EUROPE RAIL FREIGHT TRANSPORT MARKET - GROWTH, TRENDS AND FORECASTS (2023-2028)

The Europe Rail Freight Transport Market is estimated to grow with a compounded annual growth rate of about xx% during the forecasted period of 2023-2028.  

With a broadly suitable policy mix that supported a shift from public to private sector-led growth, Europe was on track to emerge from the epidemic at the end of 2021. This completely changed with Russia’s war in Ukraine and its effects. A significant terms-of-trade shock has hit Europe, weakening the outlook for growth, increasing the rate and duration of inflation, and causing a cost-of-living crisis that endangers social cohesion. In addition, concerns of medium-term output scarring—risks that were effectively averted during the pandemic—are reemerging.

The European Commission reported that in 2021, the freight was transported via rail to a total length of 399.36-billion-ton km, showing an increase of about 8.7% as compared to 2020. Key countries in the business include Germany with 123 billion-tom km followed by Poland and France with 54- and 36-billion-ton km respectively.

With the increasing focus on carbon emissions throughout the region, the European countries are actively taking steps to reduce their dependency on road freight and shift to a multimodal mode of transportation.

Shift2Rail is the first European rail programme that seeks to focus research and innovation (R&I) and market-driven solutions by expediting the integration of cutting-edge technology into cutting-edge rail product solutions. A substantial improvement in the efficiency and quality of services will benefit passengers and freight service customers. Increased capacity and improved competitiveness of rail services will enable rail to absorb a larger portion of the transportation demand, resulting in less vehicle congestion and CO2 emissions.

The European Union has planned to double freight rail’s modal share by 2030, both to reduce the transport sector’s carbon emissions and to ease the congestion of major road connections. The strategy is to transfer a large proportion of transport from road to rail which is expected to impact the market in various ways including major long-distance freight flows, key connection points such as ports, and new industries that can replace volumes lost in declining sectors, positively.

In February 2022, 33 major rail companies (infrastructure managers and passenger and freight operators) in Europe signed the ‘European Railway Pact’, committing to reducing the sector’s greenhouse gas emissions by 30% by 2030 while increasing the energy efficiency by 25% compared to 2015 levels. The players aim to make the rail freight carbon neutral by 2050.

Deutsche Bahn, Austrian ÖBB, SNCF France, PKP Poland, FS Italiane, Swiss Federal Railways, LTG Lithuania, VR Group Finland, Belgian SNCB, Danish DSB, Hungarian MÁV, Luxembourg CFL, Dutch NS, Portuguese CP, Slovenian SŽ, Thalys and Eurostar.

The fairly fragmented and developing market for rail freight transportation in Europe is heavily backed by the government’s focus on cleaner environment, rapid development in technology and heavy investments in the sector is creating opportunities and marking growth in the sector. Deutsche Bahn, Austrian ÖBB, SNCF France, PKP Poland, FS Italiane, Swiss Federal Railways along with a mix of international and domestic players are some of the active participants in the market.