22-01-2013, 12:51 PM
Global Competitiveness in the Rail and Transit Industry
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U.S. Rail and Transit in Context
On May 26, 1934, a U.S. diesel-powered train christened
the Zephyr broke the world speed record previously
held by Germany, traveling from Denver to
Chicago at an average speed of 77 miles per hour.1*†
In the 1930s and 40s, U.S. intercity passenger trains
were the envy of much of the world. Domestic manufacturers
of rolling stock—the various vehicles that
move on a railway—introduced a host of technological
innovations, including the diesel-electric locomotive,
lightweight cars with improved wheel sets,
and reliable braking systems.2
But by the mid-1950s, U.S. intercity passenger
travel began to shift to newly constructed—and
amply subsidized—highways and airways. Between
1956 and 1969, 59,400 miles of railroad track were
taken out of passenger service. By 1971, when the
government-owned rail company Amtrak was created,
less than a fifth of the 2,500 daily intercity trains
(not counting commuter lines) that ran in 1954 remained
in service.3 Today, Amtrak trains travel at
slower speeds than their predecessors did in the mid-
20th century.4
The Global Rail Industry
The United States currently invests a much smaller
amount in rail and transit, relative to the size of its
population and territory, than many countries in Europe
and parts of Asia. But proponents of expanded
rail and transit systems have ambitious plans for the
future, and the Obama administration’s stimulus
program has triggered hopes of substantially larger
public investments in coming years. There is so
much pent-up demand for federal funding from
state and local authorities that the sums that are currently
available are but a fraction of what is needed
both to bring existing systems to a good state of repair
and to expand them to keep up with increasing
ridership.
Rising U.S. spending on rail and transit systems is
certainly in line with broad global trends. The global
passenger rail industry emerged from the recent economic
crisis relatively unscathed, and worldwide demand
for rail vehicles is projected to grow strongly in
coming years.
Comparing National Investment Levels
Many countries in Europe and Asia have embraced effective
policies and invested significant funds in their
rail and transit sectors. Especially for intercity passenger
rail, U.S. spending on rail and transit relative to
gross domestic product (GDP) and population lags far
behind that of these global competitors.
Relative to the size of its economy, China's investments
dwarf those of all other countries, at $12.50 per
$1,000 of GDP in 2008. Several European countries,
including Switzerland, Austria, and the United Kingdom,
are also making major commitments.1 (See Figure
1.) Although Germany has historically had one of
the most extensive rail systems in the world, it currently
spends a relatively small $1.50 per $1,000 of
GDP. In the United States.
GlobalMarket Size
Not surprisingly, differing levels of commitment and
investment have led to highly diverging market volumes
worldwide. Globally, the consulting firm SCI
Verkehr reports that operations and capital budgets for
passenger and freight rail were a combined $590 billion
in 2008.5* Another study by Roland Berger consultants
put the size of the global market for rail goods
and related services in 2007 at $169 billion, up from
$129 billion in 2006.6Western Europe dominates the
market, followed by Asia and the Pacific, although
other regions lead in specific industry segments, such as
services.7 (SeeTable 1.) About two-thirds of the market
volume is considered “accessible,” meaning that orders
are open to bids from international suppliers.
ProjectedMarket Growth
Rail and transit ridership are on the rise in many countries.
With many new systems under construction or in
the planning stages, orders for rail vehicles and buses
are expected to show strong growth in the coming
years—and these orders will translate into employment
growth. Currently, some 400 light rail systems with
more than 44,000 rail vehicles are in operation worldwide,
another 60 systems or so are under construction,
and more than 200 are in the planning stage. Europe
has the highest density, with 170 systems and more
than 7,900 miles of lines in operation and nearly 100
more in various stages of construction or planning.
North America has 30 systems in operation and 10
under construction. Asia and the Pacific is the region
with the fastest growth. Globally, the light rail market
might reach $7.5 billion by 2015.1
Leading RailManufacturers
Rail manufacturers once were oriented primarily toward
their own domestic markets. But since the 1990s,
a series of mergers and restructurings in Europe and
North America led to the emergence of three dominant
global manufacturers: Bombardier of Canada, Alstom
of France, and Siemens of Germany. Their
Japanese competitors are part of large industrial conglomerates
that did not participate in international rail
mergers and acquisitions. State-owned companies in
China are becoming increasingly important players as
well.24 (See Table 3.)