South Africa Freight Demand ModelTM

GAIN Group has created and updated the South Africa Freight Demand ModelTM.

The FDMTM estimates sectorally disaggregated supply (production and imports) and demand (intermediate domestic demand, final domestic demand and exports) of commodities in pre-defined geographical areas, the aggregate of which reflects total national supply and demand. There are 354 districts in South Africa, which are expanded to 369 geographical areas for this analysis by distinguishing the eight largest commercial border posts between South Africa and neighbouring countries, and South Africa’s seven ports. The sectors are disaggregated into 20 agricultural commodities, 30 mining commodities and 33 manufacturing commodities. Subsequently, commodity-level freight flows, for which actual data cannot be sourced, are estimated utilising a gravity model. The gravity model assumes that bilateral trade flows are directly proportional to the disaggregated supply (origin) and demand (destination) volumes and inversely proportional to a measure of transport resistance. Transport resistance is a customised distance decay parameter informed by the nature of the commodity, known rail and port flows, industry interactions, and iterative applications of the gravity model. The FDMTM also develops a 30-year forecast at 5-year intervals (annually for the first 10 years) for three scenarios, and has been applied annually since 2006 (Havenga and Simpson, 2018).

The aggregate output of the FDMTM indicates that, in 2019, freight demand in South Africa amounted to 446 billion tonne-km (305 billion tonne-km line haul, 132 billion tonne-km last mile and 9 billion tonne-km in pipelines and on conveyor belts).