Back on track: investors should hop on board the railways
Rail transport has had a dismal 18 months, especially in Britain. Rail traffic plunged during lockdown as people stopped going out and started to work from home rather than commute. According to the Department for Transport, while road usage bottomed out within weeks of the first lockdown and had returned to near-normal levels by July 2020, even by early May 2020 rail usage was as low as 4% of typical levels. It then climbed and peaked at 43% in October, before falling back during the second and third lockdowns. Even today it is still 33% below pre-crisis usage.
However, it’s not all doom and gloom. While Covid-19 may have brought forward permanent changes in the way we live, work and communicate, there are signs of a return to the office. And in any case, railways don’t depend solely on people’s working patterns.
Governments are keen for people to use the train for long-haul journeys that they would currently take by car or aeroplane. Finally, rail freight, which accounts for a large part of the overall industry’s revenue, has been largely unaffected by lockdowns and is looking increasingly attractive compared with road haulage. There are plenty of opportunities in this
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