Sumitomo Corporation's Railway Products Business That Underpins North American Railroad

How does the railway business in North America differ from Japan?

Takano In Japan, people tend to associate railways with passenger services. In the U.S., however, rail is overwhelmingly freight focused. Because of the vast land area, people usually travel long distances by air. While rail accounts for only 0.9% of freight transport in Japan, in the U.S. it represents 28%. The freight rail network also connects with Canada and Mexico, and there are six major freight railway companies operating across North America.

Kurokawa When I first saw a freight train in the U.S., I was struck by the sheer scale. On tracks laid across uninhabited deserts and plains, the trains stretched endlessly across the landscape, often over 100 cars long. In many cases, containers unloaded from ships at ports are transferred directly to trains for inland transportation. It simply exceeds the concept of railways that Japanese people typically imagine.

What kind of railway business has Sumitomo Corporation developed in North America?

Takano Sumitomo Corporation began exporting wheels and axles manufactured in Japan to overseas markets in the 1940s. Later, we added exports of rails and tie plates* to fasten them, and in 1989 we established Arkansas Steel Associates (ASA) in the U.S. to begin local tie plate manufacturing. In 2011, together with Sumitomo Metal Industries (as it was known then), we acquired Standard Steel, a U.S. wheel and axle manufacturer with a history dating back 200 years, thus launching local production.

Kurokawa The U.S. is the only developed country where the population continues to grow, and freight rail volume is expected to increase 2–3% annually. In 2019, we made an additional investment in Standard Steel, increasing our ownership stake to 35%. With greater involvement in management policy, we have been able to pursue long-term growth investments and enhance product quality.

Even amid the pandemic and global supply chain disruptions, we maintained a stable supply of equipment and materials. In conversations with local customers and partners, we feel the deep trust that Sumitomo Corporation Group has earned over decades in North America's rail industry.

What would you say are the strengths of Sumitomo Corporation Group’s railway equipment business in North America?

Takano Our main competitors are U.S. domestic manufacturers. Since railways are national infrastructure, operators tend to favor domestic suppliers. Even in such a fiercely competitive environment, Sumitomo Corporation Group continues to be chosen due to the reliability of our products.

As a trading company, another advantage is that a single point of contact can handle a wide range of products and propose flexible solutions in response to changing circumstances. Supply and demand for wheels and axles fluctuate significantly depending on transport demand and new rolling stock supply, but we leverage our global network of manufacturers to respond quickly to these shifts.

Kurokawa Our unwavering commitment to standing by our customers and always resolving their issues is another major strength. I believe this determination to see things through is a key reason for the trust placed in us. For example, rail breakage was once a major concern for North American operators, as downtime during replacement meant substantial losses. By supplying rails from Japanese steelmakers with superior load-bearing capacity, durability and wear resistance, Sumitomo Corporation helped resolve this issue. Similarly, when acquiring Standard Steel, we transferred advanced technologies from Sumitomo Metal to enhance the company's quality and technical capabilities. This significantly reduced the frequency of accidents and repairs, alleviating the burden on railway companies.

In closing, could you share your aspirations for the future?

Kurokawa Starting in 2026, we plan to transfer our operations to SCGM in order to further enhance our expertise and agility. We anticipate that the North American rail business will continue to grow, and we aim to contribute to the growth of the rail industry by leveraging the trust and expertise we have built with our customers and business partners over the years as part of the Sumitomo Corporation Group.