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The North America rail freight transportation market size is forecast to increase by USD 35.83 billion at a CAGR of 7.45% between 2023 and 2028. The market is experiencing significant growth, driven by several key factors. One major factor is the low transportation cost of freight by rail compared to other modes, making it an attractive option for businesses looking to move large volumes of goods over long distances. Another trend influencing the market is the increasing use of artificial intelligence (AI) in rail infrastructure technology, which is enhancing operational efficiency and reducing maintenance costs. However, the market faces challenges from growing competition from alternate freight services, such as trucking and intermodal transportation, which offer more flexibility and faster delivery times. To remain competitive, rail freight providers must continually invest in technology and innovation to improve their offerings and maintain their market share.
Rail freight transport plays a significant role in North America's intermodal transportation system, with railroads connecting various regions and facilitating the movement of goods. The world's population growth and urbanization have led to an increase in freight volumes, making rail freight services an essential component of logistics networks. Artificial intelligence (AI) is transforming rail freight transportation through predictive operation and traffic planning. AI-enabled software, such as Railvision Analytics, assists locomotive engineers in optimizing fuel consumption, reducing greenhouse gas emissions, and improving economic performance. Rail freight transport caters to various industries, including coal, building materials, iron, steel, and containers and trailers.
Further, digital technology and value-added services are essential for rail freight operators to remain competitive. Rolling stock upgrades and fleet modernization are ongoing priorities to maintain environmental efficiency and meet the growing demand for rail freight services. Carloads and containers are the primary forms of cargo transported via rail freight. Fuel costs and environmental concerns continue to influence the rail freight market's economic performance. Rail freight operators must adapt to these challenges by implementing digital technologies and optimizing their operations to remain competitive in the market.
The market research report provides comprehensive data, with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The Freight cars segment is estimated to witness significant growth during the forecast period. Freight car manufacturing companies are highly focused on redesigning freight cars to increase the capacity and life span of containers, thereby enhancing the efficiency of transportation in a single trip and in the long run. This led to an increase in demand for new freight cars from end-user industries. There are constant technological upgrades in the market in terms of design and the integration of advanced technologies, such as telematics, which will drive the growth of this segment during the forecast period. Compared with other modes of transportation, rail freight transportation has a lower environmental impact, and it is 55% more fuel-efficient. In addition, opting for rail freight transportation will reduce road traffic congestion, which will reduce greenhouse gas emissions and environmental pollution.
Additionally, freight cars can carry goods weighing between 70 tons and 100 tons and can be classified into open cars, box cars, and flat cars. These cars mostly carry coal, ores, and industrial equipment. It provides affordable and full control over shipping. Trains transport nearly 70% of coal deliveries in the US, at least part of the way from mines to consumers.
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The freight cars segment was valued at USD 31.94 billion in 2018 and showed a gradual increase during the forecast period.
Our market researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Low transportation cost of freight is the key driver of the market. Rail Freight Transport plays a significant role in North America's logistics sector, offering numerous benefits over other modes of transportation. With the world's population continuing to urbanize, the demand for efficient and eco-friendly freight services is on the rise. Railroads, as a key player in intermodal transportation, offer several advantages, including high-volume cargo transportation over long distances, environmental efficiency, and cost-effectiveness. Rail freight services have been proven to be 6-7 times more efficient than road transport, resulting in a reduction in fuel consumption and greenhouse gas emissions between 30% to 80%. The cost of rail travel is only marginally higher than that of vehicle travel, making it an attractive option for governments and businesses seeking to reduce their carbon footprint while maintaining economic performance. Leading players in the rail industry are continually investing in digital technology, such as AI-enabled software and predictive operation systems, to optimize traffic planning and ensure reliability and safety. Rolling stock is being upgraded, and locomotive engineers are being trained to operate trains more efficiently, further reducing fuel costs.
Further, the rail freight transportation sector in North America handles a diverse range of goods, including coal, building materials, iron, steel, and other commodities. With the increasing focus on value-added services, rail freight transportation is not just limited to cargo movement but also offers various logistics solutions to customers. High-speed trains are also gaining popularity, with cumulative freight loading increasing in economic hubs across the continent. Rail freight transportation is increasingly competing with road and air transporters, offering a more sustainable and cost-effective solution for moving goods across North America.
The increasing use of artificial intelligence (AI) in rail infrastructure technology is the upcoming trend in the market. The market is experiencing significant growth due to advancements in technology, particularly the integration of artificial intelligence (AI) and the Internet of Things (IoT) in rail infrastructure. These technologies enhance efficiency, lower costs, and bolster safety. Governments in the US and Canada are investing in electrification projects and rail upgrades, while railway operators leverage next-generation technologies for railway signaling and track electrification. For instance, the Canadian Railway employs AI and IoT technologies to optimize train routing, predictive maintenance, and fuel efficiency. Rail freight services cater to a wide range of goods, including coal, building materials, iron, steel, and logistics. Value-added services and digital technology are also crucial aspects of the rail industry, contributing to environmental efficiency and reliability.
The market's economic performance is influenced by freight volumes, economic hubs, and competition from road and air transporters. High-speed trains and cumulative freight loading further boost the market's potential. Railroads prioritize safety, operations, and the needs of their passengers and cargo, ensuring a vital role in the transportation sector.
Growing competition from alternate freight services is a key challenge affecting the market growth. The market is experiencing significant growth due to the increasing urbanization and population growth, leading to an increase in freight volumes. Rail freight services play a crucial role in the transportation of goods, particularly heavy commodities such as coal, building materials, iron, and steel. However, rail freight transport faces competition from alternative modes of transportation like road, air, and ocean freight. Road freight offers advantages such as doorstep delivery and flexibility in delivery timings, which rail freight services lack. Moreover, rail transportation is comparatively slower and less economically feasible for short distances. However, the rail industry is embracing digital technology, with AI-enabled software and predictive operation systems, enhancing traffic planning and improving reliability and safety.
Further, railroads are also investing in high-speed trains and cumulative freight loading to increase economic performance and reduce fuel costs and greenhouse gas emissions. The rail freight transportation market is expected to grow, driven by the need for value-added services, environmental efficiency, and the reliability and safety offered by rail transport. Despite these advantages, rail freight transportation must continue to address the challenges posed by road and air transporters to maintain its market share.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Rail freight transport plays a significant role in the North American logistics landscape, particularly in intermodal transportation. With the world's population projected to reach 9.7 billion by 2050 and urbanization accelerating, the demand for efficient and sustainable freight services is increasing. Railroads offer several advantages, including lower fuel costs and reduced greenhouse gas emissions compared to road and air transporters. Rail freight transportation moves a diverse range of goods, including coal, building materials, iron, steel, and containers and trailers. The rail industry is leveraging digital technology, such as AI-enabled software, to optimize traffic planning and predictive operations. Locomotive engineers and rolling stock are being augmented by automation to enhance reliability and safety.
Further, cumulative freight loading in North America is expected to grow, driven by economic performance and the increasing importance of economic hubs. High-speed trains are also gaining traction, offering faster transit times for passengers and freight. The rail freight transportation market is expected to continue its growth trajectory, driven by the need for environmental efficiency and the increasing demand for value-added services in logistics. In the realm of real-time transport operations, AI-enabled software is revolutionizing the logistics landscape. This technology enhances the efficiency of high-speed trains and road transporters, optimizing routes and reducing delays. With the rise of e-commerce, the demand for efficient passenger rail transport and wheeled vehicles has increased, leading to innovative value-added services that improve customer experience.
As industries like mining activity rely on transportation solutions, the integration of digitalization in logistics becomes critical. Connected mobility not only streamlines operations but also enhances passenger safety, significantly reducing the risk of accidents. Moreover, solutions like rail tracking enable real-time monitoring of transport systems, contributing to lower carbon emissions and promoting sustainable practices across the transportation sector.
Market Scope |
|
Report Coverage |
Details |
Page number |
160 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 7.45% |
Market Growth 2024-2028 |
USD 35.83 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
7.75 |
Key companies profiled |
Berkshire Hathaway Inc., Brookfield Business Partners LP, Canadian National Railway Co., Canadian Pacific Kansas City, CSX Corp., DB Schenker, Deutsche Post AG, DSV AS, GeoMetrix Rail Logistics Inc., Grupo Mexico SAB de CV, Harsco Corp., Hub Group Inc., Kerry Logistics Network Ltd., Norfolk Southern Corp., Patriot Rail Co., RSI Logistics Inc., Union Pacific Corp., United Parcel Service Inc., VIA Rail Canada Inc., and WSP Global Inc. |
Market dynamics |
Parent market analysis, market growth inducers and obstacles,market forecast , fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Mode of Transportation
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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