Railroad Market Size, Share & Trends Analysis Report By Type (Passenger Rail, Rail Freight), By End-use (Mining, Construction, Agriculture, Others), By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global railroad market size was valued at USD 281.24 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 5.6% from 2023 to 2030. The market is likely to be driven by continued investments in railway line projects and the expansion of railroad networks around the world. Several national and international railway projects, particularly in the Asia Pacific, are currently in the planning, development, or building stages, which bodes well for future market growth.

Railcar leasing has become a major trend around the world and this is predicted to have a favorable impact on railroad transportation. Depending on the nature of the cargo and the use of current technologies in railroad transportation, this mode of transporting goods is not only safer but also more cost-effective. Moreover, advancements in storage facilities and power sources, as well as improvements in transportation timings are likely to create new growth prospects for the railroad transportation industry.

The impact of the COVID-19 pandemic on the rail freight business has been mixed. North and South America saw a fall in rail freight traffic while Asia witnessed an increase. In April 2020, SNCF-France’s national state-owned railroad company-announced modifications to its operations in response to the low passenger and freight demand. It decreased TGV and Intercités services to about 10% of normal levels, while Transilien and TER services, as well as Keolis-operated transport networks, were lowered to an average of 15% to 20% of normal capacity. SNCF’s rail freight service was running at 65% of its normal capacity.

In many countries, COVID-19 led to a scarcity of truck drivers, as well as restrictions on sea and air transportation, which resulted in a dramatic increase in the cost of transportation by truck, sea, or air. The cost of rail freight, in comparison, was low, and switching to rail freight became a supply chain advantage. Over the forecast period, more investments, infrastructure expansions, and technology implementation to digitize rail freight are expected, translating to increased market growth.

Type Insights

The passenger rail segment led the market with a share of 58.8% of the global revenue in 2022. The segment is projected to witness growth over the coming years as the tourism industry picks up speed thanks to inexpensive passenger train fares. Furthermore, increased investments in the expansion of passenger railroad networks and the introduction of newer and faster trains, like bullet trains and metros, are likely to propel segment growth. The passenger rail segment is also expected to register the fastest growth in the forecast period.

The rail freight segment has been witnessing steady growth owing to the growing reliance on railroad routes for the transportation of goods and lower rail freight rates. Furthermore, the railroad network's strong connection facilitates the transportation of commodities in remote places that are otherwise impossible to reach by air. Even though global trade and cargo volumes were affected by the pandemic, the market is expected to recover over the projection period as freight and shipping volumes return to pre-pandemic levels.

End-use Insights

The agriculture segment held the largest share of 34.2% in the railroad market in terms of revenue in 2022. Stable and efficient railroad service is especially crucial for the agriculture industry. Rail transportation is essentially the only cost-effective shipping option available for low-value, bulk commodities in rural areas far from sea transit and end markets. These factors have driven the agriculture railroad segment in the past. In India, the robust Indian railway network connects small farmers from the remotest parts of the country to the mainstream market, where they can sell their agricultural produce.

The mining segment is expected to register the fastest CAGR of 5.9% over the forecast period to overtake the agriculture segment in terms of market size by 2030. Monorail systems are being increasingly employed in coal and ore mines because of their efficiency and cheap running costs. Monorail systems are quickly becoming essential components in all mining projects where transportation systems have been optimized and where road and rail transportation can be combined. Looking to capitalize on the opportunities in freight transportation, the Indian Railways has been mapping mining districts across the country to connect them with the railroad network.

Regional Insights

North America held the largest market share of just over 30% in 2022 and is expected to retain its lead throughout the forecast period. Freight rail is a pillar of the American economy, according to the Association of American Railroads, and the U.S. is home to a world-class freight rail network. The growth of freight rail in the country can be linked to continued investments in the enhancement of equipment, infrastructure, and technology. Passenger railroad services in the region are driven by rising consumer demand, increased passenger safety measures, and technological as well as operational advancements.

Asia Pacific is expected to register the fastest CAGR of 6.4% from 2023 to 2030 due to increased government investments in new railroad construction and the high reliance of the population on rail transport. For example, Timetric's Construction Intelligence Center (CIC) shows that the Asia Pacific leads the world in railroad investment. It is also the world's largest transport infrastructure market, with PwC forecasting annual spending of about USD 900 billion by 2025. Apart from this, increased imports and exports from Asian countries are predicted to boost market growth.

Key Companies & Market Share Insights

The market includes both international and domestic participants who focus on strategies such as innovation, mergers and acquisitions, and investments in technology, infrastructure, and expansions to enhance their position in the market.

• In March 2021, Canadian Pacific Railway and Kansas City Southern Railway-two of the seven Class I railways operating in the U.S.-announced a merger agreement. Canadian Pacific would buy Kansas City Southern in a stock and cash deal, according to the proposed agreement

• In July 2020, the EU authorized the purchase of Bombardier’s rail unit by Alstom, a French high-speed rail company. Alstom had to commit to a number of access assurances and hand over Bombardier’s assets that were contributing to Hitachi’s joint high-speed platform

Some prominent players in the global railroad market include:

• Central Japan Railway Company

• SNCF Group

• Union Pacific Corporation

• OAO RZD (Russian Railways)

• BNSF Railway

• Indian Railways

• Deutsche Bahn

• JSC Russian Railways

• CSX Corporation

Railroad Market Report Scope

Global Railroad Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global railroad market report based on type, end-use, and region:

• Type Outlook (Revenue, USD Billion; 2017 - 2030)

  • Rail Freight

  • Passenger Rail

• End-use Outlook (Revenue, USD Billion; 2017 - 2030)

  • Mining

  • Construction

  • Agriculture

  • Others

• Regional Outlook (Revenue, USD Billion; 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

    • Italy

    • Spain

  • Asia Pacific

    • Japan

    • China

    • India

    • Australia

    • Indonesia

  • Central & South America

    • Brazil

  • Middle East & Africa

    • UAE