The Connected Rail market size is forecast to reach $115.2 billion by 2027, growing at a CAGR of 5.8% from 2022 to 2027.
Connected Rail Market
Connected Rail Market Overview
The Connected Rail market size is forecast to reach $115.2 billion by 2027, growing at a CAGR of 5.8% from 2022 to 2027. Increasing deployment of advanced technologies like IoT in railway industry for serving applications in train tracking, automated fare collection system, passenger information system and so on, rising passenger traffic, as well as increased emphasis on installation of smart railway systems, have been driving the growth of connected rail industry. With adoption of wireless connectivity, ethernet switches and digital signage within the rail industry, the need for offering modernized and optimized passenger experiences have been also catering to the market demand for connected rail systems. In addition, the growing adoption of communication-based train control for automating traffic management and infrastructure control along with governmental initiatives towards increasing rail connectivity and operational efficiency of train operations is assisting its market growth. Such factors are set to accelerate the growth of connected rail market in the long run.
Report Coverage
The report: “Connected Rail Market Outlook – Forecast (2022-2027)”, by IndustryARC covers an in-depth analysis of the following segments of the Connected Rail Market industry.
By Type: Passenger Mobility (Wi-Fi Devices, On Board Entertainment), Passenger Information System (Information Announcement System, Rail Display Systems), IP Video Surveillance, Automated Fare Collection System, Train tracking and Monitoring System, Predictive Maintenance, Freight Management System (Freight Operation Management, Freight Tracking) and Others
By Signalling System: Positive Train Control (PTC), Automated/Integrated Train Control (ATC) and Communication/Computer Based Train Control (CBTC)
By Rolling stock: Diesel Locomotive, Electric Locomotive, DMU (Diesel Multiple Unit), EMU (Electric Multiple Unit), Light Rail/Tram Car, Subway/Metro Vehicle, Passenger Coach and Freight Wagon.
By Geography: North America (U.S, Canada, Mexico), Europe (U.K, Germany, France, Italy, Spain, Others), APAC (China, Japan India, South Korea, Australia, Others), South America (Brazil, Argentina, Others), RoW (Middle East, Africa)
Key Takeaways
Passenger Information System is analyzed to grow with the highest CAGR in the connected rail market during the forecast period 2022-2027, due to rising emphasis on providing real-time transit information to passengers, shift towards smart public transportation, and so on.
Connected Rail for Freight Wagons is analyzed to witness the fastest growth during 2022-2027, owing to government mandates for increasing last-mile trade connectivity for trade along with significant investments on logistic infrastructures.
Connected rail Market in North America is anticipated to grow during the forecast period 2022-2027 owing to the rising investment towards digital transformation of railway infrastructures, growing emphasis on R& D activities on connected rail solutions and so on.
Increasing deployment of advanced technologies like IoT in railway industry along with government initiatives towards increasing rail connectivity and operational efficiency of train operations is analyzed to significantly drive the market growth of connected rail during the forecast period 2022-2027.
Connected Rail Market Segment Analysis- By Type
Passenger Information System is analyzed to grow with the highest CAGR of 7.1% in the Connected Rail Market during the forecast period 2022-2027. Growing emphasis by rail authorities towards providing real-time transit information for passengers, shift towards smart public transportation, along with increased efforts on improving passenger experience have been attributing to the market growth. Increasing R&D activities towards passenger information systems, growing adoption of integrated passenger information systems by railway operators, alongside significant demand for trains offering live arrival, destination and path crossed related information can also fuel the market growth forward. In January 2022, Siemens Mobility in collaboration with a Vienna based public transit network operator, Wiener Linien had revealed about the launch of an innovative passenger information and guidance system, for the Vienna metro system. This was meant to provide dynamic as well as visual presentation of information in the metro car, thus ensuring easier and more convenient mass transit within the city. Such factors are set to accelerate the market demand towards passenger information system in the long run.
Connected Rail Market Segment Analysis- By Rolling stock
Freight Wagon is analyzed to witness the fastest growth with a CAGR of 6.3% in the Connected Rail market during 2022-2027. Government mandates for increasing last-mile trade connectivity, along with rising number of investments towards expanding rail networks for logistic operations have been attributing to its market growth. Additionally, growing demand for cheaper modes of transport like railways for supply chain activities alongside governmental initiatives to support railways through free trade agreements can also cater to the market demand for connected rail. Moreover, rising construction or upgradation projects related to freight infrastructure, as well as increased integration of wireless technologies within freight wagons to ensure real-time tracking and monitoring, will further drive the market growth forward. In February 2022, Indian Railways had revealed its plan on equipping the rolling stock of freight wagons with GPS, for monitoring their real-time movement as well as provide information to the parties booking the wagons. Furthermore, the railways announced that around 600 crore will be allocated for this project completion, with plans of system installation only in the wagons being used on the dedicated freight corridors during the initial phase. Such factors are set to accelerate the market demand for freight wagons having connected rail capabilities in the long run.
Connected Rail Market Segment Analysis- By Geography
North America region dominated the global connected rail market with a share of around 37% in 2021, attributed to rising investment towards digital transformation of railway infrastructures, growing emphasis on R& D activities on connected rail solutions and so on. In addition to this, governmental regulations or initiatives towards ensuring passenger safety, growing adoption of rail transport, as well as significant focus of railway authorities to provide advanced and modernized passenger services will drive the market forward. Moreover, increasing utilization of advanced technologies like internet of things (IoT), artificial intelligence (AI) and many others to conduct predictive maintenance, rising rail fatalities, shift towards smart railways, growing investment on modernizing railway infrastructures overtime can also assist the market growth in the region. In May 2022, Slalom and Kawasaki Heavy Industries have collaborated in order to jointly develop a rail track maintenance support service, starting with deployment in the North American markets. This is meant to support safe as well as secure operation of rail mobility through leveraging advanced IoT, machine learning and AI capabilities for providing value-added services to freight rail operators. Such factors can be considered essential in driving the market growth of connected rail within North American region.
Connected Rail Market Drivers
Increasing deployment of advanced technologies like IoT in railway industry is positively impacting the market growth of connected rail:
Increasing deployment of advanced technologies like IoT in railway industry can be considered as a major factor driving the market growth of connected rail. Adoption of IoT sensors helps in increasing operational efficiency, reducing congestion as well as enhance predictive or preventive maintenance services, thus impacting its market growth. With the rapid rise in accidents or fatalities in railway transport, the need to gain real-time insights regarding rail lines, weather conditions, and so on, have become highly essential. Factors like growing emphasis on data analytics by train operators, increasing need for improving mobility, high usage of telemetry systems and so on have been attributing to the market growth. In the recent years passenger rail services in Japan have become more efficient spanning around 27,000 km. With the integration of IoT in railways, Japan have emerged as one of the most utilized, punctual and least subsidized railway circuit across the world. In November 2020, Bombardier Rail Control Solutions announced about the launch of a digital service, named EBI Sense, capable of delivering predictive maintenance for railway signalling. This service leverages IoT, cloud and machine learning for converting asset performance data into maintenance data through wireless sensors installed on railways, thus making it an ideal choice for widely distributed rail systems. Such factors are set to accelerate the market growth of connected rail market in the long run.
Government initiatives towards increasing rail connectivity and operational efficiency of train operations will drive the market forward:
Government initiatives towards increasing rail connectivity and operational efficiency of train operations can also be considered as one of the prime factors boosting the growth of connected rail market. Governmental efforts towards improving interstate or intrastate railway transportation facilities, significant funding or investment towards utilization of advanced technologies for enhancing railway digitalization, as well as increased emphasis on conducting proper monitoring and inspection of railway tracks have been driving the market growth. Additionally, the growing installation of Wifi, CCTV cameras, and so on for improving rail infrastructures, modernization of existing railway facilities with digital technologies, and many others can further cater to its market growth. In June 2021, Indian Railways had revealed that 6001 railway stations have been provided Wifi facility under the government’s Wifi programme. Additionally, the Railway Ministry had further announced the extension of its Wifi facility for more 102 stations in the coming time as a part of connecting passengers as well as general public through digital systems. In April 2022, Etihad Rail has revealed about completion of construction of 264km of railway link between Abu Dhabi and Dubai. The network is 75% of stage 2 of the UAE national rail network, making it one of the largest infrastructure projects in the region. These factors can be considered highly essential in boosting the market growth of connected rail overtime.
Connected Rail Market Challenges
Security and data privacy concerns associated with connected rail is hampering the market growth:
Data safety and security threats associated with the connected rail act as a major factor restraining the market growth towards connected rail. Sensors, GPS systems and many other connectivity devices have been highly utilized within railways, making it vulnerable to cyberattacks, causing potential threat to passenger security and privacy. Through dependency on connected technology, there is access to passengers' data, which in turn can impact passengers' safety, alongside contributing to accidents, through unauthorized driving access. In a move towards protecting passenger personal information, varied governmental authorities have mandated the need for system operators in public transit to meet cybersecurity-imposed regulations. Due to the rising complexities of cybercrimes related to data hacking, frauds and so on, the demand towards connected rail solutions is advancing at a slower pace. In July 2021, UK’s Northern Railway had revealed about facing a ransomware attack on its self-ticketing terminals, thus making the system turn offline. However, the British government further stated about working with the system supplier to investigate the situation and mitigate the issue at the earliest. These factors have been eventually hampering the market growth towards connected rail.
Connected Rail Market Landscape
Product launches, acquisitions and R&D activities are key strategies adopted by players in the Connected Rail Market. The Connected Rail Market top 10 companies include:
Huawei Technologies Co. Ltd.
Siemens AG
Hitachi Limited
Wabtec Corporation
Trimble, Inc.
Robert Bosch GmbH
Cisco Systems, Inc.
Nokia Corporation
Atos Corporation
IBM Corporation
Recent Developments
In December 2021, Siemens AG and VGF worked together to develop Digital Train Control System. The traditional train control system used in metro and monorail circuits is expected to be replaced by this technology. This system is being developed to reduce traffic, capacity enhancement and efficiency of train routes.
In November 2021, Robert Bosch GmbH launched an innovative driver assistance system for city rail transit that will help in reducing the chances of accidents due to human or technical error by issuing a signal to the driver in the event of a possible accident. If the driver fails to intervene the system will automatically brake until it comes to a complete stop.
In September 2021, Hitachi launched the PTC system to help automate product development processes, boost product innovation, and reduce train delivery times. This launch will also help in reducing the corporation's control costs and easing the manufacturing process.
