The Office of Rail and Road (ORR), the UK’s rail regulator, states in its new report that rail productivity in the UK has risen again over the past year but remains below pre-pandemic levels. On the key quality-adjusted productivity measure, the industry saw a 3% increase in 2024–2025, but total costs remain 21% above the level of a decade ago in real terms.
The report shows that the recovery was driven mainly by increased traffic: the number of passengers rose by 7%, and train-kilometers increased by 5% compared to the previous year.
However, industry-wide productivity remains below pre-pandemic levels, as many fixed costs do not decrease with reduced traffic, and expenses have remained high.
Passenger operators: modest recovery, but with much higher costs
For passenger operators, the report states that productivity increased by 2% compared to the previous year, but remains 14% below the 2014–2015 level after quality adjustments.
A significant portion of the pressure comes from the cost of rolling stock: over 15,000 vehicles now operate on the British network, and their leasing and maintenance cost GBP 4.1 billion last year—nearly a third of passenger operators’ expenses.
At the same time, the fleet is newer and larger, but it is used less intensively and carries fewer passengers per vehicle than a decade ago.
The report also shows that the workforce has grown significantly. The number of employees at passenger operators is 23% higher than in 2014–2015, and operators’ total costs are 40% higher.
Even though the average age of the fleet has dropped by 17%, which improves comfort and the passenger experience, the industry is paying more for trains that, on average, are used less intensively than before.
Freight is up from last year, but remains dragged down by the collapse of the coal market
In the freight segment, the report is somewhat more favorable in the short term: freight operators’ productivity increased by 8% compared to the previous year.
However, the level remains 7% below that of 2014–2015, and the main cause is the collapse of coal traffic, following mine closures and the withdrawal of this flow from the market.
The table by commodity in the report clearly shows the shift in market structure: coal traffic fell by 99%, metal traffic by 41%, while biomass increased by 51%, construction materials by 43%, and intermodal by 12%.
The report notes that these new segments have only partially offset the loss of coal and that rail freight continues to face competition from road transport, gauge issues, and the fact that the new flows do not use the same routes as the old energy shipments.
Network Rail – Better Than Last Year, But Still Below Levels from a Decade Ago
Infrastructure has also seen an improvement compared to last year. The report states that rail infrastructure productivity increased by 7% in 2024–2025, but remains 7% below the level from 2014–2015.
At the same time, the number of Network Rail employees is 17% higher than a decade ago, and infrastructure costs are still 5% above the 2014–2015 level.
The report also includes a note of caution, however. In the first year of CP7—Network Rail’s current funding cycle for 2024–2029—the Composite Sustainability Index (CSI)—which measures the overall condition of rail assets—shows a 0.4% deterioration across the network.
ORR links this trend to a shift toward more maintenance and fewer renewals, warning that better short-term productivity must not come at the expense of the long-term health of the assets.
A better picture based on TFP, but with reservations
A new feature of this year’s edition is the inclusion of a TFP (total factor productivity) analysis, a broader indicator showing how efficiently an industry’s resources—particularly labor and capital—are used together.
By this measure, the report states that the productivity of the entire industry increased by 11% in 2023–2024 and is now 8% above the 2014–2015 level.
However, the authors also explain why this picture is more optimistic than that provided by traditional indicators: in TFP, the value of railway assets has declined in real terms, as depreciation has outpaced investments in infrastructure renewal and modernization.
In other words, capital productivity looks better, but that does not automatically mean the network is in better shape.
Overall, the report’s message is that British railways are regaining ground, but have not yet returned to pre-pandemic levels.
Passengers have largely returned, freight and infrastructure have improved compared to last year, but costs remain high, and the pressure on assets and budgets has not disappeared.
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