Rail Freight Market Size - By Cargo Type (Containerized, Non-containerized, Liquid Bulk), Service Type (Full Carload, Less Than Carload, Intermodal Transportation), Distance (Short-Haul, Medium-Haul, Long-Haul), End-User Industry & Forecast, 2024 - 2032

Rail Freight Market Size

Rail Freight Market size was valued at USD 335.6 billion in 2023 and is anticipated to register a CAGR of over 5% between 2024 and 2032, attributed to economic expansion, rising industrial production, and growing trade volumes across the globe. According to the Indian government, the Indian Railways witnessed a 5% increase in its freight traffic in the financial year 2023-24, transporting over 1.5 billion tons of goods. Moreover, around 787.6 million tons of iron ore and 180.9 million tons of coal were ferried, showing growth of 8% and 13% respectively as compared to 2023.
 

Furthermore, rail freight is considered more cost-effective over long distances as compared to road transport, especially for bulk and heavy goods. This cost-efficiency has been driving industries dependent on transporting commodities and goods in large quantities.  Furthermore, rail is environment-friendly in terms of carbon emissions per ton-mile transported. Growing environmental regulations and CSR goals drive demand for rail freight as a sustainable and greener alternative.
 

Governments and private entities are increasingly funding the modernization of rail networks, including the development of high-speed rail corridors and double-stacking facilities, which increase the capacity and efficiency of freight transportation. For instance, in April 2024, the U.S. Federal Railroad Administration (FRA) opened applications for USD 2.4 billion of funding via its Consolidated Rail Infrastructure and Safety Improvements (CRISI) program, offering companies and public bodies funding to invest in infrastructure and safety modernization projects. CRISI-funded projects enhance the efficiency of the national rail network, facilitating smoother and safer movement of goods and passengers by rail across the country.
 

Infrastructure limitations including aging infrastructure, insufficient maintenance, and limited capacity in some regions across the globe lead to delays and inefficiencies. Further, many rail networks around the globe were built a long time back and have not received adequate upgrades or maintenance. This aging infrastructure leads to increased wear and tear, higher failure rates, and safety concerns. Moreover, competition from other modes of transport, such as road and maritime, serves as a significant restraint for the market.
 

Rail Freight Market Trends

The rail freight industry is undergoing a significant digital transformation with the adoption of smart technologies aimed at improving operational efficiency and service reliability. Advanced technologies such as the Internet of Things (IoT), artificial intelligence (AI), and big data analytics are being increasingly integrated into rail freight operations.
 

For instance, in March 2024, Rail Vision Ltd., a technology company received an order from a Class 1 freight rail company based in the U.S. for its AI-driven Switch Yard System. The company used the system on its locomotive for evaluation and testing different scenarios related to safety. It uses an innovative AI-based obstacle detection system (ODS) which helps rail operators to navigate issues easily including heavy traffic on tracks, maintenance issues, and harsh weather conditions.
 

Moreover, high-speed freight trains are emerging as a new trend in the rail freight market, offering faster delivery times for certain types of goods. Countries such as China and Japan are at the forefront of developing high-speed rail freight services. For instance, in July 2023, China launched its first high-speed freight train capable of reaching speeds up to 250 km/h, primarily designed to transport perishable goods and high-value items.
 

The adoption of high-speed freight trains addresses the growing demand for rapid delivery services in e-commerce and other sectors. This development is expected to revolutionize the rail freight market by providing a competitive edge over traditional freight transport methods, particularly for time-sensitive shipments.
 

Rail Freight Market Analysis

Based on the cargo type, the market is divided into containerized, non-containerized, and liquid bulk. The non-containerized type accounted for over 50% of the market share in 2023 and is expected to reach over USD 250 billion by 2032.  This segment in the rail freight market involves the transportation of goods that cannot be transported in standard containers due to their size, shape, or nature. This includes large machinery, steel coils, lumber, and bulk commodities such as grains and minerals. Thus, the growing production of coal, minerals, ores, grains, fertilizers, and other agricultural products contributes to the growth of the non-containerized cargo segment.  
 

Based on the end-user industry, the rail freight market is categorized into mining, agriculture, energy, manufacturing, construction, retail, automotive, chemical, food and beverages, and others. The mining segment accounted for a market share of 22% in 2023. The mining industry is a major end-user of rail freight services, relying on rail transport to move large quantities of raw materials from extraction sites to processing facilities and ports.
 

Rail freight is important for the mining sector due to its capacity to handle heavy and bulky commodities such as coal, iron ore, and copper over long distances. This reliance is driven by the cost-effectiveness and reliability of rail transport for bulk goods. Dedicated rail lines and infrastructure upgrades in mining regions show the importance of rail freight in supporting the mining industry's supply chain.
 

Asia Pacific rail freight market accounted for around 40% of the revenue share in 2023. The region is characterized by significant investments in rail infrastructure and the expansion of regional trade networks. Countries such as China and India are at the forefront of this growth, enhancing rail connectivity and efficiency. Strategic initiatives such as China’s Belt and Road Initiative (BRI) to develop extensive rail corridors, improving cross-border trade and integration. The region's focus on modernizing rail infrastructure and developing logistics hubs supports greater supply chain efficiency and sustainability.
 

The presence of a robust manufacturing sector and high levels of international trade, particularly in the U.S. drive the demand for rail freight for transporting raw materials and finished goods in the country. Also, North America, especially the Midwest, is a major agricultural producer, and rail transport is important for moving large volumes of agricultural products to domestic and international markets.
 

The European Union’s Green Deal aims to reduce carbon emissions, promoting rail as a key sustainable transport mode due to its lower emissions compared to road and air. Also, policies encouraging a shift from road to rail to reduce congestion, pollution, and carbon footprint drive rail freight demand in the region.
 

Rail Freight Market Share

BNSF Railway and Union Pacific Railroad dominate the rail freight industry with a market share of over 5% in 2023. They invest heavily in expanding their rail network, including upgrading existing tracks, building new lines, and optimizing terminal capacities. This helps the company to accommodate increasing freight volumes and enhance service reliability.
 

Union Pacific Railroad focuses on enhancing intermodal facilities and expanding service offerings to capture a larger share of the intermodal market. The company also focuses on improving the integration of rail with other transport modes to offer customers efficient and flexible supply chain solutions.
 

Rail Freight Market Companies

Major players operating in the rail freight industry are:

• BNSF Railway
• Canadian National Railway
• Canadian Pacific Railway
• China Railway Corporation
• CSX Corporation 
• Deutsche Bahn AG
• DHL Group
• Norfolk Southern Railway
• SNCF Logistics
• Union Pacific Railroad
   

Rail Freight Industry News

• In May 2024, Green Cargo launched a new intermodal train solution between Gothenburg Kombi and Norrkoping Port to enhance the transportation of goods. The new solution offers daily departures Monday through Friday for trailers, swap bodies, and containers, providing a fast, cost-effective, and environmentally friendly mode of transport.
   
• In April 2024, DB Cargo announced the completion of two-year practical tests of a digital freight train equipped with a Digital Automatic Coupling (DAK) system which is aimed to enable climate-friendly rail freight transport significantly more powerful and efficient.
   

The rail freight market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) and volume (Units) from 2021 to 2032, for the following segments:

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Market, By Cargo Type

• Containerized
• Non-containerized
• Liquid Bulk

Market, By Service Type

• Full carload (FCL)
• Less than carload (LCL)
• Intermodal transportation

Market, By Distance

• Short haul
• Medium-haul
• Long-haul

Market, By End-User Industry

• Mining
• Agriculture
• Energy
• Manufacturing
• Construction
• Retail
• Automotive
• Chemical
• Food & beverages
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • ANZ
  • Japan
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America
• MEA
  • UAE
  • South Africa
  • Saudi Arabia
  • Rest of MEA