Railcar Leasing Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Railcar Leasing Market Size

Railcar Leasing Market Trends & Growth Drivers

Efforts to Digitize and Connecting Supply Chains Are Major Market Trends

• Digitalized operations have the potential to transform the worldwide railcar leasing business by connecting the supply chain.
• Modern railcars can be tracked and monitored, and they are able to collect data in real-time during the journey, using an array of sensors, telematics systems, and communication technologies.
• Intelligent railcars generate a huge amount of data related to maintenance, performance, and operations. Leasing companies are using advanced analytics and artificial intelligence in railcars to gain valuable insights from this data.
• With the help of this, they can identify patterns, optimize the schedule of maintenance, and predict malfunction or parts failure, which helps them improve operational efficiency and reduce costs.

Rising Demand for Petrochemicals and Gases Are Biggest Drivers for Market

• In the present day, railcars are a common mode of bulk transportation for petrochemicals, such as LPG, CNG, gasoline, and diesel. This mode of transportation has several benefits, including dependability, efficiency, and affordability.
• Compared to other modes, rail transportation is considered more favorable for the environment, as it drastically reduces the number of trucks required to transport the goods.
• Considering the rise of environmental problems, the eco-friendly nature of trains over road and air transportation plays a key role in increasing the demand for railcar leasing for transporting petrochemicals and gas.
• Apart from this, the railroad infrastructure is well established and expanding, which makes it possible to transport materials in bulk. Moreover, because of the interconnected lines, trains can also travel internationally, which is especially true of North America and Europe.
• Due to the high density of rail lines in many countries, companies can easily, cost-effectively, and efficiently transport petrochemicals over long distances, which makes railcar leasing a viable choice.

Lack of Maintenance and Upgradation of Railway Infrastructure Is Affecting Market

• The industry's growth is slowed down by the low profitability and sustainability of this business model, mainly because of the inadequate maintenance of railway networks. Railroad networks need to be updated and maintained regularly to satisfy the unique requirements of cargo trains and offer consumers high-quality services.
• The timely delivery of items to customers is the main focus of these services, but delays during the journey cost them dearly.
• For example, more than 70% of France's freight rail lines are in bad condition. Moreover, 20% of the railway lines are out of commission and have speed limitations. This affects the efficiency with which things are moved from the producing site to the destination.
• Furthermore, in some countries, strict regulations pose a key challenge to the growth of this market, especially those targeted on particular wagon types.
• For example, in France, the transportation of crude oil via tank cars is subject to stringent government laws and requirements, such as speed restrictions, environmental protection regulations, safety regulations for rail transport, and laws on the transport of dangerous goods.
• Similarly, the U.S. Department of Transportation (DOT) controls railcar design and sets protocols for decreasing the number of railcar-related accidents.

Railcar Leasing Market Analysis

Railcar Type Insights

• The covered hopper category dominates the market with 45% revenue in 2024. The covered hopper has a weatherproof and enclosed design, due to which it is able to ferry dry bulk loads, such as sand, grains, cement, and clay over a long distance, unaffected by weather.
• Tank cars are expected to witness the highest CAGR, of 5.6%, over 2024–2030. This is because of the burgeoning need to transport bulk liquids and gases, including chemicals, liquified gases, and petroleum. This railcar is also important in transporting hazardous materials for the chemical and energy sectors.

The railcar types covered in the report include:

• Covered Hopper (Largest Category)
• Specialty Freight Car
• Hoppe Gondola
• Tank Car (Fastest-Growing Category)

Lease Type Insights

• The full-service category holds the largest share in the market, of 55%, in 2024, and it is expected to witness the highest CAGR, during 2024–2030.
• Under this model, lessor companies take care of all the maintenance and repair needs of customers, apart from providing the freight wagons on rent. The wagons are leased on a monthly fee, charged per unit.

The following lease types are included in the report:

• Full-Service (Largest and Fastest-Growing Category)
• Net
• Others

End Use Insights

• The oil and gas category dominates the market with 30% revenue in 2024, and it is expected to witness the highest CAGR, of 6.0%, during the forecast period.
• This is due to the rising demand for chemicals and petroleum products across the globe.
• As per the IEA, global oil consumption rose by more than 2 mmbpd in both 2022 and 2023.
• The key players in this industry are looking for cost-effective and reliable transportation solutions for their products.

The end uses covered in the report are:

• Automotive and Auto Components
• Agri-Produce and Forestry Products
• F&B and FMCG
• Mining Products
• Chemicals
• Oil and Gas (Largest and Fastest Growing Segment)
• Energy Equipment
• Industrial Goods
• Construction Material
• Pharmaceutical and Medical Products
• Others

Geographical Analysis

North America Is Largest Region

• North America has acquired the largest market share, of 40%, in 2024.
• This is because the U.S. is investing heavily in the advancement and expansion of its rail infrastructure.
• About 1.6 million railcars operate in the U.S. Roughly two-thirds of them are owned by leasing firms, with railroads and individual shippers owning the other third.
• APAC is the fastest-growing market, with a CAGR of 5.7% during 2024–2030. In the region, India is showing drastic growth in this market due to the expansion of cities and industrial production. This has prompted the government to enhance its railway infrastructure to move both freight and passengers in higher volumes, faster and with lower emissions.
• The key railway infrastructure initiatives in the country include the Dedicated Freight Corridors, Gati Shakti cargo terminals, network electrification and line doubling/tripling, speed improvement, automatic signaling, and enhanced telecommunications.
• Europe is the second-largest market, with Germany holding the largest share in the region. This is because of Germany’s high freight train efficiency, which has encouraged more entities to move their goods via this mode of transportation.

The regions and countries analyzed in this report include:

• North America (Largest Regional Market)
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe
  • Germany (Largest Country Market)
  • U.K. (Fastest-Growing Country Market)
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • Japan
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest and Fastest-Growing Country Market)
  • Mexico
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest Country Market)
  • South Africa
  • U.A.E. (Fastest-Growing Country Market)
  • Rest of MEA

Railcar Leasing Market Share

Market Concentration – Consolidated

The railcar leasing market is consolidated in nature because many major players acquire smaller ones to expand their presence Additionally, there are several barriers to market entry, primarily the high capital requirements, which acts as a challenge for new players. Moreover, the larger companies offer a large variety of freight wagons on lease, while the smaller ones generally have a few specific types in their fleets.

Railcar Leasing Market News

• In January 2024, GATX signed an agreement with ZTR to install PIVOT in ZTR’s new railcar remote monitoring telematics solution. PIVOT is an advanced remote monitoring solution with wireless technology.
• In December 2023, AITX completely acquired some specific railcar leasing fleet formally owned by SMBC Rail Services LLC. This acquisition saw AITX add more than 50,000 railcars, which took the total number in its fleet to 120,000.
• In September 2023, Beacon Rail Leasing Ltd. announced the complete acquisition of Mitsui Rail Capital Europe B.V., a full-service railway leasing business in Europe. In the U.K. and other European markets, Beacon Rail Leasing Ltd. operated 507 locomotives, 1,200 freight wagons, and 515 passenger train cars and intercity coaches.
• In May 2023, AITX expanded its geological presence in Europe. With this, the company’s goods wagon platform, which offers expertise, resources, and partnerships across leasing solutions, management, and maintenance, is now accessible to European manufacturers, operating lessors, and freight shippers.
• In January 2022, Beacon Rail Leasing Ltd. acquired 230 intermodal wagons from Freightliner Group Ltd.