The Thai freight and logistics market is projected to register a growth rate of 6% during 2022-2027.
Thailand, the second-largest economy in ASEAN after Indonesia, is an upper-middle-income country with an open economy. During 2019 and 2020, the country had been significantly affected by the COVID-19 pandemic and the related lockdown, leading to low consumption levels and disruptions in supply chains. Small-size and low-tech firms have suffered due to reduced orders and a shortage of inputs, including raw materials, owing to the disruption of the supply chain. However in 2021 due to Government lockdown relaxation and Government Schemes and policies to encourage consumer spending has driven the logistics market.
Express services are likely to become more significant in the near future as Thailand's economy becomes increasingly integrated owing to rapid growth in international trade services. Growth in the e-commerce industry may drive the express delivery market, owing to the rising demand for this service in the B2C business segment.
Land transport is a major domestic freight mode of transport in Thailand. As estimated, more than 80% of the total domestic transport is carried out by road freight. The major existing truck transport operators are small and lack the latest technologies. Moreover, most of these trucks run empty (on return trips), and if this is correctly developed, truck transport has abundant room for growth in the future.
With the evolution of the Asian Economic Community (AEC), Thailand's position as a transportation hub for the Greater Mekong Sub-region (GMS) has been strengthened. This initiative has increased the country's opportunities for cross-border trades and import-export shipments. The most dominant mode of transportation is road transportation. Fierce competition is expected to occur, as professional multinational logistics companies owned by foreigners are expected to use their competitive advantages to gain significant market shares and compete with local logistics providers. To withstand the competition, domestic logistics firms have to identify the risks pertaining to their services among the neighboring countries and find avenues to manage the risks.
Key Market Trends
Growing E-commerce Propels the Demand for Logistics Services
As incomes in the ASEAN countries steadily rise, the demand for consumer goods is created, with an evolved e-commerce ecosystem and increased spending of people in those countries. The second-largest economy of ASEAN, Thailand, has one of the region’s highest number of internet users. There are around 57 million internet users in the country who are well-versed in the use of digital technologies, mobile, and e-commerce. The expanding internet user base has made Thailand an ideal growth environment for e-commerce businesses.
The continued expansion of the e-commerce business has created a demand for logistics space and has brought significant changes in Thailand's supply chain and logistics operations. Many courier companies have launched their cost-effective and high-quality logistics services in the country and brought domestic end-to-end delivery to the market. Many other companies have established central warehouses and smaller drop-off and pickup points across the nation to sustain the rise in demand. For small and medium enterprises (SME), this means greater convenience and quick delivery to their consumers at a much lesser cost. Central Group, Aden, DHL Express Thailand, Kerry Express, Lazada, Pomelo, and Shopee are major e-commerce and logistics companies in the country. Additionally, the air freight handled at Thai airports is significantly increasing, owing to the ongoing demand created by e-commerce.
In Thailand, strong growth in downloads of apps of traditional retailers, such as the Charoen Pokphand Group Co. Ltd. and The Central Group's Big C hypermarkets and Tops supermarkets, suggests that the services may now be growing in familiarity beyond the Bangkok metropolitan area, where they have largely focused on until the pandemic, increasing the scope for expansion of the freight and logistics service in the country.
Thailand’s Emerging Automotive Industry Provides Opportunities for Logistics
Thailand offers excellent investment potential as a leading automotive production base in the ASEAN region, a fast-developing region for the automotive manufacturing industry. Over 50 years, the country has developed from an assembler of auto parts and components into a top automotive manufacturing and export hub. With shipments bound for around 100 countries, Thailand is the 13th-largest automotive parts exporter and the sixth-largest commercial vehicle manufacturer in the world, as well as the largest in the ASEAN region.
The country has virtually all of the world’s leading automakers, assemblers, and component manufacturers. Automotive logistics has rapidly become one of the most important sectors in Thailand, and it is still continuing to grow to this day. Recognizing the importance, ANJI-NYK logistics (Thailand), a leading automotive logistics provider, offers automobile manufacturers in Thailand end-to-end automotive logistics, focusing on the delivery of finished vehicles and automotive spare parts.
Auto exports performed very well in 2021, with unit export sales rising by 32.6% of production i.e., 857,887 vehicles. This Growth was mainly due to country’s reopening, support measures from the government to encourage consumer spending, including the 50-50 copayment scheme.
As per Industry Sources the production of new vehicles was highest in Nov 2021 i.e., 165,353 units, the highest in 12 months, but was declined by 4.1% from Nov 2020, but increased 7.4% Month on Month following covid lockdown relaxation.
The logistics market landscape of Thailand is fragmented in nature, with a mix of global and local players. According to industry sources, DHL holds a significant position in the Thai logistics market, with a foothold in air and sea freight and their expertise in 3PL services. Other global players, such as CEVA, DB Schenker, Nippon Express, Expeditors, Yusen, and FedEx, have a significant presence in the market in specific segments. Additionally, Japanese logistics companies are planning to expand their services in the market due to the rising trade and industrial activities. Global players dominate the Thai manufacturing industry, and these global players prefer global counterparts for their logistics operations. For instance, Japanese and Korean manufacturers in Thailand bring their domestic logistics partners or prefer to tie-up with service providers of the same origin. There has been a large number of mergers and acquisitions taking place, for eg: In Nov 2021 Muto Group Thailand had merged with Royal Den Hartogh Logistics, this merger will help Den Hartogh to Expand its Presence in Bangkok and near by areas and in Mar 2020, Yusen logistics Thailand Acquires AB Logistics-Thailand. This Acquisition will help Yusen logistics to expand its presence in Thailand.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
1.2 Scope of the Study
2.2 Research Phases
4.2 Market Dynamics
4.3 Technological Trends and Automation
4.4 Government Regulations and Initiatives
4.5 Value Chain/Supply Chain Analysis
4.6 Industry Attractiveness -Porter's Five Forces Analysis
4.6.1 Threat of New Entrants
4.6.2 Bargaining Power of Buyers/Consumers
4.6.3 Bargaining Power of Suppliers
4.6.4 Threat of Substitute Products
4.6.5 Intensity of Competitive Rivalry
4.7 Brief on Freight Rates
4.8 Insights into Eastern Economic Corridor (EEC)
4.9 Review and Commentary on Thailand's Relation with Other ASEAN Countries (Analyst's View)
4.10 Spotlight - Thailand Trade with Chinese Provinces
4.11 Impact of COVID -19 on the Market
5.1.1 Freight Transport
5.1.2 Freight Forwarding
5.1.4 Value-added Services and Other Services
5.2 By End User Industry
5.2.1 Manufacturing and Automotive
5.2.2 Oil and Gas, Mining, and Quarrying
5.2.3 Agriculture, Fishing, and Forestry
5.2.5 Distributive Trade (Wholesale and Retail)
5.2.6 Healthcare and Pharmaceutical
5.2.7 Other End Users
6.2 Company Profiles
6.2.1 MON Logistics Group Co. Ltd
6.2.2 Kiattana Transport Public Company Limited
6.2.3 JWD InfoLogistics Public Company Limited
6.2.4 TTK Asia Transport Co Ltd
6.2.5 Scg Logistics Management Company Limited
6.2.6 WICE Logistics
6.2.7 Yamato Transport
6.2.8 Kerry Logistics Network Limited
6.2.9 CEVA Logistics
6.2.10 DSV Panalpina
6.2.11 Deutsche Bahn AG
6.2.12 FedEx Corporation
6.2.13 Yusen Logistics Co. Ltd
6.2.14 Expeditors International
6.2.15 Nippon Express Co. Ltd
6.2.16 Kintetsu World Express Inc.
6.2.17 YCH Thailand
6.2.18 Deutsche Post DHL Group
6.2.19 CJ Logistics*
8.2 Insights into Capital Flows
8.3 Economic Statistics - Transport and Storage Sector, Contribution to Economy
8.4 External Trade Statistics - Export and Import, by Product
8.5 Insights into Key Export Destinations
8.6 Insights into Key Import Origin Countries
A selection of companies mentioned in this report includes:
- MON Logistics Group Co. Ltd
- Kiattana Transport Public Company Limited
- JWD InfoLogistics Public Company Limited
- TTK Asia Transport Co Ltd
- Scg Logistics Management Company Limited
- WICE Logistics
- Yamato Transport
- Kerry Logistics Network Limited
- CEVA Logistics
- DSV Panalpina
- Deutsche Bahn AG
- FedEx Corporation
- Yusen Logistics Co. Ltd
- Expeditors International
- Nippon Express Co. Ltd
- Kintetsu World Express Inc.
- YCH Thailand
- Deutsche Post DHL Group
- CJ Logistics*