The Thailand Post's revision of the Postal Act aims to create better regulation of postal and logistics services, improving service quality for consumers in line with the current business landscape.
The revision calls for the establishment of a new postal regulatory agency similar to the National Broadcasting and Telecommunications Commission.
Postal services are currently regulated by a committee under the Digital Economy and Society (DES) Ministry, comprising representatives from various state agencies.
Q: Why does the law need to be revised?
The DES Ministry directed its working group and Thailand Post to revise the arcane Postal Act of 1934, conforming with dramatic changes in the postal landscape.
The draft is expected to be completed in March 2025, said Thailand Post president Dhanant Subhadrabandhu.
The ministry launched a public hearing on the bill's principles on Nov 29, 2024.
Wisit Wisitsora-at, DES permanent secretary, said the law does not account for the technology that has increasingly affected the industry.
He said the law must be revised for a digital economy. The draft is also expected to foster the country's competitiveness and upgrade service quality, said Mr Wisit.
"The Postal Act has not been revised for almost 100 years and needs an update. The revision should help to reshape the competitive landscape and benefit the country," said Mr Dhanant.
He said competition in the local express delivery market continues to intensify, starting in 2022 when several foreign players in Thailand launched below-cost pricing strategies.
Mr Dhanant said the strategies affected the market landscape and could damage the logistics ecosystem in the long term. This competition affected service quality in the parcel delivery market, he said.
Mr Dhanant said the express delivery business must be properly regulated to prevent below-cost pricing practices and to create a guarantee of service quality for consumers.
From 2022 to 2024, the express delivery market was estimated to post average annual growth of 11.2%, he said.
Q: What are the additions to the new law?
The amendment focuses on drafting principles for the new law.
Mr Wisit said the ministry's team and Thailand Post have studied the law's details as well as parcel delivery service regulations in both Europe and Asia in order to draft the principles.
The ministry hired the University of the Thai Chamber of Commerce to organise all the public hearings of the draft.
"The recent public hearing covered the draft's principles. Later hearings will cover other aspects of the draft," he said.
Mr Wisit said the principles encompass several categories, including setting a direction for new postal policies in a diverse industry, as well as the scope of supervision for related services and businesses.
The amendment will also shape Thailand Post's future business operations, especially in terms of social services and existing services that only Thailand Post has been permitted to offer, he said.
Certain service segments are being considered for private sector competition, opening up the market, said Mr Wisit.
All postal service and parcel delivery services should be supervised and regulated, he said.
Once the new law is completed, an organic law will be drawn up to supervise the operations of all relevant sectors to comply with the principles of the draft, said Mr Wisit. The organic law covers the business registration system, business operations and pricing of services.
The draft will go through many vetting and approval processes, requiring some time before it takes effect, he said.
Mr Dhanant said the amendment and a new organic law will lead to the establishment of a new postal regulatory body.
He said foreign logistics businesses and e-commerce operators and their majority stakeholders have accelerated their market share expansion in the Thai supply chain, regardless of the losses they incur.
The gross merchandise value (GMV) of Thailand's e-commerce sector gained momentum and is projected to grow by 19% to US$26 billion in 2024, up from 9% growth the previous year, according to a report jointly produced by Google, Temasek and Bain & Company.
The GMV of the e-commerce sector is projected to reach $60 billion by 2030, driven by the rising popularity of video commerce, as interactive shopping experiences and engaging content captivates Thai consumers, fuelling online sales.
Mr Dhanant said without proper regulations governing the express delivery business, the market would be at extreme risk of monopoly, leading to bad outcomes for consumers in the near future.
"Thailand Post expects the amended law will directly help create a more healthy business ecosystem, with fair competition and optimum benefit for the public interest," he said.
Thailand Post held the largest share with 27% of the domestic logistics market last year, with foreign operators dominating the rest, especially those from China.