SCI Verkehr published its Rail Transport Markets 2010-2020 study in summer 2010. This identified upward trends which were broadly confirmed by the developments in the second half of 2010.
The rapid growth in the worldwide market for railfreight transport came to an abrupt halt in 2009 with a drop of around 8.4%. But even during the crisis, China and India enjoyed economic growth and therefore sustained the worldwide high demand for raw materials throughout the recession. As a result, transport demand in a number of key markets such as Australia, China, India, and South Africa only slowed down. Russia, the world's third largest market, suffered a harsh decline in 2009, but with growth of more than 8% in 2010, traffic almost hit the 2008 peak figure again last year.
There are three key drivers that will have a positive effect on worldwide railfreight traffic in the long term:
• economic growth: worldwide population growth and continuous high demand from China and India will boost economic growth
• climate change and scarcity of resources: fuel prices will continue to rise, which will increase rail's attractiveness, and the political implementation of environmental targets will also favour rail, and
• public funding: upgrades and renewals along railfreight corridors are being pushed ahead, especially in India, China, the Middle East and Eastern Europe, and many countries are promoting the transfer of freight from road to rail through financial incentives or regulatory policies.
China, the United States and Russia today account for 73% of worldwide transport activity and will be able to increase their market share slightly up to 2020. India, another major player, will increase the amount of freight it transports by 70% by 2020.
Last year, conventional rail transport generated around 3 trillion passenger-km, a 4% increase over 2009. This compares with growth of only 1.1% in 2009 due to the recession. Conventional passenger rail was the only rail sector that did not see a decline in traffic as passenger transport does not, in the short term, react strongly to economic shocks and because the mass markets of China and India, which account for more than half of total traffic worldwide, continued to grow throughout the crisis.
Growth was and will be driven by megatrends such as population growth, road congestion and urbanisation. By 2020, SCI Verkehr expects to see a total of 4.8 trillion passenger-km which equates to average annual growth of 4.8% from 2010.
Long-distance passenger rail will enjoy strong growth due to high-speed rail projects. Western Europe will benefit from new lines in Spain, Italy and France. In China, around 13,000km of new high-speed lines will be completed by 2012.
In 2010, Asia accounted for three-quarters of the world's mainline passenger rail traffic. China and India will continue to drive growth and are expected to increase by an annual average of 7.5% and 5.0%, respectively, up to 2020. The reasons for this include high population growth, ever-increasing GDP per capita and extensive investment in rail infrastructure, including China's highly ambitious high-speed projects.
Urban rail transport only grew moderately between 2000 and 2010. This was due to a decrease in traffic in the former Soviet Union countries, an important part of the world market. This decline was slightly over compensated by growth in North America, Asia, and Western Europe.
Growth is forecast in all regions of the world up to 2020. While Western and Eastern Europe and the former Soviet Union will grow moderately, North America and Asia will drive urban rail growth with an average increase of 3% a year up to 2020. The rest of the world will also see significant growth but from a low level and will therefore play only a minor role in global growth prospects.
The main driver for urban rail growth is demographic change which is met by the construction and upgrading of metros, foremost in the United States, China, and India. China is likely to put around 2000km of new metro lines into operation in the next 10 years. Similarly, India is also investing heavily in new metros, with rapid expansion underway in Delhi and new projects in several cities.
In both mainline and urban passenger rail transport, the market development is dominated by the upgrading of infrastructure in China and India. This will support the solid growth of conventional passenger rail transport and most likely lead to a performance leap in urban rail, which has been relatively constant for many years.
No matter which rail transport market one looks at in the next 10 years - urban or conventional passenger, or freight - traffic is forecast to rise globally. While this will also prove true for most national markets, the global momentum will be driven by China and India.