The outlook for Thailand's logistics industry is expected to remain weak in the second half of this year, as the global and domestic economies have yet to recover fully, leading to poor purchasing power.
Tanit Sorat, an adviser to the Thai Federation on Logistics, said the fragile economic situation cut demand for logistics in the areas of consumer goods, farm products and exports.
Another risk is a stronger baht, which would not only weigh heavily on Thai exports but also reduce revenue in baht terms for outbound logistics services, which are normally charged in US dollars, he said.
Analysts forecast revenue in the agriculture and agricultural processing sectors will contract in the second half due to the poor domestic economy and severe drought, cutting into crop production and gutting lower-income purchasing power.
Mr Tanit expects demand for logistics in the export sector will contract by 15% in terms of revenue this year, as exports remain sluggish.
The Bank of Thailand estimates exports will contract by 1.5% this year, while overall GDP is expected to grow 3%.
The use of containers in exports, which had fallen below 10,000 units for more than 18 months, only exceeded 10,000 again last month, Mr Tanit said.
He expects government stimulus packages will help to drive the domestic economy in the second half, which could raise demand for transportation of goods, construction materials and other manufacturing products.
However, demand for transportation and logistics for crops remain a major concern.
Chanyarak Phetcharat, managing director of DHL Express (Thailand), said her company had to revise its business plan to match the changing situation and potential risks.
"We're more conservative in doing business, as this will be a tough year for the sector," she said.
"However, we hope to see signs of recovery in the second half, when the government's investment budget should have a positive effect on the economy."