According to the latest market study released by Technavio, the global rail logistics market is expected to grow at a compound annual growth rate (CAGR) of nearly four percent between 2017 and 2021.

This research report provides an analysis of the market in terms of revenue and emerging market trends and includes analysis and forecasts for various market segments and all geographical regions.

The important market drivers responsible for the growth of the global rail logistics market are the increased efficiency of rail freight over truck freight, reduction in traffic and road congestion on highways, and growth of rail intermodal transportation.

The global rail logistics market is forecast to be valued at $210.13 billion by 2021.

Rail freight transportation is considered to be 4.5 to six times more fuel efficient than truck transportation. Rail freight fuel efficiency varies between 150 ton-miles per gallon to 520 ton-miles per gallon, whereas that figure for truck freight ranges between 70 and 140.

“Intermodal freight transportation is forecast to be the segment that will showcase the highest growth rate, with a CAGR of almost five percent through the forecast period,” said Sharan Raj, one of the lead analysts at Technavio for logistics research. “This growth will be driven by the cost-efficient solutions to transport of complex commodities provided by intermodal. The intermodal segment accounted for 41.72 percent of the global market.”

The high demand for intermodal transportation has brought in many investments from rail operators and manufacturers for the development and integration of intermodal technologies for better efficiency. Canadian National Railways announced an investment of $250 million towards the development of an intermodal and logistics hub in Milton, Ontario, during the forecast period. CSX, a rail transportation company in the U.S., has developed tracking systems that help shippers track their intermodal containers from the source to the destination point.

The freight car segment of the global rail logistics market is expected to maintain a steady position in the market through the forecast period. Freight car transportation includes flat cars, open cars, box cars, and sliding wall freight cars. Freight cars are meant to carry goods up to 100 tons and are primarily used in the transportation of coal, logs, and vehicle equipment.

“Rail freight operators across the globe are investing in redesigning freight cars to increase the capacity to accommodate an increased volume of goods in a single trip, and to increase the efficiency of each container,” said Sharan. “In the U.S., few manufacturers have redesigned rail cars to increase the weight capacity of the freight car from 2,200 tons to almost 3,600 tons. Such innovations will bring in demand for this segment of the global rail logistics market.”