Global rail supply industry worth €159 billion, steady growth forecasted

17 October 2016 Consultancy.uk

The global rail supply industry has enjoyed robust growth on the back of urbanisation and focus on sustainable transportation networks. A new report finds that the market, which is valued at around €159 billion, is set to grow by 2.6% growth annually up to 2021. Particularly Western Europe will see robust growth rates, at 3.1% per year.

A new report from Roland Berger, titled ‘World Rail Market Study’, commissioned by the European Rail Industry Association (UNIFE), considers the state of the global rail supply industry. The industry spans the development of infrastructure, such as tracks; rolling stock, such as locomotives and wagons; signalling systems; and related services.

Global rail supply industry market volume 2013 to 2015

Rail supply market volumes

The study finds that the rail supply industry continues to, and will continue to, enjoy robust growth. The industry as a whole had market volume of €159 billion between 2013 and 2015. Services represent the largest market segment at €61.4 billion, followed by rolling stock at €36.6 billion. Infrastructure and rail control systems account for around €43.7 billion. In terms of growth across the period, rolling stock and rail control systems are out ahead, with growth of 5.8% and 4.9% respectively.

The industry is, according to the firm’s analysis, benefitting from urbanisation. Expanding metropolitan areas and shifts towards sustainable transportation options have seen a rise in the number of railway projects, while new railway management technologies improve track utilisation and safety. Increasing demand from sub-Saharan Africa, too, is set to increase long term demand for goods and services from the rail supply industry.

Rolling stock growth

Globally, installed railway tracks grew by 26,000 km in the 2013 to 2015 period, primarily within urban areas and as intercity high-speed tracks. The Asia-Pacific region saw the bulk of the additional tracks laid, particularly in China and India. Rolling stock saw absolute growth of 32,000 units between 2013 and 2015, of which 22,000 new units began operating across the Asian-Pacific region. Freight cars saw only a slight uptick of 2.7%, to 6.1 million units.

According to Andreas Schwilling, Partner in Roland Berger’s Transportation Competence Center, "Rail vehicle manufacturers were among the key players to profit from record sales in engines and freight cars and from numerous major contracts in other areas like metros, trams, regional trains and high-speed trains."

Global market growth trajectory

Global growth

Growth rates across the total market volume, according to the firm’s analysis, are projected to average 2.6% CAGR until 2021. Considerable regional differences are marked, however, with Western Europe set to enjoy the most robust growth of 3.1%, while the CIS region will have the lowest level of growth at 0.9%. The Asia-Pacific region will see growth in line with the global average, while Africa and the Middle East are set to enjoy above average growth of 3%. Rolling stock and services are, according to the analysis, set to contribute 68% of growth between them. The focus on developing more sustainable transportation methods particularly in urban areas, the firm explains, will continue to be a major driver of market growth.

"This study confirms that the attractiveness of rail transport as a reliable and efficient means of travel is steadily rising," says Philippe Citroën, Director General of UNIFE. "Megatrends like population growth and the global increase in urbanisation will ensure that the demand for rail investments will continue to grow, especially in urban areas. Nevertheless, UNIFE is concerned by the decline in market accessibility across the globe and especially in certain Asian markets which are slowly closing to outside suppliers,” he adds.

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How data insights helped Network Rail improve the South-East route

11 April 2019 Consultancy.uk

Amey Consulting has leveraged data insights to assist Network Rail with the improvement of its South-Eastern route. Using the Quartz tool, which monitors train movement, Network Rail will now be able to commit to data-enabled interventions to quickly improve underperforming train stations.

With rail services in the UK coming under strain from the demands of modern commuter life, while the infrastructure and service delivery of the nation’s railways has come in for sustained criticism in recent years, a period of regeneration is on the cards at last. Network Rail is the owner and infrastructure manager of most of the railway network in Great Britain, and has subsequently tapped the consulting industry on a regular basis to help find areas of improvement.

The group recently drafted in consultancy BearingPoint to conduct a thorough organisational evaluation and advise Network Rail (High Speed) on attaining a ‘fit for purpose’ organisational standard – for which the consultancy was nominated at the 2019 MCA Awards. Meanwhile, ArupArcadis and Aecom have been contracted to help Colas Rail and Babcock Rail implement a decade-long framework for Network Rail, aimed at supporting the delivery of the next generation of rail systems, with the contracts said to be worth as much as £5 billion

How data insights helped Network Rail improve the South-East route

As Network Rail further aims to improve its performance and customer service offering, another area it has sought help from the consulting sector for is its South-East route. The network of railways connects London with the southern parts of the country, as well as with Europe, making it the busiest in the country, with more than 500 million passenger journeys per year. This crucial expanse of rail was plagued with small minute delays, which were impacting millions of passengers every day, while reducing the efficiency and capacity of the overall network – something Amey Consulting was selected to help solve.

Amey Consulting soon determined that with the sub-threshold delays to services only lasting for 1 or 2 minutes, most were not the subject of detailed root cause analysis, and this made their corrections almost impossible – with dire consequences. Without addressing these delays, passenger satisfaction would fall, while the capacity and efficiency of the network would be reduced, stinging the income of Network Rail even before a host of delay-related fines would hit the company.

In order to help the client gain a better understanding of where, how, when and what these small delays occur, Amey Consulting looked to demonstrate the value of data-led consulting, with a significant reduction in delays within the first month of rolling out changes to key stations. The consultants embedded themselves in Network Rail’s team, helping them learn the key skills needed to support and apply data-driven solutions.

Agile transport

This involved the deployment of the Quartz tool. The system utilises to-the-second train movement data to present the performance of individual stations across the South-East route. It allows users to effortlessly understand station performance with a high level of detail, and use this information to identify losses caused by small-minute delays. The granular data allows for targeted actions to drive efficiency savings and performance improvements. More importantly, it allows users to understand the impact of small process changes on performance. 

Steve Dyke, an Executive Partner at Amey Consulting, said of the project, “We looked to identify the physical root cause on the infrastructure, building a case for change then managing that project implementation and tracking the benefit/value.  In doing so we are working to define a data performance improvement service to the operational and infrastructure owners.”

Just as important for the project as the technology, however, was teaching the Network Rail team how to leverage it after the consultants were gone. The Amey Consulting team worked to develop an agile working culture within Network Rail’s South-East division, helping staff to be confident in using data to improve the journeys of millions of people per year by attacking the problem from the ground up.

Dyke concluded, “This is less about the tools and about the approach to managing performance.  It meant using by-the-second analysis, data science, and then agile development to visualise and identify areas where improvements can be made.  We then worked with NR to change the way they approached the management of the infrastructure changes.  So rather than pass the information down the value chain, any of which could have been missed, we managed the change end-to-end.”

The project was so successful that Amey Consulting was also among those honoured at the recent MCA Awards. The firm scooped the Performance Improvement in the Public Sector prize for its work with Network Rail, at the 2019 ceremony in London.