Transportation Thailand Market Intelligence

Industry Outlook & Drivers

Regional Market Outlook on Transportation 

The country has more than 1 million trucks operating in the market, but the shippers are provided with a limited number of logistics service providers, who can provide integrated logistics services.

Road freight is the dominant mode of transportation, transporting more than 85 percent of the country's goods and is highly fragmented, due to a large number of individual truck owner operators.

Market Overview of Thailand Road Freight

• The trucking industry is highly fragmented with more than 9,623 logistics service providers (LSP) involved in road transportation activities apart from a large number of individual truck owner operators
• Logistics cost to GDP attributes to around 14 percent of the country's GDP with cost of road freight attributing to around 4.5 percent
• Thailand has around 1,089,621 registered trucks (2017) with private trucks forming more than 73 percent of the overall supply
• Thailand's express logistics market is expected to grow at a CAGR of 6.3%, while the E-commerce logistics market is expected to grow at a CAGR of 15% between 2017 and 2022

Supply–Demand Scenario and Service Providers' Landscape

The Y-o-Y increase in the total number of registered trucks in the market indicates that the road freight market is unlikely to fall short of supply in the near future and shippers need not look for alternative mode of transport for freight movements.

Individually registered trucks outweigh the number of company owned trucks, which highlights the fragmented nature of the market and the scenario is unlikely to change in the immediate future.

Service Provider Landscape Registeration(Based on Registration)

• More than one tenth of the total number of trucks in Thailand are registered in Bangkok, highlighting the demand for road freight in the region
• The country has more than one million trucks (1,089,621) with approx. 2,93,167 trucks belonging to logistics companies while the rest operated by individuals
• Almost all the major logistics companies are centered around Bangkok. as Bangkok acts a major industrial hub
• The average age of trucks is greater than 10 years, which is majorly a result of large number of individual operators

Number of Registered Trucks (2008–2017)

• The total number of trucks in operation increased by more than 41 percent in the last ten years, highlighting the consistent supply of trucks
• Since 2008, minimum of 60,000 new trucks are being added into the market, with 2013 seeing the highest number of registrations with 1,08,529 trucks
• While the total number of trucks have been consistently on the rise, older trucks are not entirely replaced, leading to lower mileage and increased costs

Thailand Surface Logistics Infrastructure Overview

While the government has increased its investments on road and rail infrastructure, the country's geographical nature limits the movement of goods through rail and provides shippers with road freight as the preferable mode of transport of goods.

Government's increased investments in road infrastructure highlights the importance of road transportation over other modes of transport and will also reduce the overall logistics cost in terms of road transport.

Thailand Spending on Surface Infrastructure (2007–2016)

• Thailand is one the leading economies among the ASEAN with multiple ports and connectivity to four neighboring countries
• The country has been concentrating on developing its infrastructure to strengthen its logistics activities and to increase the volume of exports
• The investments for road infrastructure was more than 3billion USD in 2016, which was a 20 percent increase from 2015
• The government has also increased its investments on rail infrastructure in order to increase the rail freight volume and the investments for rail freight stood at 1.4 billion USD in 2016
• The difference in the investments in road and rail freight has been attributed to the country's higher dependency on road freight as well the country's geography

Trucking Cost Structure and Related Cost Drivers

While the industry has seen an increase in the number of truck registrations in the last few years, maintenance cost of trucks has not come down, due to large number of old fleet and has impacted the freight rates.

During peak seasons, logistics companies outsource part of the requirement to individual truck operators and also pay higher salary to manage shortage of skilled drivers.

Fuel Cost: Fuel contributes to almost one third of the overall operating cost, which is mainly attributed to the older age of the fleet. Despite increase in number of overall truck registrations, independent truckers find it hard to replace their own trucks.

Maintenance Cost: Average age of fleet is 11 years, leading to higher maintenance cost of the trucks. Apart from old fleet, inefficient road conditions also contribute to lower mileage and reduced efficiency.

Driver Wages: With increase in the shortage of skilled truck drivers, trucking companies pay additional salaries during peak seasons to meet the demand.