Transportation forecasting is the attempt of estimating the number of vehicles or people that will use a specific transportation facility in the future. For instance, a forecast may estimate the number of vehicles on a planned road or bridge, the ridership on a railway line, the number of passengers visiting an airport, or the number of ships calling on a seaport. Traffic forecasting begins with the collection of data on current traffic. This traffic data is combined with other known data, such as population, employment, trip rates, travel costs, etc., to develop a traffic demand model for the current situation. Feeding it with predicted data for population, employment, etc. results in estimates of future traffic, typically estimated for each segment of the transportation infrastructure in question, e.g., for each roadway segment or railway station.

Traffic forecasts are used for several key purposes in transportation policy, planning, and engineering: to calculate the capacity of infrastructure, e.g., how many lanes a bridge should have; to estimate the financial and social viability of projects, e.g., using cost–benefit analysis and social impact assessment; and to calculate environmental impacts, e.g., air pollution and noise.

Within the rational planning framework, transportation forecasts have traditionally followed the sequential four-step model or urban transportation planning (UTP) procedure, first implemented on mainframe computers in the 1950s at the Detroit Metropolitan Area Traffic Study and Chicago Area Transportation Study (CATS).

Land-use forecasting starts the process. Typically, forecasts are made for the region as a whole, e.g., of population growth. Such forecasts provide control totals for the local land use analysis. Typically, the region is divided into zones and by trend or regression analysis, the population and employment are determined for each.

The four steps of the classical urban transportation planning system model are:

After the classical model, there is an evaluation according to an agreed set of decision criteria and parameters. A typical criterion is cost–benefit analysis. Such analysis might be applied after the network assignment model identifies needed capacity: is such capacity worthwhile? In addition to identifying the forecasting and decision steps as additional steps in the process, it is important to note that forecasting and decision-making permeate each step in the UTP process. Planning deals with the future, and it is forecasting dependent.

Activity-based models are another class of models that predict for individuals where and when specific activities (e.g. work, leisure, shopping, ...) are conducted.

The major premise behind activity-based models is that travel demand is derived from activities that people need or wish to perform, with travel decisions forming part of the scheduling decisions. Travel is then seen as just one of the attributes of a system. The travel model is therefore set within the context of an agenda, as a component of an activity scheduling decision.