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7 Aug 2006


The Energy Crisis and Logistics Development (Current Issue No.1892)

Steep oil prices in the world market have dealt a severe blow to the Thai economy. This is particularly true for the energy-intensive transportation sector that relies largely on diesel fuel (and the like). It is thus quite pressing to enhance energy efficiency in the transportation sector, which would also in line with the country's logistics development strategies. A national plan has ambitiously designated Thailand to be the regional logistics hub. Based on government research, it was found that railway and water transport, in lieu of roads, could reduce transportation costs by 70 and 80 percent, respectively. The 2005 statistics have shown that goods delivered via land and water transport accounted for 86 percent and 11 percent of the overall domestic shipments, respectively.
Over the short-term, energy efficiency can be enhanced through modal and fuel shifts, according to the government's proposition. The first method involves switching to multi-modal transportation, e.g., pick up by truck at the origin, and then offloading to water transport for onward freight to the destination. In fuel shifts, the use of alternative energy that is affordable and locally available, such as natural gas, should be encouraged and supported in earnest nationwide.
Over the longer term, the government should place emphasis on improvements in infrastructure as a basis for logistics development. These enhancements could include implementation of a dual-rail system, establishment of the second Inland Container Depot (ICD), etc. The private sector should turn to improvements in logistic systems efficiency, e.g., shifting to alternative energy, streamlining transportation modes and processing, as well as ushering in sophisticated technology to enhance our transportation-related potential and reduce costs over the long-term. Among the technological developments that could be used are RFID technology (Radio Frequency Identification) where RF-signal transmitting/receiving electronic equipment is used instead of barcodes to expedite deliveries; SCIS (Supply Chain Information Systems) that would facilitate the exchange of information between producers, shippers and the government sector, and would efficiently accommodate future links between a government-managed e-logistics system and the EDI (Electronic Data Interchange) system initiated by the Customs Department.

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