Thailand offers opportunities in its logistics industry. It has a strong infrastructure and is a key logistics hub, with the market expected to grow from $47.42 billion in 2023 to $68.69 billion by 2029 (CAGR 6.37%).
However, the country’s logistics sector also presents intense logistical challenges, making the companies delve into the intricacies of Thailand’s logistics sector, making informed decisions to harness its substantial growth potential.
To better understand Thailand’s logistics sector, let’s dive into an excerpt from our comprehensive industry report, “State of Logistics in Southeast Asia 2023,” which examines the strengths and challenges facing the country’s logistics industry.
Download the complete report from Luwjistik.com for free.
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Outlook of the Logistics Industry in Thailand
Thailand is located in Southeast Asia with a population of 71.601 million people, split between urban (52%) and rural (48%) living areas, with a land area of 510,890 km².
According to the WorldBank report, Thailand ranks 37th globally in the Logistic Performance Index (LPI), surpassing Vietnam and Indonesia. The report highlights the country’s satisfactory logistics performance, with notable progress in transport and trade infrastructure, scoring 3.50 overall and 3.70 for ports, railroads, roads, and information technology.
(Source: Thailand LPI Score by Worldbank, 2023)
The Challenges
Reogma’s study reveals that the logistics industry in Thailand needs help with the slow adoption of digital solutions. The high cost of investment required for digitisation, including expensive automation equipment and software, hinders organisations from embracing advanced logistics solutions. This reluctance to depart from traditional practices inhibits the growth of the digital logistics market, exacerbating the issue further. Limited financial resources hinder businesses from investing in automation systems, impeding the advancement of the digital logistics industry in Thailand, as highlighted in the study.
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The Opportunities
Reogma’s study, as mentioned previously, reveals promising prospects in Thailand’s logistics industry. The growing automotive sector offers immense potential for contract logistics while the demand for cold-chain logistics services is rising. The study also highlights the exciting opportunity of combining last-mile deliveries with logistics automation, predicting a transformative expansion of Thailand’s logistics sector and creating abundant opportunities for businesses and investors.
When examining the country’s economic outlook for logistical expansion, it is noteworthy to acknowledge that UNCTAD’s data highlights Thailand’s substantial capacity for growth. In terms of GDP, Thailand recorded a significant figure of 504,491 million US dollars in 2021, reflecting a growth rate of 0.95%.
The International Merchandise Trade data reveals that Thailand boasted merchandise exports worth USD 272,006 million and merchandise imports worth USD 266,882 million in the same year, which experienced a remarkable 17.4% increase in GDP growth in 2021. These figures resulted in a merchandise trade balance of USD 5,124 million, with the United States, China, Japan, Vietnam, and Malaysia standing out as the country’s primary export partners.
(Source: Thailand Total Merchandise Trade by UNCTAD, 2021)
(Source: Thailand Top 5 Partners by UNCTAD, 2021)
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Given Thailand’s economic performance, the burgeoning e-commerce industry is driving demand for logistics services and playing a crucial role in the growth of Thailand’s logistics market. JPMorgan’s report reveals that Thailand’s B2C e-commerce sector is projected to reach a valuation of THB 860 billion (US$27.7 billion) in 2023, with a predicted compound annual growth rate (CAGR) of 7.7%. The report adds that the market is primarily dominated by global e-commerce giants such as Shopee, Lazada, Kaidee, AliExpress, and Amazon, all of whom possess robust logistics and delivery infrastructure.
(Source: Thailand Business-to-Consumer E-Commerce Value by JP Morgan, 2020)
Read the Complete Industry Report
This was just an excerpt from the State of Logistics in Southeast Asia industry report. To explore these insights further and discover how logistics companies can prepare for the future, we invite you to download the complete industry report for free.
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