Thailand’s bid to become smart, eco-friendly logistics hub in ASEAN

In the realm of business and industry, a campaign is gaining traction in which the government is being urged to bolster the country’s standing as a prospective eco-friendly hub for logistics within the prominent Southeast East Asian alliance, the Association of Southeast Asian Nations (ASEAN). Moreover, there is a strong emphasis on preparing businesses to adapt to the dawn of smart, eco-friendly industries.

Suwit Ratanachinda, the individual at the helm of the Thai Logistics Service Provider Federation, has advocated for the impending government to adopt a firm policy stance to boost Thailand as a pivotal eco-friendly logistics centre within ASEAN. He highlighted that Thailand’s geographical positioning and robust infrastructure, encompassing widespread roads and airports, create ideal connectivity to Laos, Cambodia, and Myanmar.

Additionally, the projected high-speed railway facilitating travel between Laos and China will significantly reduce the transit time into Central Asia, from the current expanse of 60 days down to a mere 15 or 16 days. This holds the potential to create an expressway of sorts to Europe.

Suwit expressed that the primary obstacle for Thailand’s eco-friendly logistics industry is the need to adapt to evolving global markets, where the momentum is steering towards smart and green logistics. These are essentially driven by advancements in digital platforms, the use of technology to build efficient management systems and the all-important goal of reducing costs.

Suwit elaborated that businesses are also seeking government intervention in the form of fiscal support, one suggestion being the cutting of the existing value-added tax of 7% down to absolute zero, aligning with the standards of Singapore. There is also a call to bring logistics entrepreneurs under the nation’s Customs Act to streamline dialogue with the Customs Department, thereby eliminating unnecessary bureaucratic processes via shipping firms.

He further advocated for eco-friendly logistics measures to assist cross-border trade and encourage the switch from legacy diesel trucks to electric options. The appeal for investment in digitised, robotics-infused warehouse systems also resounded, reflecting the need to march in step with global changes.

In monetary terms, the estimated worth of Thailand’s logistics industry this year stands at 1.2 trillion baht, keeping in stride with the economic performance of the past couple of years. Conversely, due to the downturn in freight cost, the actual value is speculated to be lower. Suwit specifically noted that the cost of containers fell from US$5,000 during the height of Covid-19 to the current valuation of US$1,000.

Currently, Thailand proudly hosts approximately 34,000 logistics entrepreneurs within its borders, reported Bangkok Post.

Providing perspective on the matter, Phusit Ratanakul Sereroengrit, head honcho of the International Trade Promotion Department, stated that the all-encompassing logistics costs in Thailand represent about 14% of GDP, a figure considered relatively high. To rise above the international competition, Thailand’s objective is to trim this percentage, in line with developed countries where logistics costs are normally capped at 10% or less of GDP.

Phusit went on to indicate his department’s commitment to building the capabilities of eco-friendly logistics service providers and broadening their associations in different sectors ranging from manufacturing and services to exports. The goal is to ensure they hold their ground against the challenges thrown up by the dynamic global economic and social landscapes.

In a strategised move to showcase Thailand’s potential as ASEAN’s eco-friendly logistics hub, partnerships have been forged with RX Tradex and private sector participants to orchestrate the Tilog-Logistix 2023 event. The theme of the exhibition sums up the grand plan: Smart and Green Logistics for a Sustainable Tomorrow. The agenda includes equipping participants with the latest technologies, industry knowledge, robust business networks and opportunities.

Tilog-Logistix 2023 event will unfold from August 17 to 19, gracing Hall 98, Bitec. The exhibition is expected to showcase products and services from over 415 brands spanning 25 countries.