Wood Tie Industry Update: Production, Purchasing & Market Trends

As we enter the final stretch of 2024, it’s important to take stock of the trends we’ve seen throughout the year and look ahead to what lies on the horizon. The wood tie industry, like many others in the hardwood sector, has faced its share of ups and downs, but there have been encouraging developments as well. Whether you’re involved in wood ties, lumber, or other hardwood products, the issues affecting one part of our industry ripple across the entire supply chain. So, let’s dive into what we’ve experienced this year and what we might expect going forward.

INVENTORY RECOVERY AND MARKET STABILITY
If you were watching closely last year, you know that low railroad tie inventories were a significant concern. Fortunately, we’ve seen a strong recovery in 2024. In fact, tie inventories have rebounded by over 20 percent from where we stood last July. That’s thanks to increased production of wood ties and timbers, fueled by lower demand for other hardwood products like lumber and flooring. It gave sawmills the breathing room they needed to boost tie production.

This is good news not just for the railway tie sector but for the hard-wood market as a whole. Steadier production and purchasing trends create the kind of stability that benefits everyone. We all know how disruptive the market can be when demand peaks and valleys are too extreme. If we can keep things balanced, it’s a win for producers, sup-pliers, and customers alike.

CAPITAL BUDGETS AND DEFERRED MAINTENANCE
The capital budgets for track improvements across railroads, from Class Is to short lines, have been impressive. But funding alone doesn’t guarantee that projects are completed. We’ve seen labor shortages, weather issues, and track time restrictions cause delays in installing ties and timbers. It’s not uncommon to hear about deferred maintenance, which is never good news for the supply chain.
Deferred maintenance creates challenges that ripple through our entire industry, but we’re keeping a close eye on these developments. It’s essential to stay informed and make sure material flow stays aligned with the railroads’ needs. On the bright side, we’re seeing a lot of support through infra-structure grants, especially for short line and re-gional roads. This investment is key to the viability of these roads and enhances the safety of their workers and communities, which is something we can all appreciate.

PRODUCTION HIGHS AND MARKET PRESSURES
This has been a year of high demand for wood ties, largely due to the inventory shortages of 2023. Railroads have been grateful that demand for other hardwood products hasn’t squeezed tie production too much. In fact, for many sawmills, this demand has been a lifeline over the past 12 months.
However, all is not rosy in the hardwood market. As the Hardwood Market Report’s August “HMR Executive” pointed out, sawmill production volumes are nearing historical lows. It’s not a log supply issue—there are plenty of logs available—but rather a weak demand for hardwood lumber. Lumber prices skyrocketed after COVID, only to plummet sharply, leaving many sawmills sitting on unsold inventory. This has forced some mills to cease production temporarily, which creates concern for the future.
Hardwood logs typically yield multiple products—lumber, ties, and more. When demand drops for one product, it puts the entire produc-tion process under strain. Tight margins are becoming the norm, and unfortunately, this could affect future supply for both lumber and ties.

SUSTAINABILITY: OUR INDUSTRY’S CORE
Wood ties continue to dominate the railway market, making up 90 percent of all ties in track. That’s not just a matter of tradition—it’s a testament to wood’s environmental advantages. As a natural and renewable resource, wood tells a powerful sustainability story. The forest growth-to-harvest ratio is 6-to-1, and wood’s ability to sequester carbon is second to none.

When you compare wood to alternative materials, which often require significantly more embodied energy to produce, it’s clear that wood remains the best option for sustainable construction. This is true not only for wood ties but also for all products derived from hardwood. Sustainability is a message that resonates across our indus-try and will continue to be a driving force.

LOOKING TOWARD 2025
As we look ahead, there are concerns about the impact of sawmill closures on the future supply of green ties and lumber. The market consistently demands 18-22 million ties per year, and maintaining that balance is on all our minds. The more stability we can achieve in our production and supply chain, the better positioned we’ll be for the future.

Railroad specifications for wood ties have also seen some significant changes this year. While not all the details are public yet, the RTA Tie Grading Guide app will soon be updated with the latest railroad specs, and I encourage you to download it and stay up to date. Grading considerations like knots, checks, and splits are evolving, as are preservative treatments.

RTA is currently conducting two major phases of research that involve testing full-size ties made from different wood species, treatment methods, and chemicals in situ. The results are evaluated annually and shared at the RTA conference. A third phase of research is also being considered, which could address several concerns recently raised by wood producers and railroad customers.

In closing out 2024, it’s clear that our success as an industry depends on our ability to adapt and move forward together. Whether you’re in the wood tie market, lumber production, or another hardwood sector, we’re all interconnected. At RTA, we’ll continue to provide the research, support, and resources our members need to navigate the challenges and opportunities that lie ahead.

LAKE STATES
Minnesota, Iowa, Wisconsin, Michigan, N Indiana, N Illinois: Weather has been dry and good for logging. More Oak available now due to the end of Oak Wilt season. Some pulp contracts in the Northern part of the area have improved – possibly due to the rail strike in Canada. Good availability of logs, but mills continue to struggle with sales.

ATLANTIC
West Virginia: Still a challenge to keep all species and grades moved and make a profit.
Virginia: Flooring, Pallet, Poplar, and ties are not moving very good or are on quotas. Mat Timbers are slow as well. Some mills in danger of shutting down.

NEW ENGLAND
New England 1: High log prices and low lumber demand are keeping log inventories in check. Overall hardwood market conditions are still very poor in demand and price. Timber mats demand and softwood lumber demand are almost completely shut off. Loggers on strict quotas.

Pennsylvania: Most mills have more than enough logs for their low production levels. White Oak / Maple uppers are the only promising note on lumber sales. Mat purchasing has slowed and a small uptick on pallet last month has now reversed back to previous pricing.

By Nate Irby, Ph.D., Railway Tie Association