What are the technological advancements driving the growth of the global freight cars market?

Global freight cars market:

Freight cars are also known as goods wagons or freight wagons, freight cars are unpowered railway vehicles, rolling stock, or motor vehicles pulled by train for cargo transportation such as food grains, oil, minerals, and other goods. Various freight cars are used in the market to transport different types of goods, which are made of different materials such as wood, steel, and iron. The use of freight cars is significantly increasing globally due to increasing trade activities in different end-use verticals such as manufacturing, automotive, food and beverages, and other industries.

Major drivers and constraints of the freight cars market:

The global freight cars market is witnessing significant growth due to the increasing global economy in recent years. Economic growth is driven by increasing investment in infrastructure, capital goods, technology, innovation, consumer expenses, and various other factors. The freight car industry plays a crucial role in overall economy by enabling efficient transportation, supply chain optimization, employment creation, and trade facilitation. Furthermore, increasing government initiatives to boost freight car market are expected to propel the market growth. For instance, in 2021, Niti Aayog, an Indian government department announced the Shoonya Initiative, which aims to electrify freight cars in urban freight sector, as a part of a substantial effort to promote the adoption of electrified vehicles and develop a favorable ecosystem for them in the nation. Thus, the efforts made by government to innovate rail freight are predicted to increase demand for freight cars in the market.

Additionally, the increasing technological advancements in freight cars, integration of GPS tracking systems, and automated monitoring systems are other notable factors that are expected to create new opportunities in the market in coming years. Integration of GPS enables remote location monitoring and improves efficiency of freight cars. The increasing incorporation of GPS technologies in freight cars by rail operators assists in managing the transport process, maintaining a consistent delivery process, scheduling freight cars, and reducing freight car theft. For instance, in 2022, Indian railways initiated real-time train monitoring, by deploying a Control Office Application system (COA). COA system is programmed and designed by ISRO after collaboration with Indian Railway Authority, to monitor actual movement of freight cars with the help of GPS. Therefore, the demand for freight cars is anticipated to increase with integration of advanced technologies to obtain real-time data and efficient transportation.

However, the stringent rules & regulations imposed regarding imports and exports and unavailability of efficient road networks in some countries are factors that may hamper market growth. For instance, in 2020, the Customs Department of India, introduced stringent rules on free-trade agreement import of white cargo to verify undue dumping of these freight under agreement from non-producing nations.

Market segmentation:

Based on region, Asia Pacific region held the largest revenue share due to factors such as growing industrialization, increasing collaboration and strategic partnerships among market players, a rise in government initiatives and policies, and substantial growth in demand from end-use industries such as agriculture, automotive, petroleum, and others. Market players in the region are significantly investing in several research and development activities which further create lucrative growth opportunities in freight cars market.