Page 58 - FoodFocusThailand No.159 June 2019

SEE THROUGH MARKET

5. Thailand’s e-commerce and logistics benefit from the government’s (WIPO) in Geneva).
attempt to position the country as a logistics hub in Southeast Asia in 7. The Thai government is working intentionally to improve water
response to the integration of the ASEAN Economic Community (AEC). transportation by improving piers to link various means of transportation
Within the community, internal trade is increasing intertwine. for people in Greater Bangkok. It tries to expand canals, rivers, and
6. Thailand’s logistics network has been well developed and well seashores to meet the standard that facilitates navigation. Recently, a
connected, linking supply chains and markets across the country to its new Bangkok-Nakhon Pathom boat route is open in Maha Sawat canal
neighbouring countries. and it will be enhanced as a logistics route in the future.
7. Navigation in rivers and seas can be conducted throughout the year
at low costs, which can be a good alternative for congested land Obstacles
transportation. 1. Water transportation lacks good management, which makes it
8. Shipping lead times and costs in Thailand are at advantage of other unpopular.
countries, which can attract more investments and generate more growth 2. SMEs are at disadvantage in terms of logistics, thus losing the
for online commerce (Source: BOI). competitiveness.
9. Now, there are more than 100 players in Thailand’s logistics sector. 3. Rail transportation, which links to other countries, fail to highlight
Considering the growth of online stores, it is expected that more players the importance of mailing service. This makes Thailand losses the
will come in, which will intensify the competition especially for costs, thus opportunity to penetrate e-commerce sector in other countries.
benefit online businesses.
Adjustment
Weaknesses 1. The Thai government could consider supporting SMEs in terms of
1. The supply chain linkages in Thailand rely too much on roads, leading logistics such as applying Pracharat Shop network across the country
to traffic congestions, especially during long holidays. This causes several as a distribution channel for online SMEs. For example, buyers can place
losses from accidents, insurance, and pointless time consumption. In many an order online and pick up items at one of the Pracharat Shops close
developed countries, most transportation networks rely on railway. (Notably, to their homes.
transportation via railway accounts for only 2% of overall transportation in 2. In long term, the Thai government can establish Pracharat Shop
Thailand). in the border provinces to facilitate e-commerce to penetrate markets in
2. The WHO reveals that road accidents in Thailand kills the second the neighbouring countries.
most in the world and only following Libya. Each year, more than 36,000 3. As rail transportation is quickly developing, linking Thailand to the
people die in road accidents in the country. (Source: Fitch Solutions) world, the government should encourage the State Railway of Thailand
3. Water transportation needs more development in terms of speed to pursue mail and delivery business. This will raise the competition in
and capacity to handle more goods. the logistics sector, ease monopoly situation and reduce transportation
costs.
Opportunities 4. Thailand has the advantage that water transportation can reach
1. Thailand is a regional hub in terms of trade, as the country holds almost every province in the country, therefore, the government should
large manufacturing sector and good growth rate for consumption. This increase the capacity of water transportation. It can improve the standard
will benefit the continuous growths for e-commerce and logistics of piers along rivers and shores to support big ships, open new
businesses. transportation routes between Thailand and its neighbour countries (such
2. During the second One Belt, One Road Initiative Summit in Beijing as Ranong-Chennai (India), which can reduce time to travel through
on April 26, 2019, the Thai Prime Minister Prayut Chan-O-Cha declared Strait of Malacca), develop ports at Bang Pakong river mouth and Tha
to push Thailand forward as the center for logistics, linking Thailand to Chin river mouth to reduce congestion at Bangkok Port, upgrade Port of
China, and push for seamless connection between China and ASEAN. Kantang (in Trang province) to be international and reduce reliance on
The One Belt, One Road Initiative also allows Thailand to link its logistics Penang Port, improve ports in the Thai gulf (such as those in Songkhla
system to Asia, Europe, and Africa. province) to allow land bridge connection by road and rail from Kantang
3. Despite low costs, water transportation only accounts for 12% of Port to Ranong Port - linking the Pacific Ocean and the Indian Ocean
transportation in Thailand. The government is trying to improve this by together, expand main ports (Bangkok Port, Laem Chabang Port, and
building more ports and piers. Map Ta Phut port), and expand rivers to facilitate big ships all year round
4. The Eastern Economic Corridor (EEC) will benefit e-commerce and (Tha Chin river, Mae Klong river, Songkhla river, Bang Pakong river, Baan
logistics. Don river, Phuket river, Ranong river, and Kantang river). Moreover, some
5. More than 32 provinces in Thailand are connected to neighbouring regulations such as allowing international shipping companies to use
countries, which means a direct connection to Malaysia, Lao PDR, containers for domestic transportation should be issued to help business
Cambodia, and Myanmar (Source: BOI). Online trade from these provinces save costs. Generally, shipping company must take empty container to
can be conducted directly to the pick up goods to port and the container cannot be used for
neighbouring countries. other purposes other than what listed.
6. As the WTO pushes for new 5. Creating allies is very important for international
agenda such as an e-commerce e-commerce, therefore, the Trade Policy and Strategy
meeting, 76 members - including Thailand Office of the Ministry of Commerce has created a
- declare a joint statement to start negotiating project called “Strategic Partners for Industrial Trade
on e-commerce at the Informal Meeting of in 4.0 Era: From CLMVT to International”, which aims
Ministers on E-Commerce in January 2019 to improve and expand networks of e-commerce
in Davos. This will bolster international business in Thailand, CLMV, and the world.
online trade to be more affluent and ensure
that no buyers or sellers are exploited.
(Source: Sunanta Kangvalkulkij, Thailand’s
permanent representative to the World
Trade Organization (WTO) and the World
Intellectual Property Organization
58 FOOD FOCUS THAILAND JUNE 2019