Be prepared for the free trade in logistics industry

Be prepared for the free trade in logistics industry

 

Thai logistics companies are urged to set up their strategies to be ready for the free logistics industry. At the same time the government should be encouraged to help fill the gap for building trust and strengths of Thai logistics service providers.

According to the announcement of ASEAN, 2015 is aimed to start its ASEAN Economic Community (AEC) and the free trade area policy has been planned for 5 service industries of health, computer and telecommunication, tourism and air freight in 2010 and logistics in 2013 and other kinds of service industries in 2015.

Therefore it is a great opportunity for logistics service providers to have their plan and strategies to be ready for the threat of international providers who might expand their business into Thailand. However it is a good timing if any Thai providers would like to extend their client base into ASEAN. Khun Somsak Wisetruangroj, President of TIFFA, said that Thai logistics provider should aware now of the benefits and the effects which might have upon their business as there are four steps of free trade called Modes of Supply which are Cross Border, Consumption Abroad, Commercial Presence and Presence of Natural Person. What Thai service providers should learn is restrictions of each mode.

Government urged to provide knowledge to Thai providers

 

AEC is a great opportunity and means bigger market for Thai business. Khun Somsak addressed that Thai businessmen should have a look of what other ASEAN countries are experiencing and they should try to understand the strengths and the opportunity. He also added that it is a good timing for Thailand to develop its business capability in ASEAN and world market.

Khun Somsak said that the government should pave the way to better understanding for Thai service providers, providing some background and knowledge of free trade in ASEAN.

 According to him, it is likely that warehouse business should be the most popular one which interests many providers. Air and sea freight services should remain unaffected.

Upward trend of logistics industry shows strong competition

 

In Mr. Somsak’s view the competition of the logistics and freight forwarder business is still fierce in both international and national levels.

For international level customers are big companies with a great variety of products and network worldwide. The market is highly competitive. The providers offer integrated services covering on-site operation, warehousing, inland transport, customs clearance and door to door international transport.

For national level the market is smaller but still highly competitive. The market covers non vessel operating common carriers (NVOcc) and customs brokers.

 

 

For the mixed level the competition between international and local logistics service providers is getting fiercer. The markets include inland transport, customs clearance and international transport.

Opportunities and threats in logistics business in 2012

 

Warehousing would be the major business according to the expansion of the Map Ta Pud and Eastern Seaboard projects. The land transport especially between the EWEC (R9) route is focused and the market will be getting bigger in the near future. Thailand will be the center of land transport of ASEAN connecting Indo China, Malaysia and China. However the threat is the restrictions of the state run organizations which may cause inconvenience for service providers.

 

Fill the gap and strengthen Thai logistics industry

 

Khun Somsak revealed that Thai logistics service providers still have lots of drawbacks comparing to big companies. In his views what we have to develop are to amend the customs acts related to overland transport and status guaranteeing, to enforce the VAT of 0% for international logistics, to share knowledge and explain the ASEAN Framework Agreement on Multimodal Transport, ASEAN Framework Agreement on the Facilitation of Goods in Transit, ASEAN Framework Agreement for the Facilitation of Inter-State Transport and GMS -Cross Border Transport Agreement (CBTA), to give better understanding the liberalization of logistics business sector and to set up standard for skill certification of logistics in order to encourage Thailand to be a regional hub.

 

 

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