The State of the Rail Sector
The motivation behind this research stems from the rapidly increasing demand for passenger and freight transport. By 2050, it’s projected that passenger-kilometers (pkm) and tonne-kilometers (tkm) will surge by 200% from the base year of 2019 (ITF/OECD). Particularly, rail freights have been experiencing steady growth, with a promising 4.3% annual increase over the next three years. Despite this, the rail’s share in the transportation mix has been diminishing in recent years. The upcoming years are crucial for all stakeholders, including public authorities, established rail companies, and potential newcomers, to face the challenges presented by other modes of transportation and harness the benefits of rail transport.
One of the key trends identified by ADL research that’s reshaping the logistics industry is technology disruption. This includes innovations like train automation, the Internet of Trains, digital twins, and other solutions that have already moved past the proof-of-concept stage.
Data Integration as a Must-Have for Digital Disruption
In this context, the importance of collecting high-quality data, ensuring its resilience during processing, and reducing the time and effort required for data integration infrastructure has never been greater. The research classifies railway trends into three main groups: technology and infrastructure, consumer behavior and value proposition, and regulation and organizational setup. Seven out of the 15 trends mentioned in the technology and infrastructure section are closely linked to data processing and integration.
The report provides insights on market scenarios and implications for CEOs’ agendas. Leaders and key stakeholders in railway companies can use this framework to assess their current positions and make strategic adjustments if necessary.
Scenarios Overview
Railways typically serve national markets with specific characteristics, and two primary criteria define them: variations in transport market regulations and rail’s attractiveness compared to other modes. Some markets have highly regulated rail systems, while others have looser regulations, and customer preferences for rail vary accordingly.
There’s an ongoing long-term trend toward standardizing railway systems across national borders, especially in Europe. This includes harmonizing regulations, safety standards, interoperability, sustainability, technology adoption (such as ETCS), and cross-national ticketing. Simultaneously, significant portions of the rail infrastructure require renovation, modernization, replacement, or extension to remain fully functional.
Takeaways for CEOs to Consider
The insights gathered from various rail systems suggest that railway management strategies and agendas must address specific policies. These policies vary depending on the role of the individual or organization within the ecosystem, such as public authorities, OEMs, suppliers, operators, infrastructure providers, private and public investors, and other mobility solution providers.
- Integration: What new paradigms and operating models are needed to integrate the railway backbone and core services with adjacent mobility offerings, including on-demand services, taxi services, micro-mobility, luggage services, and more?
- Standardization and Technology Innovation: What is the technological roadmap? This includes technology for the network (e.g., digital twins and telemetry), technology for maintenance (e.g., inspection on the move, remote telemetry, visual and robotic rail automation), technology for rolling stock (e.g., train automation, smart and agile rolling stock, hydrogen), and technology for distribution (e.g., MaaS and customization).
- Harmonization: What efforts should be made to eliminate national approaches and ‘dialects’ for common infrastructure technology (ETCS) and rolling stock technology (interoperability)?
You can read the full report here.