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Don’t Forget! You Saw it in the
August 2018 #10229 Page #87
Lumber Briefs By Matt Layman Publisher, Layman’s Lumber Guide
Was the 2018 Canadian Rail Car Shortage Real or Imagined?
T
here is a longer, quite fascinating tale to be pondered on the subject of this year’s historic western Canadian shipment backlog, however, for now let’s skip the conspiracy theories and stick to the confirmable facts.
The source for this article’s information is the Canadian government and the American Association of Railroads (AAR). First, lumber. Canada professed early in the year that lumber production in 2018 would decline by about 7%. Additionally, western Canadian mills claim they would ship 20% less to the U.S. as a result of the 20% tariff.
Now, the railroad. The AAR reported that the average number of Canadian rail originations in 2017 was 3369 cars per week. If Canada is producing 7% less in 2018, we can infer that 3133 cars per week are needed to ship that Canadian production. The green line on the chart shows the base line of cars needed to ship production. The red line shows AAR’s Weekly Rail Traffic in the lumber category as reported by the railroads. Note this is what the railroads themselves documented as cars loaded.
Also, note the time line. Week #12 was when the industry was put on notice of the car shortage. From week #52 – week #12, weekly loadings averaged 2918, creating a backlog of 2795 cars. From then until the present, there has been no shortage of cars necessary to ship production, but initially there was a shortage needed to catch up the winter backlog.
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A veteran lumberman, Matt Layman publishes Layman's Lumber Guide, the weekly forecasts and buying advisories that help component manufacturers save money on lumber purchases every day. You can reach Matt at 336-516-6684 or matt@laymansguide.org. PHONE: 800-289-5627
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