European Rail Freight Industry - Segmented by Cargo Type, by Destination, by Service, by End User, and by Geography - Growth, Trends, and Forecast (2018 - 2023)

The European rail freight industry is expected to grow at a steady pace during the forecast period. Owing to the growing demand for road freight, the market for rail transport had witnessed a decreasing trend in terms of volume in the period of 2013-2015. The developments in rail infrastructure, the growing demand for cross-border rail trade, and the increased usage of intermodal transport, etc. have driven the market post-2015. For instance, the volume of goods transported by rail in Europe registered 556.9 billion metric ton-km in 2016, which represents a growth of 5.2% compared to that of 2015. However, these figures are far less when compared to the rail freight movement in the United States and the Russian Federation. Even though Europe is a developed region, rail infrastructure development and government support are needed for a reliable and sustainable freight movement.

On the other hand, many European ports are developing strong rail hinterland networks, which are offering tough and strong competition to the road freight transport and services business. For instance, the modal share of hinterland transport by rail is 47 % in the port of Hamburg, Germany, compared to the share of 42% by roadways. The volumes for rail freight are relatively high in the port of Rotterdam, but it faces a strong competition from inland waterways.

How Technology Aids the European Rail Freight Industry
The European government and the members of the European Rail Freight Association (ERFA) are coming up with initiatives to improve and restructure the infrastructure of railways by offering better traffic management, scheduling systems, and signaling. The major factor driving the growth of the rail freight market in Europe is the significant growth of the Europe-Asia railway line, especially China, which has resulted in the increased trade between the two regions. According to industry sources and trade analysts, more than 500,000 metric ton of freight was transported between China and Europe by rail in 2016. Out of which, 180,000 metric ton of cargo traveled from China to Western Europe. The most recent advancement in the market is the implementation of train-flow planning software and big data analytics in rail freight operations, to reduce the redundant and premature stopping and breaking of trains and the delays in the transportation. Additionally, the integration of intelligent systems in goods cars and the usage of advanced GPS technologies are also expected to augment the efficiency level of the rail freight transport sector in Europe.

Opportunities and Challenges for Rail Freight Industry
Rail freight remains important for the transportation of raw materials, such as bulk products and steel. But these goods are becoming less relevant with the growing demand for advanced materials. Hence, there is a need for rail companies to find ways to attract some other product groups. Proper initiatives are needed to improve the quality, otherwise, it will be difficult to attract these product groups for transportation from within the European Union. Owing to flexibility and door-to-door service capability, Road freight services benefit from the growing e-commerce sector and online retail shopping. The rail sector has to adapt to the growing demand and place itself as the major mode of transport in the intermodal services.

Additionally, rail operators need to draft plans for the construction of alternative rail lanes between the major regions, to cater to the demand and to provide interruption-free services. For instance, the Rastatt incident, which paralyzed the rail freight traffic during a 7-week interruption of railway operations on the Basel-Karlsruhe line of the Rhine-Alpine Corridor, has resulted in an economic damage of more than EUR 2 billion. This has caused a disruption in the rail supply chain, incurring losses for rail logistics companies, manufacturing industries, and terminal operators.

Key Developments
Apr 2018: The EU Commission presented the budget for the Multi-Annual Financial Framework (MFF) for the period 2021-2027. EUR 30 billion has been allocated to the transport program, Connecting Europe Facility (CEF), which includes major investments in important railway projects such as the TEN-T corridors.
Feb 2018: Owing to the Europe-Asia partnership expansion, DB Cargo has marked its footprint in the New Silk Road revolution by increasing its share in the Trans-Eurasia Logistics (TEL). The latest initiative presents good opportunities for the major growth in the traffic between the two regions.

Major Players
Deutsche Bahn AG, Polskie Koleje Panstwowe SA (PKP), SNCF Mobilités Group, Rail Cargo Group, CD Cargo AS, RheinCargo GmbH and Co. KG, Freightliner Group, LINEAS, CTL Logistics Group, and Latvijas Dzelzcelš VAS (Latvian Railways), among others.

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The current and future market outlook in the developed and emerging regions
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