The global rail industry accounts for $468 billion in annual revenue and it is expected to grow at a 7% CAGR from 2020 to 2025. Flat growth of rail shipments (including shipments of coal and grain shipments- which are shrinking) means carriers have to focus on operational efficiency for any positive earnings impact: rising employee productivity, fuel-efficient equipment, and improved safety measures.
The global ocean freight market is also flat, impacted by bunker oil prices, dry bulk [containerized and RoRo (roll-on/roll-off) demand, growth of the handy size segment, etc. We expect to see higher levels of consolidation in the global shipping industry due to vessel prices and anemic profitability and freight rates.
Trucking is localized to a greater extent than air and ocean transportation. In 2021, the global market revenue was estimated over $875.5 billion. In the U.S. alone, trucking is estimated at $800 billion, and it is responsible for moving 70% of all goods in the country.
For the air cargo industry, the global revenue was estimated at $175 billion in 2021. Despite the Covid-19 hit and the increases in oil price, the industry is expected to grow at a 5.6% CAGR for the following 5 years. The scarcity of containers is pushing shippers of high-value commodities to choose air over ocean for small and light weight cargo.
Passenger traffic by air is up. According to the International Civil Aviation Organization, global air passenger traffic reached 4.5 billion passengers in 2019; the organization believes traffic will hit 10 billion passengers by 2040. Increasing demand for seats along with the need to lightweight airframes to reduce fuel costs is driving new orders for aircraft.
At $19.4 billion in estimated revenue in 2020, fleet management is a small but growing segment of the transportation industry – and is capturing the attention of both public and private sector fleet owners. Growth of this segment can be attributed to agency/company pressure to offload employees, improved vehicle technology (diagnostics/maintenance/safety solutions), improved fleet management technology (tracking, dispatch, etc.), pressure to reduce costs and improve rider/customer satisfaction, and greater vendor focus on specialist segments (shuttles/delivery/service, trailer tracking, heavy equipment).
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