After unveiling a logistics and supply-chain research programme supported by the Thailand Research Fund last week, many suggestions on the country's logistics development were proposed.

Thailand, being located strategically in Southeast Asia, should not overlook the opportunities from the trade pacts. The East-West Economic Corridor highway through the north of Thailand - linking Da Nang in Vietnam to Moulmein in Burma - is under development.

Additionally, Thailand is of course a trade partner with China, especially for fresh fruit, with around Bt5 billion in trade value between the countries. It is also a major exporter of para-rubber products to China, with a total value of Bt32 billion in 2005. Around 41 per cent of China's total rubber imports were from Thailand.

The research, conducted on the logistics of Thai products mainly exported from farms in Thailand to end users in China, consists of case studies of fresh fruits such as durian and mangosteen, as well as para-rubber. All modes of transport were taken into account.

The research found that logistics in Thailand is now "not systematic" and is without a central database. Most Thai exporters have sought their distribution channels by themselves, resulting in higher logistics costs and a lack of competitive edge. There are neither modalities nor formal databases that exporters can use in their decision making.

Kaewta Rohitratana, associate professor at Thammasat University's business school, who is the head of logistics research and study in China under the context of the Asean-China free-trade agreement, said that after tracing the transport routes of fresh fruit such as durian and mangosteen and also para-rubber from Thailand to China's ports, the problems found were

l no acknowledged buyers, as trading through brokers dominated

l no changes in transport routes that would lead to cheaper prices

l quality inconsistency as a result of seven days' transit time.

She suggested the government should exploit a focused strategy in potential areas such as Shanghai, Xiamen and Guangzhou in the south and east of China, to determine the best way to deliver products to targeted consumers. By doing this, Thai exporters would be able to plan to export their products at competitive prices efficiently.

According to the survey, almost 100 per cent of Thai fresh fruits were exported to China via Hong Kong port before transport to Guangzhou port and the huge fresh-fruit and wholesale Jiangnan Market in Guangzhou. About 90 per cent of Thai fruits have been distributed at the Jiangnan market, where retailers such as Lotus, Carrefour and small supermarkets buy them.

Kaewta said Shanghai and Xiamen ports should be good alternatives for fresh Thai fruit exported to China. From the study, transport to these ports took five days at maximum because there was no need to stop over in Hong Kong.

In addition, there are other potential distribution channels, including the Korean-based supermarket Trust-mart with the largest branch network in China, and wholesalers in the Tianpingjia wholesale fruit market, which is the second-largest customer of Jiangnan market. Thai fruits exporters could use these channels, the researcher said.

Tuanjai Somboonwiwat, an assistant professor at King Mongkut's University of Technology Thon Buri, said that before export to China, Thai fruits are mostly transported from two main growing areas, the east and the south, to Laem Chabang port.

She said the study found exporters always experience a shortage of vacant containers during the harvest season. It also found the best way to help exporters precisely forecast the use of containers in the country.

The researcher said Surat Thani port was taken into account for a new route to transport fresh fruit from Chumphon and Nakhon Si Thammarat to Laem Chabang port before exporting to China.

Now that around 80 per cent of total logistics costs are from domestic transport, the research team also suggested multi-modal transport to create possible routes with the cheapest costs.

Tuanjai said by adding Surat Thani port to the Chumphon-Hong Kong port route, the exporters would cut their transport costs by 4.5 per cent, down to Bt71,650 per standard 20-foot shipping container, while the Nakhon Si Thammarat route could save 17.4 per cent, down to Bt71,950 per container. However, the transit time would be longer.

The case studies on para-rubber products exported to China and border-crossing trade will be run in the next in the series.

Sasithorn Ongdee

The Nation