Forecasting South African containers for international trade: A commodity-based approach

Abstract

The most common approach used internationally for forecasting international trade containers is models based on the correlation between container trade and economic growth. While the strong historical correlation is indisputable, this paper argues that there will be saturation in the propensity to containerise as all the suitable volumes of the underlying commodities shift to containers over time. In addition, the link between freight transport and GDP will decouple as more sustainable approaches to economic development, and therefore freight transport, are necessitated by economic and environmental realities. A commodity-based model, taking into account the underlying drivers of containerisation, is proposed here as a more realistic forecast of container demand. This could have a material impact on how large-scale investment decisions are directed.