Thailand’s logistics costs too high

Thailand’s actual logistics costs index this year should not be above its previous forecast of 23.9 percent of gross domestic product, the Nation reported, citing Thammasat Business School associate professor Ruth Banomyong. While he declined to give details on the forecast for 2008, he said the high fi gures for logistics costs, including almost 50 […]


Thailand’s actual logistics costs index this year should not be above its previous forecast of 23.9 percent of gross domestic product, the Nation reported, citing Thammasat Business School associate professor Ruth Banomyong.

While he declined to give details on the forecast for 2008, he said the high fi gures for logistics costs, including almost 50 percent of total logistics costs from transportation, indicate that the country still lacks competitiveness due to its high costs in inventory carrying, transportation, administration and warehousing.

The country saw consecutive declines in its logistics costs index from 2000 to 2004, due mainly to the increase in GDP growth. In 2005, the index rose to 19.4 percent from 15.4 percent a year earlier, affected by higher transportation costs in the wake of the rise in world oil prices. Moreover, rising interest rates in 2005 and 2006 put pressure on inventory-carrying costs.