Logistic Costs in Thailand on the Decline (14/06/2012)
Logistics costs in Thailand are declining, and it has been suggested that Thailand continue to improve the efficiency of transport and logistics management, so that its logistics costs would reduce further.

The suggestion was made by the Office of the National Economic and Social Development Board (NESDB) in its report submitted to the Cabinet for acknowledgement.

According to the report, Thailand’s logistics costs in 2010 amounted to 1.6 billion baht, accounting for 15.2 percent of GDP. The amount rose slightly over 15.1 percent of the country’s GDP recorded in 2009, as a result of economic recovery and export growth.

When compared with some other countries in 2010, NESBD stated that logistics costs in the United States were lower, as they accounted for 8.3 percent of GDP. Logistic costs in China were higher, accounting for 17.8 percent of GDP.

NESDB believed that Thailand’s logistics costs in 2011 would drop to 14.5 percent of GDP due to severe floods in the third and fourth quarters of 2011, leading to supply chain disruption in such major industries as automobiles and electronics.

The report stated that the proportion of Thailand’s logistics costs to GDP during 2001-2011 declined by 0.3 percent on average. Although the situation reflected greater efficiency in logistics management, it took place mainly among large industries with modern transport. Thailand still relies on road transport, at 80 percent, which is costly because of high energy prices. For this reason, Thai entrepreneurs need to shoulder high production costs in terms of logistics.

In order to cut the costs, NESDB suggested that various transport systems be developed, with an emphasis on cost-effective and environment-friendly forms, while enhancing the potential of the business sector for product distribution to consumers. Supply chain optimization should also be enhanced, especially logistics activities in the agriculture sector and small and medium-sized enterprises.

The establishment of the National Single-Window system should receive a major boost in order to improve related laws and regulations, as a way of enhancing Thailand’s competitiveness in preparation for the realization of the ASEAN Community in 2015.

Moreover, NESDB pointed out that the quality of personnel in logistics should be developed on a continual basis, especially those at the operation level, such as truck drivers. Labor skills should also be developed and upgraded to a higher degree of professionalism and internationalization.

Thailand is ideally positioned to serve as the logistics hub for ASEAN, which is striving to promote its community-building efforts for the integration of the region as a whole. In preparation for Thailand’s role as a regional logistics hub, the Thai government has been developing the capabilities and capacities of the country’s logistics service providers through financial support and training manpower with expertise.

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