Display mode (Doesn't show in master page preview)

26 Feb 2009

Services

Road Transport: Bracing for Economic Crisis(Business Brief No.2442)

คะแนนเฉลี่ย
In 2008, road transport business was hit hard by exorbitant oil prices. Operators were reluctant to raise freight charges because customers gained greater bargaining power. Normally, service providers and customers enter into agreements where freight charges are agreed upon in advance, which in most cases, could not catch up with the soaring oil prices. On the plus side, however, road transport business was nevertheless supported by healthy exports and private consumption. The seizure of two Bangkok airports by anti-government protesters late last year proved to be a blessing in disguise for truck transport at the expense of air transport, as trucks were used to send goods to other airports in the provinces or to neighboring countries. KASIKORN RESEARCH CENTER (KResearch) estimates that the road transport throughput in 2008 will total some 426 million tons, shrinking 0.5 percent YoY, compared to around 428.1 million tons in 2007, an increase of 0.1 percent.
In 2009, the road transport business will continue to be threatened by the global economic recession that will marginalize our exports and domestic spending, though oil prices – the key challenge last year - have been easing. KResearch forecasts that Thai exports may contract 10-16 percent YoY, against 16.8 percent growth last year. Meanwhile, private consumption is expected to grow -0.2 to +0.3 percent, compared to the 2.5-percent growth of last year. Given the slump in exports and domestic consumption – significant contributors to the road transport business – the business volume will likely falter. Competition will become more intense, especially with multinational transport firms with ample capital and advanced technology.
KResearch forecasts that road-based cargo traffic will total around 413.2-417.5 million tons, contracting 2-3 percent in continuation from the contraction of 0.5 percent last year. The impact would also be felt in other related industries as well, e.g., truck sales, maintenance, NGV installation services, as well as warehousing and logistics. Inevitably, more job losses will be seen in the transport sector.

To survive these difficulties, KResearch holds the view that transport sector operators should take advantage of the opportunities offered by economic routes within the GMS (Greater Mekong Sub-Region) and BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral, Technical and Economic Cooperation) schemes. Over the short-term, emphasis should be placed on transport efficiency, cost saving measures, market expansion to acquire new customers and the implementation of effective business synergies. In the end, truck operators should brace themselves for liberalization in transport and logistics. Focus should be on the use of NGV, pooled funding for investments into new transportation and logistic technologies plus greater transport within the GMS and BIMSTEC member countries.

View full article


Services