Challenge
Rail logistics sits at the crossroads of economic growth, job creation, and climate action. As developing countries expand their economies and create job opportunities, demand for efficient, reliable and sustainable logistics systems keeps rising. Freight rail has a unique role to play in facilitating trade, lowering logistics costs, and linking production hubs to ports and markets.
However, business-as-usual approaches to freight transport are no longer sustainable. In many low- and middle-income countries, rapid urbanization and economic growth are driving up freight demand. Relying primarily on road-based logistics will exacerbate congestion, accelerate infrastructure wear, inflate logistics costs, and worsen environmental and health outcomes due to higher emissions and air pollution.
The rail logistics sector faces critical bottlenecks that limit its effectiveness. Outdated infrastructure, poor intermodal integration, and fragmented transport systems reduce the competitiveness of rail and make modal shifts from road to rail difficult. Even when the environmental and economic benefits are clear, the absence of enabling policy frameworks, limited institutional capacity, and financing constraints continue to stall progress.
Approach
ľ¹ÏÓ°Ôº¡¯s approach to rail logistics improvement is built on a comprehensive and integrated approach that combines infrastructure financing, policy and regulatory reform, and institutional capacity-building, to help countries develop efficient, competitive, and low-carbon logistics systems. ľ¹ÏÓ°Ôº is actively engaged in railway research, analysis, technical support, and lending projects in over 20 countries worldwide.
A core element of this approach is infrastructure development, with investments aimed at constructing and modernizing rail lines, logistics terminals, and multimodal hubs to strengthen connectivity and improve service quality.
ľ¹ÏÓ°Ôº¡¯s support for policy and regulatory reforms enables countries to unlock the full potential of railways. In Serbia, for example, the engagement has gone beyond financing infrastructure to addressing institutional strengthening and environmental concerns, such as air quality.
Complementing these efforts is a strong focus on technical assistance and knowledge sharing. ľ¹ÏÓ°Ôº works closely with client governments to design and implement effective rail logistics strategies through continuous dialogue, analytical work, and the dissemination of best practices. Flagship reports such as provide actionable guidance on enhancing national logistics frameworks. Capacity-building initiatives, including training sessions and workshops (e.g., an Annual Railway Workshop on Cross-border Services), further support institutions in managing and operating modern rail systems.
Results
World Bank-supported rail logistics projects are delivering tangible results, lowering transport costs, improving freight efficiency, enhancing railway and operating safety, and reducing emissions in several countries, thereby contributing to broader economic, environmental, and social impacts.
In India, led to the construction of 1,200 km of newly built tracks, from 2011 to 2024. This investment is delivering major gains in efficiency, environment, economic competitiveness, and regional development.
The EDFC projects have dramatically expanded rail capacity. On EDFC¡¯s first section, daily freight train capacity increased fourfold, from 32 train pairs to over 130, boosting service reliability and customer satisfaction. Train operational speeds were increased significantly, with freight trains now operating at three times the speed of conventional services, reducing logistics costs by $58 million, and making rail more competitive for logistics providers. By shifting freight to dedicated tracks, the projects also freed up capacity on the conventional rail network. On the Khurja¨CKanpur section alone, daily passenger train services increased from 69 to 128, improving frequency and punctuality for millions of rail users.
Construction activities generated jobs and supported local livelihoods. Villagers near construction sites earned between $20 and $31 per day through skilled and unskilled labor, with additional monthly income opportunities for (mostly) women working in camp services. These opportunities contributed to tangible improvements in local economic development in project areas. In total, the EDFC projects generated about 9 million days of employment during project implementation.
The projects are generating substantial climate benefits: in 2024 alone, greenhouse gas (GHG) emissions were reduced by around 55,000 tCO?. By 2042, total cumulative emissions reductions, caused by shifting freight transport from road to rail alongside the EDFC, are projected to reach 13.19 million tons, a reduction of 57 percent from pre-project levels in 2010.
Each kilometer-long freight train on the EDFC replaces about 72 trucks, helping to reduce highway congestion, improve safety, and lower air pollution. This shift is expected to save India approximately Rs 4.9 billion ($58 million) in logistics costs and Rs 2.4 billion ($28 million) in pollution-related health and environmental costs, over the lifetime of the project. These changes mean faster, cleaner, and more affordable goods movement, improving both business efficiency and air quality. Building on earlier EDFC investments, the Rail Logistics Project, launched in 2022, aims to enhance the efficiency of freight and passenger transport while reducing greenhouse gas emissions (GHG).
In Egypt, the , which aims to increase network capacity and efficiency, has benefited about 2.9 million people (including 1.7 million youth) from improved access to sustainable transport infrastructure and services. The (RISE) project aims to substantially improve safety and service quality improvements on the Alexandria to Nag Hammadi corridor. The project is expected to make train travel significantly safer, reducing the number of serious injuries and deaths per passenger journey by over 20 percent between 2019 and 2027. About 27.4 million people (including 16.5 million youth) benefit from improved access to sustainable transport infrastructure and services.
In Cameroon, the improved efficiency and safety along the critical Douala¨CN¡¯Djamena corridor through targeted investments in both road and rail infrastructure. Modernization of 17 rail switch points, installation of signalized level crossings, and rehabilitation of 55 railway bridges enabled smoother and faster freight movement. These investments led to a two-hour reduction in travel time for 75 percent of corridor users, and helped lower the cost of transporting a 20-foot container by over 7 percent, from $6,000 in 2012 to $5,560 in 2022.
In Uzbekistan, the constructed a vital rail link between the isolated Ferghana Valley and the rest of the country, dramatically improving regional connectivity. The project directly benefited over 740,000 people by reducing both passenger and freight transport costs and enhancing service reliability. Passenger travel costs from Andijan to Tashkent dropped by 33 percent between 2015 and 2020, while freight costs for key goods, such as oil, fertilizer, and automobiles, fell by up to 80 percent compared to previous truck routes or longer rail routes. Reliability improved significantly, with the percentage of delayed trips falling from 95 percent to just 10 percent. This large drop is transforming the economic and social accessibility of the region by ensuring greater international trade engagements.
In Serbia, the is strengthening institutional capacity, reforming railway governance, and integrating digital technologies to improve safety and efficiency. Travel speed is expected to increase, making rail more attractive and competitive. Crucially, the project is expected to reduce level crossings accidents involving cars and pedestrians by 23%, from 43 crashes annually in 2019 to 32 by 2032. The fatality rate per train kilometer has been reduced to about half from 3.56 per train-kilometer in 2019 to 1.89 per train-kilometer in 2025, exceeding the initial long-term target for 2032.
In China, between 2018 ¨C 2022, the enhanced institutional capacity for sustainable logistics by developing national policies, technical standards, and tools to promote green and efficient freight systems. Pilots across five cities and provinces informed national-level strategies and the integration of climate-smart planning into China¡¯s freight sector. This laid the groundwork for long-term increased operational efficiency across logistics networks.
On a global scale, the World Bank is delivering groundbreaking knowledge products. Two recent flagship World Bank reports have shaped the global conversation on reducing freight-related emissions, highlighting how strategies to avoid unnecessary transport, shift cargo from road to rail, and improve efficiency can cut carbon while also making goods movement more affordable, reliable, and sustainable for people and businesses, especially through the expanded use of low-carbon rail: and .
