Thailand: ASEAN’s Key Logistics Hub
Thailand’s logistic market offering opportunities for companies located overseas as it is getting popularity as a regional supply chain management hub.
Thailand is the main ASEAN transport point and also a logistic hub. Thailand is located in Indochina and the Mainland Southeast Asia. It has Myanmar, Laos, Cambodia and Malaysia as its neighbor countries. Many foreign-based manufacturing companies want to set up their production in Greater Mekong Sub-region (GMS). They are particularly targeting Vietnam and Myanmar as their manufacturing location to reduce product cost for Asian countries. It is the result of raised product cost in ASEAN countries like China.
The search for alternative manufacturing bases in Southeast Asia, however, has not diminished Thailand’s role as a regional manufacturing powerhouse, while it also fulfills the role of a key logistics hub for Indochina. Thailand’s GDP has the largest share of export accounts and exports account of the whole country has 80% shares of manufacturing sector. Thailand is the largest automotive producer in ASEAN countries. It is also trading bloc’s leader in supplier countries for supplying electronics and its components. This supplied material then processed in other ASEAN countries. Thailand is the leading producer of electric appliances.
Thailand mainly exports electronics items. This electronic item list includes computer parts, integrated circuits, and all such electrical items. There is a tremendous increase in demand for logistic services in foreign. To meet this increased demand, Thailand plays the important role by increasing regional supply chain. With such increased regional supply chain, Thailand gets the second position in largest ASEAN exporters list. They export machinery, their parts and other components related to the machine. The services also manage all functions of the supply chain i.e. sourcing and distributing. In the session of the year 2009 to 2014, it is found that Thailand exports to ASEAN countries increased by 12% as an annual average. This annual increment is because of 20% growth in exports to neighbor countries Cambodia, Myanmar, and Laos.
With the discovery of a number of opportunities in Thailand’s logistics industry, logistic companies based abroad, like DHL, UPS, etc. are trying to get into Thailand. Some of them have already made the road to entering in Thailand’s logistic industry. Thailand has enhanced it market situations and expanded its services as the country stabilized with respect to politics in the year 2015.