DUBLIN--(BUSINESS WIRE)--The "Rail Freight Transport Market - Growth, Trends, and Forecast (2020 - 2025)" report has been added to ResearchAndMarkets.com's offering.
The global rail freight transport market is expected to exhibit a CAGR of about 2% during the forecast period 2020-2025
North America leads the global rail freight market and Asia-Pacific is expected to overtake North America during the forecast period. Moreover, the rise in global trade and various trade agreements are boosting the global trade flows. The non-containerized cargo and liquid bulk dominate the type of cargo transported by rail while the growth of Intermodal transport is boosting the transport of containerized cargo. Intermodal cargo is estimated to witness high growth over the forecast period.
Similarly, with the rise in international trade and the countries recognizing the benefits of rail freight transport, cross-border rail freight transport is gaining huge momentum across different parts of the world. In some regions of Central Asia, Eastern Europe, South Asia, Southeast Asia, and Sub-Saharan Africa characterized by groupings of many small countries, rail freight can increase economic integration by providing access to international and regional markets and connecting landlocked countries.
COVID-19 had a mixed impact on the global rail freight market as regions line North and South America saw a decline in the rail freight market while Asia and Europe saw a rise in the rail freight traffic. In the long term regional share of rail freight is expected to see a prominent increase. With this there is expected to be higher investment, further infrastructure development and technology implementation to digitize rail freight.
Key Market Trends
Low cost of transportation and modal shift drive the market
Rail freight companies continue to invest and reduce costs for customers. For instance, they have increased the payloads they can carry, with tonnage per train up by 80% in the last decade. When shipping by rail, the lower interest costs for the tied-up capital partly cover the higher transportation costs, making rail freight a very cost-efficient shipping alternative. Let me exemplify:
If a company ships 750 containers per year, with an average cargo value of 250 000 EUR per container, and a financial cost of 5% PA, the daily interest cost is 37.52 EUR per container. Shipping goods door-to-door from China to Europe by rail typically takes about 25 days, compared to the sea, which typically takes about 42 days. This means a saving in interest cost of 708 EUR per container or 531,165 EUR per year for all 750 containers. This is money that can be used to cover extra costs and create a more agile supply chain, which can also have an additional positive impact on cost parameters and capital binding.
Rail freight companies continue to invest and reduce costs for customers. For instance, they have increased the payloads they can carry, with tonnage per train up by 80% in the last decade. Railway transportation costs are lower. The cost of railway transportation is only one-tenth of the cost of automobile transportation; transportation fuel consumption is about one-twentieth of automobile transportation.
The COVID-19 crisis has resulted in the shortage of truck drivers, restriction on sea and air transport in many countries and regions. As a result, the cost of transportation through truck, sea, or air has sharply risen as compared to rail freight costs. This has made the shift to rail fright a supply chain advantage.
The rail freight transport market is moderately consolidated in nature, with a mix of global and local players. According to industry sources, the rail industry is facing huge competition from its similar service providers road and air transporters since last decade. Many countries are heavily investing in the railroad infrastructural developments, especially investments are huge in the Americas and Europe regions. International companies are holding a large amount of market share by acquiring or joining hands with local companies in many regions.
In-country level, most of the markets seems to be concentrated with the presence of one or two major players. Additionally, in some countries, state-run companies own a major share of the market. During the COVID-19 pandemic, rail freight is playing a key role during this critical time in connecting European economies and keeping freight moving.
- Current Market Scenario
- Technological Trends
- Government Regulations and Initiatives
- Insights into Transport Corridors in Key Regions
- Spotlight on the Effects of the Belt and Road Initiative (BRI)
- Review and Commentary on the Freight Transportation Costs by Rail
- Elaboration on Key Trade Agreements Related to Rail
- Impact of COVID-19 on the Market (Short-term and Long-term Impact on the Market and the Economy)
- Insights into Key End Users of the Rail Freight Sector
- Union Pacific Railroad
- Canadian National Railway
- CSX Transportation
- Norfolk Southern Railway
- BNSF Railway
- Swiss Federal Railways
- DB Cargo
- United Parcel Service (UPS)
- Canadian Pacific Railway
- Russian Railways (RZD)
- Geneese & Wyoming Inc.
- Indian Railways
- Japan Freight Railway Company (JR Freight)
For more information about this report visit https://www.researchandmarkets.com/r/4rgx3p