Thailand Post to overhaul framework in modernisation efforts
Thailand’s Digital Economy and Society Ministry tasked Thailand Post with overhauling the outdated Postal Act of 1934. The initiative aims to enhance the regulation of postal and logistics services, aligning them with the current business environment.
The Postal Act of 1934 was the first comprehensive piece of legislation governing postal services in Thailand. It established the framework for the operation of the postal system, including the creation of the Post and Telegraph Department, which later became Thailand Post.
This move is expected to elevate service quality and reshape the competitive landscape within the industry. Thailand Post President Dhanant Subhadrabandhu indicated that the new draft of the legislation should be ready by next year.
He emphasised that the title of the new bill will differ from the original, reflecting the significant changes in the business landscape over the decades. The revision will foster a more competitive environment, ultimately benefiting the country, according to Dhanant.
“The Postal Act has remained unchanged for nearly a century and is due for a comprehensive update.”
The express delivery market in Thailand experienced increasing competition since 2022, driven largely by the entrance of foreign companies employing below-cost pricing strategies. This practice, deemed as predatory pricing by Thailand Post, has significantly impacted the market landscape and poses a potential threat to the logistics ecosystem if left unchecked.
Quality concerns
Despite incurring substantial losses, global logistics companies have managed to expand their market share in Thailand. These dynamics have led to concerns about service quality in the parcel delivery sector, which Thailand Post dominated with a 27% share of the domestic logistics market last year.
The remaining market share is largely held by foreign operators, particularly Chinese companies.
Dhanant highlighted the need for proper regulation to curb below-cost pricing practices and to ensure service quality for consumers. He warned that without such regulations, the domestic market might risk monopolisation, which could be detrimental to consumers.
“Thailand Post has been aware of these threats for a number of years, prompting the implementation of a turnaround roadmap.”
Apart from its delivery services, Thailand Post also plays a vital role in supporting local communities, especially during crises. It distributes medicines, medical supplies, and equipment nationwide, as well as delivers produce and goods from farmers to consumers.
Updating the Postal Act is seen as a step towards ensuring greater accountability from service providers regarding service quality.
According to Dhanant, the express delivery market is projected to witness an average annual growth of 11.2% from 2022 to 2024, underscoring the increasing importance of maintaining high service standards, reported Bangkok Post.
