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Global Railway Transport Industry

The global railroad transport industry is expected to hit the $800 billion mark by 2015, according to research from Global Industry Analysts. Demand for rail transportation declined because of the economic recession. Freight volumes plummeted by as much as 30%, with the US and the EU particularly badly hit.

State stimulus packages and rescue plans launched in a bid to stimulate economic recovery encompassed initiatives for the transportation sector. Many of these packages are helping projects led by public sector rail operators, who rely on the government for funding.

Key Market Segments

The world rail freight industry was worth $194 billion in 2011, having recorded 6% yearly growth for the four preceding years, reports MarketLine. Sector consumption volumes witnessed close to 4% yearly growth over the same four-year period, reaching almost 11,000 billion FTK in 2011. Market growth is expected to accelerate to a yearly rate of 8% between 2011 and 2016, bringing the market to almost $286 billion.

The global passenger rail sector represented a $169 billion market in 2010 after 6% expansion year-on-year. MarketLine predicts the sector will generate almost $210 billion in 2015, or 24% growth in five years. In 2010, the global passenger rail sector expanded by 4%, reaching almost 2,775 billion PKm. In terms of volume, the global passenger rail sector is predicted to exceed 3,300 billion PKm in 2015, representing 19% growth in five years. The EU has a 43% share in the world global passenger rail sector.

Regional Market Share

The global rail freight industry encompasses revenue generated through freight transportation by rail. In the EU, the rail freight market exceeded revenue of $47 billion in 2011. The EU rail freight sector recorded almost 3% yearly growth between 2007 and 2011, according to research from MarketLine. Sector consumption volume fell at a yearly rate of -0.4% over the four-year period ending 2011. Industry performance is expected to pick up over the coming year, reaching yearly growth of almost 6% between 2011 and 2016. The global rail freight industry is expected to exceed $62 billion by the close of 2016.

The North American railroad market was worth close to $109 billion in 2011. MarketLine reported almost 7% annual growth in the sector over the four preceding years. Freight is the leading market segment, generating more than $87 billion in 2011 and accounting for more than 80% of the overall market in terms of value. Market growth is expected to accelerate to exceed yearly growth of 7% for the five-year period ending 2016. The North American railroad sector is predicted to generate revenue of almost $153 billion by the end of 2016.

Market Outlook

A rapid increase in global population, along with urbanization, and economic development are all factors fuelling growth in the global railway transport sector. Growing awareness as to the negative impact of traffic congestion on the environment is also encouraging rail passenger traffic as an alternative to car travel. Rail transportation continues to benefit from the advantages it offers such as greater energy efficiency than water, road and air transportation, reports Global Industry Analysts.

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