externality charges in rural areas and increase equitable access to the core transport network. The research also expounds the single‐network characteristic of South Africa’s railroad, based on density requirements, relative to the size of the network (Simpson and Havenga, 2010).

In sum, the benefits of understanding macro‐logistics facilitates decisions and discussions beyond transport and allow policy makers to focus on impacts of national logistics in a way that would not otherwise be possible. As can be seen from the case studies in the United States and South Africa the evidence can provide a basis for decisions with transformational impact. The challenge for emerging economies is that the research and application of macro‐logistics are still in their infancy.

# **<u>Mesoscopic Applications targeting Industries or Geographies</u>**

Commodity‐level freight‐flow analysis enables a more robust linking of freight activity with underlying economic activity, such as the increase in high‐value, low‐weight products which informs modal, service and transport technology requirements (Mesenbourg, 2011; Lawson et al., 2011).

Production of low‐value bulk commodities, such as grain or coal, generates a transport demand disproportionate to their value (Transportation Research Board, 1997). In New Zealand, the _National Freight Demand Study_ showed that almost 60% of the total freight transport demand consists of the movement of relatively low value commodities such as liquid milk, aggregate, timber and wood chips. For these goods, transport costs can represent a high proportion of the delivered costs. Minimizing the transport costs is therefore an essential part of keeping the overall logistics costs low and, for items which are converted into exports ensuring that these are competitive on world markets (Richard Paling Consulting, 2008).

For most commodity groups, the relationship between the value of output (in monetary terms) and transport volumes changes over time. These changes may be due to changes in the mix of commodities being produced within a given commodity group or changes in the average real value per ton of major products within the group (Transportation Research Board, 1997). In the United States, the Commodity Flow Survey (CFS) has allowed policy makers and researchers to understand how the growth in demand for higher value and time‐sensitive commodities has affected the transportation system by driving growth in trucking (Ludlow, 2011). For example, from 1999 to 2009 the percentage of electronic commerce sales in the retail sector increased sevenfold from 0.6% of total retail sales in 1999 to 4.1% in 2009. In manufacturing, e‐commerce shipments increased from 18% of total manufacturing shipments in 2000, to 39% in 2008 (Mesenbourg, 2011; Lawson et al., 2011). The CFS is also being applied to understand the impact of increasing globalization on furniture industry supply chains with U.S. furniture imports having grown 108% and exports increasing 41% from 1999 to 2007. The commodity forecasts and predicted flows will enhance understanding of the underlying global and domestic furniture supply chain requirements (Liu and Tolliver, 2011).

In South Africa, the commodity‐level segmentation within the national freight demand model enabled the identification of palletizable fast moving consumer goods for the domestic intermodal business case. More than half of South Africa’s potential intermodal freight moves on the country’s two most‐ dense freight corridors. Building three intermodal terminals to connect the three major industrial hubs – Gauteng, Durban and Cape Town – could enable modal shift to rail, increasing rail densities and thereby reducing logistics costs ‐ including externalities ‐ for the identified intermodal freight flows on these two corridors by two‐thirds (Havenga et al., 2012).

An understanding of the transportation of hazardous materials allows objective evaluation of the safety risks involved. Understanding the geographical flows of these commodities facilitates policy‐ 16