Asia Pacific Rail Freight Transport Market - Growth, Trends, COVID-19 Impact, and Forecast (2023-2028)

The size of the Asia Pacific Rail Freight Transport Market is USD 170 billion in the current year and is anticipated to register a CAGR of over 4% during the forecast period

Key Highlights

• The rail freight digital transformation solution and services are creating new opportunities which are more agile to transform the rail freight digital transformation market share by developing new models and freight management systems to monitor the core operations of the rail freight digital transformation market.
• A well-functioning rail network provides the backbone of several countries’ logistics sectors. Especially in countries like Australia, New Zealand or Indonesia, freight accounts for the larger share of railway traffic volumes given the long transport distances. South Korea and Thailand in terms of railway traffic volumes where support the reduction of road traffic and pollution in dense urban areas.
• Asia Pacific is expected to account for almost half of global freight activity by that time. Consequently, transport emissions might rise 48% from 2015 to 2050 at the regional level. With the onset of Covid-19, there was a surge in rail freight demand which led to growth in this sector as well as prompted the government of various countries to develop the railway network for the future.

APAC Rail Freight Transport Market Trends

Investments in New and Existing Rail Systems

• The implementation of national transport strategies across the Asia Pacific region requires on the one hand investments in new rail infrastructure projects in order to expand the respective country’s railway network and to increase connectivity. On the other hand, investments are needed to support the incremental renewal of existing systems.
• New projects aim to foster the modal shift from road to rail but also the decarbonisation of the railway operation itself. In several countries of the region the rail electrification rate is still relatively low. Accordingly, new railway projects provide an opportunity for implementation to benefit from electrification’s substantial emission reduction potential, especially in the area of long-distance passenger and freight transport. At the same time, investing in existing rail systems exemplarily by replacing older and less efficient rolling stock with modern and environmentally friendly technology is also of high importance to utilise available resources and to optimise the decarbonisation impact.

China Leading the Market in the Region

• In 2022, China had the highest railway coverage compared to other listed countries in the Asia-Pacific region, amounting to 131 thousand kilometres. This was followed by India with a railway coverage of 68 thousand kilometres in 2022. China has altered its strategy for the rail sector in its 14th five-year plan from 2021-2025 from network growth to enhancing efficiency. The state railway is changing course, according to the Chinese Railway Market Study, which was published on May 10. Digitalization and automation are now expected to play a more significant role than network growth.
• The Chinese rail technology market will rise over the next five years, this growth will be fueled by digital advances, particularly the dynamically expanding after-sales sector, rather than newline development and new rolling stock.
• The OEM market is predicted to increase rapidly for the freight wagon, EMU, and LRV segments. For years, Chinese rail technology firms have made significant investments in the study and advancement of contemporary technology. The strategic plan "Made in China 2025," released by the central government in 2015, focuses particularly on high-tech industries, including a portion of the rail industry, which is now mostly controlled by foreign corporations.

APAC Rail Freight Transport Market Competitor Analysis

The Asia Pacific Rail Freight Transport Market is moderately consolidated in nature, with a mix of global and local players. Major players include China State Railway Group Co. Ltd., Aurizon Holdings Ltd., M & W China Limited, Japan Freight Railway Co., Indian Railways, and many more. According to industry sources, the rail industry has been facing huge competition from its similar service providers, road and air transporters, since the last decade. Many countries are heavily investing in railroad infrastructural developments, and investments are especially huge in China and India. International companies hold a large market share by acquiring or joining hands with local companies in many regions. At the country level, most of the markets seem to be concentrated with the presence of one or two major players.

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