United States Rail Freight Transport Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023-2028)

The size of United States Rail Freight Transport Market is USD 69.1 billion in the current year and is anticipated to register a CAGR of over 9% during the forecast period.

Key Highlights

• The Association of American Railroads estimates that the U.S. freight rail network runs approximately 140,000 miles of privately owned track in all states but Hawaii. It transports one-third of all exports from the United States and around 40% of all long-distance freight.
• As consumer spending and trade levels grow due to the COVID-19 (coronavirus) pandemic, freight volumes and demand for rail transportation are expected to rise. Therefore, consumer and industry demand for products will rise, driving up industrial output levels.
• The demand for such high-speed, fuel-efficient services will increase, which will benefit operators in the rail transportation sector. North America's most significant market was the United States, where Class I railways often ranked among the top providers of freight transportation services.
• Based on freight revenue, BNSF Railway, Union Pacific Corporation, CSX Corporation, and Norfolk Southern were consistently ranked among the top 20 worldwide freight firms in 2020. By mid-2021, Class I railways had surpassed railroads in the Asia-Pacific area as some of the biggest railroad firms in the world.
• North American freight railways begun to bounce back from the COVID-19 pandemic's harmful effects by 2021. Union Pacific's economic performance in 2021 was restored to pre-pandemic levels with freight revenue of about USD 20.2 billion. Other Class I railways also saw a comparable rise.
• In December 2021, Canadian Pacific finalized the acquisition of competitor Class I railroad Kansas City Southern to maintain its competitiveness in the area. The company was projected to expand operations throughout the three major nations in the area as a result of the merger, with the United States expected to account for about half of the company's revenue.

US Rail Freight Transport Market Trends

Demand on The US Freight Rail Network Increase

The market for freight rail transportation is expected to increase by as much as 30% to 40% by 2050, and the United States now boasts the largest and most lucrative freight railway network in the world. The US consumer demand alone, which has been increasing since the summer of 2021, is predicted by economists and experts to increase by between 30% and 40% over the following few decades, fueling the need for land-based transportation of commodities. In addition, while the US's freight rail efficiency is far superior to that of the rest of the world, it trails behind the rest of the world in terms of passenger trains. About 40% of the nation's long-distance freight is transported via the nation's 140 000 miles of rail lines. While trains are increasingly delivering consumer products as the e-commerce boom continues, freight rail competes directly with trucking to move automobiles, coal, and chemical cargo. There are seven significant freight rail networks in the US, and the top five companies reported a combined operating revenue.

Low Cost of Transporation and Modal Shift Drive The Market

Rail freight transport is more affordable and effective than other modes of transportation because it enables the delivery of more cargo over greater distances. Rail transport is believed to be six to seven times more effective than driving, with pollution reductions of 30% to 80%. Additionally, the cost of train travel is just 10% more expensive than that of vehicle travel. These factors affect the decision of governments to use rail freight transportation. Companies that use rail for freight transportation continually invest to reduce costs for customers. For instance, a strong increase in tonnage per train during the previous ten years has allowed them to deliver more freight. Since the lower interest rates for the money that is being held up partly balance the higher transportation costs, rail freight is a relatively affordable shipping alternative. Train transportation costs are less costly. The cost of rail transit is about one-tenth that of driving a car, and it consumes only a quarter of the quantity of petroleum that driving a car does.

US Rail Freight Transport Market Competitor Analysis

The rail freight transport market is moderately consolidated in nature, with a mix of global and local players. 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. The united states are heavily investing in railroad infrastructural developments. There are some major freight railroads that connect North America. Union Pacific and BNSF dominate the west. CSX and Norfolk Southern are the primary east coast operators, while Kansas City Southern, along with Canadian Pacific and Canadian National run routes north and south. Amtrak, which is the United State’s passenger service, owns only 3% of the country’s rail.

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