THE SERVICE EXPANSION POTENTIAL OF RAILWAY SYSTEM FOR FREIGHT TRANSPORTATION IN THAILAND

Transcription

1 THE SERVICE EXPANSION POTENTIAL OF RAILWAY SYSTEM FOR FREIGHT TRANSPORTATION IN THAILAND Pongtana Vanichkobchinda Department of Logistics Engineering, School of Engineering, University of Thai Chamber of Commerce 126/1 Vibhavadee-Rangsit Road, Dindaeng, Bangkok, 10400, Thailand Tel: , Fax: ABSTRACT Over almost a decade, Thailand has been experiencing a long period of economic growth, leading to transition from a predominantly agricultural economy to an industrialized economy. Other than the skills of the Thai people and the availability of resources, this feat has been primarily the result of massive local and foreign investment. Most of investment has occurred in the area known as the Eastern Seaboard (ESB). As may be expected, the industries expand, and with this growth the demand for infrastructure system especially in transportation system supporting logistics activities increases. Unlike in developed countries, roadway system in Thailand has been largely invested, while the investment in the railway system considerably declines. Consequently, the Thai railway system tends to lose its competitiveness to the road transportation, despite of its several advantages such as the high efficiency, large freight volume, cost effectiveness, time punctuality, speed safety and low energy consumption, specifically at medium to long distance transportation. As a result from the low investment, the provision of railway system infrastructure and facilities becomes rather limited, while the demand of service lines has been increasing annually during the past ten years. Such demand has become apparent in the transport of containers and bulky products such as cement and mineral and petroleum products. For instance, the increasing demand on container transport from Lad Krabang Inland Container Depot (ICD-Lad Krabang) to Laem Chabang (LCB) in currently limited by the rolling stock number and service track capacity. While the demand continues to grow and the railway system still keeps advantages of medium-to-long distance transportation over other modes, there is a clear need in the increase in railway system investment. The main objective of this paper is to evaluate the potential of service expansion of the railway freight transportation in Thailand. The more efficient railway system will offer a lower transportation cost, hence the production cost, and enhance the competitiveness in the foreign trade opportunity. KEYWORDS Railway Transportation, Freight Transportation, Railway Logistics, Railway Track 1. Overview of Thailand Railway Transportation System In the past, Thailand railway transportation was basically known as a passenger railway. Although its service included freight transport, the marketing focus was weighted toward passenger traffic. Railway was most frequently used for inter-city transport of passenger especially amongst the poorer levels of society. With the exception of the transport of some petroleum products, however, railway has captured only a minimal share of national total freight transport. This lack of emphasis on freight traffic, though, has begun to change over the past few decades. Nevertheless, the total revenues of Thai railway are relatively dwindling, caused primarily by artificially low fares for passenger traffic which had been imposed by the government. Therefore, it is most challenging for the Thai railway to capture more revenues from freight traffic and increase its total usage share. Medium to long distance freight transportation always plays crucial role in driving social and economics expansion by means of transporting and distributing goods to different regions in a country. In Thailand, the demand of road freight transportation has been continuously growing, while that of railway mode, though also growing, tends to be constrained by the declining investment. Road traffic congestion can usually be observed both in in-urban and inter-urban areas. However, such congestion is associated with higher transportation cost, more fuel consumption and environmental impacts, 305

2 which are direct/indirect costs to logistics transportation service provider resulting in an increase in total cost of production. In fact, railways mode are more efficient at transporting bulk freight traffic over medium to long distances. It can also effectively handle large volume of transportation with time punctuality, speed safety and lower energy consumption, compared to their main rival, the trucking industry [1,2,3]. However generally in Thailand, agriculture product such as rice, coconut and sugar, and secondary products such as machines and consumer products, depends largely on truck transportation. As a result, very few portions of these cargoes being transported by rail, despite of its several advantages of large-volume services offered for bulky cargoes. It is a straight choice for those logistics transportation service providers to save their cost by switching the mode of transportation from road to rail. Accordingly, it is of great importance for government to enhance service expansion in the country and promote the use of railway amongst the transportation sector. Source: Office of Transport and Traffic Policy and Planning (2005) Figure 1: Railway Expansion Opportunity in ESB and Nearby Area. Opportunity of railway service expansion is actually relatively obvious. In fact, the demand of service lines has been increasing annually during the past ten years. Such demand has become apparent, for example, in the transport of containers. Container transportation line, which connects between Laem Chabang (LCB) port in the Eastern Seaboard (ESB) and Lat Krabang Inland Container Depot (ICD-Lad Krabang or known as LICD ) that lies on the Eastern Line of the State Railway of Thailand (SRT), has continuously increased its volume of transportation. To respond to the further increase of container transportation, track doubling and expansion of the Inland Container Depot (ICD) can be taken to consideration. The schematic diagram of railway expansion opportunities in ESB and the area nearby is shown in Fig. 1 [4]. Logistically, this clearly implies that railway mode has potential expansion opportunity and at the same time become a powerful policy option that will response to the transport demand in Indochina countries under the North-South and East-West Economic Corridor Development Plan, which has been established in respond to the transportation demand in six countries along Mekong River. These countries include Laos, Cambodia, Myanmar, Vietnam, the Yunnan Province of the People s Republic of China and Thailand, forming the international economic corridor namely Greater Mekong Subregion (GMS). The broadened freight service would support the trade in GMS and this is in fact become a highly prospective opportunity for the government to consider granting the investment [5]. Existing railway linkage in GMS area is as shown in Fig. 2 [6]. Figure 2: Greater Mekong Subregion Map. Source: ADB (2005) It is accordingly a clear need to improve current freight transportation system and invest more on the infrastructure construction, particularly in ESB area, in order to encourage the railway usage, serve the existing and future demand, and make the investment become more attractive. However, to achieve the improvement, there are obstacle issues to overcome, most importantly 306

3 the freight traffic congestion in the ESB. This paper aims at proposing recommendations in order to improve the current freight transportation system by means of clarifying current congestion problem of rail freight transportation of SRT as well as a potential solution. 2. Analysis of Thailand Railway Freight Transportation 2.1 Overall Freight Transportation Freight service in Thailand is provided by road, railway, air, coastal shipping and inland waterway. Focusing particularly on rail and road freight demands, it is obvious that the demand of road freight transportation has been continuously growing. The demand of railway mode has also been growing, however, constrained by the limited service capacity. As a result, railway has captured only a minimal share of national total freight transport volume. According to statistics, road and rail modes share 90% and 2% of freight transportation during , respectively [7]. The percentage share of freight transportation against freight volume is as shown in Table 1. Table 1: Percentage Share of Thailand Transportation Modes (Units: x 1,000 tons) Transportation Mode Road 400, , , , ,275 Railway 8,776 8,893 12,240 14,223 10,191 Inland waterway 17,833 25,043 28,824 29,140 29,630 Coastal shipping 19,657 24,795 27,222 27,762 28,322 Air Total 446, , , , ,472 Source: Ministry of Transport (2007) Nevertheless, early in 2006, the Royal Thai Government issued a national mega-project to improve Thailand logistics sector, following the clear need in the increase in railway system investment. The underlining policy attempts to make railway transport become more competitive than the road, and to practically adopt other measures with an aim to switch the mode of freight transport from truck, which is currently the most in use, to rail system. The Ministry of Transport intends to promote the role of railway system to become more active in meeting the national s future transport needs by implementing railway freight transportation and intermodal policy. The target is to increase the share of rail transport to 20% of the total freight by Growth Rate of Product Transportation by Railway Mode Railway freight transportation has been increased from approximately 7.8 million tons in 1995 to 12 million tons over the 10-year period, as shown in Fig. 3. According to statistics, three major types of commodities being transported by rail include petroleum product (including LPG), bag/bulk cement and container. In 2005, these merchandises shared approximately 87% of the total rail freight volume. Over the past decade, the bulky products gradually lost their freight shares. Meanwhile, the demand of container continued to increase. Fig. 4 shows rail freight volume classified by category of commodities taken on rail during ,000 Tons,000 Tons Figure 3: Railway Freight Transportation Statistics. Source: Ministry of Transportation (2007) 8,000 6,000 4,000 2,000 0 Petroleum Product & LPG Cement Container (General Product) Source: Ministry of Transport (2007) Figure 4: ly Growth Rate of Railway Freight Commodities In general, there are more than 600 rail stations and stopping places all over the country. 292 stations provide freight transportation services, and only 4 out of these stations handle more than 1 million tons of freight volume. These 4 freight stations are located at LCB port, ICD-Lad Krabang, Bung Phra in Phitsanulok province and Phahoyothin in Bangkok [8]. Fig. 5 illustrates the locations of selected rail freight stations togerther with the volume being handled annually. All togerther, rail stations in Laem Chabang (LCB) port in the ESB and Lat Krabang 307

4 Inland Container Depot (ICD-Lad Krabang) are handling over 7 million freight volume per year [9]. It is apparent that most of the freight movements are in the ESB area, where industrial activities are highly concentrated. The major volumes of freight commodities movement which has origin/destination along the ESB line in year 2005 are shown in Tables 2, 3 and 4 [9,10,11,12]. Generally, the frieght movements along the ESB line are mostly occupied by containers, liquefied petroleum gas (LPG) tanks and other petroleum products. The container transportation line, which connects between LCB port in the ESB and ICD-Lad Krabang that lies on - Table 3: LPG Movements with Origin/Destination on ESB Line in Origin/Destination Quantities (Tons) 1) Bang Lamung Samram 350,880 2) Bang Lamung Nakorn Sawan 185,520 Source: State Railway of Thailand (2002). The Study on Rail Freight Transportation in Thailand Table 4: Container Movements with Origin/ Destination on ESB line in Origin/Destination Quantities (TEUs) Export Import ESB Line to/from LCB port 246, ,292 Source: Laem Chabang Port (2006) the Eastern Line of the State Railway of Thailand (SRT), has continuously increased its volume of transportation. During the past 5 years, after the completion of container depot at LCB port and the international shipping depot, ICD-Lad Krabang, the volume of container transportation has drastically increased. The increasing volume of container classified by import and export shipments is shown in Fig. 6. Therefore, it is obvious that with the demand of service lines that has been increasing annually, the opportunity of railway service expansion become relatively apparent.,000 TEUs Import Export 50 Source: SRT (2002) [9] Figure 5: Selected Rail Stations and Freight Volume in Service Table 2: Petroleum Product Movements with Origin/Destination on ESB Line in Origin/Destination Quantities (Tons) 1) Bung Phra Laem Chabang 729,242 2) Map Ta Phut Khon Kean 230,008 3) Map Ta Phut Lampang 175,646 4) Map Ta Phut Bung Phra 128,023 Source: State Railway of Thailand (2002). The Study on Rail Freight Transportation in Thailand Figure 6: ly Growth Rate of Railway Containers Freight Transportation Source: Laem Chabang Port (2006) 3. Railway Track Capacity Analysis To identify the opportunity of potential expansion of railway track, focusing particularly on ESB line, the author approached the capacity investigation by separating the analysis into two different analytic activities as classified below: 308

5 Analysis of existing railway track capacity Analysis of existing demand of railway freight transportation 3.1 Analysis of Existing Railway Track Capacity In estimating the line capacity for single line with passing loops, the usually accepted method of calculating the number of trains is by means of Scott s Formula which is used as follows to give a rough estimate of daily capacity: Daily Line Capacity = , (1) ( T + ) 1 T 2 where 1440 = daily minute T 1 = the average time taken over the slowest station to station section within the route (min), T 2 = the signaling and safe working time to allow the reoccupation of the section (min), 0.7 = applied to cater for operational out of course running and to allow for track and structure maintenance. The bottleneck of ESB railway line is the single track line from Chachoengsao to Si Racha (see Fig.1). The ruling longest transit time for station-to-station in Chachoengsao to Si Racha section is minutes. Applying the usual SRT signaling and safe working time for reoccupation of 3 minutes, the line capacity can be calculated as follow [13]: Line Capacity = = 45 daily trains, ( ) Note that the estimated 45 daily trains include the capacity for 2 directions, which are both go- and returntrips. 3.2 Analysis of Existing Demand of Railway Freight Transportation The statistics of SRT Railway Operation Department report the account of the actual demand of train operation for ESB line. The current demand is 60 trains per day, which are classified into 1) freight train; 2) passenger train and 3) train operated only upon request [12]. Based on the one-way track capacity and the freight volume of three major commodities taken on rail shown in Tables 2, 3, and 4, the number of trains required daily along the ESB service line can be calculated using a typical equation as follows: PT No. of trains per day per one way = TC WD (for one round multiply the No. of trains by 2) where PT = Product volume required to transport per year (ton or TEU/ year) TC = Train capacity (ton or TEU/ train /one way) WD = Working day (assume 365 working day) As a result, the existing demand for railway freight transportation can be estimated as shown in Table 5, which also agrees with the SRT statistics above. Table 5: Existing Railway Transportation Demand Commodities Train Requirement (go & return) (trains/day/oneway) 1. Freight train - Petroleum product 10 - LPG 4 - Container Passenger train 4 3. Train operated upon 14 request Total 60 Therefore, it can be seen that to respond to the current demand, track doubling along ESB line can be taken to consideration. Such a large potential is pronounced by itself, not only to serve the existing demand, but also even for the one in the future. 4. Conclusion The analysis of the railway freight transportation system as a whole indicates that the Thai railway system is now experiencing an excessively growing freight demand, especially in the Eastern Seaboard (ESB) area, where industrial activities are highly concentrated. In fact, the demand of service lines has been increasing annually during the past ten years, especially in the transport of containers. Container transportation line, which connects between Laem Chabang (LCB) port in the Eastern Seaboard (ESB) and Lat Krabang Inland Container Depot (ICD-Lad Krabang) that lies on the Eastern Line of the State Railway of Thailand (SRT), has continuously increased its volume of transportation. While the demand continues to grow and the railway system still keeps advantages of medium-to-long distance (2) 309

6 transportation over other modes, there is a clear need in the increase in railway system investment. To evaluate the potential of service expansion, an analysis on the railway track capacity was taken. It was clearly shown that the capacity of the existing tracks was far behind the required service volume. More importantly, the existing demand of railway freight exceeds the current capacity by more than double. Therefore, it can be seen that in order to respond to the current demand, track doubling along ESB line can be taken to consideration. By all means, service expansion could become one of the powerful tools for the government to realize the goal of switching traffic mode from road to rail, and increase the share of rail transport to 20% of the total freight by Also, the expansion opportunity is largely pronounced taking into consideration the future transport demand in Indochina countries under the North-South and East- West Economic Corridor Development Plan. The broadened freight service would support the trade in GMS, and this is in fact become a highly prospective opportunity for the government to consider granting the investment. Therefore, it is a straight choice for the government to make an investment on track-doubling, focusing particularly on ESB service line, with success. Ultimately, the service expansion in the country will promote the use of railway amongst the transportation sector, offered more efficient railway system with a lower transportation cost,, the production cost, and enhance the competitiveness in the foreign trade opportunity. [6] Asian Development Bank (2005). Regional Cooperation Strategy and Program Update : The Greater Mekong Subregion Beyond Borders [Available Online]: pdf [7] Ministry of Transport (2007), The Statistic of Passenger and Freight Transportation [Available Online] [8] State Railway of Thailand (2002). Investigation of Capacity Constrains and Determination of the need for Track Doubling for SRT Network. [9] State Railway of Thailand (2002). The Study on Rail Freight Transportation in Thailand. [10] State Railway of Thailand: Container Transportation Department (2006) Lat Krabang Inland Container Depot ly Report. [11] State Railway of Thailand: Commercial Department Report (2006): Railway Freight Transport Operation Plan. [12] Laem Chabang Port (2006), Statistics of Containers transported by Railway Mode [Available Online] hp [13] State Railway of Thailand: Railway Operation Department Report (2006): Railway Freight Transport Operation Plan. References [1] S. Ohnell & J. Woxenius, An industry analysis of express freight from a European railway perspective, International Journal of Physical Distribution & Logistics Management, 33(8), 2003, [2] N. Kiang & L. Schipper, Energy trends in the Japan transportation sector, Transport Policy, 3(1/2), 1996, [3] D. Campisi & M. Gastaldi, Environmental protection, economic efficiency and intermodal competition in freight transport, Transportation Research Part C, 4(6), 1996, [4] Office of Transport and Traffic Policy and Planning (2005). Multimodal Transportation Development Strategy for Thailand Logistics. [5] M. Krongkaew, The development of the Greater Mekong Subregion: real promise or false hope, Journal of Asian Economics, 15, 2004,