Global Rail Freight Market 2021-2026

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Rail freight has a major role in global freight transport system. In Europe, Its environmental friendliness provides additional value by helping Europe in reducing carbon emission targets. Each freight train removes ~50 -70 trucks from the roads, reducing carbon emissions, traffic congestion and improving safety.

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Language

english

Licence

Multi User

Publisher

Mobility Foresights

Release date

2021

SKU: MFPL21-4367 Categories: , , ,

Description

INTRODUCTION

Rail freight has a major role in global freight transport system. In Europe, Its environmental friendliness provides additional value by helping Europe in reducing carbon emission targets. Each freight train removes ~50 -70 trucks from the roads, reducing carbon emissions, traffic congestion and improving safety.

 

RAIL FREIGHT MARKET DYNAMICS

 

SI.noTimelineDevelopments
1Q4-2021German government to invest in railroad transportation with an aim of increasing 25% of rail freight transportation by 2030 and also to reduce CO2 emissions.
2Q4-2021Greece to invest €4 billion in the development of railway transport projects flawless traffic and the launching of more rail freight services.
3Q4-2021Irish rail network Irish Rail to invest €500 million to increase the rail freight services under the plan Rail Freight 2040.
4Q4-2021The US government declared new cyber rules for passenger and freight carriers to keep the network safe under the Transport Security Administration which starts from the end of the year. 
5Q4-2021The UK government doubled the rail line Bootle branch rail to reduce traffic with an investment of €8.3 million near the port of Liverpool. 

 One of the major challenges for rail freight market in the US is substitution of coal by natural gas in power generation. Rail transport has always lagged behind road transport due to first and last mile transport often required in rail freight movement. 

 Low oil prices over the past 3 years have further dented the growth of rail freight whereas making truck freight even more competitive. The high energy tax burden on the rail freight in the US and Europe is a major challenge to rail freight market. The advent of new digital marketplaces, fuel economy improvement technologies and ADAS have made road transport even more shipper friendly.

So, is the growth period for rail freight over? Well. Not exactly. The system saves the US, billions of dollars through reduced energy consumption and reduced air pollution. 

 The rail freight system needs to improve its processes and make it shipper friendly. The deployment of digital technology on rolling stock will do just that. It will make it possible to enhance the reliability and safety of operations at the same time making them more transparent.

 In US, severe winter weather and flooding on parts of its ~52,000 route-km network contributed to decline in overall rail freight volumes.

 In UK, a consortium of business interests has called on the UK government to immediately start a programme for improving rail electrification to help meet the target of decarbonising the railway by 2040.

 TransmetriQ, a division of Railinc, has announced a significant advancement in cargo tracking and ETA services.The Rail Management System (RMS) from TransmetriQ helps shippers better manage their freight rail operations. Customized, accurate, and near-real-time data are combined with features like electronic billing in this solution.

 RMS was created by Railinc to provide a one-stop shop for rail shippers to manage and evaluate their rail operations. It offers near-real-time visibility and fully customisable analytics, making it simple for shippers to optimise their rail operations.

 RMS is a TMS designed specifically for rail shippers by rail specialists. It’s the result of a cross-functional team of product, technology, design, and data science specialists putting in long hours of development time.

 The user-friendly RMS interface makes migrating from other systems a breeze, allowing shippers to take advantage of RMS’s insights right now. The TransmetriQ team collaborated with a number of shippers from diverse industries to determine the necessary components for RMS, as well as to plan for future enhancements.

 RMS will soon feature rate and route optimization capabilities, a fleet management module, and further artificial intelligence and machine learning-based applications. Rather than simply alerting shippers to concerns, RMS will recommend optimization options for them using artificial intelligence.

 RMS, as the most sophisticated and adaptable rail freight management system available, enables shippers to make more accurate real-time choices. With these key features, it enables more efficient freight management and simplified freight rail shipping: 

  1. Personalised control, allowing users to adapt RMS as their needs change over time; 
  2. Embedded industry-leading expertise; 
  3. Comprehensive perspective, with a modular design that allows data integration with other platforms
  4. Increased accuracy by leveraging Railinc’s direct connection with railroads to provide high-quality data, fast.

A nationwide consultation on how to increase freight to relieve traffic congestion and cut carbon emissions has been launched by the transition team for Great British Railways, the new overall body for network and operations management in the UK.

 A call for evidence has been issued by the self-described future visionary of British railways to gather opinions from industry on how to enhance the quantity of freight transported by train. The Great British Railways Transition Team (GBRTT) is seeking opinions and suggestions on how to increase rail freight from as many stakeholders as possible, both inside and outside the rail and logistics industries.

 By establishing a clear government objective for growth, a freight growth target will function as a spur for investment in the rail freight sector. By highlighting the importance of freight on the rail network, it will encourage patrons and investors in the industry. This will lessen the number of lorries on the road and help the nation achieve its lofty greenhouse gas reduction targets.

 There would be fewer road truck journeys annually if rail freight volumes triple over the next few years, as the GBRTT claims modelling indicates may be necessary to fulfil the net-zero targets. A decarbonized logistics system relies heavily on freight trains, but there is still room for the railroad to go further.

 To assist fulfil net zero obligations, they might need to triple the volume of freight transported by rail. Additionally, this would improve the economy and reduce traffic congestion for vehicles.

 This request for information will aid in determining how much of the present and future freight market demand could be satisfied by rail. Before taking the helm, they want to know how they can increase the sector’s sustainability and efficiency as well as how to reach out to new clients.

GLOBAL RAIL FREIGHT MARKET NEW PRODUCT LAUNCH

 A new rail freight route connecting DP World London Gateway to Maritime’s intermodal freight facility in Tamworth has been announced by UK logistics company Maritime Transport (BIFT). The new service began with a total transport capacity of 87TEU in each direction and will be run by GB Railfreight (GBRf).

 The new service began with a total transport capacity of 87TEU in each direction and will be run by GB Railfreight (GBRf). Eight intermodal services are being run by GBRf into the rail terminals of Maritime in Manchester, Wakefield, the East Midlands Gateway, and BIFT.

 This will be Maritime Transport’s third service into the London Gateway logistics centre of DP World. According to John Trenchard, UK Commercial and Supply Chain Director at DP World London Gateway, more customers will be able to take advantage of quick, dependable, and adaptable connections to global supply chains and markets.

 Additionally, the launch of a new daily connection will result in a significant reduction in CO2 emissions, saving over 4 million road miles per year in an increasingly congested road network, according to Maritime Transport, which acquired BIFT in 2014 as part of the acquisition deal with Roadways Container Logistics.

 According to a statement, reduced turnaround times, new services, and ongoing investments in container handling equipment have all contributed to the terminal’s increasing box throughput over time.

 

RAIL FREIGHT MARKET SEGMENTATION

 

CHINA`S EFFORTS  FOR EXPANSION AND INNOVATION IN  RAIL FREIGHT MARKET

China has intensified efforts to integrate all national ports and diversify their business growth model.  It wants to enhance their earning ability via measures such as sea-rail transport, intelligent port development and further expanding connectivity with markets related to the Belt and Road Initiative.

 The goods exported via rail from China to Europe have expanded from electronic products, printers and laptops to now include food, wine, apparel and even cars.

 China is also looking to promote technical innovation in rail freight market.

 For example, a Chinese rail company has started selling low-emissions freight containers that maintain low temperature doing away with fuel-generated refrigeration. The invention, utilizing phase-change materials has the potential to drive down emissions produced in cooling rail and road freight containers.

  

RECENT DEVELOPMENTS IN RAIL WAGONS AND OPERATORS 

SI.noTimelineCompanyDevelopments
1Q4-2021Canadian PacificCanadian Pacific is partnered with Kansas City Corporation to construct a new rail line linking US, Mexico and Canada. 
2Q4-2021DB Cargo AG DB Cargo AG partnered Kombiverkehr KG to shift its freight operations to rail transport to reduce CO2 and also with a common growth strategy.
3Q4-2021SNCFOrano partnered with SNCF to develop carbon free transport between Europe and France by utilizing rail mode transport. 
4Q2-2021VTGVTG has collaborated with LIQVIS for Liquefied natural gas fuel for rail transport projects. VTG is partnered with Siemens Mobility to increase the efficiency of the Brake Monitoring System(BMS) to improve rail freight transportation efficiency.
5Q4-2021DHL Global DHL Global Forwarding is the leading freight specialist, has started its two way rail services between China, Vientiane, Kunming and Laos which reduces the transport time to almost one day from two days via the new China-Laos railway.
6Q4-2021Union Pacific TransportUnion Pacific Transport revealed its CADX system, an advanced movement planner to manage movement of trains safely with maximum productivity. 

 Globally, the production of freight wagons is estimated to have dropped by at least 19-20% in 2020. However, after 1st quarter the traffic in China, Eurasia and Europe regions spiked as the delivery of medical supplies propelled the route

  1. 2020 was a year of remarkable growth for rail freight traffic on the New Silk Road route. The overall impact of COVID in air, sea and road transportation ultimately benefited rail freight instead of wrecking it
  2. In February 2021, Operail, an international railway logistics company from Estonia has initiated the conversion of locomotives in its fleet to LNG (Liquified Natural Gas) locomotive
  3. In January 2021, Nigerian Ministry have awarded the Mota-Engil a Portuguese company a contract to design and construct the railway line connecting Nigeria and Niger.
  4. Algeria is planning to transport 17 Million tonne freight in 2021, the railway network is also estimated to be close to 6,500 km in the country
  5. In 2020, EU rail freight industry witnessed a € 2.28 B revenue loss, a 12% decrease in the revenue Y-o-Y
  6. Despite COVID Indian Railways has overtaken its last year Freight Traffic revenue. It crossed the number in 1st week of February 2021. Loading in the 2020-2021 period has also witnessed a 8% spike compared to last year
  7. Chinese Railway Group announced that the freight service from China to Europe in H1-2020 was up by 36% compared to 2019, as 5,122 freight trains ran across the continents during the period
  8. In Australia, NSW State Government and Wagga Wagga City Council have completed the contracts to set up Riverina Intermodal Freight & Logistics (RiFL) Hub.
  9. Russian Railways inaugurated the fast freight service transporting chemical products from Tomsk Oblast to Hamina in Finland. The duration is cut by half and about 10 trains per month is planned to operate
  10. Russian companies have been trying to increase the axle load capacity of the wagon by innovating the number of axles such as 3 and 4 axle bogies
  11. Russian companies have been trying to increase the axle load capacity of the wagon by innovating the number of axles such as 3 and 4 axle bogies
  12. In US, during 2nd half of 2020, 3 segments, – intermodal (mostly used in import and export transportation), grain and auto manufacturing – helped to lead an rail freight economy recovery
  13. GEFCO French logistics company has developed rail logistics network to transport PSA’s automobiles from its Kenitra plant in Morocco.
  14. To increase the carload transportation, in the southeast United States and in Mexico, railroads have raised tunnel clearances on many lines so as to accommodate new automobile designs in the carrier wagon
  15. Germany is investing 86 Billion Euros (~98B USD) over the next ten years to maintain and modernize the rail network. Country is focused in encouraging the goods transport by rail. It is estimated that the country’s freight volume compared to 2020 will increase by 25% by 2030
  16. Although the winter-proof rail switch system is almost a 10-year-old invention, very few to none of the operators have adopted the feature. This has led to frequent stand still in operations of freight traffic across Europe and especially in Dutch Railway
  17. By December 2020, DB Cargo had fitted the composite brakes in their 63,000 wagons. Followed by, METRANS who upgraded its entire 3,000 container fleet with these brakes
  18. In December 2020, 40 Wagons leased from Wascosa by Green Cargo are new type of flat cars where the load carrying cassette is designed keeping in mind the different steel product loads 
  19. In December 2020, Russian leading wagon manufacturer UWC signed an agreement with TMH Africa a subsidiary of Transmashholding to improve the freight wagon market in Africa region.
  20. In September 2020, DB cargo and VTG partnered to create modular and multi-functional freight wagon. Modular setup allows the wagons to be optimized based on weight, power and cost
  21. In September 2020, Wascosa has developed new tank wagon for acrylonitrile in co-operation with AnQore and Tatravagonka. Standout feature in the wagon being self-supporting tank construction and the special collision protection system developed for this wagon by the system supplier EST Eisenbahn-Systemtechnik
  22. The DFC project worth (81,000 Crore) will boost freight revenue of Indian railways and also open up newer avenue to freight locomotives as well as wagon manufacturers. As of July 2020 DFCCIL, status report, 68% of physical work on Western and 66% on Eastern corridor was completed
  23. In Oct 2019,India based Adaniapplied for accreditation as a licensed rail infrastructure manager and rolling stock operator in Australia
  24. In Oct 2019, an experimental longer train with 70 wagons was operated between China (Korgas) and in Kazakhstan (Altynkol) as part of a pilot programme to improve efficiency at the border crossing 
  25. In Sep `19, Russia’s State Transport Leasing Co gave contract for United Wagon Co to deliver 5 000 grain hopper wagons by Q4-2020 and 20 000 open wagons by Q4- 2022.Russian railways plans to reduce Japan – European delivery times via the trans-Siberian route to 14 days
  26. In Aug 2019, Kazhakstan based Texol Group awarded United Wagon Co a contract to supply 400 articulated LPG tank wagons by Q1- 2021
  27. In Aug 2019, about 50% or 34,000 DB Cargo wagon fleet was equipped with telematics and smart sensors. By 2020, 100% of DB cargo`s fleet will be equipped with telematics. Every wagon will be fitted a telematics module, GPS, RFID and NFC tags.The sensors will transmit information about the load’s condition, temperature and humidity, as well as monitoring of sensitive/hazardous materials
  28. In Aug 2019, Turkey based Tüpraş awarded Stadler a contract to supply seven electro-diesel locomotives starting 2021, along with an eight-year complete service maintenance agreement
  29. In August 2018, Tunisian Railways acquired 60 Chinese railway wagons. These wagons will be dedicated to transport cereals and grains. These trains will connect Tunis to Ghardimaou in northwest and Bizerte in north.

 

RAIL FREIGHT MARKET SIZE AND FORECAST

The rail freight volume remained very much stable during 2000-2013, as compared to road freight which grew by 7% during the same period. The overall share of rail freight in Europe came down to ~17% in 2013 from ~20% in 2000.

 The road freight share, on the other hand, grew from ~72% to ~75% in the same duration. The rail freight market across the globe is in dire need of better policies supporting the growth of railroad and intermodal freight transport.

Estonian operator Operail carried ~76, 000 TEU in 2019, +46% YOY increase in TEU and ~100+% increase in containerised freight tonnage YOY. In Netherlands, rail freight transport saw an increase in kilometres increase in KMs in 2019.

 Rail freight transport carried out 9.8 million train kilometers, +5% YOY. This increase can be attributed to Havenspoorlijn, a 40km railway line connecting the various yards of the port of Rotterdam.

 The global rail freight market is estimated at $220B-$250B annually.

 

RAIL FREIGHT MARKET COMPETITIVE LANDSCAPE

 

SI.noTimelineCompanyDevelopments
1Q4-2021DB Cargo AGDB Cargo AG to increase the efficiency of the single wagonload traffic by automating the shunting activities which will make it more competitive in rail freight transport.
2Q4-2021German & Dutch railwayA joint partnership between German and Dutch started its trials of automated freight trains to reduce the road transport and increase rail freight transport improvement with an investment of €20 million.
3Q3-2021DHLDHL to acquire J F Hillebrand Group for $1.8 billion to expand its logistics operations. 
4Q4-2021BNSFBNSF railway made $5.79 billion in its third quarter with a 12% increase from the previous year quarter.

 So far, there is no clear global leader in rail freight market but there are multiple regional leaders.

 In recent years, trends in infrastructure charges, especially compared with other modes of transport, have significantly impacted the competitiveness of rail freight operators. 

 The market dominance of rail freight operators is more regionalized now than ever. For example, in US, BNSF Railway and Union Pacific Railroad have a strong presence in the Western US, and CSX Transportation and Norfolk Southern are predominant in the Eastern US. This market has also seen frequent merger to reduce competition and maintain healthy freight rates over past 2 decades.

 In 2019, BNSF reported decline in freight for all major segments, including industrial products (-3%), consumer products (-5%) , agricultural products  and coal. BNSF invested a total of $3.6B on capital projects in 2019, the majority of which was allocated towards maintenance and network expansion.

THIS REPORT WILL ANSWER FOLLOWING QUESTIONS

  • What are the most important technology trends in regional rail freight market?
  • Changes in containers/wagons in coming years
  • Impact of Belt and road initiative on global rail freight market
  • How has tariff war impacted China-Europe, China-US trade and its effects on rail freight?
  • Freight rate trends in past 12 months on  major routes
  • Market share of major vendors in US, Europe and China

 

Companies mentioned