Firms told to seek foreign partners

Thailand’s logistics industry is being urged to seriously look for foreign partners to raise its competitiveness.

Given the poor resources of many Thai operators, especially small and mediumsized enterprises (SMEs), the issue is particularly urgent with the imminent arrival of the Asean Economic Community (AEC), said Thanit Sorat, president of logistics operator V-Serve Group.

“Currently, we have around 12,00013,000 SMEs involved in the logistics industry. However, the poor condition of many of them is a cause for concern, particularly once the AEC arrives at the end of the year,” he said.

He added that most Thai SMEs share the same problems — a lack of capital and lack of technology.

“We believe that such SMEs could be developed and stay afloat if they have the right strategic partnerships with international companies,” he said.

According to Mr Thanit, a lack of human resources is one of the key stumbling blocks of the logistics business, as only a handful of institutes provide logistics on their curriculum and courses only focus on theory, without on-the-job training.

Charnvit Amatamatucharti, deputy secretary-general of the National Economic and Social Development Board, said logistics costs are expected to drop to 13% of GDP this year from 14.4% last year due to low oil prices and better management of the private sector.

However, he warned that logistics costs may increase to more than 13% of GDP next year once oil prices increase.

The government has set an ambitious goal to cut logistics costs by 2% in 2027 once the planned infrastructure development projects are completed.

Prime Minister Prayut Chan-o-cha’s cabinet approved an eight-year infrastructure development plan (2015-22) worth 1.91 trillion baht on March 27.

The new proposals cover a nationwide metre-gauge, double-track rail network, motorway capacity, Bangkok’s masstransit system and high-speed rail links between the capital and the East and the North as well as better connections between Bangkok and major tourist destinations upcountry.

Funding will stem mainly from the government’s fiscal budget, borrowing and a public-private partnership.