Five trends for the rail industry in 2019

March 06, 2019 // By Nick Flaherty
Five trends for the rail industry in 2019
Convergence technologies and the benefits of digitalisation has been on the rise in the industry for the last 5 years, says Viswanath Machiraju, the General Manager and Strategy Head of the Transportation Business Unit at Cyient.

2018 turned out to be a good year for the rail industry—a 2.7% growth rate was projected at the start of the year for freight-rail traffic. But the actual volume toward the end of the year stood at 2.9% with almost all segments showing improvement.  While the adoption rate and scale of new technologies can be far better, there has been an increasing emphasis to improve reliability, availability and passenger connectivity to ensure maintenance and operational costs are minimised. 

Cyient, which worked with Bombadier on the Elizbeth line in London (above), sees five key trends in 2019 says Machiraju:

Despite the failure of the Siemens/Alsthom transportation merger, consolidation continues to be the dominant tactic in the industry. Japanese multinational Hitachi that already owned 50.77% interest in Italian rail transportation service provider Ansaldo STS purchased an additional 31.79% of its share capital taking the aggregate stake up to 82.56% in November 2018. Wabtec Corporation signed an agreement to combine its operations with GE Transportation. Finland-based Transtech manufacturing double-deck carriages, low-floor trams, vehicle transport carriages, and electrical units sold its 25% stake to Skoda Transportation Group.

The increasing rate and scale of such deals indicate that the rail industry is set for more consolidation. In the fragmented industry, companies have realized that their general business interests and innovation in the industry can be more successfully promoted if they are more vertically or horizontally integrated in their supply chains. For example, standardization and harmonization of asset platforms, supply chain optimizations and wider global footprint are few of the critical drivers leading to such exercises. The rail industry is often one of the critical backbones of the economic framework of countries, therefore leading to increasing interference from regulatory bodies and competition commissions in fructification of such deals. 

Digitalisation has emerged as the key driver for innovation in the railways. It provides significant opportunities to streamline operations, improve reliability of assets and enhance passenger (or customer

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