What form of infrastructure investment would benefit the rail industry the most over the next five years?
Respondents from the rail industry are eager to integrate with other forms of transport services for the benefit of passengers. Half of respondents from the rail industry believe that integration with other forms of transport to develop Transport or Mobility as a Service, creating and managing journeys using a mix of public and private means of transport, including the “last mile” leg from the station to destination and paid for with a single account, would be more beneficial than increased capacity on existing lines and the development of high speed lines.
While investment in infrastructure continues to be viewed as the optimal investment opportunity currently for the rail industry, by 28 percent, interest in technology is growing. 17 percent believe new technology presents the best investment opportunity currently, up from 12 percent in 2016.
Aside from fuel efficient and low carbon technology, what form of technology will be the most significant driver of change in the rail industry over the next five years?
In common with respondents from the shipping and logistics industries, rail respondents expect big data to be the technology most likely to transform the rail industry over the next five years. 38 percent believe that the ability to anticipate passenger behaviour and predict repairs and maintenance issues via the adoption of big data and predictive analytics will be the biggest catalyst for change, followed by 21 percent who point to the increased automation of rolling stock, and 17 percent who point to Software supporting Transport as a Service.
As new technology captures the attention of the rail industry, sentiment remains largely positive. 86 percent believe that current market conditions are favourable for their industry, down marginally from 92 percent in 2016.
The continued confidence of respondents from the rail industry is attributed to growing urban populations creating increased demand for rail transport, cited by 40 percent. Improved conditions in key markets is highlighted by 16 percent and the availability of funding for investment and the emergence of new market opportunities are both cited by 12 percent.
Which three countries offer the best investment opportunities for rail over the next two to five years?
The UK and USA remain the most popular markets for investment, by 15 percent and 12 percent respectively. Australia is favoured by 10 percent, overtaking China. Regionally, Europe is considered to offer the best investment opportunities for the rail industry over the next two to five years, in contrast to respondents from the aviation, shipping and logistics industries, who indicate that they will focus their attention on Asia Pacific.
Despite high levels of optimism currently, 71 percent anticipate an increase in competition over the next five years, while 73 percent believe that the number of routes and services offered will rise. Respondents are less certain that fares and freight costs will rise - 57 percent expect to see an increase between now and 2022.
When it comes to the availability of funding, rail respondents are more confident in their industry’s ability to secure finance than the transport sector as a whole. While 52 percent of respondents from the rail industry believe finance will be increasingly available over the next five years, just 22 percent from aviation and shipping, and 19 percent from logistics, hold the same view.
The number of routes/services offered will
Fares/freight costs will
The availability of funds will
Rail respondents expect the industry to turn to a diverse range of sources for its funding needs over the next two years, with 31 percent anticipating that government funding will act as the rail industry’s principal source of finance. Capital markets and finance leases follow, selected by 19 percent and 15 percent respectively.
Although respondents are more confident of the rail industry’s ability to access finance than respondents from other transport industries, 21 percent of rail respondents believe that an increase in funding costs poses the greatest threat to the rail industry over the next five years, while 28 percent are apprehensive about the impact of political uncertainty globally.
When asked what poses the greatest challenge to the operational efficiency of the rail industry, 31 percent point to inadequate infrastructure, while 17 percent express unease about a lack of suitably qualified people.
Aside from infrastructure investment, which of the following forms of government support would help the rail industry most?
Regulation remains a concern for the rail industry. Aside from infrastructure investment, respondents believe that the government support most helpful to the industry would be deregulation and greater transparency as to the introduction of proposed regulation and in the application and enforcement of new regulation, both highlighted by 24 percent.
The regulation respondents would most like governments to address is the regulation of competition and barriers to entry. This is the regulation that has had the greatest impact on the rail industry over the past decade, according to 39 percent.