Global rail freight market to be worth $210bn

13 January 2017

The global rail logistics market is expected to grow by nearly 4% annually between 2017-21, according to a report.

Technavio predicted the global rail logistics market would be worth $210bn by 2021.

One of the most important drivers of growth in the market is the increasing efficiency of rail freight over truck freight. The report said rail freight transportation is between 4.5 and six times more efficient than truck transport.

Fuel efficiency in rail varies between 150 and 520 tonne-miles-per-gallon, but for truck freight the figure is between 70 and 140.

The report said road freight accounted for 55% of freight transport “in a majority of countries” but an increase in congestion would cause a shift to rail.

“Intermodal freight transportation is forecast to be the segment that will showcase the highest growth rate,” said the report, predicting annual growth of almost 5% through the forecast period.

It said that the intermodal transport currently accounted for 41.72% of the global market and the high demand for this form of transport was bringing in investments from rail operators and manufacturers to develop better intermodal technologies.

For example, Canadian National Railways was planning to invest $250m in an intermodal and logistics hub in Milton, Ontario.

CSX, a US logistics company, has developed tracking systems to allow shippers to track containers across different shipping methods from the source to destination.

The growth of the oil and gas industry has increased demand for rail “tank wagons”, which now make up a third of the US freight market.

“Rail freight operators across the globe are investing in redesigning freight cars to increase the capacity... and to increase the efficiency of each container,” said Sharan Raj, lead analyst at Technavio for logistics research.

“Such innovations will bring in demand for this segment of the global rail logistics market.”

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