Back on track: why you should invest in railways

Rail transport suffered a severe blow in the pandemic. But while post-Covid-19 working patterns may reduce revenue, trends in technology, long-distance travel and freight all bode well, says Matthew Partridge

Union Pacific Railroad freight train
US railway firms continued paying dividends last year
(Image credit: © Getty Images)

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.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri