Ministry of Commerce calls for Logistics Industry to support local SMEs

Ministry of Commerce calls for Logistics Industry to support local SMEs

On March 16, 2018, Ministry of Commerce (MOC) held a brainstorm session with Thai logistics service providers, representatives from Department of Business Development (DBD) and Department of International Trade Promotion (DITP), including logistics related associations to discuss possible cooperation among Thai logistics service providers in supporting E-commerce express delivery services for Thai SMEs.

Mrs. Nuntawan Sakuntanaga, Permanent Secretary, Ministry of Commerce, said that there are a few number of global logistics service providers offering an express delivery services in e-commerce market currently. However, Thailand’s e-commerce market has grown significantly. Total e-commerce revenue across all product categories is 2.9 billion USD and it is expected to reach 5.3 billion USD by 2021. Besides, MOC foresee potential contribution of e-commerce to Thai economy, and then arrange the discussion to propose an establishment of the public-private partnership project to support shipment delivery for Thai SMEs, operating in E-Commerce business.

According to the discussion, Thai logistics service providers are cost competitive compared with the global companies. They are capable to offer services at low cost, be familiar with route and direction in particular regions and provinces and also be well equipped with transit hubs and network in upcountry. Moreover, Thai LSPs is able provide services covering variety of commodities, including agricultural products. However, the lack of integrated logistics solutions and effective logistics management are significant to competitiveness of Thai Logistics service providers. The use of technology in logistics management solutions from Technology Startup is one of the key action proposed in the discussion to improve overall operation performance, productivity and cost management. In addition, the extended issues in the discussion include proposal to establish standard framework in information management, standard cost structure for express delivery services and the digital platform that incorporates 3 elements of e-commerce business which are E-Marketplace, E-Payment and E-Logistics. The project also includes delivery service for OTOP and agricultural products to 20,000 Thong Fah (Blue Flag) Pracharat stores across country.

In 2017, E-commerce delivery service in Thailand is forecast to grow by 10% from 20 billion baht and e-commerce business generated an average of 1.5 million parcel shipments per day and the number rose to 2 million by the end of 2017.