The Railway Industry outlines railways and trains as the medium of transport comprising wheeled vehicles running on a specific track. Railway is the 2nd mode of transport on land after road transport. According to an estimate, the railway carries 8% of the world’s passengers and freight transport across the globe. Today, we’ll discuss the PESTLE analysis of Railway Industry; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Railway Industry
Some of the main political factors in the Railway Industry PESTLE analysis are as follows;
I-Infrastructure Funding
The development of railway infrastructure requires a massive amount of government funding. It comprises building railway tracks across the country and among different countries; such mega projects go on for decades. Therefore, they require a strong commitment from the government by bringing all the politicians on board about the railway projects. Only then the building and development of railway infrastructure would become successful.
II-Trade Policies
If the railway track is running across multiple countries, then it requires government approval from various countries. The trade policies of different countries are variable depending on their geopolitical and diplomatic relations with neighboring countries. Many countries have land neighboring borders with various countries, but they don’t allow them for railway track building.
III-Political Stability
The stable political environment of the country plays a key role in the growth of businesses and companies. When the country is going through political turmoil, conflicts, and violent activities, then it doesn’t attract the attention of investors to invest their capital investment into the mega railway infrastructure project.
Economic Factors Affecting Railway Industry
Some of the main economic factors in the Railway Industry PESTLE analysis are as follows;
I-Economic Growth
The country’s economic growth plays a crucial role in the growth and development of the Railway Industry. For instance, when the country’s economy is growing, investors and businesses are investing their capital into the country; the government has a lot of capital in the foreign reserve. It allows the country and the government to invest in mega railway projects.
II-Employment and Wage Laws
The other reason for the government to invest in mega railway projects is to create employment opportunities. When the country has a lower wage rate, and availability of massive cheap labor, then it compels investors and the government to launch such projects. However, when the wage rate is high, better employment opportunities are available, and then it becomes highly difficult for the government to attract and maintain labor in the long term.
III-Fuel Price
The fuel price is highly volatile and it keeps changing throughout the years due to various political, economic, demand, and supply factors. Railway Industry requires a massive amount of fuel to carry out its freight and logistics operation during the railway infrastructure building stage. A small change in fuel price would increase the cost and expenses of the railway project.
Social Factors Impacting Railway Industry
Some of the main social factors in the Railway Industry PESTEL analysis are as follows;
I-Urbanization Trends
The trend of urbanization is an old concept of the inflow of people toward big cities for employment and better opportunities. As a result, the cities are increasing in size and population and they require a massive amount of resources to keep their daily operations running. Railway is the most suitable mode of transport for massive freight and logistics supplies to feed entire cities and countries.
II-Rail Safety
When choosing any mode of transport, safety, and security are the top priority of customers and passengers. Railway is the safest mode of transportation of all, and that’s why many safety-cautious customers prefer rail and train.
III-Community Relations Across Rail Tracks
The Railway Industry focuses on building strong relations with the local communities across the railway track. It allows them to keep their rail track safe with the help and assistance of local community members. As a result, they would receive cheap and safe modes of transport across the country, wherever they want to go.
Technological Factors Affecting Railway Industry
Some of the main technological factors in the Railway Industry PESTEL analysis are as follows;
I-Tech Innovation
Railway Industry is investing a significant amount of capital resources in the latest and advanced technology. It allowed them the development of bullet trains, electric trains, hanging trains, and other forms of trains. Advanced technology has brought revolutionary changes in the Railway Industry and by developing unique, speedy, and efficient trains.
II-Advanced Technology
Railway Industry is employing the latest advanced technology like AI, ML, data analytics, and automation. It allows them to accurately predict the massive influx of passengers in the upcoming holiday season on the particular stations. As a result, they could re-route all the trains to the specific stop to satisfy the needs and demands of passengers.
III-Safety and Comfort
Railway Industry is implementing the latest technology to make trains the safest and most comfortable mode of transportation. It allows them to attract the attention of tourists and passengers by making the train the safest mode of transportation.
Legal Factors Impacting Railway Industry
Some of the main legal factors in the Railway Industry PESTEL analysis are as follows;
Regulatory Compliance
Railway Industry should comply with the government policies of different countries. It focuses on areas like passenger safety, data security, labor laws, employment contracts, trade policies, and other legal requirements. Regulatory compliance would help them to smoothly perform their operations without any delays and disruption.
Environmental Factors Affecting Railway Industry
Some of the main environmental factors in the Railway Industry PESTEL analysis are as follows;
Sustainability Initiative
Railway Industry should make a strong commitment to environmental sustainability initiatives. It comprises investing in renewable sources of energy, biodegradable packaging, ethical sourcing of material, and others. Environmental sustainability initiatives would help them to keep up with the growing sustainability trends of the customer market.
Conclusion: Railway Industry PESTLE Analysis |PESTEL Analysis of Railway Industry |External Environmental Analysis of Railway Industry | Strategic Analysis of Railway Industry
After an in-depth study of the pestle analysis of Railway Industry; we have realized that Railway Industry plays a key role in the growth of the country. If you are learning about the Railway Industry PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
