Logistics and the future: The rise of macrologistics

Abstract

Background: The components of national freight logistics costs are still optimised in isolation, instead of systemic optimisation between logistics and other supply chain elements. The risk is the tragedy of the commons effect, where a positive return for economic activities in isolation could lead to a negative collective result in the long-term. Therefore, there is a need to elevate the systemic view of logistics to the macroeconomic realm.

Objectives: The primary objective of this study was to further the macrologistics discipline through its formal definition and to develop an instrumentation construct to support macroeconomic trade-off analysis. The secondary objective was to apply instrumentation outputs to national-level logistics challenges.

Method: A review of macrologistics was conducted, followed by a discussion on macrologistics instrumentation, which is twofold: a freight-flow model and a related logistics costs model. A disaggregated national input–output table was developed, followed by gravity modelling, to determine freight flows. Logistics cost calculations relate these flows to the costs of fulfilling associated logistics functions.

Results: This review contributes to the developing theory of macrologistics, while the instrumentation outputs improve the systemic understanding of the national freight-flow landscape, enabling informed debate and prioritisation analysis. This systemic view enabled macrologistics proposals to address South Africa’s logistics challenges, including proposals regarding a domestic intermodal strategy externality cost internalisation; international trade facilitation; infrastructure investments; and rail branch line revitalisation.

Conclusion: The elevation of logistics to the macroeconomic realm will enable the management of logistics as a national production factor, thereby contributing to reducing national freight logistics costs and improving national competitiveness.