Hitachi will ship more cargo, not fly, to cut costs

Hitachi Global Storage Technologies (Thailand), one of the country's largest exporters, has partially shifted its transportation mode from airfreight to liners to offset higher costs due to soaring oil prices.

Deputy managing director Nakorn Tangsujaritpun said the company, which previously used to ship all its hard-disk drives as air cargo, has begun to send the products by sea since late last year, as oil prices have continued to touch new highs.

Situated on a 127-rai complex in Prachinburi, Hitachi GST is the largest hard-disk drive production base of the company, accounting for 58 per cent of the company's global output last year.

With export revenues of US$2.8 billion (Bt93 billion) last year, the company is also one of Thailand's largest exporters.

But as  il prices eat into its slim profit margin, Hitachi GST has begun shifting to marine transport, which is significantly cheaper than air transport. At present, about 6 to 8 per cent of its hard drives are exported through ships and the figures are to rise to 12 per cent this year, Nakorn said.

The company had to adjust its production-planning schedules because of the changes made from airfreight to shipping.

Nonetheless, Nakorn said, for short distances, such as shipping to Singapore - which is a Hitachi logistics hub - exporting by ship takes only a day longer than when sending the products by air. This is because airfreight procedures require goods to be parked one night before shipping.

Besides shipping, Hitachi GST is also exploring the possibility of using trucks to deliver hard drives to Dell's personal computers factories in Malaysia instead of using air cargos, he said. 

Hitachi GST's Prachinburi plant assembles 2.5-inches and 3.5-inches hard drives for notebooks and desktops, respectively, as well as the rugged, road-ready Endurastar hard drives for car navigation and other applications.

Official statistics from Airports of Thailand showed domestic air-freight volumes had dropped by a significant 44 per cent in the first four months of the year, to 8,934 tonnes.

Nevertheless, international airfreight from January to April was still increasing by 8.16 per cent - when compared to the same period last year - touching 417,367 tonnes.

General manager of electronic-components maker Nidec Copal (Thailand) Apichat Dangbuav said his company, which exports most of its products back to Japan, has continued to ship by air.

      At a glance

the ground reality:

n Statistics from Airports of Thailand showed domestic airfreight volume had dropped by a significant 44 per cent in the first four months of the year, to 8,934 tonnes.

n But international airfreight from January to April increased by 8.16 per cent touching 417,367 tonnes.