Freight Rail Industry Poised to Surpass $20 Billion in IoT Revenue by 2032

• Chinmay
• January 27, 2025
• Internet of Things
• ABI Research, freight rail, IoT in railways, machine vision in rail, North American rail industry, predictive maintenance, rail digitization, railcar telematics, RailPulse
• 0 Comments

The freight rail industry is undergoing a significant transformation, fueled by investments in digitization and IoT technologies. According to global technology intelligence firm ABI Research, the revenue for IoT in the freight rail sector is projected to exceed $20 billion by 2032.

Driving Factors for IoT Growth in Freight Rail

The growth of IoT in the freight rail industry is driven by the need for more efficient, safe, and cost-effective transportation systems. Advancements in digitalization and real-time data analytics are enabling predictive maintenance, enhancing safety, and improving operational efficiency.

Adhish Luitel, Principal Analyst at ABI Research, highlighted the shift:
“The global railcar telematics market is driven by the increasing demand for efficient, safe, and cost-effective transportation systems. This expansion can be attributed to advancements in digitalization and the integration of IoT technologies due to heightened emphasis on real-time data analytics enabling preventive maintenance.”

Key Players and Initiatives in the IoT Rail Market

Vendors like Amsted Digital, Wabtec, Nexxiot, and ZTR are emerging as leaders in the North American freight rail market. A noteworthy initiative is RailPulse, a coalition of major railcar owners in North America, including Class 1 and Class 2 railroads, lessors, and rail-car-owning shippers. This group is working to accelerate the adoption of digital solutions across the industry.

The North American Market: An Untapped Opportunity

Compared to Europe, North America’s rail sector is still underpenetrated in terms of IoT-based visibility. With a Total Addressable Market (TAM) of nearly 2 million railcars, the potential for IoT adoption is immense. Technologies like machine vision and sensor-based inspection devices, often mounted at rail-grade crossings, are leading the charge in rail digitization.

Adhish Luitel elaborated on one specific use case:
“Rail braking inspections are critical to ensure safety and compliance in the industry. These checks verify that the air brake system is functioning properly across the entire train, which can span over a mile in length. However, the process can be time-consuming as manual inspection for each car requires constant coordination between the train crew and the control centre. This is when IoT technologies can provide efficiency gains.”

A Data-Driven Future for Freight Rail

These insights are part of ABI Research’s Rail Freight Data market report, which falls under the company’s Supply Chain Management and Logistics research service. The report provides deep data insights, market share analysis, and segmented forecasts to identify key opportunities in the freight rail IoT space. With the increasing emphasis on real-time data, predictive maintenance, and digital transformation, the freight rail industry is poised to achieve greater operational efficiency and enhanced safety, driving the market toward the $20 billion milestone by 2032.