Forecasting the demand for South African rail goods transport

There has been a substantial decline in the demand for rail transport for a large number of commodities over the past decades. In particular, higher-value commodities, capable of bearing a higher transport cost, have been replaced by low-value commodities like coal and iron ore. In this paper a forecasting model for the rail demand of eighteen individual commodities was estimated by means of the method of ordinary least squares. In general macro-economic activity variables such as GDP and GDE were used as independent variables and these provided good regression results. An ex post historical simulation yielded satisfactory forecasts. The model suggests that total rail tonnage will increase annually by about 1.2 per cent under a ‘pessimistic’ economic scenario, by 3.5 per cent under an ‘average’ scenario and by 6.5 per cent under an ‘optimistic’ scenario.