Skepticsm over ambitious plan for railways

Will Transport Minister Sophon Saram's recently announced policy to shift the focus of the nation's inland transport system from road to rail within six months be short-lived?

Sophon wants railways to account for 30 per cent of the nation's transport system within six months, up from not more than 10 per cent currently.

Logistics service operators told The Nation that they agreed with the goal, but doubted it could be achieved in such a brief time, and encouraged the government to work on a policy to support the logistics industry in the long term, instead.

Among the reasons for the operators' scepticism regarding the achievability of boosting the country's reliance on rail in such a short time were: a lack of efficient facilities and equipment at State Railway of Thailand (SRT); the one-way nature of much rail transport; and an easing of world oil prices.

Those involved in the logistics industry have been aware for years that SRT lacks proper facilities and equipment for loading goods onto trains and delivering them to customers' doors. That's why trains have generally been used to carry passengers, rather than goods.

"It would be impossible for the private sector to rely upon rail for 30 per cent of its transport needs in six months," said Jarupat Tantimit, vice president of the Thai Licensed Customs Brokers Association.

The private sector used to transport goods by rail but suffered large losses as a result of SRT's failure to develop its services and equipment, she said, adding that SRT does not have enough engines.

Trains have only been used to ferry goods from one station to another, she said. The parties transporting the goods would have to supply the equipment to unload containers themselves, along with any vehicles needed to get the goods to their final destinations.

Nopporn Thepsithar, senior vice president for logistics and exports at the country's second-largest cement producer, Siam City Cement (SCCC), said the government might be able to meet a less ambitious target by offering promotions to encourage enterprises to transport their products by rail.

"If the government wants to expand the proportion of rail use for transport to 30 per cent, it will have to offer steep discounts," he said. "Encouraging the use of rail needs a long-term master plan. It might take three to five years to increase the use of trains."

Nopporn suggested the government establish and implement such a long-term master plan, which he said should focus on developing infrastructure. "It's a structural problem," he said.

The government should select certain products to transport by rail as a pilot project, he suggested. The most suitable products would be commodities such as steel, cement, para rubber and sugar, he said, adding that to transport them efficiently, the government should establish warehouses for these products.

In addition, transporting products by rail is less efficient because it does not ensure two-way transport. Most enterprises try to reduce their transport costs by ensuring a truck making a delivery returns with a second load of goods.

Nopporn said SCCC has pooled its fleet of trucks with those of allied firms to carry products such as sugar, steel, paper and coal on return trips in a bid to avoid trucks making trips without any loads.

Tipp Dalal, CEO of Tripple i Logistics Group, agreed in principle with the government's policy of using more rail transport. "There was much talk of relying more on rail transport during the world oil price spike," he said.

Piyanuch Samrith, managing director of NIM See Seng Transport 1988, said after the recent launch of Siam Logistics Alliance (SLA), a grouping of 26 logistics companies that have pooled their resources to gain a competitive edge, that private companies did not have the time to wait while the government developed a policy in support of the use of rail transport.

"We set up the SLA to share resources of our 26 members in a bid to reduce costs," she said, adding that the alliance still relies mainly on road transport.

According to a survey conducted by the Department of Alternative Energy Development and Efficiency on the country's oil and gas consumption in 2007, refined oil and natural gas accounted for most of the consumption.

 Consumption of refined oil was about 40.9 billion litres, of which 69 per cent was used in the transport sector.

Within the transport sector itself, 79 per cent of consumption was by land transport, 16 per cent by air and 5 per cent by water. About 99.5 per cent of land transport was on the county's roads, with rail accounting for the rest.

Supporting the country's logistics industry is considered crucial to reducing the nation's oil consumption.

Will the policy of Transport Minister Sophon Saram to shift the nation's inland transport focus from 'road' to 'rail' mode within six months that announced recently be only a short-term policy?

He wanted the portion of using 'rail' up to 30 per cent within six months from not more than 10 per cent currently. The rest is by road.

Logistics service operators talked to Sasithorn Ongdee that they really agreed with the idea though it could hardly happen in the period of time as targeted. At the meantime, they suggest the government should have a policy to enhance the logistics industry in the long term instead.

Several seasons for supporting the argument that it must be hardly possible to use much more 'rail' in the short time are as follows: lacking efficient facilities and equipment at State Railway of Thailand (SRT);inability of double handling; andlowering of the world oil prices

As being aware in the logistics industry for years that SRT has a lack of such efficient facilities and equipment that use for loading up or down goods and products from the train or delivering them to the customers' doors. That's why 'rail' has been carried passengers rather than 'goods and products'.

"It could not happen that the private sector to use more 'rail' transport so that its portion arises to 30 per cent in six months," said Jarupat Tantimit, vice president of Thai Licensed Customs Brokers' Association.

She said the private sector used to transport their goods and products by rail but experiencing a huge loss, resulting from the fact that SRT never develop its services and equipment. It also has an insufficient number of locomotives.

The authority, she added, just carried the goods and products from one station to the other station. Service users themselves would have to seek for any equipment to discharge the containers from the train and any tow cars to pull the containers to the end destination.

"Never just-in-time of the train is another factor that might cause more opportunity loss to the companies," said Jarupat.

Nopporn Thepsithar, senior vice president for logistics and export of the country's second-largest cement producer Siam City Cement Plc (SCCC), said that the government might meet a little target if it exploit any promotions to encourage enterprises to transport their products by 'rail' instead of by 'road'.

"If the government wants to expand the portion of using 'rail' for transport up to 30 per cent, it will have to offer steep discounts," said he, adding that "Encouraging the use of rail needs a long-term master plan. It might take three to five years to raise the portion of using rail".

Nopporn suggested that the government should establish a long-term master plan and implement it continuously. The development should focus on infrastructure in parallel to SRT's operation support. "It's about structural problem," said he.

Moreover, it should select some products to transport by rail as pilot project. Most suitable products are such commodities as steel, cement, para rubber, and sugar, said he. To transport efficiently, the government should establish warehouses for these products.

In addition, when transporting products by rail, it's less conveniently than by road because it could not do a two-way transport. Most enterprises have tried to reduce their transport costs by not making an empty trip.

Nopporn said as for SCCC, the company has pooled the trucks with its alliances to drive back such as sugar, steel, paper and coals in a bid to avoid an empty truck.

Tipp Dalal, CEO of Tripple i Logistics Group, agreed in principle that if the government has a policy to use more transport by rail. "There were talks much to transport by rail during the world oil price," said he.

Meanwhile, Piyanuch Samrith, managing director of NIM See Seng Transport 1988, after the launch of newly registered Siam Logistics Alliance Co Ltd (SLA) that the private companies could not wait for the government's policy to support the use of rail transport.

"We set up SLA to share resources of our 26 members in a bit to reduce costs," said she, and adding that the alliances' major transports are still concentrated by road.

According to a survey conducted by Department of Alternative Energy Development and Efficiency (DEDE) on the country's oil and gas consumption in 2007, there were mostly refined oil and natural gas.

Refined oil consumption was about 40.9 billion litre, of which 69 per cent were used in transport sector and the rest was distributed in other sectors such as industry, agriculture, and household.

For transport sector, there were divided into by land transport 79 per cent, by air 16 per cent and by water 5 per cent. Of this, about 99.5 per cent of land transport were in the road mode meanwhile the remainder was in the rail mode.

To support the logistics industry was one of crucial suggestions to reduce the nation's oil consumption, amounted to 1,450 kilotons on equivalent in 2011, out of the total target of 3,413 kilotons on equivalent.