Logistics sector key economic growth
Along with trade expansion and foreign capital inflows that are quickening the pace of Thailand’s economic growth, the logistics industry is establishing itself as a crucial contributor to the nation’s competitiveness.
The evolution of the Asean Economic Community and the impact of free-trade agreements on key manufacturing markets outside the region are the two distinct forces shaping the nation’s logistics landscape, according to an analysis by consultancy firm Frost & Sullivan.
Frost & Sullivan – which provides market research and analysis, growth strategy consulting and corporate training services across multiple industries – said revenue in the logistics sector reached USS$71.7 billion (Bt2.6 trillion) in 2014 and was estimated to reach $96.5 billion in 2019.
“The government plan to position Thailand as the trade and service hub of the Greater Mekong sub-region and as the gateway to Asia are opening up opportunities in the logistics and transport industry,” said Jeff Tan, Frost & Sullivan Automotive and Transportation senior consultant. “Thailand’s road transport plays a key role in connecting the landlocked countries of Indochina.”
Frost & Sullivan said increasing foreign direct investment in Myanmar, Cambodia and Laos would support cross-border trucking activities and accelerate road network development in Thailand.
It said modernisation programmes, including basic infrastructure improvements, new equipment installations and security and hardware upgrades, were underway in the country’s two key ports.
The focus on high-tech manufacturing would support growth in air services.
Frost & Sullivan said new leadership was driving advancements in overall logistic capabilities. But it warned that global uncertainties such as stagnation in the euro zone and Japan posed a threat to Thailand’s export outlook and could derail transportation and logistics projects.
Possible delays in government spending and failure to invest optimally in logistics infrastructure could hamper freight movement and lower Thailand’s productivity.
“Restructuring the supply chain and logistics framework to capitalise on -|industrial agglomeration will facilitate efficient logistics management,” Tan said. “Moving forward, developing a holistic strategy encompassing network coverage, infrastructure setup, human resources and service quality will enable logistics service providers to strengthen their foothold in Thailand’s logistics industry.”
