Rail Logistics Market Expected to Reach $3,579.7 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Rail Logistics Market," The rail logistics market was valued at $1,995.00 billion in 2021, and is estimated to reach $3,579.7 billion by 2031, growing at a CAGR of 6.1% from 2022 to 2031.

Asia-Pacific is expected to dominate the global rail logistics market during the forecast period. Increase in trade in the region is attributed to increase in investments by governments for rail freight used for movement of goods. For instance, governments of India and Nepal launched Jaynagar-Kurtha Railway link, a cross-border railway aimed at enhancing investment, commerce, and trading activities between the two countries.

The rail logistics market is estimated to witness growth, owing to increasing trade activities across the globe, and increasing trade related contracts, over the forecast period. In addition, rising demand for goods from various regional markets is helping to build better trade relations within neighbouring regions, thereby fuelling the growth of the global market over the forecast period. Moreover, government in several countries across the globe are launching various trade & transportation initiatives to strengthen transportation infrastructure in their region, which also contribute in the growth of the market. For instance, in 2019, the Canadian government invested $2.1 billion for the Trade and Transportation Corridors Initiative (TTCI) to build stronger, more efficient transportation corridors to international markets. The core element of the TTCI is the merit-based National Trade Corridors Fund (NTCF), which will provide $2 billion over 11 years to strengthen Canada’s trade infrastructure, including ports, waterways, airports, roads, bridges, border crossings, rail networks, and interconnectivity between them.

The growth of the global rail logistics market has propelled due to increase in allocation of budget for development of railways and rise in demand for secure, safer, & efficient transport system. However, restrictions associated with cross border freight transport is the factor that hampers the growth of the market. Furthermore, surge in development & testing of autonomous train, and increase in industrial & mining activities are the factors expected to offer growth opportunities during the forecast period.

COVID-19 Impact Analysis

The rapid spread of coronavirus pandemic has brought unprecedented challenges and threatens the normal life of human beings and global public health. Owing to this pandemic, many businesses are halted and are waiting for the rail logistics market conditions to improve. In addition, to contain the spread of COVID-19, countries such as the U.S., India, the Netherlands, Brazil, and Colombia took extreme measures such as lockdown, social distancing, stay-home regulation, and social Isolation.

Following the directions of the World Health Organization (WHO) for minimizing the spread of the virus, governments of various countries have set up lockdown and trade restrictions, which has disrupted the exports, especially from China, causing large scale manufacturing interruptions across Europe, and the closure of assembly plants in the U.S. The situation has put intense pressure on the rail logistics industry. The railway department has shut down all the passenger train services and has limited its freight transport services with a reduction in demand for commodities and disturbed supply chain.

In addition, during COVID-19 period, railways in several countries utilized rail logistics services for transportation of essential commodities to consumption places. For instance, in August 2020, Indian Railways operated 1,900 Kisan Rail services to move perishable goods such as fruits, vegetables, poultry, fishery, and dairy products from production units to the places of consumption. 

However, in 2021, majority of the governments have focused on infrastructural development in the second wave of COVID-19 health crisis. Therefore, such infrastructure developments planned in the rail industry front for 2021 are anticipated to support the growth of the rail logistics market. This positive demand outlook for the market is estimated to witness positive growth and the market is expected to witness strong recovery in 2021. Market participants of rail logistics industry are following certain approaches to manage the operations by slashed budgets, extended equipment lifecycles, and reduced salaries in the short term to overcome the financial downturn.

KEY FINDINGS OF THE STUDY

• By type, the freight cars segment is anticipated to exhibit significant growth in the near future.
• By operational area, the international segment is anticipated to exhibit significant growth in the near future.
• By end-use industry, the healthcare segment is anticipated to exhibit significant growth in the near future.
• By region, Asia-Pacific is anticipated to register the highest CAGR during the forecast period.

Key players operating in the global rail logistics market include A.P. Moller-Maersk, CEVA Logistics AG, C.H. Robinson Worldwide, Inc., DB Schenker, Deutsche Post DHL Group, DSV A/S, Geodis, FedEx, Kuehne+Nagel International AG, Nippon Express Co., Ltd., Schenker Deutschland AG, and United Parcel Service of America, Inc.