Plywood & the railroad car shortage

I AST SPRING'S tight supply of l- rai.lroad cars was nothing new to plywood manufacturers, who have contended with a boxcar shortase on an almost annual basis-only the severity of the problem changes from year to year,"

comments Gerry

Riemer,

assistant

director-transportation, Resource & Indus- Gerry Riemer try Services Div. of the American Plvwood Association.

APA members forward approximately 120,000 carloads of plywood annually. An adequate supply of rail equipment is crucial if the plywood industry is to maintain current production levels, let alone meet future srowth forecasts.

This spring's car shortage had a substantial impact on the plywood industry, comparable to the severe boxcar drought of 1966 and 1972-73. Riemer said serious problems arose in a number of locations in 1978, but they were scattered throughout the plywood producing regions.

At least one plywood mill was forced to temporarily close down during this spring's railcar crunch, he said, and several others were hard pressed to attain adequate warehouse space to stay in production until cars became available.

On the surface, this spring's boxcar shortage was caused, in part, by an unusually harsh winter in the Northeastern U.S. that tied up freight cars in eastern rail centers. Riemer, however, says the real problem is there are simply not enough railcars to go around. An equally important factor is that utilization of the existing fleet has deteriorated as well.

CAR DEMAND UP, SUPPLY DOWN

DESPITE boxcar supply problems, railroads continue to be the plywood industry's primary mode of transportation. Last year more than 2/3rds of all plywood made was shipped by rail.

The major reason for the plywood industry's problems with rail transportation is that the number of boxcars in service continues to dwindle each year. According to a report issued last year by the Car Service Division of the Association of American Railroads, the ownership of all boxcar types by Class I carriers has steadily declined: from 580,652 in 1967 to 449.089 n 1976.

While the nation's boxcar fleet has shrunk, demand for cars has continued to increase from plywood manufacturers as well as other industries. In the relatively railcar - rich 1967, softwood plywood production totaled 12.96 billion sq. ft. on a 3/8" basis, according to Riemer. In 1976, the plywood industry produced 18.44 btllion sq. ft.

Putting it another way: compared to nine years earlier, during 1976 the plywood industry had 23% fewer boxcars at its disposal to move 42% more plywood.

"On numerous occasions, rail carriers have indicated the increased

Story at a Glance

Why the plywood industry keeps running short of railroad cars . . . alternate means of delivery . . possibility of reverse demurrage, a national car fleet and mandatory car distribution.

capacity of new equipment has compensated for the loss in the number of cars available," Riemer said. "From various reports, however, it appears this is not the case: the carrying capacity of the existing boxcar fleet is still 20-25% less than it was in 1967."

"The basic problem of too much is compounded by poor utilization of existing equipment by railroads," he continued. "For instance, the average boxcar spends an estimated 89% of the time in terminal movements. The national average trip cycle (loadempty-load) is about 1.1 trips per month."

For these and other reasons, the plywood industry is gradually depending more on motor carriers to ship the product from mill to market, according to Riemer.

BARGES AN ALTERNATIVE?

The continuing decline of rail shipments is discernible in all three major plywood producing regions. Railroads carie d 7 6% of Pacifi c Northwest plywood during 1977, down l% from 1974;65% of the plywood from the South, a reduction of 4% from three years earlier; and 6l% of pro(Pleasenlmtupage 46)