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NAREERAT WIRIYAPONG
Skyrocketing global oil prices and intensifying competition in international trade have prompted Thailand to sharpen logistics competitiveness to lower manufacturers' costs and cut the kingdom's import oil bills. With a road network nationwide of 190,000 kilometres compared to just 4,000 km of railways, Thailand has relied heavily on road transport, accounting for almost 88% of total transport use, while the remaining 12% is divided among marine, rail and air modes.
In fact, road transport is the least-efficient means of transport, consuming one litre of petrol for 25 kilometres compared to 85 km and 217 km, respectively, for air and marine transport, according to the National Economic and Social Development Board.
All told, when other factors including road repairs necessitated by the prevalence of overloaded trucks are factored in, road transport costs eight times more than marine shipments and three times higher than using the rail system.
Oil prices, which jumped by $60 in the first five months of this year to above $120 a barrel, have focused concern on Thailand's energy use, of which 35% is consumed by the transport sector.
Currently, logistics costs amount to 19% of Thailand's gross domestic product _ much higher than in neighbouring countries such as Malaysia. In Japan, logistics costs make up only 8.7% of the GDP. The National Economic and Social Development Board (NESDB) aims to bring the figure down to 16% of GDP by 2011.
To achieve the target, the think-tank plans to speed up construction of mass-transit rail lines in Bangkok and develop dual-rail and high-speed train routes linking the capital with major provinces, with further links to neighbouring countries and onward into China.
Additionally, a deep-sea port on the eastern Andaman coast has been planned to reduce the period for shipping goods to and from Thailand to key destinations in Europe and the Middle East.
The government, meanwhile, has instructed Thai Airways International to move ahead with its plan to set up a cargo airline to increase the speed of Thai exports to international markets. It also aims for greater utilisation of both Don Mueang and Suvarnabhumi airports in terms of cargo movements.
An NESDB paper cited inefficient transport as the major obstacle to improving the logistics capabilities of strategic industries. As well, business operators do not have enough appropriate depots and distribution centres to serve their needs.
''Trade and transport facilitation need to be upgraded to help bring down lead time and fixed costs. Both the government and the private sector to seriously look at in order to maintain trading with the country's major trade partners,'' the NESDB paper said.
By improving logistics efficiency and promoting alternative fuels, such as NGV, gasohol and biodiesel, the government aims to cut oil consumption by 10% in 2009 and 25% in the transport sector.
However, the expansion of NGV outlets has not kept pace with fast-rising demand. Currently, NGV is available at 200 service stations nationwide with the target to increase to 247 outlets by July 2008.
Toyota Motor Thailand, the country's biggest auto maker, said earlier that NGV demand rose by 190% in 2007 while the number of NGV outlets expanded by only 60% over the previous year.
The carmaker currently uses NGV for 40% of its inbound logistics, as the fuel is up to eight times cheaper than diesel.
Citing the need for higher technology to help improve logistics efficiency, authorities have also looked at the possibility of liberalising the logistics industry under the World Trade Organisation (WTO). Foreign ownership is currently capped at a maximum of 49% for logistics service operators in Thailand.
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