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North America Rail Infrastructure Market Size, Share & COVID-19 Impact Analysis, By Service Provider (Railway Fleet Operator, Infrastructure Manager), By Railway Fleet Operator (Rapid Transit Railway, Passenger Railway, Freight Railway), By Infrastructure Manager (Rail Networking & Signaling, New Track Investment, Maintenance Investment), and Regional Forecast, 2022-2029

Region : North America | Format: PDF | Report ID: FBI107025

 

KEY MARKET INSIGHTS

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The North America rail infrastructure market size was valued at USD 114.31 billion in 2021. The market is projected to grow from USD 119.43 billion in 2022 to USD 162.72 billion by 2029, exhibiting a CAGR of 4.52% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with rail infrastructure experiencing lower-than-anticipated demand across North America compared to pre-pandemic levels. Based on our analysis, the North America rail infrastructure market exhibited a decline of -15.3% in 2020 compared to 2019.


Rail infrastructure is a foundation for the rail transport system. It forms a connection between ports, railway stations, and cities. Railway systems are used for various economic activities such as freight transport, cargo transport, and handling. The rail system is low cost compared to other modes of transport; hence, it becomes an essential part of many businesses. Moreover, rapid globalization is expected to boost the demand for transportation, thereby propelling market growth in the region.


Furthermore, owing to global environmental concerns, such as global warming, the depletion of resources has led key players to invest in R&D of green transport in various regions such as Mass Rapid Transport (MRT), electric trains, and others.


COVID-19 IMPACT


COVID-19 Led to Delays and Cancellation of Various Rail Infrastructure Projects, Eventually Leading to Capital Loss


The COVID-19 pandemic severely affected the railway sector, and the effect was visible in several facilities, including low passenger air traffic, delays in infrastructure projects, and disruption in rail freight movements. In addition, according to a report by a leading public transit app Movit, the pandemic has impacted the U.S. rail sector, with a reported 70% decrease in travel via train in urban areas from May 2020. Moreover, many key regional players suspended their services and operations due to the pandemic. In March 2020, VIA Rail Canada announced the suspension of some of its services to limit the spread of the coronavirus (COVID-19). The rail operator reported reducing services on the Québec City-Windsor corridor by 50%.


LATEST TRENDS


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Advancement in North America Rail Infrastructure Technology Using Artificial Intelligence and IoT to Boost Market Growth


Increasing adoption of advanced technologies such as the Internet of Things (IoT), Big Data, and artificial intelligence for enhancing railway operations will spur opportunities in the coming years for North America railway infrastructure.


Furthermore, various governments highly invest in advanced electrification projects of rail tracks and other upgrading projects. The operators used next-generation technologies for railway signaling and electrification of tracks.


The use of innovative technologies such as AI, machine learning, and machine vision for completing and automating rail inspections has increased across the U.S. Also, machine vision-enabling sensors and cameras installed on the railcars or tracks are used to inspect various components of cars.


In 2020 the Federal Railroad Administration (FRA) revised rail integrity and tracked safety standards to reduce costs, transmission, accurate and timely collection data analysis, and maintain its integrity. The focus on developing innovative inspection methods and data quality in the new regulations will lead to the digital transformation of the rail industry across the region.


DRIVING FACTORS


Increase in R&D for New Rail Systems Owing to Ease of Accessibility, Safe & Sustainable Travel to Boost Market Growth


High-speed Rail (HSR) plays a prominent role in the North America railway infrastructure of urban areas, which gives rise to socio-economic dynamics and stimulates the fundamental aspects of economic growth by providing higher connectivity.


The drastic changes in rail infrastructure development resulted in enhanced accessibility. They changed the distribution of various elements, including labor, capital, transport, raw materials, and other resources in different geographical spaces.


Furthermore, the increase in investment in R&D for the adoption of Artificial intelligence (AI) and Big Data in railway signaling drives the market for railway infrastructure.


Additionally, during the inspection of trains that have undergone breakdowns or damages due to train collisions, it was concluded that the root causing factor was track clearance error. Such incidents have significantly modified the rail signaling system to reduce track clearance errors or delays.


Moreover, delays in the signaling of trains have been reduced by the application of AI, which, in turn, assisted in decreasing the delays in the arrival and departure of trains.


Growing Investment in High-speed Rail Links and Expansion of Existing Lines to Drive Market Growth


Increasing use of railway transportation and higher expenditure on expansion railway lines boosts the market growth across the region.


The U.S. has the biggest railway network in the world, with an operating route length of over 250,000km. Freight lines constitute about 80% of the U.S. total rail network, while the total passenger network constitutes nearly 35,000 km. The U.S. freight rail lines include 538 railroads operated by private operators. The country plans to build a 27,000 km national high-speed rail system in four phases by 2030.


California's high-speed railway network will connect San Francisco to Los Angeles and extend to Sacramento and San Diego, covering 1,287 km. The high-speed train system project costs nearly USD 68 billion and will be ready to use by 2033.


Furthermore, in August 2021, Canada's EllisDon and U.S. AECOM privately funded USD 7.8 billion for Canada’s first high-speed rail. Prairie Link High-speed Rail (HSR) signed an agreement with Alberta Transportation to build an estimated 200-mile fast rail network that connects the provincial cities of Edmonton, Calgary, and Red Deer.


Thus, rising expenditure on the expansion of railway lines and modernization of existing railway infrastructure propels the market's growth across North America.


RESTRAINING FACTORS


Rise in Inflation Rate in Various Regions to Hamper the Market Growth


The impact of inflation is visible in various industry sectors, including the railway infrastructure market. Increasing raw material prices, increase in labor cost, and other factors hamper the market development in various regions.


Furthermore, since March 2020, steel prices are rising from USD 500 to USD 800, and in July 2021, the price of steel increased by 200% to USD 1,800.


Due to such a rise in raw material prices, the overall rail infrastructure market is anticipated to see a downfall in the coming years. 


Furthermore, other key building materials, including cement and labor, face inflation pressures. This factor is anticipated to reduce raw material availability and global material prices apart from logistic challenges and increasing fuel prices.


Moreover, due to the COVID-19 pandemic, the global construction sector has been negatively impacted due to supply chain disruptions, and lockdowns in various regions leading to delays of government projects related to North America railway infrastructure.


SEGMENTATION


By Service Provider Analysis


Railway Fleet Operator Segment to Dominate the Market Owing to Increased Freight Trains in North America 


By service provider, the market is categorized into railway fleet operator and infrastructure manager. The railway fleet operator segment is anticipated to dominate during the forecast period owing to the increase in rail transport for goods movement, low cost, and other factors. Rail freight transport can also cover large areas in a much shorter period of time, making it more economical and thus propelling market growth.


The infrastructure manager segment is expected to witness moderate growth due to rising development in new track development, signaling, and other systems. Moreover, in July 2022, CN announced to invest USD 485 million in the U.S. for technology development, capacity building, rolling stock, signaling system, and track infrastructure, and others.


By Railway Fleet Operator Analysis


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Freight Railway Segment to Lead Attributable to Rapid Adoption of Rail in Goods Transportation


By railway fleet operator, the market is categorized into rapid transit railway, passenger railway, and freight railway. Freight railway is anticipated to be the largest growing segment. The increasing adoption of North American rail services for cargo transport is likely to aid the market growth.


The rapid transit railway segment is anticipated to show significant growth during the forecast period. The growth in the segment is owing to the increase in investment by players such as Amtrak for the development of intercity metros in the North America region.


By Infrastructure Manager Analysis


New Track Investment Segment to Lead Supported by Increasing Government Plans for New Track Development 


Based on infrastructure manager, the market is divided into rail networking & signaling, new track investment, and maintenance investment. The new track investment segment is projected to witness a higher growth rate due to the growing budget allocation by the government for infrastructure development in the North American rail infrastructure. Moreover, in November 2021, the U.S. House of Representative passed a bill of USD 1 trillion for railway infrastructure and jobs, including USD 550 billion in new funding and spending on rail transit.


The maintenance investment segment is expected to witness significant growth owing to an increase in the number of players in rail maintenance. Moreover, owing to the aging of rail tracks, the maintenance investment segment is projected to witness a surge in demand during the forecast period.  


REGIONAL INSIGHTS


On the basis of geography, the North America market is studied across the U.S. and Canada. The U.S. dominated the market share in 2021 and was valued at USD 92.65 billion in 2021. The growth is due to the highest expenditure from the U.S. on new track investment and freight rail network. Furthermore, the market is anticipated to dominate owing to the wide competitive landscape with the presence of key players such as Union Pacific, CSX, and Kansas City Southern Railway,


The North America rail infrastructure market in Canada is projected to witness significant growth during the forecast period. The North America rail infrastructure market growth is attributed to the growing contracts in the Canadian region for the expansion of the total rail network. Moreover, in July 2022, rail technology company Wabtec signed a contract with Canada's national rail company, CN, to use the PDS precision delivery system. The PDS system evaluates data collected from vehicles and wayside equipment and Positive Train Control (PTC).


Additionally, the system offers a high degree of automation through end-to-end electronic delivery of binding instructions and automated enforcement of Dark Territory authorities.


KEY INDUSTRY PLAYERS


Expansion of Rail Track in North America by Key Players in Rail Infrastructure Technologies to Motivate Development


The rail infrastructure market in North America is highly fragmented, with the presence of many key railroad companies such as Kansas City Southern, Canadian Pacific, and Via Rail Canada, among others. These players are focusing on the expansion of cost-effective rail networks and freight transportation in various areas in North America. In January 2022, Amtrak and Canadian Pacific Railroad (CP) signed an agreement to support each other's expansion plans. Under the agreement, Amtrak commits to support the merger of CP and Kansas City Southern (KCS), and CP commits to support Amtrak's expansion of intercity passenger rail service. These include increasing the frequency of Amtrak's Hiawatha service between Chicago and Milwaukee, expanding its service from Milwaukee to St. Paul, Minnesota, and the second round-trip route on the Twin Cities-Milwaukee-Chicago Corridor.


LIST OF KEY COMPANIES PROFILED:  



  • CSX (U.S.)

  • Norfolk Southern (NS) (U.S.)

  • Burlington Northern and Santa Fe (BNSF) (U.S.)

  • Union Pacific (UP) (U.S.)

  • Canadian Pacific (CP) (Canada)

  • Canadian National Railway (CN) (Canada)

  • Kansas City Southern (KCS) (U.S.)

  • Via Rail Canada (Canada)


KEY INDUSTRY DEVELOPMENTS:



  • March 2021 - CN subsidiary WCL and Watco announced a deal to sell approximately 1,400 km of non-core rail lines and assets in Michigan, Wisconsin, and Ontario to short-line operator Watco.

  • April 2021- CN bid nearly USD 30 billion for Kansas City Southern (KCS), which created a bidding war between itself and the Canadian Pacific Railway (CPR). CPR placed a USD 25 billion bid for the company in March 2021.

  • July 2022- Kansas City Southern announced an agreement with the Mexican Ministry of Infrastructure, Communications, and Transportation (SICT) to invest in Celaya Railway Bypass. This investment intends to fund new investment in the Celaya-NBA Railway Line and other infrastructure in an amount not more than USD 196 million.

  • December 2021- Kansas City Southern announced the completion of its sale to Canadian Pacific Railway Limited (CP). The transaction is valued at an enterprise value of approximately USD 31 billion.

  • June 2022- BNSF announced the setup of the Tacoma Domestic Intermodal Facility in Partnership with NWSA to meet increased demand in the Pacific Northwest.


REPORT COVERAGE


An Infographic Representation of North America Rail Infrastructure Market

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The North America rail infrastructure market research report provides a detailed market analysis. It comprises all major aspects such as R&D capabilities and manufacturing process optimization. Moreover, the research report offers insights into the market trends, highlights key industry developments, and provided Porter’s Five Forces analysis. In addition to the above-mentioned factors, it mainly focuses on several factors that have contributed to the market growth in North America in recent years.


Report Scope & Segmentation















































  ATTRIBUTE



  DETAILS



Study Period



2018-2029



Base Year



2021



Forecast Period



2022-2029



Historical Period



2018-2020



Unit



Value (USD Billion)



Segmentation



By Service Provider, Railway Fleet Operator, Infrastructure Manager, and Country



By Service Provider



  • Railway Fleet Operator

  • Infrastructure Manager


 



By Railway Fleet Operator



  • Rapid Transit Railway

  • Passenger Railway

  • Freight Railway


 



By Infrastructure Manager



  • Rail Network & Signaling

  • New Track Investment

  • Maintenance Investment



By Country


 




  • U.S. (By Service Provider, Railway Fleet Operator, Infrastructure Manager)

  • Canada (By  Service Provider, Railway Fleet Operator, Infrastructure Manager)



Frequently Asked Questions

Fortune Business Insights says that the global market size was USD 114.31 billion in 2021 and is projected to reach USD 162.72 billion by 2029.

The freight railway segment is the leading segment in the market.

Canadian National Railway (CN) (Canada), Kansas City Southern (KCS) (U.S.), and Via Rail Canada are the major players in the global market.

The U.S. dominated the market in terms of share in 2021.

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