This is because of the strength of the Thai baht, the fact that the infrastructure of the Thailand Logistics system is increasingly more expensive and that the corporate tax is much higher than in the other surrounding countries. However, one may argue that Thailand’s import and export taxes are decreasing, but the same is true for the whole world. The deals made in the World Trade Organization with regards to the Free Trade Area are making both import and export businesses’ (Logistics businesses) lives easier, but these contracts do not deal with the fact that export goods are getting more expensive when compared to the export goods from surrounding countries such as Vietnam and India.
Another type of business that is relevant to Logistics is the forwarding company. Some may argue that this shift from exporting to importing should not cause much impact with regards to the total volume of shipments for Logistics in and out of the country, as the increase in import goods may just be enough to cancel out the decrease in export goods. However, due to the fact that transportation costs are rising with oil prices, the costs of transporting goods are also increasing. This is a major dilemma for forwarding companies to solve, how can they cut Logistics costs elsewhere yet keep the same quality of service and the price low? In conclusion, looking at the Thai economy as a whole, it can be easily seen that this trend may have a long-lasting effect to import-export businesses and Logistics business are getting bigger steadily.
Components of Thailand Logistics System
The picture show the overview of Thailand logistics system. Consist of 3 main components as 1. Logistics services - 2. Logistics information systems and 3. Logistics infrastructure and resources are closely linked of this system. The interaction of the 3 main components in the Thailand logistics system is interpreted as follows. Logistics services support the movement of materials and products from inputs through production to consumers, as well as associated waste disposal and reverse flows. They include activities undertaken inhouse by the users of the services (e.g. storage or inventory control at a manufacturer’s plant) and the operations of external service providers.
Logistics services comprise physical activities (e.g. transport, storage) as well as non-physical activities (e.g. supply chain design, selection of contractors, freightage negotiations). Most activities of logistics services are bi-direction. Information systems include modelling and management of decision making, and more important issues are tracking and tracing. It provides essential data and consultation in each step of the interaction among logistics services and the target stations. Infrastructure comprises human resources, financial resources, packaging materials, warehouses, transport and communications. Most fixed capital is for
building those infrastructures. They are concrete foundations and basements within Thailand logistics systems.