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Published on October 11, 2007

The move is to defend against an invasion of large international logistics firms, which are expected to gain greater market dominance in Thailand.

Considered as one of the country's fast-expanding businesses, the logistics sector has shown a growth rate of 8 per cent annually, worth Bt500 billion. In comparison, this year's overall economic growth rate is expected to be 4 to 5 per cent.

Registered with initial capital of Bt5 million, the TLA was founded on August 24, supported by the Business Development Department and the Centre for Logistics Excellence.

The TLA is the first-ever cluster for small and medium-sized firms in the logistics industry, aimed at increasing their business strength and eliminating weaknesses.

Its chairman Chumpol Saichuer said the alliance would provide clients with one-stop service as a third-party logistics service provider that can compete with large foreign firms.

The TLA is held equally by 30 companies, each of which has more than 20 years of experience in four main areas: inland transportation, customs clearance, freight forwarding and warehousing.

"We have PTT as the first client to provide chemical logistics," said Chumpol, adding that the TLA was also in talks with PTT Exploration and Production to provide logistics service.

Formed as a business alliance, the TLA has such strong points as an acquisitive instinct, experience and capacity, he said. The group has combined registered capital of Bt300 million with assets of 1,700 trucks nationwide worth more than Bt3 billion. Overall, the group generates an income of more than Bt2 billion a year.

"We're a group of Thai entrepreneurs who want to provide logistics service to clients, providing them with reasonable prices and satisfaction," said Chumpol.

He added that each TLA member, who are also shareholders, may provide only one area of logistics service to their clients. "When operating, the TLA will serve as a flagship brand for logistics services provided as solutions or packages," he said.

In addition, Chumpol said these solutions would save clients more on costs than the other providers because there are synergies among the 30 companies for administration, allowing the TLA to bring down overheads.

 

In terms of organisational structure, Pongchai Athikomrattanakul, director of the Centre for Logistics Excellence, said that the company would operate similarly to the airline industry's Star Alliance, which pools and distributes appropriate jobs to its members.

He said the TLA was designed to have two committees: one for policy and business direction and another for day-to-day operations. The operational panel will be responsible for seeking clients, distributing jobs to suitable members, and auditing work distributed to the members for quality standards.

Pongchai added that each TLA member could continue to provide services to its clients if the services fall within its ability to do so. If not, they will have to send clients to the TLA.

Chumpol said the TLA expected to expand into new market segments by focusing on chemical products.

"We expect the TLA's income to reach Bt4 billion, breaking down into petrochemical products and spare parts at Bt500 million each, consumer products and the industrial sector at Bt1 billion each, and the rest for other sectors," said Chumpol.

He said that the TLA planned to list shares on the stock market in the next three to five years.

Business Development Department deputy director-general Sutisak Laohachewin said the TLA was formed under the department's programme to increase competitiveness for SMEs.

He added that the logistics sector was becoming important for the economy in terms of trade value and foreign direct investment.

Among the 30 companies in the alliance are Alfright International, Apidamrong, Appa Forwarder, Better Logistics System, Customs Freight Forwarder, Deutsche Freight Logistics, Far East Reefer & Logistics, Four Group Shipping, Freightway International, and Good World Logistics.

Sasithorn Ongdee

 The Nation