Rail Freight Digital Transformation Market Size, Trends & Forecast Report to 2032

Market for Rail Freight Digital Transformation: Rail freight transportation is the long-distance movement of products and cargo between cities and nations using rails or trains. They are primarily utilised for railroad locomotive-hauling bulk commodities and cargo from the point of origin to the final destination. To increase operating efficiency and reduce infrastructure costs, digital transformation services have, however, had a significant impact on the rail freight transportation sector in recent years.

Over the course of the projection period, the market for rail freight digital transformation is anticipated to expand at a CAGR of 8.4%, rising from a market share of US$ 63.69 billion in 2022 to US$ 142.68 billion by 2032.

Digital technologies such as cloud computing, Artificial Intelligence (AI), Internet of Things (IoT), 5G, cybersecurity, big data and analytics have transformed the rail freight business positively. The rail freight digital transformation solution and services are creating new opportunities which are more agile to transform the rail freight business, by developing new models and freight management systems to monitor the core operations of the rail freight transportation industry.

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Rail Freight Digital Transformation Market – Novel Developments

Key players in the Rail Freight Digital Transformation market are focusing on product innovation and strategic partnerships with the technology vendors to collaborate for offering digital transformation solution and services for sustained business growth:

  • In 2019, VTG AG- a leading rail logistics company, launched solutions for rail freight transformation under VTG Connect digitization initiative, for optimizing rail freight logistics operations and predictive maintenance.
  • In 2018, DXC Technology collaborated with New York Metropolitan Transportation Authority (MTA), to implement enterprise asset management solution for optimizing rail transport maintenance activities to support its digital transformation services.
  • In 2018, IT service giant TCS partnered with SAP Leonardo to develop an Intelligent Rail Digital Maintenance (iRDM) solution for conducting predictive maintenance to reduce unplanned network outrage and breakdown, thus increasing the efficiency and boost safety.
  • In 2018, Dutch Railways collaborated with Railnova, a leading provider of predictive maintenance and IoT solutions for railways, to deploy real-time monitoring solution to enable predictive maintenance.

Rail Freight Digital Transformation Market- Dynamics

Rail Freight Digital Transformation Market- Asia Pacific 

Asia Pacific has one of the busiest and largest rail networks in the world and is estimated to emerge as a highly lucrative region for rail freight digital transformation market. As China’s One Belt One Road (OBOR) global development strategy is gaining traction, the rail freight volumes in the Asia Pacific region tends to increase.

According to China Railway, rail freight volume for goods in China for 2018 was 4.0 billion tonnes and is estimated to reach 4.8 billion tonnes by 2020. Moreover, Indian Railway is planning to triple its rail freight volume by 2030. Such massive freight volume statistics shows the growth and opportunities for rail freight transportation industry in Asia Pacific countries.

Digital technologies has emerged as a key driver for rail freight industry in the Asia Pacific region. The use of IoT, 5G, Augmented and Virtual Reality (AR/VR) techniques, and cybersecurity, for rail freight management has streamlined the operations and reduced the costs. The governments in the Asia Pacific region are doing big investments to implement the rail freight digital transformation services, in the coming years.

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Rail Freight Digital Transformation Market – Aging Traditional Rail Freight Transportation Network to Boost Demand for Digital Transformation

Rail freight transportation is traditionally a very old industry. The aging rail infrastructure is failing to fulfil the growing rail freight volume demand year-on-year. With the tremendous increasing in the pace of technology and digital services, the rail freight transportation infrastructure is disrupting at a very high level.

The use of technologies such as 5G and LTE for high speed connectivity, cloud infrastructure for scalability and backend rail freight operations, cybersecurity systems for rail safety etc., is revolutionizing rail freight transportation market. These technological breakthroughs would provide immense growth opportunities in the rail freight digital transformation market in the next 5 years.

Rail Freight Digital Transformation Market – Technology Vendors Focus on Strategic Collaborations with Railways to Commercialize Products for High Profitability

Technology vendors such as SAP, DXC Technologies, Ericsson, VTG and others are doing strategic collaborations with the governments around the world for multi-year contracts to revolutionize the rail freight transportation via digitization. The rail freight digital transformation promotes the adoption of cutting-edge technologies to complement the traditional rail freight supply chain to build a robust digital foundation, to automate operations, maintenance, safety and other core functions with increased efficiency.