Predicting freight flows in a globalising world

In this paper we suggest a methodology to predict commodity-specific transportation flows that brings together data in value and in quantity terms in a consistent way. The approach is based on the modern gravity formulation. There are three driving forces of the transport flows dynamics: economic growth, the ongoing globalization (reduction of trade barriers), and the changing commodity composition of trade, whereby the evolution of value-to-weight ratios is explicitly taken into account. The methodology is applied to forecast the interregional trade flows in Europe.