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Published on July 23, 2007

Many logistics-related companies have adjusted to competition from large foreign firms with deep pockets and great expertise.

With the Asean Economic Community's (AEC) services market liberalisation, Thailand will have to open its service sector, including logistics, to other Asean members.

Association president Jarupat Tantimit said that once the services sector, including logistics, opened, the small service-providers, mostly Thai-owned, would be the most affected.

Apart from the customs clearance, Jaurpat said many members provide logistics services, including freight-forwarding, transport, and warehousing, and 80 per cent of them concentrate on freight-forwarding and customs clearance.

About 60 of the 200 as-sociation members are small companies with registered capital of not more than Bt10 million. Some 40 per cent are medium-sized joint ventures.

About 2 per cent is represented by the big four express-consignment firms DHL, FedEx, UPS and TNT.

Jarupat said the schedule package of specific commitments under the Asean Framework Agreement on Services (AFAS) had not been finalised. The next round of meetings will be in Indonesia.

The package, to come into initial effect next year, will be fully liberalised in 2013 under the commitments. In the customs-clearance business, the ceiling of foreign shareholding will be raised to 70 per cent.

However, the previous meeting indicated that there were no limitations on national treatment for customs-clearance services as long as foreign-equity participa-tion did not exceed 49 per

cent.

In addition, a customs broker must be a Thai national and obtain a licence from the Customs Department.

An industry-watcher said custom brokers had already been hit by the government's launch of a direct electronic customs service to cargo-owners.

Some said they were still able to work as consultants, processing cargo-owners'

e-customs documents, though revenues from customs clearance tended to be thinner.

Many companies have tried to shift their focus from customs clearance to other areas such as free-zone warehousing near Suvarnbhumi Airport.

Like other firms, Shipper ThaiSomdej Group has announced that its core business will soon be duty-free warehousing on a 2,640-square-metre space at Bang Pakong in Chachoengsao province.

Eternity Grand Logistics, which provides the full range of logistics, is now looking at multi-modal shipment services focusing on inland transport on the northern route. It now provides inland transportation, customs brokerage, warehouse and distribution and inter-business consulting.

Best Bonded Warehouse Co Ltd is also building up a distribution centre with an investment of up to Bt6 billion to serve cargo shipments from southern China and Indochina on 200-300 rai near Suvarnabhumi Airport.

In the meantime some are looking for strategic partners by either offering a stake in their business or setting up a new joint venture.

However, thousands of small customs-clearance firms are still not members of the association. "They are too small to access the funds to expand," said the association's president.

Sasithorn Ongdee

The Nation