The global rail industry is at a transformative juncture, with several emerging trends poised to redefine its future. After attending the 2024 edition of the InnoTrans trade fair in Berlin, our Oliver Wyman team has identified six critical areas of focus: signaling innovation, sustainability, cybersecurity, artificial intelligence (AI) advancement, the expanding Asian market presence, and diversity. These insights are crucial for enhancing the rail sector's inclusivity and global competitiveness.
Implementing innovative signalling technologies in rail
Beyond major original equipment manufacturers (OEMs), we saw many players from different industries (software and electronics) showcasing a wide array of innovative signaling technologies. Signaling has been a recurring theme over the years, but its increased presence this year could reflect growing expectations from infrastructure managers to find solutions to enhance capacity — a longstanding challenge for the European rail network.
Sustainability remains a priority on the rail industry’s agenda
We had the privilege to facilitate a discussion on “Green Fleets” with operators, OEMs, and system suppliers. Two critical axes are crystalizing: optimizing energy consumption (efficiency of traction, auxiliaries, and so on) and moving from recyclability to recycled materials, closing the loop of circularity. To accelerate this transition, industry players need to go beyond the obvious use cases, which already make sense only from an economical perspective, and create new ones that also create competitive differentiation.
Cybersecurity is a top concern in the rail industry
As the industry evolves to incorporate more digital solutions across all aspects of rail — from customer experience to safety, operations, maintenance, and manufacturing — the importance of cybersecurity cannot be overstated. With the exponential growth of data processing and interconnections between systems, cybersecurity must be embedded in all systems by design, particularly concerning the resilience of operations and infrastructure.
AI Is shaping customer experience and rail operations
AI is increasingly in the spotlight, and rail players need to identify the most relevant use cases before true adoption. AI applications are already evident at the end of the rail value chain, such as in customer analytics, ticketing, and real-time traffic analysis. For industrial players, however, the most valuable use cases are less clear. These players must now ask themselves which applications will deliver the most value, as well as identify the necessary steps for AI-related talent acquisition, development, and integration.
The rise of Asian Tier 1 firms in global rail systems
Beyond the usual presence of major Asian OEMs (CRRC, Rotem, and others), we observed an increased presence of Asian Tier 1 firms on a large range of subsystems and components (brakes, PIS, doors, TCMS, and so on). This could anticipate an increased interest for international markets due to reducing demand in the Chinese domestic market.
Making rail inclusive for all
InnoTrans 2024 saw unprecedented attendance, with over 3,000 exhibitors and tens of thousands of visitors, showcasing the positive dynamics within the rail sector. However, the industry still faces challenges regarding diversity, particularly in terms of gender equality and ethnic representation. This raises important questions about the attractiveness of the rail sector to all populations and the steps needed to foster a more inclusive environment.