The railway system is an important mode of transportation
that has been in existence for over two centuries. It is a means of
transportation that involves the use of trains that run on metal tracks, and it
has played a significant role in the development of economies worldwide. This
essay will explore the history and evolution of the railway system, its
benefits and drawbacks, and its future prospects.
The history of the railway system dates back to the early
19th century when the first steam-powered locomotive was invented. The railway
system rapidly spread across Europe and North America, and by the mid-19th
century, it had become the most efficient means of transportation for goods and
people. The railway system played a crucial role in the Industrial Revolution,
enabling the movement of raw materials and finished goods across vast
distances.
One of the key benefits of the railway system is its
efficiency. Trains can transport large volumes of goods and people over long
distances at relatively low cost, making them an attractive option for
businesses and individuals. Trains are also more environmentally friendly than
other forms of transportation, such as cars and airplanes, as they produce fewer
emissions per passenger mile.
Despite its many benefits, the railway system has its
drawbacks. One of the major challenges facing the railway system is the high
cost of building and maintaining the infrastructure. This can be a significant
barrier to entry for new players in the market, limiting competition and
innovation. Additionally, the railway system can be vulnerable to disruptions
caused by accidents, natural disasters, and other unforeseen events, which can
cause significant economic damage.
Looking ahead, the future of the railway system looks
promising. Advances in technology, such as the development of high-speed trains
and the use of automation and artificial intelligence, have the potential to
revolutionize the railway system and make it even more efficient and
cost-effective. Additionally, the growing awareness of environmental issues is
likely to lead to increased investment in sustainable forms of transportation,
such as trains.
Dynamics of Railway
System Market
The demand for personal mobility has increased over the
years, leading to a rise in road traffic in major cities worldwide. However,
the inadequate road network infrastructure has resulted in road congestion and
longer travel times in urban areas. Consequently, urban planners and local
governments are integrating rapid transit networks and tramways with existing
city infrastructure to address this issue. Furthermore, commuters are searching
for eco-friendly, reliable, and cost-effective modes of transportation.
Developed countries such as Germany, France, and the UK are promoting the use
of rapid transit systems to reduce traffic congestion. Developing nations such
as India, China, Egypt, Brazil, and the UAE are investing heavily in the
development of metros. For example, in 2021, 823.5 km of metro rail in India
was under construction in over 15 cities, and China planned an investment of
USD 5 billion for 16 metro lines for a total length of 310 km and five railway
projects for 135 km in 2020. Additionally, the Chinese government announced an
investment of USD 155 billion in expanding its railway network by 22,000 km by
2025. The expansion of rail networks in developed and developing countries will
fuel the railway system market.
One of the significant concerns in major metropolitan cities
is the inadequate infrastructure and degradation of air quality. High gasoline
prices, traffic congestion, and GHG emissions are other challenges faced by
city dwellers. Public transportation offers several benefits over private
transportation in this scenario. Urban transit systems aid in reducing traffic
congestion and are more energy-efficient than other modes of transport. The
increasing urbanization is expected to drive the growth of rapid transit
systems such as metro, light rail, electric multiple units, and diesel multiple
units. Furthermore, many countries are investing heavily in metros to reduce
traffic on the roads. India, China, Egypt, and Brazil are actively investing in
the development of metro infrastructure. These metros are equipped with
advanced systems such as train information systems, train safety systems, and
HVAC systems. As a result, the increasing number of metro projects will fuel
the market for railway systems.
The development of rolling stock and supporting
infrastructure in the transportation sector is a highly capital-intensive and
complex process that requires substantial financial backing from local and
national governments. As urban areas experience increased demand for public
transportation and traffic congestion, governments are looking to invest
heavily in improving existing infrastructure and developing new support
infrastructure. These investments will create opportunities for new rolling
stock orders. However, the high cost of new rail vehicles may hinder investment
and act as a constraint, as seen in the cancellation of the Klang Valley Mass
Rapid Transit Line 3 due to the large investment made in developing Lines 1 and
2.
Moreover, capital-intensive projects or technologies, such
as Maglev, may face growth obstacles due to their long return on investment
(ROI) period. The cost of related infrastructure for Maglev can range from USD
50 million to 200 million per mile, making it financially impractical for many.
Governments worldwide are increasingly focusing on adopting
emission-free public transportation modes, including passenger and freight
transportation through railways. This presents an opportunity for OEMs to develop
more hybrid trains that comply with emission standards. While railways may not
be the biggest source of air pollution, opting for hybrid trains significantly
reduces emissions caused by conventional diesel trains. Hybrid trains are also
cost-effective, which will save money for governments. Many governments have
recognized this need and are taking action. For example, the Indian government
has approved the proposal of 100% electrification of trains by 2022, which will
save around 3 billion liters of diesel annually and approximately USD 2 billion
each year. The UK government plans to phase out trains that run solely on
diesel fuel by 2040, creating a significant opportunity for the railway system
market. As of 2022-23, approximately 33% of total trains in the UK operate
solely on diesel fuel.
The cost of maintaining and overhauling railway systems is a
significant factor that impacts passenger safety and comfort on board. Leading
companies like Hitachi have developed advanced comfort and safety systems, such
as active suspensions for Shinkansen bullet trains in Japan. However, with
continuous advancements in these systems, railway systems have become more
complex and require periodic maintenance to ensure reliability. Regular
maintenance and repairs can be costly, which could potentially hinder the
growth of the railway system market.
In North America, the US has the largest rail network
globally, covering over 300,000 km. Many decision-makers in the US support
higher public transport investments to achieve sustainable development and
increased urban mobility. The US government has been actively involved in
redeveloping, expanding, and modernizing existing transportation modes,
including the railway system. To promote rail passenger transportation, the US railways
are being updated with new safety systems, and new funding has been allocated
to complete pending projects. The recent USD 2.3 trillion infrastructure
modernization plan by the US President includes USD 80 billion for the redesign
of the train system. Companies operating in the market are also introducing and
integrating advanced technologies to rolling stock systems, power supply
systems, and information systems, resulting in benefits such as reduced
maintenance costs, greater safety, superior operational flexibility, improved
reliability, and more predictable operation.
During the forecast period, Brazil is projected to
experience notable growth in the RoW region. The country's rolling stock and
railway systems market is expanding rapidly and is among the fastest-growing in
the region. The availability of low-cost labor has prompted several major
players to venture into Brazil's manufacturing sector. The country's railway
network employs broad, meter, standard, and dual gauges, covering a total length
of 5,000 km, 24,000 km, 200 km, and 400 km, respectively. According to the
Brazilian Association of the Railway Industry (ABIFER) September 2021
"Rail Month" report, investments in Brazil's rail industry exceeded
USD 17 billion. The federal government is working to encourage private
investment in expanding the railway network and promoting train travel from
north to south, with the assistance of the Ministry of Infrastructure (MINFRA).
North America is expected to experience the highest compound
annual growth rate (CAGR) during the forecast period. US-based original
equipment manufacturers (OEMs) are focused on producing locomotives for various
types of trains, such as light rail, tramways, metros, and conventional trains,
in response to increasing demand for passenger comfort and safety. A number of
emerging players are introducing advanced railway systems in the region. Thermo
King, a railway system manufacturer based in the US, provides HVAC for driver
cabins that can eliminate all viruses from the air.
Due to the large size of the US and Canada, diesel
locomotives are primarily utilized for transportation of both goods and
passengers. The cost of infrastructure for electric locomotives would be
substantially higher due to the great distances covered. Freight transportation
is the primary application of rolling stock in the US, while passenger
transportation is mainly handled by airlines.
To meet the rising demand, OEMs such as Alstom SA (France)
and Montreal Locomotive Works (Canada) are also planning to establish new
production facilities in Mexico and Canada, which is expected to boost the
market in this region.
The railway system market is being driven by various
factors, including increased funding for railway development, a growing need
for secure and efficient transportation, and rising demand for public transport
to alleviate traffic congestion. The market is also being influenced by a surge
in demand for safety and compliance in rail transit and the need for passenger
and freight capacity. However, market growth is hindered by obstacles such as
high capital requirements, lack of technology infrastructure, and high
maintenance costs.
Despite these challenges, there are opportunities for growth
in the railway system market. Developing countries are improving their railway
infrastructure, and advancements in autonomous and green transport technologies
are also contributing to market expansion. The rise in the popularity of public
transportation and the need for cost-saving maintenance tools and energy-efficient
transport are also driving market growth. Other factors that are positively
affecting the railway system market include the development of metro and
high-speed rail projects, smart transportation and smart cities, and government
support for railways. The market is also benefiting from rapid urbanization,
population growth, and the adoption of IoT and automation technologies to improve
optimization.
The railway system market is poised for continued growth,
with the demand for high-speed rail in emerging nations and the use of railways
for industrial and mining activities creating profitable opportunities for
market players during the forecast period.
According to the World Health Organization (WHO), road
traffic accidents are the primary cause of fatalities among people aged 15 to
30 years, resulting in 1.3 million deaths annually.
Globally, car crashes involving cars, buses, motorcycles,
bicycles, trucks, or pedestrians claim nearly 4,000 lives every day, according
to the Centers for Disease Control and Prevention. Consequently, railway
transportation is becoming increasingly popular due to its safety and
cost-effectiveness. The latest trains are equipped with onboard cameras,
sensors, and communication devices, and they often run underground or at ground
level, safeguarded by fences or walls to prevent unauthorized access.
Railway systems enhance efficiency, reduce accidents, and
prevent collisions. Moreover, modern advanced trains consume less energy due to
their improved acceleration, traction, and braking systems. This results in a
reduction of energy consumption by around 30%, depending on the degree of
automation. For example, Alstom launched its first French hybrid train in 2022,
in partnership with SNCF Voyageurs. This electric-diesel-battery regional train
has two energy storage systems that offer reduced energy consumption and
greenhouse gas emissions. It's a solution that allows for the adaptation to
existing diesel fleets without modifying the current infrastructure. Such
trains also provide a flexible way to coordinate frequency, improving the
system's performance in all aspects, which boosts the market's growth.
The railway system market has seen a number of recent
developments that are impacting the industry. One major trend is the growing adoption
of advanced technologies and automation to improve efficiency and safety in
rail transit. This includes the use of Internet of Things (IoT) sensors and
data analytics to monitor train performance and detect maintenance needs, as
well as the integration of artificial intelligence and machine learning to
optimize scheduling and route planning.
Another key development in the railway system market is the
increasing focus on sustainability and green transport solutions. This has led
to a rise in the use of electric and hybrid trains, as well as the development
of innovative energy storage solutions that can be used to power trains.
Additionally, there has been a growing emphasis on reducing the carbon
footprint of rail transit by utilizing renewable energy sources such as wind
and solar power.
In terms of infrastructure, there has been significant
investment in railway development in both developed and emerging markets. This
includes the construction of high-speed rail networks and the expansion of
existing railway systems to accommodate growing demand. Governments around the
world are also increasingly turning to public-private partnerships to finance
railway projects and improve transportation infrastructure.
The railway system market has also been impacted by changing
consumer preferences, as more people opt for public transportation as a
convenient and cost-effective alternative to driving. This has led to a growing
demand for high-quality and reliable rail services, as well as an increased
focus on safety and security.
Dominating Companies in Railway System Market
- ABB
- ALSTOM
- AMERICAN EQUIPMENT COMPANY
- CALAMP
- CONSTRUCCIONES Y AUXILIAR DE FERROCARRILES (CAF)
- CRRC
- FUJI ELECTRIC
- HITACHI
- INGETEAM
- KNORR-BREMSE
- MEDCOM
- MITSUBISHI HEAVY INDUSTRIES
- SIEMENS
- SINARA TRANSPORT MACHINES
- SKODA TRANSPORTATION
- STRUKTON
- THERMO KING
- TOSHIBA
- WOOJIN INDUSTRIAL SYSTEMS
- STADLER RAIL AG
- TRANSMASHHOLDING
- Wabtec Corporation
Recent Developments in Railway System Market
Siemens-Alstom Merger: In September 2017, Siemens and Alstom
announced a merger of their railway businesses to create a new entity called
Siemens Alstom. The merger aimed to create a stronger global competitor in the
railway systems market, with a focus on advanced mobility solutions and
digitization.
Hitachi's Acquisition of Ansaldo STS: In February 2018,
Hitachi completed the acquisition of Ansaldo STS, a leading provider of railway
signaling and automation systems. The acquisition was aimed at expanding
Hitachi's railway systems business in Europe and other markets.
Wabtec-MotivePower Partnership: In August 2018, Wabtec and
MotivePower, a subsidiary of Wabtec, formed a partnership with China's CRRC
Corporation Limited to develop and manufacture locomotives and other railway
equipment for the North American market. The partnership aimed to leverage
CRRC's technological expertise and manufacturing capabilities to enhance
Wabtec's market position in North America.
Bombardier's Sale of Transportation Business to Alstom: In
February 2020, Bombardier completed the sale of its transportation business to
Alstom, creating a new global leader in the railway systems market. The
acquisition was aimed at strengthening Alstom's presence in North America and
expanding its product portfolio in key markets.
Siemens Mobility's Acquisition of RailTerm: In September
2020, Siemens Mobility acquired RailTerm, a Canadian railway systems and
operations management company. The acquisition aimed to expand Siemens
Mobility's capabilities in rail automation and digitalization, and strengthen its
position in the North American market.
Thales' Acquisition of Gemalto: In April 2019, Thales
completed the acquisition of Gemalto, a leading provider of digital security
and authentication solutions for various industries including transportation.
The acquisition aimed to strengthen Thales' position in the railway systems
market by offering enhanced security and digitalization solutions for rail
networks.
Siemens Mobility's Acquisition of Sqills: In February 2021,
Siemens Mobility acquired Sqills, a leading provider of software solutions for
the railway industry. The acquisition aimed to enhance Siemens Mobility's
capabilities in digitalization and offer end-to-end solutions for railway
operators, from ticketing to passenger experience.