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Published on October 31, 2007

Needless to say, this cost is added on to product prices. If the cost were lower, products would be cheaper.

What can reduce logistics expenses?

Many say that an efficient rail network could.

But for years - except for the subway and the Skytrain - Thailand has never embarked on any new rail construction, either in Bangkok or upcountry.

At a seminar last week, Ekniti Nitithanprapas, director of the Fiscal Policy Office's Macroeconomic Analysis Group, said one of the main policies the new government must focus on is the improvement of the railway infrastructure.

While saying this is a priority, he raised an example of why Thailand needs to do so if it wants to reduce its logistics costs.

Thailand's rail network has a combined length of more than 5,000 kilometres nationwide. However, due to a single-track system, many trains have to wait for their turn and this causes huge inconvenience for the shipment of goods by rail.

Moreover, the narrow-gauge railway means weak locomotives.

Ekniti said he had learned it can take a lot of time to transport cement from a plant in Kaeng Khoi in Saraburi to Laem Chabang port in Chon Buri.

First, the train must wait for its turn to travel on the single-track route.

Second, low-powered locomotives cannot climb hills.

They need to unload part of the cement at the foot of the hill, climb the hill with the remainder, then come back and load the parked cement and make another trip.

This explains why we still see cement trucks on the road despite skyrocketing oil prices.

achara_d@nationgroup.com

The Nation