Asia Pacific Trade Facilitation Forum 2014

24 – 25 September 2014, BITEC

Bangkok, Thailand

Trade facilitation and logistics performance in Thailand

Ruth Banomyong (PhD)

Centre for Logistics Research

Thammasat University

ruth@banomyong.com

Agenda • Introduction

• The logistics performance index (LPI)

1. An ASEAN perspective

2. Thailand’s ranking

• Thailand’s efforts in monitoring logistics

performance

• Service assessment

• Policies Matters…

50%

70%

90%

110%

130%

150%

170%

190%

210%

230%

250%

2 2.5 3 3.5 4 4.5

LPI score (2010)

UNESCAP-World Bank trade costs vs. LPI score

Introduction: The relationship between Trade

facilitation and logistics performance

Supply chain bottlenecks are the primary cause of friction

in trade (trade costs). Reducing them by half would raise

trade by 15% and production by 5% globally.

Avera

ge t

rade c

osts

of goods v

alu

e

LPI 2014: Top 10 performers by income group

4

1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Malaysia

China

Turkey

Hungary

South Africa

Thailand

Romania

Panama

Bulgaria

Mexico

Top 10 upper middle-income

1.0 2.0 3.0 4.0 5.0

VietnamIndonesia

IndiaPhilippines

UkraineEgypt, Arab Rep.

El SalvadorPakistan

NigeriaGuatemala

Top 10 lower middle-income 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

MalawiKenya

RwandaCambodia

Burkina FasoLiberia

EthiopiaNepal

BurundiBangladesh

Top 10 low-income

1.0 2.0 3.0 4.0 5.0

Germany

Netherlands

Belgium

United Kingdom

Singapore

Sweden

Norway

Luxembourg

United States

Japan

Top 10 overall By overall LPI score

Typology LPI Score ASEAN countries

logistics friendly 3.50 - 5.00 Singapore Malaysia

consistent performers 2.95 - 3.49 Thailand Philippines Vietnam Indonesia

partial performers 2.40 - 2.94 Cambodia

logistics unfriendly 0.00 - 2.39 Laos Myanmar

ASEAN LPI 2014 Ranking

Note:

• Different time period so comparison not adequate

• The 2011 floods affected the perception of respondents on

Thailand’s logistics capability

• The 2013 protest in Thailand does not seem to have affected

perception but…

• Thailand moved into the “consistent logistics” group

Thailand (LPI) 2007 2010 2012 2014

Score 3.31 3.29 3.18 3.43

Rank 31 35 38 35

Thailand’s efforts • Since 2001, Thailand has recognised

logistics development as a national

priority.

• A national logistics development policy

has been approved for the period 2007-

2011 & 2013-2017.

• Trade Facilitation policies in Thailand have

been fuzzy to say the least

Ultimate Goals

Competitiveness,

Co-prosperity, Sustainability, and

Quality of life

6. Develop Human resource development system

7. Develop Monitoring system for self improvement

1. Increase Competitiveness in Supply Chain

Management and Potential Business 2. Promote Business Related to Trade and

Services in Border Town Areas.

Strategic Objectives

Logistics efficiency & responsiveness, Value creation, and regional

inclusive growth

Strategic Positions

Trade & Service Hub of GMS, and

Gateway to Asia

Triangle of

Achievement

2. Trade

facilitation

enhancement

3 Missions

7 Strategy

1. Supply chain

competitiveness

3. Capacity

building and

Policy

driving

factors

Efficiency

&

Effectiveness

1.Strategic Plan

2.Issue based

3.Green

Society

4. Private

Participation

4. Improve

Facilitation at

Gateways

5. Promote

Services

Improvement and

Expand LSPs

Network

3. Develop

Transport

Services and

Logistics

Networks

Trade Facilitation & Supply Chain Management for Competitiveness

Thailand’s Logistics Development Strategy (2013-2017)

3 Missions and 7 Strategies

Supply chain

competitiveness

Trade facilitation

enhancement

Capacity building and Policy

driving factors

1. Increase Competitiveness in Supply Chain Management and Potential Business

2. Promote Business Related to Trade and Services in Border

Town Areas.

3. Develop Transport Services and Logistics Networks

4. Improve Facilitation at Gateways

5. Promote Services Improvement and Expand LSPs Network

6. Develop Human resource development system

7. Develop Monitoring system for self improvement

Thailand’s Logistics Development Strategy (2013-2017)

• Thammasat University helped developed the

methodology to estimate national logistics cost/GDP

in 2004 for NESDB

• Thammasat University has helped the Thai Ministry

of Industry to develop an assessment database for

manufacturing firm logistics performance since 2011

• Thammasat University has helped the Thai Ministry

of Agriculture to assess logistic and supply chain

performance of key agricultural produce

• No assessment for logistics performance of services yet…MoC?

Monitoring performance in Thailand

Cost

dimension

Time

dimension

Reliability

dimension

9 Logistic

activities

27 KPIs

Industrial Logistics Conceptual Framework

Industrial Assessment Framework

• However, not all KPIs are of equal importance.

• 9 key KPIs can reflect overall logistics

performance

Cost Time Reliability

Transport Order Cycle Time

Delivery in Full & on Time

Warehouse Delivery Cycle Time

Forecast Accuracy

Inventory Inventory days Return Rate

Example of service providers performance assessment

Key Performance Indonesia Thailand Global

Benchmark

Delivery In Full and On Time

82.60% 86.60% 95.00%

Damage rate

3.54% 5.00% 1.00%

Cash Conversion Cycle (C2C)

15.84

13

1

Source: The Author

Policies matter to Logistics Performance

• Ports

• Road/rail corridors

• Airports Infrastructure

• Customs & payments

• Simplification & automation

• Harmonization & standardization

Procedures and

Trade Facilitation

• Forwarders, truckers, brokers etc.

• Regulation of entry

• Market structure and competition Services

• ‘Green Logistics’

• City Logistics

Sustainable Logistics

14

Regulations (customs, services) are increasingly

regional, but implementation is national.