Logistics infrastructure to be expanded across Thailand

Thai cargo warehouse

Thailand’s logistics infrastructure is being upgraded and this is an area Thai Airways International is focusing on and is a key part of its strategy to expand and improve its cargo operations, writes Michael Mackey.

The mothership of what is being planned in Thailand is the Eastern Economic Corridor (EEC).

Basically, the North East Gulf of Thailand is to become a new industrial hub, but one of high-tech value adding industries which need air cargo support. This will be provided by the development of the airport at U-Tapao.

Thai is aware of the opportunity and the work it involves and again the approach it is taking is multi-pronged with some infrastructural and some strategic initiatives already underway.

“We are going to be building up the small warehouse….The first one is going to be one third of the Suvarnabhumi warehouse,” Thai’s managing director of cargo and mail department, Dumrungchai Sawangcharoen said.

There are two things to note here. U-Tapao as a facility is owned by the Royal Thai Navy whose ownership, might, even under a military government complicate things. There is also some feeling U-Tapao and the entire EEC is complicated by the government pushing it through under Section 44 – its special powers legislation.

Within Thai two specific problems have arisen. The government wants a study on what Thai plans for U-Tapao and fast. The government would like it finished by the end of this year and implemented next, one Thai official, who asked not to be named, said. “I’m not sure we can do it,” added the official.

Another part of this is Thailand’s complicated Public Private Partnership process, the step after, which the official said was “quite hard” and “long”.

That said by one official others are looking at Thai needs to do to tap the market there well might be although Thai acknowledge they won’t win it by right. “We have to build up the demand at U-Tapao,” acknowledged Sawangcharoen.

On the cards is not a package of incentives but a strategic alliance with other freight companies with overseas carriers very much to the fore. This is very much fresh territory for Thai.

“We have to look at freighter airlines that want to fly into U-Tapao and carry goods from the EEC,” said Sawangcharoen who added that Chinese firms were very much on the top of the list. “We have talked to Lazada –but its very early stages,” he added.