RR Ties for $40

[drobertson]

I was told by an ole timer years ago, learn the logs, cut for ties, he suggested when cutting 7x9's, if there is a face or two, take it to a 6x8. This has often worked out, but as ron mentioned, you end up with a f1f, the tie now goes for .37/ft rather than .53/ft  I have decided with my volume, it is better to go for 7x9's and take what the log gives.  Custom cutting when available is allot less stressful, no cost out, there is just not enough to stay busy for me. The tie and flooring market is the only way for me to stay busy.  The real killer is when logs are purchased at 300/m  and several only produce 4x6's it is a loss.  Many loggers now run by the ton rather than scaling the log, and as you would expect, some junk gets accidently mixed in the load.     david

[tbish]

how do u go about finding where they buy them? we sawd thousands of ties in the late 1980s but the place we sold them has long ben closed and the tracks removed

[Leigh Family Farm]

Complete side note: I just went to print this thread because its got so much info in it...its 60 pages!!  Now back to your discussion...

[stavebuyer]

One thing I have noticed over the last 10 years is that the smaller mills sawing grade logs have mostly disappeared. The big bandmills with dry kilns that sell overseas have pretty well priced logs above what a mill selling green lumber mill can pay. Smaller mills that focus on ties seem to be holding their own. The big mills really can't justify putting a 8' tie log on the carriage.

[inspectorwoody]

Thanks for the great information Ron. 

Stavebuyer hit the nail on the head too.

Last I heard W.Oak logs were .80, .60 and .40.

So going off the green market prices, with FAS being $1.00/ft and Select being $.98/ft, sure doesn't leave a guy much room for sawing cost etc.

As far as the big mills not being able to justify putting a tie log on the carriage, I'm sure some don't but to be honest, I wonder why in the world do we see the logs we do come in the mill.

There was some difference of opinion between myself and my supervisor on Monday when we were cutting W.Oak. I have not yet got to the bottom of it but I put together the following as an example. I have not been told what our 2com or 3A/Rustic prices are so when I find that out, I may lay off cutting ties if the prices are such that it justifies it.

Hopefully this will also help someone else.

7x9x8=42 bd/ft

March price is $22.00/tie or $0.52/ft.

From our place to buyer is 140 miles. Trucking at $4.20/mile would amount to $588.

200 Ties on a semi.

200x42=8400'

$588/8400=$.07/ft trucking.

$.52-$.07=$.45/ft.

2com W.Oak is 440/mbf and 3A is 350/mbf. 4x6 cant is 350/mbf.

If I knew what our sawing cost per ft were, I'd be able to get an idea of what the lumber would have to bring to justify cutting up the tie but I don't.

With some others experience with large mills, they may be able to chime in and help with that. 

[Ron Wenrich]

Your sawing costs are lower by sawing the tie than by sawing the boards.  It might only be a dollar or two, but in the course of the day, that really adds up.

Ties also have a shipping fee that is tacked on.  Lumber doesn't.  Then there's also a discount that some of the wholesalers take on lumber - less 2% if paid within 10 days, for example.  We get paid when they inspect the ties in our yard. 

When I do my cost comparison, I pretty much just look for a breakeven point where cutting lumber is equal to cutting ties. 

Log costs can be tricky, and a better way to think about it is that the interior of most logs are the same value.  The higher priced logs should yield better jacket boards, and be able to make up for the added value.  Most of the high value logs also have larger diameters to work with.  But, you have to get your value off of those jacket boards.  When value starts to slip, you need to go to plan B.   

In theory, all high value logs should saw to a pallet cant or better.  In practice, its a variable.  My experience has been that the longer I saw on a log, the lower the value of the boards.  At some point, you have to decide that its no longer worth the risk of pulling the next board. 

Log prices vs lumber prices is also a tricky comparison.  You probably have some overrun in there between the lumber footage and the log footage.  Without decent log yield studies, its hard to get a good grasp on what prices should be.

[GeneWengert-WoodDoc]

InspectorWoody,
I like your logic and approach.  When we saw a tie, we would likely get around 30 to 35 bf of lumber due to the loss of sawdust.  So, perhaps you should use this when when calculating the value when sawing into lumber rather than 42 bf of lumber.

Sawing white oak has always been a close call, as the white oak market has never been real strong, compared to red oak,cherry, walnut, etc.  we do often see q-sawn white oak doing well...barrel staves and export.  But the low grade seems hard to move.  Prices are given, but buyers are few.

[Kansas]

This is the part that gets me. If number #2 and three are that low, and cants as well, why would you not convert that into pallet cut stock and nearly double your money. Just does not make sense to me. Again the question that begs, if softwood pallet lumber out of Canada goes for what its going, hardwood should be as much, if not more. If nothing else, cants should be much higher than .35 cents. I have to be missing something here, because it seems to me, hardwood pallet/cant prices have not kept up with softwood, for whatever reasons. According to my reckoning, a full 1 1/2 x 3 1/2 based on 452 per thousand on a fake board foot basis yields .66 cents a board foot. 5/8 x 5 1/2 is .72. 5/8 x 3 1/2 is .82 on a true board foot basis.

[inspectorwoody]

Kansas

Here is how I take your question of not cutting the low grade in to pallet cut stock etc. Someone will correct me if I'm wrong.  :D

You get more for pallet "parts" because you have added more cost to produce it. A 3.5x6 cant has to be re-manufactured, a low grade board has to be re-manufactured etc. etc. Your paying for extra equipment, extra employees etc.

Could I buy random width 3com for 250/mbf and re-manufacture it for pallet parts and make money. You bet I could. Is there enough there to make it worth it? That I don't know. If I did venture into it, I would request specified widths and lengths to maximize yield. So now the price jumps up to 325/MBF if not more.

Some mills only want to deal with so much.

Ron

As far as sawing cost, I was trying to refer to an overall per foot basis. Say we cut 45MBF/day. What does it cost us to produce each foot. $.20 or $.25? Equipment cost, employee cost etc. etc.

I was not aware of the shipping fee on ties. Does this apply when you truck your own?

I'm looking at an old tie PO. Shipment terms are delivered and Payment terms are Net 30. I don't see any notes of a fee.

I believe we do the 2% and maybe even a 10% but we do offer the Net 30.

[Ron Wenrich]

If you have an average daily cost, and your volume is 45 Mbf/day (that's good production), you can arrive at an average sawing cost.  My mill is a lot smaller.  But, I do know that if I'm sawing locust, I'd be lucky to 7-8 Mbf/day, but sawing 16' tulip poplar I might get 17-18 Mbf.  All things being equal, which gives me the lowest mfg costs? 

I can even go to sawing 8' tulip poplar at 12 Mbf/ day, and that would give another sawing cost.  If you would look at sawing ties vs sawing everything down to boards and a cant, you would get another sawing cost value.  Its all a variable, and to plug one value in for all the species and diameter ranges isn't quite an accurate picture.  I know that I get better production in May and October than I do any other time of the year.  It may be about 10% difference. 

The tie buyers in our area have different zones, similar to pulpwood buyers.  They pay so much extra for shipping from each zone.  They don't pick up, so all trucking is either done on your trucks or whoever you sub to.  But, payment is the day they inspect the ties.  They mark the bundles so they can compare them at their yard to limit guys switching ties out.  They used to have mills take out the rejects, but found there was also some dishonesty there.

Some of the grade buyers use a discount for quick payment.  At 2%, that 1000 wood drops to 980.  Just something to keep in mind when comparing wood prices. 

There are lots of variables, and as markets change, so should your awareness of cutting practices.  What is right for one mill is not necessarily right for another. 

[Kansas]

It continues. My pallet friend that uses Canadian lumber said his price has gone up once again, to 423 a thousand, FOB at the mill. That is on the fake board foot basis. My math skills seem to be suspect today, but as near as I can tell, that is a 47% increase from a year ago. On a standard deck 5/8 x 3 1/2 inch deck board, my guess is its getting close to 90 cents delivered in on a true board foot basis. But here is the kicker. He is having a heck of a time getting lumber in. He had someone wanting to price a block pallet, new lumber, which I assume to be a European type pallet. He has turned them down so far, but is trying to chase down Southern Yellow Pine. He told the lady who called, if I price them, you are going to scream about the price. His brokers tell him it is going up more. He told me anything he prices now is only good for 2-3 weeks. Its interesting that as a pallet builder, he doesn't view this positively. As a sawmill operation, I have a different view.

[WH_Conley]

Kansas, what is the piece price on the boards. When you talk about fake and real, we all might not be on the same page. I believe the piece price would eliminate any confusion.

[Jeff]

I have no clue what the term fake board feet means unless he is talking about nominal.

[Ron Wenrich]

I think he's talking about the dimension sizes in softwoods.  He talked about it before, and refers to a 2x4 only being a 1½x3½.  His buddy is buying them in and converting to pallet boards.  A 5/8"x3½" deck board is getting 90 cents on a true basis.  So, the 2x4 "fake" @ $423/Mbf ends up costing $645 in "real" lumber.  Of course, this price would be better than cutting ties. 

I've tried to follow the logic, and I understand about cutting those 5/8" boards.  Lots of labor in them.  Around here, pallet cants are around $450 delivered.  The cost to peel them off is a lot higher, unless you're set up for it.  I only know of a handful of mills that fool around with them. 

I'm just wondering why his buddy doesn't buy pallet cants in softwoods instead of pine dimension stock delivered in from Canada.  He could also use some options or futures to hedge his costs. 

I'm sure Kansas will correct me if I'm wrong.   

[Jeff]

So he is referring to nominal size.

[muddstopper]

I only read the first 5 or 6 pages of this thread, but I am not a logger so I wont throw my 2cents toward the profitability of sawing RRties. I do want to touch on another part of the tie discussion. Having worked for a major railroad for 37+years, most of them on traveling tie gangs. I have probably handled more ties than this entire group as a collective. I have installed the concrete ties and removed them just a few short years later because they wont stand up to the heavy tonnage of freight lines. I have also installed and removed composite ties, some made with wood chips, sawdust, plastics and glues, because they wouldnt hold up either. I have even installed, and later removed steel ties, that wouldnt do the job either. Wood has an amazing flexability that these other materials simply dont have. Anything to rigid will simply break like repeated bending of a wire. Simply put, the RR's use wood ties because they havent found a better material for the job, and believe me, they keep looking.

Also, not to bust anybodies bubble, I wouldnt look for RR's to be a major hualer of crude oil. When it comes to fuel, acohol will be what the railroads hual the most of. Not just the liquid itself, but also the grain and sugars used to make the ethanol is where the RR's will make their money. Most of the increase in track improvments are being made in the midwest where the corn is grown and the acohol is produced.

Someone mentioned the dangers of transporting crude oil and their by products in tank cars. Even went so far as to publish a few links to some serious incidents that had happend in the past. One would do well to not read to much into these reports posted, the newest one being over 30years old. The railroads have a tremendous safty record when it comes to hualing hazardous material. The trucking companies nor the pipe lines can boast of a better record. Still that doesnt mean the RR's would be a better fit for transporting refined or crude oil across the country. The reference was made to the tank capacity of a tank car compared to a truck tanker, well the same comparison can be made between a tank car and a pipe line. It simply cheaper and more efficient to hual the oil in a pipe line than it is in a tank car, whether by rail or truck.

As for the increased in the amount of track improvements being made, it might interest some to know that the railroads are not really hireing that many people to get the work done. Not even keeping up with the number of folks that retire each year. Layoffs are not that all uncommon and I know of one major railline that has actually cut back on the scheduled amount of track work to be done this year. Of course RR's look at the big picture over many years, not just this year or the next. If manufactureing ever returns to this country, then you can look for the railroads to be the main suppliers of material hualing. If imports increase, nothing beats a train for getting something from the West coast to the East coast in large quantities. Trucks can go where trains cant, but a train can hual more tonnage, greater distances, and on less fuel than a fleet of trucks.

[Mooseherder]

The Railroad may want the Wood tie markets to think that concrete will replace them if their prices go too high.
Now that the secret is out they won't be able to hold that over their head for much longer.

[Ron Wenrich]

Its not any secret.  If they stopped buying, the price of all low grade would slump.  If they buy too much, they force the price up.  It seems that they simply match the going to supply to anticipated demand.  These guys are pretty sophisticated buyers. 

[SwampDonkey]

Right now, they are hauling natural gas by special container on trucks to McCain foods to replace stove oil. At one time they had rail to the local plant but all the river valley rail system was taken up 25 years ago. This is at both processing plants.

News clip

[dgdrls]

This appears to be a market worth investigating especially since I need to try and make my next
mill purchase at least a break even proposition,

Is there a listing, directory or web-site of tie buyers in NY or the NE??

Good thread, lots of good information and experience  here.

Thanks
DGDrls

[muddstopper]

It might interest some of you to know that the railroads are some of the largest landowners in the country. RR tracks and right of ways are only a small portion of their land holdings. they do own massive amounts of timber land and do use their own timber for cross tie production. They need more ties, they just saw down a few more trees. Of course after the Conrail mergers, they also sold off a lot of their timber lands, both NS and CSX, in order to service some of the debt that they incrued because of the purchase, but the railroad still hold thousands of acres of timber land. While they do still buy ties from other sources, if prices get to high, they simply start cutting their own timber.

[SwampDonkey]

Those RR timber lands were sold off here in NB years ago. If you see NB Railroad Company on a sign here, it's owned by the Irvings. Irvings are a forest company, but do have some track and lease some to. But the rail road, like CN rail, don't own much outside of the rail bed, switch yards and shops. The river valley rail was abandoned 25 years ago and has reverted to DNR, the rail road doesn't own it. It's now the NB trail network. It will never return here. In my county there is very little land that isn't private land, any that aren't are 100 acre parcels scattered hither and yawn that are mostly all cut off. The Irvings have so many companies that it made a couple interesting books. When my grandfather was very young back before the depression he used to go with his father and guide for the Dead River Company on the Restigouche R, for salmon. The Irvings bought the company out, they still exist, and he never cared for Irvings all the rest of his life. The Irvings still have that fishing lodge and have exclusive rights to the water and the fishing. That was why he never liked them.

[dgdrls]

I have noticed a fair amount of rail tie work here in the Northern NY Region above Watertown,
Has the price on ties moved at all?

DGD

[SwampDonkey]

While working this week out in the bush, the area happened to be near a freight rail line. I saw car after car of petroleum roll by one day on a block that bordered the rail road. On this block I had to watch out for old fencing that is mostly disintegrated, but hard on saw blades.  :-\

[WH_Conley]

Only thing I have heard about ties is that a new log buyer started up a couple of months ago and is paying $75.00 per thousand more for tie timber than anyone else and trucking the logs 150 miles. Needless to say, he is getting all the logs. Either he is gambling big time or he has a better market.