalancedMax 5 next morning, 17 Democrats joined us for sue. The Hardwood Federation advocatedScroll on graph for3 to zoom inDemand For Paper (Chips) Scroll on graph to zoom in 4 3 breakfast. These numbers, and the effort by re-authorization of the Farm Bill by Sept. 302 4 2 PoorestStableMax 5 members of Congress to attend the events, and advocated for the following Farm Bill 3 1 continue to prove that Hardwood Federation programs: Max 5 Oct Jan Apr Jul Oct J 4 2016 2017 2017 2017 2017 20 Lumber 2(#2 & #3) 5 Min 1 Max and the HFPAC maintain a solid reputation • Full funding for the Market Access 4 9.RegardingStableMin your above answer, please provide context for market, weather or other condi ons. 3 1 Stable and significant clout on Capitol Hill. These Program (MAP) and Foreign MarketStable CurrentOct Jan Apr Jul Oct J 3 Scroll on graph to zoom inDemand2016 For 2017 2017 2017 2017 20 2 events also provide us with an outstanding Development (FMD) program in the Lumber 3 2018 Farm Bill; ScrollNorthMin on & graph South2 to zoomCarolina: in(#2 Lumber and prices#3) have finally peaked and cross e prices are looking be�er because of this opportunity to reconnect with friends on the 1 4 Min Oct Jan 2 Apr Jul Oct J Arkansas,Max 5 Louisiana, Mississippi, W Tennessee: In our region log inventories are being reduced due to very unusual Hill and establish new relationships. • New categorical exclusions fromexcessive NEPA1 rainfall in the 2016area in August. Weather2017 trends will play a2017 major role determining2017 log inventories for2017 the winter, 20 Oct Jan Apr Jul Oct J because of rainfall receiv2016ed in August. 2017 2017 2017 2017 20 This year’s Fly-In was all about trade and in the House bill that will facilitateExport 4 5 West Virginia: Most mills s ll don'tMin have the log1 decks that they would like to have. Max Paper (Chips) the Farm Bill. Whereas we have covered as federal forest management; and Stable Virginia: 3S ll having plenty of rain which is causing some delays on ge�ng logs out. Tie produc on seems to be picking up Current Stable many as five issues in past years, in 2018, it • Timber Innovation Act provisionssomewhat in the but is s ll way below normal for this me of year. WOOD CROSSTIEDemand For PROCUREMENT Stable TRENDS Minnesota,2 Iowa, Wisconsin,Export Michigan, N Indiana, N Illinois: With the slow down on 1C&Btr Red Oak Lumber, we have seen was really about highlighting these two. Farm Bill to develop new markets for 3 someScrollMin on mills graph start to zoom to focus in on sawing more es. Some new Amish mills star ng up. 1 3 4 wood products using Cross LaminatedRailwayPennsylvania: Tie Associa S ll on ge�ng (ROctTA) too Procur muchemen rain. tLo TrwendsJan grade Dashboard2 lumber demand beloAprw repr remainsesents str theong. monthlyJul opinions of "in-theOct field" wood J e buyers who procure un2016treated cross es fr2017om sawmills in their2017 specific regions.4 The2017 data is submi�ed to2017 RTA within the 20 Trade 2 Timber. firNewst two England weeks 1: of Some the month areas fsollo ll gwinge�ng the hea repor ngvy rains. periodOverall c beover�ered. log The inventories output is at in mills.two forms Red Oak - monthly upper gr andade a lumber12-month Max 5 runningfallingBoard/Mat offview on (which Timbersprice and start demanded in July some 2016).what. You can choose individual regions or grouped regions from the dropdown menus 5 Our message on trade was simple: Trade is Unfortunately, the Farm Bill was not final- Min 1 Max aboE Texas,ve for NWboth Louisiana: the monthly The and mills trend have da logsta. it'sAll thefinaly charts dried on up the and page hardw willood change logs ha basedve been on yourmoving dropdown every w selec ons.ell . 4 5 having a devastating impact on hardwood ized by the September deadline, but we will Min 1 Max SinceKentucky, the inf Tennessee:orma on pr CurrentDemandovided r fromepr esents the export a snapshot-in- me-opinion for #2 and #3Stable red oak lumberof individuals, has so� eachened. working Also seeing for a demand variety of so� een for procurhickStableoremeny lumbert companies,. Mills aeDemand beginRTA does to shi� notFor produc onw arrant nor a waaccepy fromt responsibility lumber and forcu�ng the accuracyindustrial of products. the data If g enerwe haveated. a Fdrory winter sawmills, and we asked that the Trump Ad- continue to push Congress to pass a final 3bill quescross ons e produc on or feedback should pleaseBoard/Mat incr emailease. us (mailto: [email protected]). ® 2016 Railway Tie Associa on. ministration return to the negotiating table by the end of the year in order to continue Timbers 3 2 4 Scroll on graph to zoom in 2 as soon as possible. The hardwood industry important forestry related programs. Min 1 relies on export markets for its survival. In For information on participating in1. ComparedFly-in to last month,Oct the quan ty of logsJan on hand at mill yAprards is: Jul Oct J 2016 2017 2017 2017 2017 20 5 2017, U.S. hardwood producers shipped 2019, contact the Hardwood Federation at Min 1 Max Export $4.04 billion worth of U.S. products to glob- (202) 463-2705. Quantity Of Ideal Logs On Hand al markets; $2.09 billion to Greater China. Stable At Mill Yards 3 Scroll on graph to zoom in China, the NAFTA countries and the E.U. 4 Dana Lee Cole, dana.cole@ 2 make up 82 percent of hardwood exports. In hardwoodfederation.com, 3 4 2 is executive director of theMax 5 2017, the United States had a trade surplus 5 Empty 1 Full of $1.475 billion in hardwood lumber, up Hardwood Federation, which 4 serves as the voice of 28 5 Min 1 Max from $1.1 billion in 2015. Log Availability associations dedicated Stableto 3 During the Fly-In, it was stated that the promoting and supporting Scroll on graph to zoom in proposed 10-25 percent retaliatory tariffs by the hardwood industry. 2 Min China on U.S. hardwood exports was already 1 Oct Jan Apr Jul Oct J 2016 2017 2017 2017 2017 20 6. What is your current view of overall hardwood sawmill produc on? CROSSTIES • SEPTEMBER/OCTOBER 2018 19 CONFERENCE SHOWCASE RTA Presenters Share Experience, Insight With Attendees RTA has convened an outstanding lineup of presenters for the 100th Annual RTA Technical Conference & Symposium. Experts will address a variety of topics ranging from economics and procurement to engineering, research and development, and environmental issues. For detailed biographies, please log onto RTA’s conference app at www.eventmobi.com/rta2018. WEDNESDAY, OCT. 24 ECONOMIC IMPACT SESSION president of government affairs for the Following RTA’s Wednesday General Preceding the Economic Impact Session Railway Supply Institute. Business Session and welcome from RTA is railroad consultant Tony Hatch of ABH President Tim Ries of Koppers Inc., Federal Consulting. Hatch will provide an analy- Railroad Administrator sis of the rail industry’s financial health. (FRA) Ronald Batory Hatch is a veteran analyst and financial will provide the Keynote consultant with decades of experience. A Address, opening the panel of experts has been seated to pro- conference’s presentations vide more insight, including Chuck Baker, Hatch Baker and panel discussions. executive director for the National Railroad Batory Batory was confirmed Construction and Maintenance Association; as FRA Administrator in February and has Brent McClendon, president and CEO for more than 45 years of rail industry experi- the National Wooden Pallet and Container ence, most recently serving as president and Association, with 24 years in the forest COO of Conrail. He retired from Conrail products industry; and Nicole Brewin, vice McClendon Brewin last year. From left to right: Richard Piper, Welder/Fabricator for 25 years Rick Moore, Welder/Fabricator for 32 years Rick “Killer” Yeomans, Hydraulic Specialist for 34 years, 20 in the US Army David Piper, Equipment Designer and Sawmiller, 50 years MADE IN AMERICA David “Dave” Broussard, PLC Automation Specialist, 25 years HEADQUARTERS 800.237.6880 607 Front St. • Central City, KY 42330 www.brewcoinc.com 20 CROSSTIES • SEPTEMBER/OCTOBER 2018 CONFERENCE SHOWCASE PROCUREMENT SESSION CLASS 1 ENGINEERING & AAR UPDATE & BIOCHAR The Procurement Session will follow a ENVIRONMENTAL FORUM TECHNOLOGIES FOR TIES brief break and be moderated by Dana Lee The Class 1 Engineering & Environmental Next on the agenda is the AAR Update Cole, executive director of the Hardwood Forum will open with a presentation from & Biochar Technologies for Ties session. Federation since 2012. The federation rep- James Kessler, senior vice president of Participants are Bob Fronczak, assistant resents trade associations engaged in manu- North Carolina Railroad Company and pres- vice president environment and hazardous facturing, wholesaling or distribution of ident of the American Railway Engineering materials for the Association of American North American hardwood lumber, veneer, and Maintenance-of-Way Association. Railroads; Charles Hegberg, biochar consul- plywood, flooring and related products. Kessler has 45 years of experience in the tant and mid-Atlantic manager and senior Procurement Session presenters will be planning, design and construction of rail- environmental consultant for Skelly and Loy Philip Fischer of Maley & Wertz Hardwood road and rail transit projects. Panelists will Inc.; Mike McGolden, founder of Coaltec Lumber, who conducts kiln-dried lum- feature the expertise of Kevin Hicks, AVP Energy; and Henry Brandhorst, managing ber sales and serves as manager of export engineering - design for Union Pacific; director of CHZ Technologies LLC. sales; Larry Jones, president of IndusTree Matt Hammond, assistant vice president Companies and RTA recipient of the Silver chief engineer, system maintenance and Saw Award for 2014; Derek Douthit of planning – engineering; Tod Echler, chief Douthit Lumber and this year’s recipient of engineer of design and construction for RTA’s Silver Saw Award; and Paul Gaines, CSX Transportation; and Michael Singelyn, second generation co-owner and vice senior manager engineering for Canadian Fronczak president of operations for Madison County National. Wood Products in Fredericktown, Mo. RAILROAD PURCHASING FORUM Matthew Hammond Assistant Vice PresidentThe final Chief Engineersession, System of the Maintenance 2018 RTA and Planning— Engineering Conference will be the Railroad Purchasing Matt Hammond wasForum, named moderated assistant vice bypresident Kristine and chief Storm, engineer vice, System Maintenancepresident and Planning, of purchasingfor BNSF’s Engineering for Genesee organization & in August 2018. In this role, Matt leads the team that is responsible for the planning and proactiveWyoming maintenance and of BNSF’smember more ofthan RTA’s 32,500 route Executive miles Kessler Hammond of track. Committee. Purchasing executives on Cole Fisscher Matt joined BNSF in 2005 as a gang trackman in North Dakota and served in several Engineeringthe roles panel before takinginclude his first Cory supervisory Thomas position of in BNSF2007 as assistant roadmaster in Gillette, Wyo. Railway; Nate Irby of Union Pacific; Erin Matt was then promotedCarson to ofa roadmaster CSX; Bill position Blaise in Tacoma, of Kansas Wash., and then Lincoln, Neb., prior to being promoted in 2011 to division engineer for BNSF’s Northwest CityDivision Southern;, where he oversaw Hamza Engineering Founane responsibilities of for BNSF in Washington, and Oregon. Canadian National; and Wade Ostrander Hicks Singelyn In 2013, Matt was promoted to general director of line maintenance for BNSF’s Montana Divisionof Canadian before moving Pacific. to Texas in 2016 to serve in his most Jones Douthit THURSDAY, OCT. 25 recent position as general director of line maintenance on BNSF’s Red River Division, which covers all of Texas and portions of Louisiana and Oklahoma. RESEARCH SESSION LUNCHEON KEYNOTE On Thursday, the RTA Conference willEducation . Bachelor of Aeronautical Science, University of North Dakota Jonathan Mackay, investment strategies for continue with the Research Session, fea- Schroders, will make a presentation during turing Maureen Hodson of EHS Support,Personal Matt and his wife, Nicole, reside in Fort Worth, Texas. They have two children, RTA's Working Luncheon. Mackay will with more than 14 years of experienceReagan in and Piper. address the State of the U.S. and Global the environmental field and seven years as Storm Blaise Economies.Jonathan Mackay works in Mackay partnership an environmental attorney; the Creosote with Hartford Funds to represent Schroders' Council’s Patrick Stark, who will report on strategiesInvestment to financial advisorsStrategist and interme - the council’s Worker Exposure Study; Jeff BNSF diaries in the Northeast region. Lloyd, senior vice president innovationBNSF Railwayand is one of North America’s leading freight transportation companies operating on 32,500 route miles of track in 28 states, and also operates in three Canadian provinces. BNSF Headquarters BNSF is one of the top transporters of consumer goods, grain and agricultural products, low- sustainability forBNSF Nisus Railway Company Corp.; and Tony 2650 Lou Menk Dr. 2nd Floor sulfur coal, and industrial goods such as petroleum, chemicals, housing materials, food and P.O. Box 961057 beverages. BNSF’s Irbyshipments help feed, clothe, Thomassupply, and power American homes and Chambers, presidentFort Worth, of TX 76161 ABC-0057 Tie Tech Phone: 800-795-2673 businesses every day. BNSF and its employees have developed one of the most International LLC,www.bnsf.com with more than 40technologically years advanced, and efficient railroads in the industry. We work continuously to 9 /21/2018 working in the treated wood tie industry. Carson Mackay Hodson Chambers Lloyd CareerCROSSTIES • SEPTEMBER/OCTOBER 2018 21 Jonathan Mackay joined Schroders in 2016 as an Investment Strategist working in partnership with Hartford Funds to represent our strategies to financial advisors and intermediaries in the Northeast region. Jonathan joins us from Morgan Stanley where he was a Senior Market Strategist, providing advice to the firm’s sales force and clients on a variety of investing topics. Jon was also responsible for authoring various in-depth reports and contributing to weekly and monthly investment publications. He traveled frequently throughout the Americas on behalf of the firm’s Global Investment Committee meeting with high net worth individuals and middle market institutions and their Financial Advisors. Before joining Morgan Stanley, Jon held a number of different roles at Citigroup Smith Barney. He was a Fixed Income Strategist responsible for commentary on the credit markets. Prior to this he was a credit desk analyst working on trade ideas for the High Yield, Emerging Markets and Investment Grade corporate bond desks. Jon began his career as an analyst at Emerging Markets Securities LLC where he worked on the creation of Structured Trade Credit transactions. Education Bachelor’s degree in Medical Anthropology, Brown University Associations & licensing FINRA Series 7, 24 and 63 CONFERENCE SHOWCASE Branding Hammer Award started attending RTA meetings in the late 1980s,” he said. “The great thing about the Winner Loves to Give Back RTA is that it brings together end users and Profiles By Paige Townley the people who make, treat and ship the and building tracks and turn outs. “That was products.” a very good foundation for me,” Bosshart Though Bosshart has now retired from said. “I was fortunate to be working for good BNSF—and moved back home to the people, and they taught me a lot.” state of Washington—he continues to Bosshart hadn’t planned to spend his stay busy, occasionally doing consulting entire career in the industry. Prior to joining work and participating on committees. BNSF, he had never even worked in the He’s particularly involved in working with railroad industry. Growing up at the base of Habitat for Humanity. Bosshart got involved Mount Rainier in Washington, he spent his with the organization decades ago, and he summers and holidays logging for a local said it has become a serious passion. “In the paper company. “Many people in the small small community I grew up in, I was always town where I lived were in the logging grateful for the people who did volunteer industry or something related to it,” he said. work in our town,” he said. “So, for me, From Spokane, Wash., and Superior, Wis., “So, that work was a natural fit for me.” supporting Habitat for Humanity has been a to Minneapolis, Minn., and Fort Worth, After graduating from the University way of giving back.” Texas, John Bosshart has trekked across the of Washington with a degree in civil While he’s now taking time to pursue country during his time in the industry—and engineering, Bosshart happened to get a job other hobbies and interests—he and his all for the same company. offer from the former Burlington Northern wife, Colleen, just finished building a This year’s Branding Hammer Award Railroad. “That started my long career in house for themselves and he’s enjoying recipient spent the last 40 years working the railroad industry,” he said. “It was never downhill skiing—he’s still focused on for Burlington Northern Santa Fe Railway hard for me to want to stay in the industry spending much of his time doing what (BNSF). During that time, he served once I started. I quickly saw that a great he can to help others through Habitat for in various positions—director of track career could be enjoyed within the railroad Humanity. “Working with Habitat isn’t just standards and procedures, inspecting industry.” rewarding, it’s also fun for me,” he said. products and plants, and even building track. His career with the railroad took him to “It really means a lot to me to help people In fact, one of his first jobs at BNSF was in life in six different cities, and it led him to be homeowners who otherwise might not be Minnesota and Wisconsin doing construction the Railway Tie Association (RTA). “I first able to own a home.” It’s All About Family For Silver Saw Award Winner possible after school in the afternoons and The company produces approximately on the weekends. “As a kid I was always 3,400 ties per week. Douthit attributes fascinated by how it all worked.” much of the company’s success and In 2003, Derek and his father made ability to produce so many quality the decision to go out on their own. products to its employees. “We are a That’s when they formed Douthit Tie and very family-oriented company,” he said. Lumber. “As soon as I was old enough “We rely on God first, then family and to work, I got into this business,” Douthit then our job. We take that mentality with said. “I couldn’t see myself doing anything all of our employees. We are successful else for a career.” because of our employees, and we never Douthit Tie and Lumber is based in forget that." Camden, Ark. Today, the Douthits operate Douthit has been named this year’s two hardwood sawmills manufacturing Silver Saw Award winner and gives products such as wood ties, pallet cants most of the credit for the recognition to For Derek Douthit, the railroad industry and graded hardwood lumber. those who work alongside him at Douthit has always been a part of life. When The company also has a facility to Tie and Lumber every day. “It’s an Derek was a kid his father, David, worked build and produce pipe crating for pipe incredible honor to receive the Silver for a railroad tie company. Then, when companies, as well as its own trucking Saw Award,” he said. “Everyone here Derek was in his early teens, his father company. “We can ship our own products, puts in the hard work to achieve the and a business partner bought a one- and our lumber goes everywhere,” said success that we have. I’m extremely man sawmill where they did work on the Douthit, who serves as the company’s honored to be recognized with the side. Derek would help out as much as vice president and oversees operations. Silver Saw Award.” 22 CROSSTIES • SEPTEMBER/OCTOBER 2018 CONFERENCE SHOWCASE Dalles, Oregon. After those negotiations, Broad Axe Winner Spends Career McGinley and the other owners founded AmeriTies Holdings LLC, a company In The Wood Tie Industry focused on providing treating services to nity to travel throughout the entire eastern the Union Pacific Railroad at that plant for part of the United States while at Conrail materials and crossties, switch ties, and fab- and learned a lot about the wood treating rication of bridge timbers. industry.” AmeriTies built a second plant—in Hope, While still at Conrail, he also worked in Ark.—and today employs approximately the purchasing department for a couple of 110 people, with McGinley at the helm as years. Then, when he left Conrail, he went president and COO. McGinley has spent his to work for Perma Treat Corp, a crosstie entire career in the railroad industry, and manufacturer in Connecticut, where he it’s a decision that he’s thoroughly enjoyed. worked in production and manufacturing. “Many smart folks have dedicated them- After nine years, he was presented with selves to our industry and are producing John McGinley—this year’s Broad Axe another opportunity: a job at Kerr-McGee. products that will serve for many years to Award recipient—has served as president “They recruited me, and I saw that move come." and chief operating officer for AmeriTies as an opportunity to grow in my career,” Part of what helps the industry continue Holdings LLC since 2005, yet his career has McGinley explained. “At that time, Kerr- improving is involvement in the Railway taken him all through the ranks of the rail- McGee had multiple treating plants and was Tie Association (RTA), McGinley said, add- road industry. the second largest supplier of crossties in the ing that he has long appreciated the work McGinley first started out in the industry industry.” of the association and even served on its after graduating from Penn State University When Kerr-McGee eventually ceased its Executive Committee and as president in the with a degree in forestry. From there, he railroad tie operations to focus on oil and early 1990s. “It’s so important for our indus- went on to get a master’s degree at the gas, McGinley, along with a few others, saw try to have a vehicle like the RTA to con- University of Pittsburgh, and before gradu- an opportunity to start a new company and tinue developing processes and procedures ation had been hired by Consolidated Rail purchase Kerr-McGee’s crosstie processing for the betterment of our products,” Corporation (Conrail). “I had the opportu- equipment at the Union Pacific plant in The he said. Supplier Award Winner Appreciates Friendships Saturday afternoon when I was working, I company I always hoped to end up working fell about 40 feet, and it almost killed me,” with, and I’m so glad I did.” Moss said. “It was the worst day of my life. MiTek took Moss all over the country— I had a 50/50 chance of survival, but into eight provinces of Canada and even into I lived.” Mexico—one part of his job he thoroughly After recovering, Moss met someone in enjoyed. Another part of the job he enjoyed the railroad supply industry who convinced was the friendships. “One of my favorite him to take a chance on making a career parts of my job was that I got to meet and change. “Gordon Matlock had a patent get to know so many people,” he said. “To pending on the end plate,” Moss explained. me, it’s friends first and then business. I “I decided to go into business with him.” was given the chance to make many new For seven years Moss worked with friendships, and they could trust me.” Matlock on the end plate before the As a supplier, Moss found it important Many people don’t get second chances at company was sold to Robbins Engineering. to be a part of the Railway Tie Association life. But, when Bill Moss did, he took full After a few years, Moss left Robbins (RTA), even serving as one of the earliest advantage. Engineering and worked in wood treating suppliers on the RTA Executive Board. Years before joining the railroad industry, before returning to the end plate business “To me it was so important to be involved Moss worked as an ironworker, setting steel soon after. “We had a great product,” Moss with RTA, because that’s a great avenue on various skyscrapers and other projects. said. “It wasn’t very long, and Dan Moss to contact customers and share products,” He had worked on projects in Chicago and I joined MiTek USA. That was one of Moss said. “The product I sold was used and New York, and one day was working the best things that ever happened to me.” almost exclusively by the railroad industry, on a bridge in St. Charles, Mo., when the It was then that Moss became a sales so it was great having the opportunity to unthinkable happened. “It was a bridge rep for MiTek. “It was wonderful working get in front of other RTA members to share out across the St. Charles River, and one for MiTek,” Moss added. “MiTek is the information and get their opinions.” CROSSTIES • SEPTEMBER/OCTOBER 2018 23 CONFERENCE SHOWCASE RTA Awards Forestry Scholarships To 3 Deserving Students By Kristen McIntosh Eaton Harris Spottswood he Railway Tie Association awarded Eaton has participated in two research the owner/manager for E. Harris Timber T three John Mabry Forestry Scholarships projects at UK, one that involved tree-ring Consulting, where he is responsible for to deserving college students: Daniel Eaton, research and another analyzing reforestation measuring trees and their attributes for an undergraduate student at University of on abandoned strip mines in eastern inventory and appraisal purposes as well as Kentucky; Ethan Harris, who is attend- Kentucky. budget planning and contract acquisition. ing Oregon State University; and Savolia Eaton said he has learned the importance He has also performed a variety of duties Spottswood, who is a student at West of forests having an economic value. for J.A. Mantle Consulting in a team Virginia University. “Before coming to UK, I saw wood leader role. He is a member of the Society products industries solely as a threat to of American Foresters, Rocky Mountain Daniel Eaton forests, but that is rather shallow view. Elk Foundation and Umpqua Community With a 3.98 grade point average in forestry, Rather, these industries provide forests College Forestry Club. Daniel Eaton has earned numerous with an economic value, persuading society Once Harris earns his bachelor’s degree academic honors. He has been named to the to value forests and protect them, as in forest management, he will pursue a Deans List and is a University of Kentucky opposed to turning them into parking lots, master’s degree in business. “I hope that by Patterson Scholar, National Merit Scholar subdivisions, etc.,” he said. “My exposure to going this route, I will be prepared for a and Eagle Scout. forest economics has sharpened that drive to full management position in a company It was on a canoeing trip with his Boy protect; I now believe my role in society is and/or be better prepared to continue my Scout troop in the Minnesota Boundary to maximize the economic value of forests own business and make something good Waters when Eaton realized he was meant in an ecologically sustainable manner so out of it. I want to be able to manage the to work in the outdoors and was driven to that Americans will value their forests as forests we have left in the United States in protect America’s forests. He was 17 on that a source of livelihood as well as natural a way that is sustainable yet profitable. This trip. beauty. These are the means by which I am will allow us to have places to recreate and “When I arrived at University of called to protect the forests I was so moved have fun, yet still have a living workplace Kentucky as a freshman, I had very little by as a 17-year-old.” that can benefit us all. If that means I idea what forestry actually was, but I chose Eaton said his career path involves have to specialize in fir management to to major in it anyway. Over my three years pursuing an MBA through UK’s one- make sure our forests will be around for as a forestry major, I have a much firmer year program following completion of generations to come, I will. By making sure grasp on what forestry is and how it is his bachelor’s degree. “I believe that the our forests are managed properly, it will that we go about protecting forests. My business knowledge provided by the MBA cause other businesses to be sustained as perspective on what ‘protecting a forest’ coupled with the technical knowledge from well, including the railroad industry all the means has changed quite a bit over these my forestry and NRES degrees will better way down to our homes. Our forests and three years. enable me to contribute to the growth of ecosystems are very important to me as a Eaton is a double major in Natural Kentucky and America’s forest industry.” forester, hunter and citizen of this beautiful Resources and Environmental Science, country.” a program that has given him a broader Ethan Harris Harris is married to wife Maygen and perspective on the natural resources issues Studying forest management at Oregon father two young daughters, Harlow and that face the world. State University, Ethan Harris is also Coralee. 24 CROSSTIES • SEPTEMBER/OCTOBER 2018 Savolia Spottswood Majoring in wood science and technology at West Virginia University in Morgantown, Savolia Spottswood has assisted her professors for projects on several occasions: a teacher’s assistant for dendrology course, where she was responsible for 18 students during pre-walks in the field and for preparing samples for lab the next day; a field research assistant responsible for recording the diameter at breast height of trees; and a research assistant responsible for testing and research sample presentation as well as maintaining lab space organization and cleanliness. As a senior wood science and technology major with an emphasis on wood processing and a minor in sustainable design, Spottswood said her educational focus is in pursuit of a bio-economy and its full implementation in the United States. “When I first came to West Virginia University, I enrolled as a forest resource management undergraduate student, not sure what I was going to do with it but intrigued by the forest. By the end of my first year…I realized the application of wood products sparked my interest more than the study of forest management, and since then I’ve been a wood science student.” Post-graduation, Spottswood said she plans to be involved in the development of sustainable treated wood products for outdoor application. She met Tony Chambers, a member of the Railway Tie Association at the West Virginia University Forestry and Natural Resources Alumni Banquet. Chambers shared information on dual treatment of wood using borate and creosote. “He said the treatment is more environmentally friendly yet just as effective as a creosote-only treatment.” Spottswood did her own follow-up research on the subject of dual treatment and sparked an interest in finding long-term solutions for wood products treatment. “This is exactly the kind of thing I want to involve myself in. Not only is it related to my field of study, but it also incorporates a bio-based treatment that can be really beneficial for the environment and the economy. Using sustainable practices is exactly where my passion is, and I aspire to see the wood preservative industry more widely adopt a bio-friendly approach.” CROSSTIES • SEPTEMBER/OCTOBER 2018 25 XXX 2018 SYMPOSIUM & TECHNICAL CONFERENCE Oct. 23-25, 2018 | SCHEDULE AT A GLANCE* *Subject To Updates #RTA100th for 2018 Conference Tweets TUESDAY, OCTOBER 23 WEDNESDAY, OCTOBER 24 8:30 am RTA Golf Tournament 2:45-4:30 pm Class 1 Engineering & Environmental Forum Raptor Bay Golf Club James Kessler, Sr. VP North Carolina RR Co., AREMA President (Air Boat Tour for Attendees during Golf Outing – See Below) Kevin Hicks, AVP, Union Pacific 3:00-6:00 pm RTA Guest Sponsored Hospitality Suites Matt Hammond, AVP & Chief Engineer-System 5:30-7:00 pm RTA President’s Reception Maintenance & Planning, BNSF Tod Echler, AVP Engineering, CSX Transportation WEDNESDAY, OCTOBER 24 Michael Singelyn, Sr. Mgr. Engineering, Canadian National (invited) Vendor-mercials: 3 minutes each 7:45-8:00 am RTA GENERAL BUSINESS SESSION AND WELCOME 6:50-10:50 pm Annual RTA Banquet & Awards Recap 8:00-8:30 am Keynote - Ronald Batory, FRA Administrator A black tie/formal event. Doors open at 6:45 pm, with awards at 7:20 pm 8:30-9:00 am Tony Hatch, ABH Consulting THURSDAY, OCTOBER 25 9:00-10:15 am Legislative Importance of Economic Impact Data 7:45-9:15 am Research Session Chuck Baker, Executive Director, NRC Maureen Hodson, EHS Support Brent McClendon, NWPCA Patrick Stark, Creosote Council Worker Exposure Study Nicole Brewin, RSI Jeff Lloyd, Nisus Tony Chambers, ABC Tie Tech International, LLC 10:15-10:45 am Networking and Exhibition Break 9:15-11:00 am AAR Update & Biochar Technologies For Ties 10:45–12:00 pm Procurement Session Bob Fronczak, AAR Dana Cole, Moderator, Hardwood Federation Charles Hegberg/Mike McGolden, Biochar Consultant/CoalTec Energy Philip Fischer, Maley & Wertz Hardwood Lumber Henry Brandhorst, CHZ Technologies Darrell Beasley, Beasley Forest Products (invited) Larry Jones, IndusTree Companies 11:00-12:45 pm Railroad Purchasing Forum Derek Douthit, Douthit Lumber Kristine Storm, Genesee & Wyoming Paul Gaines, Madison County Wood Products (Presenter/Moderator) Cory Thomas, BNSF 12:00-2:45 pm RTA Working Luncheon Nate Irby, Union Pacific Download the Conference App with Keynote Address, Scholarship Presentations Erin Carson, CSX Transportation and Mini-Workshop with this QR Bill Blaise, Kansas City Southern code and at Jonathan Mackay, Schroders, State of the U.S. Hamza Founane, Canadian National www.eventmobi.com/ rta2018 & Global Economies Wade Ostrander, Canadian Pacific OPTIONAL ACTIVITIES FOR ATTENDEES AND SPOUSES/GUESTS. THESE EVENTS REQUIRE ADDITIONAL REGISTRATIONS. The Golf tournament and Air Boat tour are on Tuesday, October 23rd. The Naples Botanical Garden Visit and Limited Glass Blowing Activity are on Wednesday, October 24th (both during the business sessions and luncheon). All of these activities are optional and require additional registrations. OCTOBER 23, 2018 Experience the art of glass in motion with Chihuly trained art- OCTOBER 24, 2018 Optional - RTA Golf Tournament – Raptor Bay Golf Club ist, Conrad Williams. A Florida native, he has been creating RTA Banquet Black Tie 100th Conference Celebration 8:30 am - 3:00 pm on October 23, 2018 with glass since 1998. After receiving his BFA from California 6:45 pm - 10:50 pm on October 24 $225 pre-event - $275 at event College of the Arts in glass and sculpture, he settled in the Banquet and President’s Reception Entertainment Each hole of the Raptor Bay Golf Club was carefully created Northwest after completing a yearlong internship with Ben Vocalist Extraordinaire Jean Frye Sidwell & Acoustic/Pic- to blend with the environment, leaving a beautiful course Moore and Dale Chihuly. Shortly after the birth of their first colo Bassist, Composer and Producer, Chris Sidwell will with natural surroundings. Under the guidance of Audubon son, Conrad and his wife Erin returned to their hometown, perform during the President’s Reception and also during International, they have developed an ecological design that Naples, FL to pursue their creative endeavors. dinner at the Banquet on Thursday evening. Jean is truly preserved the most valuable habitats on-site and restored You will learn the basic steps it takes to make an orna- a jazz singer’s, jazz singer. Partnered with husband, Chris, nearly 25 acres of wetlands. With no residential sites on the ment or paperweight. You will be introduced to the tools, she is co-creator & co-owner of Pacific Coast Music, an property, the natural surroundings encourage the appear- equipment and given a brief history of glassblowing. With independent record label. Due to the overwhelming success ance of protected wild creatures including the American Conrad’s help, you will shape, cut and blow out your form. of her CD’s and Pandora Radio Station, Jean is recognized Bald Eagle, Great Blue Herons, Snowy Egrets and even the You will be able to select from a variety of colors. Lessons as an international recording artist. Chris has produced and very shy Whooping Crane. The tournament quality course include all the materials you need to create your work. recorded multiple CD’s under the successful record label that features wide fairways with one height of cut throughout and Conrad’s studio will accommodate 6 people at a time, so he co-owns with wife, Jean. five sets of tees to give players of every level a memorable while one class is creating, the other will be able to enjoy the Rocky LaPorte – With his unmistakable accent and his outing. shopping and dining located in Venetian Village. hilarious and endearing delivery, Comedian Rocky LaPorte is becoming more well known by the day. His performance Optional – Air Boat Tour (Minimum 20 – Maximum 40) Optional - Private Guided Tour of the World Class Naples on “The Tonight Show with Jay Leno” brought him a standing 9:45 am - 2:45 pm October 23rd Botanical Garden followed by Naples Shopping & Lunch ovation, and he’s been featured on his own “Comedy Central $185 pre-event - $235 at event on your Own, 9:30 am - 3:00 pm, Cost $125 pre-event Presents” special. You’ll experience an adventure aboard our nature-based - $175 at Event, Light Continental Breakfast at hotel at Rocky’s opened for the likes of Louie Anderson, Garry airboats. You’ll glide through the Lake Trafford in the north- 8:30am (minimum 20 – maximum 50) Shandling, Drew Carey, Tim Allen, Hootie and the Blowfish eastern portion of the Everglades. You’ll explore areas only Naples Botanical Garden is a world class paradise that com- and the Righteous Brothers, just to name a few. He’s done an accessible by air boat, while a knowledgeable guide pro- bines delightful cultivated tropical gardens with beautifully enormous amount of charity work also for St Jude’s for Chil- vides a brief narration about the natural and human history of restored natural habitats. A guide will take visitors through dren, N.F.L. Charities, Homeless shelters, cancer research the area. Keep an eye out for gators, native birds, and other seven different gardens. and Police and Fire Dept fundraisers. Rocky has won numer- swamp creatures. Have your cameras ready for some fantas- • The Asian Garden ous awards for his clean corporate-client-friendly humor: tic photo opportunities and guaranteed alligator sightings. • The Brazillian Garden • Top 5: Last Comic Standing 2014 – NBC • The Caribbean Garden • Winner: Stand Up of the Year Award – OCTOBER 24, 2018 SOLD OUT • The Children’s Garden Las Vegas Comedy Festival Optional Exclusive Glass Blowing Experience • The Florida Garden • Winner: Johnnie Walker National Comedy Search, $295 pre-event no at-event • The Preserve Hollywood 9:30 am - 4:00 pm (Minimum 6 – maximum 12) • The Water Garden 26 CROSSTIES • SEPTEMBER/OCTOBER 2018 Crosstie Production - 12 month rolling total (000) 30,000 28,000 26,000 24,000 2015 22,000 2016 2017 20,000 2018 18,000 Tie Statistics16,000 14,000 & TrendsSEPT-OCT1 2 3 4 5 6 2018 7 8 9 10 11 12 In August, YTD tie production was 20.3 percent down from year-ago levels. ties - SHORT TERM TRENDS Crosstie Production - 12 month rolling total (000) Crosstie Inventories (000) - 3-month Moving Average Crosstie Production - 12 Month Rolling Total (000) Crosstie Inventories (000) 24,000 30,00030,000 24,000 28,000 28,000 22,000 22,000 26,00026,000 20,00020,000 24,00024,000 2015 2015 22,00022,000 18,000201618,000 2016 2017 2017 20,00020,000 2018 2018 16,00016,000 18,00018,000 14,00014,000 16,00016,000 14,00014,000 12,00012,000 J1 F 2 M 3 4 A M 5 J 6 J 7 A 8 9S 10O 11N 12 D 1J 2F 3M 4 A 5 M 6J 7J 8A 9S 10O 11N 12 D ——2015 —2016 —2017 —2018 ——2015 —2016 —2017 —2018 August inventories were 24.9 percent below year-ago levels. InIn August, August, YTD tie YTD production tie production was 20.3 percent was down 20.3 from percentyear-ago levels. down fromAugust year-ago inventories were levels. 24.9 percent below year-ago levels. Crosstie Inventories (000) - 3-month Moving Average 24,000 RTA MEMBER TIE PRODUCTION & INVENTORY 2012 2013 2014 2015 2016 2017 2018 22,000 Prod. Inven. Prod. Inven. Prod. Inven. Prod. Inven. Prod. Inven. Prod. Inven. Prod. Inven. 20,000JAN 1,920 17,074 2,061 20,043 1,563 17,987 2,013 16,122 2,226 19,314 1,901 23,141 1,286 17,692 FEB 1,967 16,688 1,701 19,706 1,428 17,931 1,8762015 16,127 2,166 19,241 1,795 22,108 1,407 17,081 18,000MAR 2,164 17,045 1,725 19,269 1,642 17,105 2,0342016 16,703 2,502 19,567 1,859 22,184 1,467 16,914 APR 2,031 16,609 1,722 19,072 1,558 16,525 2,1902017 16,006 2,313 19,381 1,764 21,338 1,347 16,379 2018 16,000MAY 2,275 16,873 1,751 18,074 1,501 16,707 2,122 16,081 2,241 19,238 1,891 20,860 1,522 16,242 JUN 2,279 17,076 1,609 17,978 1,711 15,769 2,212 16,009 2,540 19,277 1,800 20,119 1,544 14,857 14,000JUL 2,127 16,885 1,805 17,579 1,786 15,269 2,396 15,997 2,213 19,286 1,640 19,524 1,409 14,836 AUG 2,536 17,888 1,916 17,024 1,816 15,311 2,507 16,406 2,495 19,635 1,999 19,310 1,695 14,587 12,000 SEP 2,0881 2 18,027 3 4 1,753 5 6 16,809 7 8 1,892 9 10 15,501 11 12 2,542 17,031 2,304 20,275 1,707 18,844 OCT 2,277 18,505 2,073 16,634 2,049 15,605 2,634 17,765 2,159 21,330 1,492 18,588 AugustNOV inventories1,900 19,022 were 1,717 24.9 16,326 percent 1,671 below 15,567 year-ago 2,103 levels. 18,196 2,061 20,409 1,391 18,365 DEC 1,701 19,357 1,526 18,267 1,884 15,955 2,269 18,769 1,933 21,976 1,262 18,030 (In thousands of ties) NOTE: This report is compiled from non-duplicating information furnished by major railroads and supplier companies. Data and analyses are based on reports from RTA members 28 CROSSTIES • SEPTEMBER/OCTOBER 2018 Regional Pricing Trends Graphs are available ties - LONG TERM TRENDS online at www.rta.org. Crosstie Production/Inventory/Hardwood Trend Pricing with 4/4 2A RED OAK Pricing* CrosstieCrosstie Production Production and and Inventory Inventory (12 month(12 month moving moving averages) averages) NOTES: 2,400 22,000 • Tie production and inventory is shown in a 2,200 20,000 12-month moving average format. This results in 2,000 18,000 minimizing monthly devia- tions, more clearly illustrating 1,800 16,000 long-term trends. 1,600 14,000 • “Green” 4/4 2A Red Oak is sometimes considered a 1,400 12,000 benchmark to compare Inventory (000) Inventory (000)Inventory historical tie price move- Monthly Monthly Production (000) 1,200 10,000 ments. This data represents Monthly Production (000) a trend line developed from 1,000 Production Inventory 8,000 Production Inventory composite data of from the reporting regions, compiled 800 6,000 with permission from the Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Hardwood Market Report. • The tie trend price line is only a “trend” line. The Hardwood TiesHardwood 7x9 - Green Trend Trend Pricing Pricing with 4/4with Red Green Oak PricingRed Oak 4/4 2A Pricing graph shows a “composite” number that is a consistent $800 $32 ratio of the high & low prices $30 reported by HMR for all $700 regions. Thus, the line is $28 only representative of trends, not actual pricing. $600 $26 • In the real marketplace $24 $500 for hardwood lumber and $22 ties, prices fluctuate often, Green Trend Price Line Price Trend Green sometimes significantly. - $400 $20 Information presented in Green Red Oak 4/4 2A Red Green 4/4 2A Red Oak these graphs should be $18 Ties 7x9 7x9 Ties Green Red Oak 4/4 2A Tie Trend Price Line considered in that light. For $300 “Green” 4/4 2A Red Oak Tie Trend the most current pricing Ties 7x9 - Green Trend $16 available, reported weekly, $200 $14 we encourage you to sub- scribe to: Hardwood Market Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Report (901) 767-9126. ties - RR INVENTORY/DEMAND US ECONOMIC CLASS 1 RR CONSOLIDATED MONTHLY TIE REPORT DATA Class I Inventory Commitments Class I Black Tie Demand Estimate Real US Fed Funds Source: BNSF, CN, CP, CSX, NS, UP Black Tie Green Tie 6 Month 12 Month GDP Rate Rate 3rd Quarter 2017 Total (Avg.) 2,551,872 9,697,260 7,176,667 15,686,667 3.3% 1.15% 4th Quarter 2017 Total (Avg.) 2,587,937 9,721,390 7,427,000 15,744,000 2.6% 1.20% 1st Quarter 2018 Total (Avg.) 2,566,683 9,128,203 7,646,333 15,943,333 2.2% 1.45% 2nd Quarter 2018 Total (Avg.) 2,914,291 9,946,370 7,694,667 15,589,333 4.2% 1.74% Eastern Division 619,938 1,533,095 2,554,000 5,108,000 Western Division 1,334,000 5,200,000 3,650,000 7,300,000 July 2018 1.91% Canadian Division 193,681 1,067,138 1,350,000 3,550,000 Total 2,147,619 7,800,233 7,554,000 15,958,000 Eastern Division 609,063 1,834,820 2,554,000 5,108,000 Western Division 1,300,000 5,000,000 3,650,000 7,300,000 August 2018 1.91% Canadian Division 257,865 1,137,735 900,000 3,550,000 Total 2,166,928 7,972,255 7,104,000 15,958,000 CROSSTIES • SEPTEMBER/OCTOBER 2018 29 Trend lines in the four graphs below are 4 quarter moving averages. Real GDP (billions of chained 2012 dollars) 19,000 18,500 18,000 17,500 17,000 16,500 16,000 15,500 15,000 14,500 14,000 13,500 13,000 12,500 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Trend lines in the four graphs below are 4 quarter moving averages. Final estimate of the 2nd quarter GDP growth was 4.2%. Trend lines in the four graphsReal GDPbelow (billions are 4of quarterchained 2012 moving dollars) averages. US Class 1 Freight (billions of ton-miles) 19,000 Real GDP (billions of chained 2012 dollars) 500 18,500 18,000 17,50019,000 450 17,00018,500 16,50018,000 400 16,00017,500 15,50017,000 15,00016,500 350 14,50016,000 14,00015,500 300 13,50015,000 13,00014,500 12,50014,000 250 13,500 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 13,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 12,500 Final estimate of2Q 3Q the4Q 2nd2Q 3Q quarter4Q 2Q 3Q 4Q GDP2Q growth3Q 4Q 2Q was3Q 4Q 4.2%.2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q Source:ties Surface Transportation - BUSINESS Board TRENDS 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 RevenueTrend freight lines was in up the by 3.51% four graphsin the 2nd below quarter areversus 4 quarterlast quarter, moving averages. US Class 1 Freight (billions of ton-miles) andTrend was uplines 4.93 in thepercent four fromgraphs year below ago are levels. 4 quarter moving averages. Final estimate of the 2nd quarter GDP growth was 4.2%. 500 Real GDP (billions of chained 2012 dollars) US Class 1 Freight (billions of ton-miles) Real GDPRailConnect (billions Freight of Car chained Data - Carloads 2012 dollars) US Class 1 Freight (billions of ton-miles) 450 CHOOSE A TRACK RECORD 2,500,00019,000 500 18,500 18,000 400 2,000,000 450 17,500 17,000 350 1,500,00016,500 400 16,000 THOUSANDS OF MILES LONG 15,500 300 1,000,000 15,000 350 14,500 500,00014,000 250 ® 300 13,500 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 MITEK ANTI-SPLIT PLATES 13,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 0 12,500 250 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Surface Transportation Board 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 US Diesel Prices - cents per gallon Revenue 2005freight2006 was up2007 by 3.51%2008 2009 in the 2010 2nd quarter2011 2012versus2013 last quarter,2014 2015 2016 2017 2018 In theFinal third estimate quarter of of 2018 the short2nd linequarter freight GDP was upgrowth by 11.6 was percent 4.2%. from year ago (estimate). Source:and was Surfaceup 4.93 percentTransportation from year Board. ago levels. Revenue freight was up by 3.51% in the 2nd Final estimate of the 2nd quarter GDP growth was 4.2%. 500quarterSource: versus Surface last Transportation quarter, and Board was up 4.93 percent from year ago levels. INCLUDED WORKS Revenue freight was up by 3.51% in the 2nd quarter versus last quarter, IN AAR CROSSTIE TESTING WITH ALL CURRENT Quarterly Tie Purchases US Class 1 Freight (billions of ton-miles) 400and was up 4.93 percentRailConnect from year ago Freight levels. Car Data - Carloads Quarterly Tie Purchases RailConnect Freight Car Data - Carloads FOR 45+ YEARS END PLATE MACHIENS 8,000500 2,500,000 300 RailConnect Freight Car Data - Carloads 7,000 450 2,000,000 6,000 2,500,000 200 5,000400 1,500,000 2,000,000 4,000 (000) 100 350 1,000,000 3,000 1,500,000 2,000 300 0500,000 1,000 1,000,000 250 0 0 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 5/1/18 500,000 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 3Q 3Q Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 0 Crosstie purchases were up 10.6 percent in the second quarter of 2018 In the third quarter of 2018 short line freight was up by 11.6 percent from Source: Surface Transportation Board In September,In the third quarterdiesel2Q 3Q 4Q pricesof2Q 3Q 20184Q have2Q 3Q short4Q increased2Q line3Q 4Q freight2Q 3Q 4Q by 2Q was17.1%3Q 4Q up2Q 3Q byfrom4Q 11.62Q 3Q year4Q percent2Q ago3Q 4Q levels.from2Q 3Q 4Q year2Q 3Q 4Q ago2Q 3Q (estimate).4Q 2Q 3Q 4Q 2Q 3Q versus last quarter. year ago (estimate).2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 CrosstieRevenue purchases freight waswere up up by 10.6 3.51% percent in the in 2ndthe secondquarter quarterversus lastof 2018 quarter, versus last quarter. and was up 4.93 percent from yearUS Dieselago levels. Prices - cents per gallon Used with permission YTD Housing starts Quarterlyare LIBOR6.6 Tie 30percent dayPurchases higher than last year; permits are up 3.8 percent. US Diesel Prices - cents per gallon In the third quarter of 2018Class shortLIBOR 1line Freight freight Source:30 was Dayup Associationby 11.6 percent of American from year Railroads ago (estimate). 500 6 RailConnect Index Source: RMI RailConnect Freight Car Data - Carloads 8,000 Quarterly Tie Purchases 5 7,000 2,500,000400 US Housing Starts (saar) 6,0008,000 4 2,000,000 1,400 300 5,0007,000 3 1,2004,000 1,500,000 6,000 MEETS OR EXCEEDS (000) 200 percent 1,000 2 3,0005,000 RAILROAD SPECIFICATIONS 2015 1,000,000 2,0004,000800 2016 100 1 (000) (000) 1,000600 500,000 3,000 2017 0 0 2,0004000 2018 0 3Q 3Q Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 1,000200 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q YTD Housing starts are 6.6 percent higher than last year; permits1/1/05 5/1/05 9/1/05 1/1/06 are5/1/06 9/1/06 1/1/07 up5/1/07 9/1/07 3.81/1/08 5/1/08 9/1/08 percent.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 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 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 TRUST THE ONLY ANTI-SPLIT PLATES PROVEN TO PERFORM SINCE 1970. 0 JFMAMJJASOND In September, diesel prices have increased by 17.1% from year ago Normalization3Q of interest3Q Q3 ratesQ3 isQ3 in progressQ3 Q3 asQ3 measuredQ3 Q3 byQ3 LIBORQ3 Q3 Inlevels. the third quarter of 2018 short line freight was up by 11.6 percent from year ago (estimate). (interestCrosstie purchases rate).2005 In were2006 September up2007 10.62008 percent FOMC2009 in the2010 meeting second2011 quarter2012 2018, of2013 2018 the2014 versusFED2015 increasedlast 2016 quarter.2017 2018 Normalization of interest rates is in progress as measured by LIBOR (interest rate). In September, diesel prices have increased by 17.1% from year ago levels. the FED funds by 25bp to 2.25%, and signaled one more hike this year. MiTek’s Anti-Split Plates are specifically designed for end grain applications, with patent features that US Housing Starts (saar) In September FOMC meeting 2018,US the Housing FED increased Permits the FED (saar) funds by 25bp to 2.25%, ensure penetration at the end of the tie for maximum holding power. Extend the Life of Your Crossties. US HousingQuarterly Tie Starts Purchases (saar) and Crosstiesignaled purchasesone more werehikeUS thisup Housing10.6 year. percent in Permits the second quarter (saar) of 2018 versus last quarter. LIBOR 30 day 1,400 1,400 8,000 Contact Shea Zeiser, 1-800-325-8072. 61,200 1,200 7,000 1,000 5 1,000 6,000 2015 2015 800 800 5,0004 2016 2016 (000) 600 (000) 600 4,000 2017 2017 (000) 3 400 2018 400 2018 3,000 percent 200 2,0002 200 0 0 1,0001 1-800-328-5934 JFMAMJJASOND JFMAMJJASOND 0 n 2015 n 2016 n 2017 n 2018 n 2015 n 2016 n 2017 n 2018 MiTek-US.com 0 3Q 3Q Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 2005 2006 2007 2008 2009 YTD2010 Housing2011 2012 starts2013 are2014 6.62015 percent2016 2017 higher2018 than last year; permits are up 3.8 percent. COPYRIGHT © 2018 MITEK INDUSTRIES, INC. ALL RIGHTS RESERVED US Housing Permits (saar) 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 Crosstie30 1,400 purchases were up 10.6 percent in the second quarter of 2018 versus last quarter. CROSSTIES • SEPTEMBER/OCTOBER 2018 Normalization1,200 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 signaled1,000 one more hike this year. 2015 800 2016 (000) 600 2017 400 2018 200 0 JFMAMJJASOND CHOOSE A TRACK RECORD THOUSANDS OF MILES LONG MITEK® ANTI-SPLIT PLATES INCLUDED WORKS IN AAR CROSSTIE TESTING WITH ALL CURRENT FOR 45+ YEARS END PLATE MACHIENS MEETS OR EXCEEDS RAILROAD SPECIFICATIONS TRUST THE ONLY ANTI-SPLIT PLATES PROVEN TO PERFORM SINCE 1970. MiTek’s Anti-Split Plates are specifically designed for end grain applications, with patent features that ensure penetration at the end of the tie for maximum holding power. Extend the Life of Your Crossties. Contact Shea Zeiser, 1-800-325-8072. 1-800-328-5934 MiTek-US.com COPYRIGHT © 2018 MITEK INDUSTRIES, INC. ALL RIGHTS RESERVED ® We are Stronger together. Stella-Jones unique advantage for customers is the breadth of products and services that we provide. Crossties & Switch Ties Bridge Timbers & Panelized Decks Highway Grade Crossings Procurement Yards (18) Tie Plants (13) Crosstie Distribution Yards (8) We’re ready to work with you today; across North America and in your backyard. Visit www.Stella-Jones.com or call Borate Pre-Treatment QNAP Bridge Timbers 1.800.272.8437 © 2018, Stella-Jones Corporation. 1.800.272.8437 www.stella-jones.com All Rights Reserved