UK rail productivity rises but stays below pre-pandemic levels

UK rail productivity rose again in 2024–2025. A new report from the Office of Rail and Road says the industry remains below pre-pandemic levels. Costs also remain far above those of a decade ago.

On the main quality-adjusted measure, productivity across Britain’s rail sector increased by 3% over the year. That is according to ORR’s 2026 rail productivity report. Total costs, however, remain 21% above the level of ten years ago in real terms. The report says stronger traffic drove the improvement. Passenger numbers rose by 7%. Train-kilometers increased by 5% from the previous year.

Still, the recovery remains incomplete. Many fixed costs do not fall when traffic is lower. Spending across the sector has stayed elevated.

UK rail productivity and passenger operator costs

For passenger operators, productivity increased by 2% from the previous year. After quality adjustments, it still stands 14% below the 2014–2015 level.

A large share of the pressure comes from rolling stock. More than 15,000 vehicles now operate on the British network. Leasing and maintenance costs for that fleet reached GBP 4.1 billion last year. That amounted to almost one-third of passenger operators’ total spending.

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The fleet is newer and larger than it was a decade ago. Still, it is being used less intensively and carries fewer passengers per vehicle. In practical terms, the network is now running a bigger and newer fleet. Yet it gets less use from each vehicle than ten years ago. The report also shows that staffing has risen sharply. Passenger operators employ 23% more people than in 2014–2015. Their total costs are 40% higher.

At the same time, the average age of the fleet has fallen by 17%. That improves comfort and the passenger experience. Even so, operators are paying more for trains that, on average, are used less intensively than before.

Freight productivity and the impact of coal traffic

The short-term picture is somewhat stronger in freight. Freight operators recorded an 8% productivity increase compared with the previous year.

Even so, freight productivity remains 7% below the 2014–2015 level. The report identifies the collapse of coal traffic as the main reason. It links that shift to mine closures and the withdrawal of that flow from the market.

The commodity breakdown in the ORR report shows how the freight market has changed. Coal traffic fell by 99%. Metal traffic declined by 41%. Over the same period, biomass increased by 51%. Construction materials rose by 43%. Intermodal traffic grew by 12%.

Still, the report says these new segments have only partly offset the loss of coal. Rail freight also continues to face competition from road transport and gauge issues. In addition, the newer flows do not use the same routes as the former energy shipments.

Network Rail infrastructure productivity and TFP

Infrastructure productivity also improved compared with last year. According to the report, rail infrastructure productivity increased by 7% in 2024–2025. It still remains 7% below the 2014–2015 level.

Meanwhile, Network Rail employs 17% more people than it did a decade ago. Infrastructure costs are still 5% above the 2014–2015 figure.

The report also includes a note of caution. In the first year of CP7, Network Rail’s current 2024–2029 funding cycle, the Composite Sustainability Index (CSI) showed a 0.4% deterioration across the network. The index measures the overall condition of rail assets.

ORR links that trend to a greater focus on maintenance and fewer renewals. It warns that better short-term productivity should not come at the expense of the long-term health of the assets.

This year’s report also introduces a TFP analysis, or total factor productivity. It offers a broader view of how efficiently the industry uses labor and capital together. On that measure, productivity across the whole industry increased by 11% in 2023–2024. It now stands 8% above the 2014–2015 level, as ORR notes in a blog accompanying the report.

Still, the report also explains why that picture appears more positive than the traditional indicators. Under TFP, the real-term value of railway assets has fallen. Depreciation has outpaced investment in infrastructure renewal and modernization.

In other words, stronger capital productivity does not automatically mean the network is in better condition.

Overall, the report says British railways are recovering. Yet they have not returned to pre-pandemic levels. Passengers have largely returned. Freight and infrastructure performed better than a year earlier. Costs, however, remain high. Pressure on assets and budgets has not disappeared.

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