Asia Pacific Trade Facilitation Forum September 2014, BITEC Bangkok, Thailand

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1 Asia Pacific Trade Facilitation Forum September 2014, BITEC Bangkok, Thailand

2 Trade facilitation and logistics performance in Thailand Ruth Banomyong (PhD) Centre for Logistics Research Thammasat University

3 Introduction Agenda The logistics performance index (LPI) 1. An ASEAN perspective 2. Thailand s ranking Thailand s efforts in monitoring logistics performance Service assessment Policies Matters

4 Average trade costs of goods value Introduction: The relationship between Trade facilitation and logistics performance 250% 230% 210% 190% 170% 150% 130% 110% 90% 70% 50% UNESCAP-World Bank trade costs vs. LPI score LPI score (2010) 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.

5 LPI 2014: Top 10 performers by income group Top 10 overall By overall LPI score Top 10 upper middle-income Germany Netherlands Belgium United Kingdom Singapore Sweden Norway Luxembourg United States Japan Vietnam Indonesia India Philippines Ukraine Egypt, Arab Rep. El Salvador Pakistan Nigeria Guatemala Top 10 lower middle-income Malaysia China Turkey Hungary South Africa Thailand Romania Panama Bulgaria Mexico Malawi Kenya Rwanda Cambodia Burkina Faso Liberia Ethiopia Nepal Burundi Bangladesh Top 10 low-income

6 ASEAN LPI 2014 Ranking Typology LPI Score ASEAN countries logistics friendly Singapore Malaysia consistent performers Thailand Philippines Vietnam Indonesia partial performers Cambodia logistics unfriendly Laos Myanmar

7 Thailand (LPI) Note: Score Rank 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

8 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 & Trade Facilitation policies in Thailand have been fuzzy to say the least

9 Thailand s Logistics Development Strategy ( ) Trade Facilitation & Supply Chain Management for Competitiveness Triangle of Achievement 3 Missions 7 Strategy 1. Supply chain competitiveness Strategic Objectives Logistics efficiency & responsiveness, Value creation, and regional inclusive growth 1. Increase Competitiveness in Supply Chain Management and Potential Business Ultimate Goals Competitiveness, Co-prosperity, Sustainability, and Quality of life Trade & Service Hub of GMS, and Gateway to Asia Strategic Positions 2. Promote Business Related to Trade and Services in Border Town Areas. Efficiency & Effectiveness 2. Trade facilitation enhancement 3. Capacity building and Policy driving factors 3. Develop 5. Promote Transport 4. Improve Services Services and Facilitation at Improvement and Logistics Gateways Expand LSPs Networks Network 6. Develop Human resource development system 7. Develop Monitoring system for self improvement 1.Strategic Plan 2.Issue based 3.Green Society 4. Private Participation

10 Thailand s Logistics Development Strategy ( ) 3 Missions and 7 Strategies Supply chain competitiveness 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 Trade facilitation enhancement 4. Improve Facilitation at Gateways 5. Promote Services Improvement and Expand LSPs Network Capacity building and Policy driving factors 6. Develop Human resource development system 7. Develop Monitoring system for self improvement

11 Monitoring performance in Thailand 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?

12 Industrial Logistics Conceptual Framework Cost dimension Time dimension Reliability dimension 9 Logistic activities 27 KPIs

13 Industrial Assessment Framework However, not all KPIs are of equal importance. 9 key KPIs can reflect overall logistics performance Cost Time Reliability Transport Warehouse Order Cycle Time Delivery Cycle Time Delivery in Full & on Time Forecast Accuracy Inventory Inventory days Return Rate

14 Example of service providers performance assessment Key Performance Indonesia Thailand Global Benchmark Delivery In Full and On Time Damage rate Cash Conversion Cycle (C2C) 82.60% 86.60% 95.00% 3.54% 5.00% 1.00% Source: The Author

15 Policies matter to Logistics Performance Infrastructure Ports Road/rail corridors Airports Procedures and Trade Facilitation Customs & payments Simplification & automation Harmonization & standardization Services Forwarders, truckers, brokers etc. Regulation of entry Market structure and competition Sustainable Logistics Green Logistics City Logistics Regulations (customs, services) are increasingly regional, but implementation is national. 14

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