The logistics industry has been rapidly growing in Thailand, reaching a market size of $61.87 billion in 2020. The international trade is also booming with a significant rise in imports and exportations in recent years. All of this leads to the growth of the logistics market and how it will play a major role in the future economy of Thailand. Here are some trends and insights you need to know about the Thai Logistics Market:
The Thailand Logistics Market
The market has come a long way in the past two decades. Thailand’s rapid GDP growth and increase in trade has resulted in a significant increase in the number of logistics companies in the country. The Thailand Freight Forwarding Market size is expected to reach around $100 billion by 2026 with an annual growth of 6% percent.
Transport and storage
Transportation, shipping, and storage are the key areas where logistics services are available. Moreover, the top-performing logistics companies in Thailand focus on operating in these areas as a priority. As of 2021, Bangkok is the hub for most transportation in Thailand. A variety of modes of transport, such as bus, train, waterways, and roadways, can be accessed within the vicinity of the city. Roadways were the largest transport sector in Thailand.
Bangkok was the main gateway for exports in 2020. In addition, the city has an extensive port and a port system that can support massive tonnages. In 2020, there were around 1,800 registered companies operating out of the Port of Bangkok.
Due to the increasing demand for online shopping, there has been a growing number of shipping containers moving in and out of Thailand. A majority of the cargo that is shipped in and out of Thailand is in the form of food, consumer goods, retail products, and more.
In 2020, the total Thai container shipment came in at over 9.57 million TEUs, which indicates a decrease from the previous year.
International trade
A lot of companies in Thailand rely on sea transport to transport their goods. The marine industry is especially important to the country’s economy. Thailand has the second largest number of shipyards in Southeast Asia behind Indonesia. This number stands at 22, but the country’s shipbuilding capabilities are starting to improve.
Currently, the country’s marine infrastructure is not comparable with its competitors in the region.
The growth of the international trade could result in a growing Thai economy. The Thai government is strengthening the logistics system to boost trade as the supply chain reaches new heights. With the rising demand of various commodities, the supply chain becomes complicated as the logistics firms need to meet requirements and fulfill order demands quickly and seamlessly.
The vastness of Thailand is an obstacle in the logistics industry as the distances between the airports, seaports and rail stations are daunting and needs a lot of time and resources. With Thailand being one of the most promising economy in the region, logistics firms are sure to grow exponentially in the coming years.
Supply chain
Thailand’s logistics industry is set to experience huge change in the near future. Both government and the private sector are working on upgrading and modernizing the system to facilitate the logistics process. These improvements are required to facilitate and secure the shipment of goods into and out of the country. The country is focusing on aligning its logistics sector with international standards, such as safety and efficiency, to create a supply chain that is able to handle even the most demanding transport operations. Furthermore, Thailand is a major producer of electrical goods and petrochemicals, which will play a large role in the future. The import and export of these products will help boost the logistics industry in the country.
Future trends in the market
Thailand, like many other countries, is seeing a shift toward e-commerce and logistics. Alongside these trends, increasing social media usage and internet connectivity are also impacting the industry.
The second-largest economy of ASEAN, Thailand, has one of the region’s highest number of internet users. There are around 57 million internet users in the country who are well-versed in the use of digital technologies, mobile, and e-commerce. The expanding internet user base has made Thailand an ideal growth environment for e-commerce businesses.
Some other trends in the Thai logistics market include the rising demand for high-speed air cargo transportation, the growth in the demand for food logistics, the emergence of autonomous trucks, and the emergence of retail giants such as Alibaba.
The U.S. trade deficit with Thailand is decreasing, which means that the country imports less than it exports. This has a direct impact on the logistics market, which supports exports and imports. The past five years have been difficult for trade with the United States, but Thailand has proven to be a good alternative. Thailand will continue to be a good option because its economy has high growth potential and it exports a variety of products including clothing, pharmaceuticals, and electronic goods.
As the goods economy expands, more value-added products are required. Thailand is manufacturing more high-end products including consumer electronics. The growing e-commerce sector will have a profound impact on the logistics market.
