Evidence of Higher Track Material Pricing to Agencies
Earlier discussions here have noted the possibility. Now, it is happening.
In order to continue my anonymity, I must not divulge too many facts or names. But I can note that for the same track material, our quoted price has increased almost 30% in a matter of twelve months. The material was essentially the same, the customer was the same, only the price was different!
In another case, our bid to another customer rose over 50% for the same material. There was a greater difference in time, that increase came after a four year interval.
Why? Several reasons. Fuel costs, material costs (primarily because all of our suppliers' fuel costs have risen as well), and a higher "Contingency" factor have all contributed. The ability to add that contingency increase is due to how much more material the Class One Railroads are buying.
I mentioned in an earlier post that at the AREMA Conference, almost all suppliers spoke of how busy they are. One told me, "At this time last year, our quoted lead time to our customers was one week. Then it slipped to two weeks, then to two to four weeks. Now, we are at eight to ten weeks out!" This is just one indication of increased Class One Railroad track material purchasing.
The fact that fewer Transit and Commuter Rail Projects seem to be in the pipeline now may contribute to why many Agencies have not come to grips with this situation. However, I am hearing that some of the more "far-sighted and aware" Agencies are lining up committments for material now, even before their RFQ's go out. These Agencies will get their needed material, and at a reasonable cost. It will be interesting to see what happens to some of the others.