Warehousing seen as rising star in tough year

Yet, the industry contributes about Bt800 billion or 10 per cent to gross domestic product (GDP), following the tourism industry with 15 per cent.

Amid the general gloom, warehousing is seen as a rising star for this year, or at least for this quarter. That can be attributed to the temporary closure of two major airports in Bangkok - Suvarnabhumi and Don Mueang.

"Many warehouses have expanded since November to serve higher demand for product storage," Chumpol Saichuer, chairman of the Thai Logistics Alliance, said yesterday.

Warehousing is one of the country's four major logistics services. The other three are land transportation, customs clearance and freight forwarding. Chumpol said customs clearance brokers, which are managed by and mostly owned by Thais, would be the hardest hit from intense competition. Customs clearance is now considered as

just another service included in

the comprehensive solutions packages offered by large logistics providers.

"Firms that only do customs clearance can't survive in the near future," he said.

 Some of the 200 independent customs clearance brokers in the country have become mere subcontractors for other firms, he said.

The freight-forwarding business will also be in the doldrums as it is related directly to exports, he said. According to the Commerce Ministry, the country this year expects to see its exports grow at 3 per cent, compared to their double-digit pace of the past few years. Exports account for 65-70 per cent of GDP.

For land transport services, representing 80 per cent of all transportation modes, there are three main markets - consumer products, construction projects and exports.

The country has 700,000 transport vehicles, most of which are dominated by large firms.

Transporting consumer products by truck, though it might show a slowdown, will still do well this year with a growth rate of 10 per cent, against 20 per cent last year.

Trucking services that carry cargo containers for export will be the most affected from the global economic crisis. The slump in global spending power has led to declining demand for shipping products and goods.

The transport of building materials will also flounder this year in line with the shrinking of the property industry, Chumpol added.

Ruth Banomyong, an associate professor at Thammasat Business School, said the school now expected the country's logistics costs, mainly comprising oil, transport and storage, to fall to 21-22 per cent per GDP last year, lower than its projection of 24 per cent.

For this year, logistics costs per GDP will not improve further, staying at 21-23 per cent.

The school's forecast is somewhat higher than the view of the National Economic and Social Development Board, which estimates 21 per cent this year.

Tanit Sorat, vice chairman of the Federation of Thai Industries, suggested earlier that if operators turned to alternative energy, that would cushion them from the oil-related effect if the global oil price soars again in the future.

This year operators will suffer, he said. Some ominous signs are the empty trucks parked at Laem Chabang Port, while many vessels are not fully loaded with export products.