Logistic Opportunities for Collaboration Between Cambodia and Thailand 20012013 Final

7/29/2019 Logistic Opportunities for Collaboration Between Cambodia and Thailand 20012013 Final

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Thai-Cambodia Trade and Logistics

Cooperation for AEC

Jan 25, 2013


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Agenda:

1. High-level macro economics study

1.1 Current Trade between Thailand and ASEAN countries

1.2 Competitive landscape ASEAN logistics

1.3 Regional trade agreements, macro economic forecast and effects analysis

1.4 Geographical locations interesting for further study

1.5 Scenarios for further development

2. Opportunities for trading between Thailand and Cambodia

2.1 Tariff and Non barrier tariff reduction

2.2 Improving custom clearance services

2.3 Cross border trading

3. Logistics practices

3.1 Cross-docking, Hub and Spoke, Multi modal transportation, and Backhauling

3.2 IT in logistics

3.3 Green logistics and safety management

3.4 Corporate social responsibility

3.3 The collaboration between Thailand and Cambodia towards to operational excellence

4. Export Logistics Model Award (ELMA)


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Agenda:













3.2 IT in logistics






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Thailands Export To Entire ASEAN Region

Q3/2012

13,844.81

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Q1/2000 Q1/2001 Q1/2002 Q1/2003 Q1/2004 Q1/2005 Q1/2006 Q1/2007 Q1/2008 Q1/2009 Q1/2010 Q1/2011 Q1/2012

Thailand Export to ASEAN - Millions of US $Trend line shows the moving average over 12 month

CountryValue of Export(Millions of US $)

1 Malaysia 11,287.35

2 Indonesia 10,265.13

3 Singapore 10,176.14

4 Vietnam 6,196.13

5 Philippines 4,508.42

6 Cambodia 3,436.69

7 Laos 3,293.94

8 Myanmar 2,796.88

9 Brunei 181.72

Thailand Export - Country Ranking(Based on total value Jan12 Nov12)

Source: Bank of Thailand

Malaysia

21.6%

Indonesia

19.7%

Singapore

19.5%

Vietnam

11.9%

Philippines8.6%

Cambodia

6.6%

Laos

6.3%

Myanmar

5.4%

Brunei

0.3%

For the past 13 years

Thailand's export has

been steadily growing

with 5% year-on-year.

The Global Financial

Crisis had a negative

effect on exports in

2008, but Thailand

managed to recover

quickly and continueto grow to new record

levels.


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From Q1/2000 to Q3/2012 Millions of US $

Trend line shows the moving average over 12 months

Thailands Export To ASEAN Trade Partners

0

1,000

2,000

3,000

4,000

Malaysia

0

1,000

2,000

3,000

4,000

Indonesia

0

1,000

2,000

3,000

4,000

Singapore

0

1,000

2,000

3,000

4,000

Vietnam

Out of the 4 countries:

Malaysia, Singapore and

Vietnam all show a

decline in exports over

the recent period.

Indonesia is still

growing, but the rate isstarting to show signs of

slowing down.



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From Q1/2000 to Q3/2012 Millions of US $


Thailands Export To ASEAN Trade Partners

Out of the 5 countries:

Cambodia, Laos,

Myanmar and Brunei all

have a strong growing

trend

The Philippines is

showing a fluctuatingexport volume and has a

upwards trend

0

500

1,000

1,500

Philippines

0

500

1,000

1,500

Cambodia

0

500

1,000

1,500

Laos

0

500

1,000

1,500

Myanmar

0

20

40

60

Brunei


Gro

wing


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Thailands Export By Product Category

0%10%

20%

30%

40%

50%

60%

70%

80%90%

100%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Manufacturing Agriculture Other Exports Fishery Mining Forestry Re-Exports

ManufacturingValue of Export

(Millions of US $)%

1 Electronics 30,276.50 16.7%

2 Automotive 26,451.99 14.6%

3 Agro-manufacturing Products 26,423.26 14.5%

4 Machinery & Equipment 15,815.49 8.7%

5 Petroleum products 12,152.74 6.7%

6 Petro-chemical Products 10,764.50 5.9%

7 Electrical Appliances 10,654.00 5.9%

8 Metal & Steel 10,251.93 5.6%

9 Chemicals 7,695.60 4.2%

Table is based on data from Jan12Nov12 and only

shows the 9 largest sub-categories of Manufacturing

The 3 largest sub-categories Electronics,

Automotive and Agro-manufacturing Products

account for 45.8% of the total manufacturing

export


For more than 15 years Thailands export has been dominated by the manufacturing industry. Graph is based on Thailands total worldwide export


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Thailands Export To Cambodia Through Cross border

Source: Bank of Thailand, Dept. of Foreign Trade

0

1,000

2,000

3,000

4,000

5,000Sakaeo

0

1,000

2,000

3,000Trat

0

100

200

300

400

500Chanthaburi

0

50

100

150

Surin0

50

100

150

200Sisaket

From Jan03 to Nov12 Millions of Baht


Sakaeo

Trat

Chanthaburi

Surin

Sisaket

Sakaeo and Trat are the main border points for export to Cambodia and

both show a steady growth. The other 3 areas are significantly smallerand show a fluctuating export.

Growing


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Overview Thailands Export To Cambodia through Cross border


67,826.00

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2008 2009 2010 2011 2012

Export Import Balance

41.39

1.371.461.721.742.062.182.232.302.602.782.823.133.343.48

3.70

3.86

4.08

4.23

4.74

4.78Sugar

Internal combustion piston engines and parts

Beverages (non-alcohol)

Cosmetics

Tires

Motorcycles and parts

Alcohol drink

Automobile and accessoriesMachines and components

Aninmal feed

Other vehicles and components

Fabric and thread

Gasoline

Iron and steel products.

Raw materials of cosmetics

Fats and oils from plants and other animals

Other livestock products

Fertilizer

Other petroleum products

Instant noodles and packaged food

Others

Thailand and Cambodia Trade Statistics 2008 2012

Thailand Top 20 Exported Products to Cambodia 2012 (%)

Million of Bath

%


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Thailands Import From Cambodia Through Cross border

From Jan03 to Nov12 Millions of Baht


0

200

400

600

800

1,000Sakaeo

0

10

20

30

40

50

60

70Trat

0

100

200

300

400

500Chanthaburi

0

10

20

30

40

50

60

70Surin

0

25

50

75

100Sisaket

Sakaeo

Trat

Chanthaburi

Surin

Sisaket


Sakaeo is the main border point for import from Cambodia. Trat has

seen a major increase in import over the past year. The other 3 areasare significantly smaller and show a fluctuating import.


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Overview Thailands Import from Cambodia through Cross border


6,430.54

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2008 2009 2010 2011 2012

Export Import Balance

6.88

0.811.031.511.731.91

33.053.48

3.56

4.195.52

6.17

6.53

11.38

39.25

Vegetables

Steel

Aluminum products

Vegetable oils and products

Copper products

Motor generator sets and components

Scrap paper

Wire and cable insulation

Receiver - transmitter equipments (telephone,

radio, cable television equipment)Grains

Garments

Printed circuit board

Tools made of metal

Other wood products

Timber

Others

Thailand and Cambodia Trade Statistics 2008 2012

Thailand Top 15 Imported Products from Cambodia 2012 (%)

Million of Bath

%


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Agenda:













3.2 IT in logistics






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Competitive landscape ASEAN logistics - Cambodia

0n 19 June 2012, the World Bank released a list that ranks the ease of importing, exporting and transporting goods in

different countries. Cambodia moved up 27 places and was ranked 101 out of the 155 countries included in the World

Banks report titled: Trade Logistics in the Global Economy.

Cambodia scored 2.56 out of 5 on the survey. In the 2010 report, Cambodia scored 2.37 and ranked 129.

Ranking and scores,

out of 155 countries.Overall Customs Infrastructure

International

Shipments

Logistics

quality and

competence

Tracking and

TracingTimelines

Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score Rank Score

Singapore 1 4.13 1 4.10 2 4.15 2 3.99 6 4.07 6 4.07 1 4.39

Malaysia 29 3.49 29 3.28 27 3.43 26 3.40 30 3.45 28 3.54 28 3.86

Thailand 38 3.18 42 2.96 44 3.08 35 3.21 49 2.98 45 3.18 39 3.63

Philippines 52 3.02 67 2.63 62 2.80 56 2.97 39 3.14 39 3.30 69 3.30

Vietnam 53 3.00 63 2.65 72 2.68 39 3.14 82 2.68 47 3.16 38 3.64

Indonesia 59 2.94 75 2.53 85 2.54 57 2.97 62 2.85 52 3.12 42 3.61

Cambodia 101 2.56 108 2.30 128 2.20 101 2.61 103 2.50 78 2.77 104 2.95

Myanmar 129 2.37 122 2.24 133 2.10 116 2.47 110 2.42 129 2.34 140 2.59

World Bank Report:

Trade Logistics in the Global Economy - The Logistics Performance Index (Laos and Brunei not covered)


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Competitive landscape ASEAN logistics - Singapore

Seaport One of the busiest ports worldwide

Currently serves as a regional logistics hub for many

companies in South East Asia

Strong support by the government to further enhance its

position in maritime sector

Statistics:o 29.9 Million TEU in 2011

o 530.5 Million tons of cargo throughput in 2011

o 43.2 Million tons of Bunker sales in 2011

Air cargo Changhi Airfreight Center is a state-of-the-art location with

good logistics support infrastructure connecting to 210 cities

in 60 countries

9 airfreight terminals with a combined handling capacity of 3

million tons per annum, making it one of the largest air cargo

operations in the world

Statistics:

o 983,110 tons discharged in 2011

o 882,142 tons loaded in 2011

Source: Singapore Department of Statistics

SingaporeSingapore is a prime location for major logistics firms, with 20 of the top 25 global logistics players conducting

operations here. Most of them have set up regional or global headquarter functions in Singapore.


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Competitive landscape ASEAN logistics - Thailand

Seaport 2 seaports (Leam Chabang and Rayong) and 3 river ports

(Bangkok, Chieng Sean, and Chaing Kong). 3 ports are next to

the neighboring countries such as Chieng Sean Port (Laos),

Chaing Kong (Laos) and Ranong (Myanmar)

Ranked 23rd busiest port of the world

Statistics

o 5.73 Million TEUs in 2011 (Leam Chabang)o 1.34 Million TEUs in 2010 (Bangkok)

Air cargo Six international airports. A state-of-the-art facility located at

Suvarnabhumi airport currently services 116 airlines and 27

air cargo carriers. Suvarnabhumi has been ranked as the 10th best airport

globally.

Statistics

1.3 million tons handled in 2010 (international)

4.97 thousand tons handled in 2010 (domestic)

Source: Worldshipping.org, BOI

ThailandThe Thai Government has planned to establish a world-class logistics system to support Thailand as Indochinas trade

and investment center.


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Competitive landscape ASEAN logistics - Cambodia

Seaport 2 Major ports with Sihanoukville (Kampong Som) being the

largest and most important deep sea port. Phnom Penh is the

countrys second largest port and is based at the junction of

the Bassac, the Mekong, and the Tonle Sap rivers

Statistics

o 95,333 TEUs in 2012 (Phnom Penh)

o 224,206 TEUs in 2010 (Total)

Source: Port Autonome De SihanoukVille (PAS), Xin Hua Publishing

CambodiaCambodias infrastructure is currently undergoing rapid improvements. Multiple projects are currently in progress to

connect the country with its neighbors and the rest of Asia.

Cambodias foreign trade has seen rapid growth over the past few years and all signs show that this trend will

continue in the near future.

With the AEC measures being put into place to further promote inter-ASEAN trade, it is essential for Cambodia

to have a modern infrastructure in order to keep up with the rest of the region.

An important step has already been taken by rehabilitating the train line between Samrong, just South of

Phnom Penh, and Sihanoukville port. This railway is expected to cover around 40% of freight traffic between the

capital and the countrys main deep sea port.


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Agenda:













3.2 IT in logistics






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Development of ASEAN Economic Organization

The Association of Southeast Asian Nations (ASEAN), established in 1967.

ASEAN is a geo-political and economic organization of 10 countries locatedin Southeast Asia; Brunei Darussalam, Cambodia, Indonesia, Laos,Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam.

Its aims include the acceleration of economic growth, social progress,cultural development among its members, and the promotion of regionalpeace.

The Foundation of AEC

GoodsServices Investment

From ASEAN Free Trade Area

(AFTA) to ASEAN Trade in

Goods Agreement (ATIGA)

Tariff reduction for selected

items in 1993 to 0% tariff in

2015

ASEAN Framework

Agreement on Services

(AFAS)

Started in 1995

From ASEAN Investment

Area (AIA) to ASEAN

Comprehensive Investment

Agreement (ACIA)

Started in 1998

Collaboration

Agriculture, forestry,

food security, intellectual

property, infrastructure,

E-ASEAN, consumer

protection, competition

policy, etc..

Source: thai-aec.com, thailandaec.com, gxasean.com, tradelogistics.go.th


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AEC Blueprint

The ASEAN Economic Community (AEC) shall be the goal of regional economic integration by 2015. AEC envisages

the following key characteristics:

Source: asean.org

1

2

3

4

A Single Market And Production Base

A Highly Competitive Economic Region

A Region Of Equitable Economic Development

A Region Fully Integrated Into The Global Economy

However, ASEAN leaders have decided to delay the launch of the ASEAN Economic Community (AEC) for 12

months from Jan 1 to Dec 31, 2015 to prepare the necessary regulations

(ASEAN Summit, Phnom Penh, November 2012)


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Highlight of AEC Blueprint: Single Market and Production Base

The five (5) core elements of ASEAN single market and production base are:

A Single MarketAnd Production

Base

In addition, the single market and production base also include two important components, namely, the priorityintegration sectors, and food, agriculture and forestry

Free Flow of Services

Free Flow of Capital Free Flow of Investment

Free Flow of Goods

Free Flow of SkilledLabour

0% tariff by 2010 except CLMV by 2015(Cambodia, Laos, Myanmar, Vietnam)

Free flow 4 sectors (e-ASEAN,

Healthcare, Tourism, Logistics)

Mutual Recognition Agreement

(MRA) for 7 professions(Engineering, Nursing , Architecture,

Accountancy services, Surveying,

Medical and Dental)

Promote and sustain the investment

within ASEAN (National treatment)

Strengthening ASEAN Capital Market

Development and Integration

Source: asean.org, NESDB


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Free Flow of Service: Increase % Foreign Ownership

A free and open investment regime is key to enhancing ASEANs competitiveness in attracting foreign directinvestment (FDI) as well as intra-ASEAN investment. Sustained inflows of new investments and reinvestments willpromote and ensure dynamic development of ASEAN economies.

Source: ASEAN, Thailand Ministry of Commerce, Press Search

Priority Integration Sectors (PIS)

under AEC

Agro based products

Air travel

Automotive

E-ASEAN (ICT)

Electronics

Fisheries

Healthcare

Rubber based products

Textiles and apparels

Tourism

Wood based products Logistics

PIS 4 sectors: E-ASEAN

(ICT), Healthcare,Tourism, Air travel

49% 51% 70%

Logistics 49% 51% 70%

Others 30% 49% 51% 70%

2006 2008 2010 2013 2015

Investment and service liberalization: Decrease shareholder restriction of ASEAN

investor


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Agenda:













3.2 IT in logistics






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New Trade Lanes

1. The land use policy shall focus on promoting thedistribution of economic prosperity of the country and

throughout all regions based on the difference in

capability of each area

2. The development of international transport and logistics

networks under the existing and future development

plan and integration of the linkages within the sub-region

and between sub-regions, as well as the cooperation

under the Master Plan on ASEAN Connectivity

3. Development of Thailands regions shall be pursued to

connect with neighboring countries and Southeast Asia.

The major development schemes include the EWEC,

NSEC, and SEC under the GMS Scheme

4. Development of border economic zones and border

towns shall be undertaken to serve as an economic

gateway connecting with neighboring countries.

GMS Economic Corridors

Source: Ministry of Transport


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New Trade Lanes Southern Economic Corridor (SEC)

Source: Asian Development Bank

Central Sub-corridor: BangkokPhnom Penh Ho Chi Minh City

Vung Tau

Northern Sub-corridor: Bangkok

Siem Riep Stung Treng

Rathanakini O Yadov Pleiku

Quy Nhon

Southern Coastal Sub-corridor:

Bangkok Trat Koh Kong

Kampot Ha Tien Ca Mau City

Nam Can

Inter-corridor Link, which links the

three SEC sub-corridors with theEastWest Economic Corridor:

Sihanoukville Phnom Penh

Kratie Stung Treng Dong Kralor

(Tra Pang Kriel) Pakse

Savannakhet.

The SEC comprises the following sub-corridors and inter-corridor link connecting major

towns and cities in the southern part of GMS:
http://www.siamintelligence.com/wp-content/uploads/2011/08/sec-map-2010-crop.jpg


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New Trade Lanes Southern Economic Corridor (SEC)

Social and Economic opportunities of the SEC for

Cambodia:

12 Million people of the overall Cambodianpopulation are living along the corridor. The

development of the SEC will directly and indirectly

benefit the majority of Cambodias population

Cambodia has world-renowned tourism spots along

the SEC which will benefit from a better infrastructure

The SEC offers a means for Cambodia to catch up with

the more economically advanced member countries

Thailand and Vietnam have a strong manufacturing

base along the SEC. Interconnecting the

manufacturing hubs in Thailand and Vietnam, will

create many business opportunities for Cambodia

The relatively young population of Cambodia indicates

that there is a growing labor force and an expanding

consumer market that could support SEC

development

d
http://www.siamintelligence.com/wp-content/uploads/2011/08/sec-map-2010-crop.jpg


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Agenda:













3.2 IT in logistics






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Scenarios for further development

Key findings:

As shown in the previous section, the most feasible option for Thailand to becoming a center of connectivity in the

ASEAN region is by road and rail

Thailands export to MY, SG, ID and VN is declining, while the export to KH, MM, LA and PH is growing

These smaller trade partners are currently undergoing major economic developments with projects to upgradetheir infrastructure and industrial capabilities

The entire ASEAN region is rapidly moving into the direction of becoming one big economic region.


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As most neighboring countries are still in the process

of improving their infrastructure, Thailand canpromote land-border trade by setting up local hubs

Advantages of these local hubs are:

o With a fixed network of routes, transportation

resources can be planned more efficiently

o Opportunities to consolidate cargo for

economies of scale and lower transportationcosts

o Possibility to conduct pre-shipment operations

at the hub such as sorting, cleaning and packing

cargo. This advantage can be very beneficial for

Cambodia as nearly 40% of its export to

Thailand are vegetables

o With a well developed regional road and rail

network, multimodal transportation can beutilized for cost efficiency

Scenario 1: Enhance border trade by developing regional hubs near country borders


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With the ongoing development of an Inter-Asian

highway network and a inter-connecting railwaynetwork, more opportunities emerge for Thailand to

ship cargo directly to its final destination

Advantages of direct shipments are:

o Considerable reduction of lead-time as there is

no hub-connection

o

Less likely to suffer delays as it eliminates relyingon hub operations

o Less chance of cargo damage or cargo waste as

it requires less handling

Scenario 2: Directly ship cargo to neighboring countries through inter-connecting road and

railways

A d


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Agenda:













3.2 IT in logistics






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AEC also offers greater prospects for further liberalization of the CLMV (Cambodia,

Laos, Myanmar, Vietnam) economies, which will put greater importance on tradeand investment. However, it also brings along stronger competition.

Logistics business can use opportunities offered by the AEC to increase domestic

and foreign investment, and create a network of partnership for integrated

services.

Logistics business can benefit from AEC as following:

Tariff and Non-tariff barrier reduction from CLMV

Basic infrastructure and transport development

Investment support from government

The Opportunities for trading between Thailand and Cambodia after AEC

Agenda


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Agenda:













3.2 IT in logistics






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Past 2012-2013 2015 2017Free flow of Goods

1. Tariff reduction

2. Non Tariff barrier

reduction

ASEAN-6IL=0%

SL,HSL=0-5%

CLMV

IL=0-5%

Vietnam

SL=0-5%

Laos, Myanmar

IL=0-5%

CLMV

IL=0%

Cambodia

SL=0-5%

ASEAN-5(Exp

Philippines)

NTB reduction

Philippines)

NTB reduction

CLMV

NTB reduction

For trade in goods, CLMV will provide more opportunities for the export market in

the next period due to the reduction in tariffs

IL=Inclusion list

SL=Sensitive list

HSL=Highly sensitive list

NTBs eg. Additional fee other than import duties, sanitary regulation, product characteristics requirement

Source: SCB EIC analysis

The opportunities after Tariff and Non barrier tariff reduction


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The inclusion list, sensitive list, and highly sensitive list

List Cambodia Thailand

Inclusion list 94-97% of all products Almost 99% of all products

Sensitive list

50 items

- Living duck, geese

- Cut of duck, geese

- Fish

- Some flowers eg. Orchid, roses

- Some vegetables eg. Tomatoes,

Onions, Garlic, cauliflower,

broccoli, carrot, beans

- Pineapples, orange,

watermelon

7 items

- Coffee

- Copra

- Flowers

- Potatoes

Highly sensitive list None None


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Products which have to

reduce tariff by 4-6% areelectric motors, sugar,

petroleum oils, and

automobiles

So, the export value from

Thailand to Cambodia of

theses products is expected

to increase in near future.


% Export from Thailand to Cambodia and expected further tariff reduction

Exporters/importers study

more custom rules for eachcountry

Logistic company prepares

special trucks for some

products such as petroleum

and automobiles

The opportunities after Tariff and Non barrier tariff reduction

Agenda:


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Agenda:













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Solution

Government

Private sector

Improve the customs system, such as develop the

National Single Window (No paper work) Reduce paperwork and time

System integration

Problem

Thailand and Cambodia have relativelyhigh cost, substantial paperwork and

time-consuming process for import and

export.


The opportunities for improving custom clearance services

Agenda:


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Agenda:













3.2 IT in logistics






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Almost 80% of trading value between Thailand and countries next to Thailand (Cambodia, Laos,

Myanmar, and Malaysia) is in a form of cross border trading.

So, cross border trading is significant for Thailand and Cambodia particularly when AEC becomes

effective in 2005.

Thailand and Cambodia government aim to increase trading value 30% during 2012 and 2015.

(Growth 27% in 2011)

62.3%7.8%

12.3%

17.6%

Cross border trading btw Thailand and

countries next to Thailand

Malaysia

Cambodia

Laos

Myanmar

Source: DFT, Ministry of Commerce

833

1,007

1,147

The opportunities cross border trading between Thailand and Cambodia

76.7%77.3%

78.4%

23.3%

22.7%

21.6%

0

200

400

600

800

1000

1200

1400

2009 2010 2011

BillionsBaht

Others

Cross border trade

Trading btw Thailand and countries next to Thailand


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On June, 14 2012 Thailand and Cambodia

open the bridge connecting between

Arranyaprathet and Poi pet. This occurs

under Cross Border Transport Agreement

(CBTA). Both Thailand and Cambodiaagree for giving quota of 40 trucks for

each countries. This quota is going to

increase in near future.

The routes under CBTA is divided into as

folllowing:

1) Bangkok-Arranyaprathet-Poipet-

Bavet

2) Bangkok-Leam Chabung-

Arranyaprathet-Poipet-Bavet

Road

1

2


Logistics facilities and infrastructure


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2

To Leam

Chabung

From To Sihanoukville

port (km)

To Leam

Chabang(km)

Banteay

Meanchey

618 304

Oddar

Meanchey

674 430

Battambang 554 382

Siem Reap 541 408

Province Product Export to

Banteay

Meanchey

Rice 0.5mt/y, Soy bean

7000 t/y, Cassava 0.8t/y

THA, VN

OddarMeanchey

Soybean 1,200 t/y,Cassava 15,000 t/y

THA, VN

Battambang Rice 0.7 mt/y Malaysia,

EU, USA.

Cassava 1.3 mt/y THA, VN

Siem Reap Crocodile skin 22,000

heads in 2008

Singapore,

VN

Rice 0.05 mt/y, Cassava8,000 t/y

THA, VN

Products in provinces next to Thailand can be transported to Leam Chabang which is closer

than Sihanoukville port.

Route 2 (Leam Chabung-Poipet)


Sihanoukville port

Source: Trade promotion department, Cambodia


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Dawei port

Export to middle

east, Europe

Garment and footwear industries

Mainly located in Phnom Penh.

In 2011, export to US. 1.84 billions $ (43%),

export to EU 1.3 billions $ (30%), export to Japan

and Canada 0.98 billions $ (23%)

Garment,

88%

Timber

rubber

fish, 6%

Rice, 2%Others,

4%

Cambodia major export products % by

value 2011

US.,

43%

EU,

30%

Others,

27%

Source: Ministry of commerce, Cambodia

When the construction of Dawei deep sea port has finished, Thais and Cambodians can exploit Dawei-

Bangkok-Phnom Penh route for transport goods to Dawei port which is used to export to EU and middle

east. The distance travelled by vessel is shorter than going through Singapore.

Garment industries

can use Dawei port

to export to EU.

Distance from

Phnom Penh to

Dawei 1,073 km


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Thailand and Cambodia have a railway building

project, which connects Bangkok-

Arranyaprathet-Poi Pet- Sri Sophon- Batambang-

Phnom Penh.

Thai Ministry of Transport is consideringbetween using Ban Klong Luek or Ban Nhong

Eian as a connection point with Poi Pet. The

railway from Bangkok to Phnom Penh is

expected to be used within 2013.

The next step is to make an agreement with

Vietnam to construct railway to Ho Chi Min city.

Rail

Available in 2013

Next phase

Logistics facilities and infrastructure


Source: EXIM bank


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More convenience road routes and railways leads to

An increase of cross border trading

An increase of tourism (Cambodia has a lot of beautiful place eg, Tonle

lake (the largest lake in ASEAN) and killing fields in and it will be more

interesting if it can connect to Ho Chi Min)

An increase of logistics and transportation business

An increase of passenger transportation service

An increase of truck and car manufacturers


Agenda:


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g













3.2 IT in logistics





h d f l i i i


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Logistics cost to GDP of Thailand is declining. However, it still high comparing Singapore

and Malaysia

Domestically, Thailand still relies heavily on road transport accounting for 83%. It shouldchange to rail system and maritime transport which have lower energy cost by 3.3 and 5

times, respectively

Also, it needs logistics practices to improve efficiency of logistics operations

38%

32%

8%6%

16%

Logistic cost factors

Transport

Warehousing

Order processing

Administration

Inventory holding


The needs of logistics practices

L i i b i d l Li h h ?


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Light asset business = a logistics service provider making little investment in assets (no fleet for

transportation or warehouse)

Heavy asset business = a logistics service provider making high investment in assets

Thai and Cambodian logistic operators with small capital should apply light asset model to

generate higher returns without having to invest in many assets

Light asset (C.H.Robinson) Heavy asset (UPS)

Logistics Operator

One of the worlds largest third party logistics

providers with over 53,000 transportationproviders under contract globally

The world largest package delivery company and a global leader in

supply chain solutions

Company structure

Over 53,000 customers, 235 offices and 8,350

employees worldwide

Service to more than 200 countries with 2,879 worldwide operating

facilities, 8.8 million customers, and 398,300 employees

101,121 fleets and 223 UPS airplanes

Main service

Global freight and integrated logistics services,

customs brokerage service, warehouse, logistics

consulting

Product sourcing

Money transfer and payment services

Worldwide package delivery service and express delivery service

Integrated freight and logistics services, freight forwarder, full

truckload, less-than-truckload custom brokerage service, and

warehouse

Financial service for importer and exporter

Extra and

specialized service

Largest network of motor carrier capacity in

North America

Special service in logistics such as supply chain design and planning,

technical check and repair, reverse logistics

Revenue and asset Total revenue in 2011=USD 10.3 billion

Total asset in 2011-USD 2.1 billion

Total revenue in 2011=USD 53.1 billion

Total asset in 2011-USD 34.7 billion

Revenue/Asset

ratio

4.83 1.53

Point/Investment

ratio

0.55 0.22Source: SCB EIC analysis

Logistics business model- Light or heavy asset?

Agenda:


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3.2 IT in logistics





L i ti ti


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Cross-docking

Carrier CContinuous move (c-move)

Full-trailer

Carrier A

Multi modal transport

Full-trailer

BackhaulingManagementCarrier B

Carrier EHub

Hub and Spoke

Logistics practices

L i ti ti C d ki


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Receiving, picking, sorting and issuing

with no inventory added

X

Potential are of cross-dockingX

Chiengmai

Korat

XX

Surathani

Songkla

Pathumthani

XPisanulok

XUdorn

Phuket

X Leam ChabangXX

X

Logistics practices - Cross-docking

Logistics practices H b and Spoke and Windo deli er


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Chiangmai HubNonsomboon Hub

Hadyai HubMetro DC RangsitBangkaen

Ramintra

BungkumBangkapi

Sapansung

Ramkumhang

Minburi Nongjok

Ladkrabang

Ladlumkaew

Pakgred

Nontburi

Banggray

Thinoi

Bangbuatong

Pinglownanakornchaisri

Boromratchachonnanee

Puttamontonsai 2

Petkasame

Nonkam

Prakanong Bangna

Bangple

Bangsaotong

KlongtonKlongtoey

Pravest

Srinakarin

Samutprakarn

Bang

koknoiBangkokyai

Jomtong

BangkuntianThonburi

Prapadang

Suksawas

Ratburana

Rat.

LadprowHuykhang

Pomprab

Mahaprutaram

SatornBangkolam

Yanawa

Samkok

Patumtani

Klong Lhang

Thunyaburi

LumlugkaDonmuang

Jatujak

Prachachun,Bangsu

Phayati

TL

C

C

West

LowerNorth

LowerNortheast

East

UpperNortheast

Upper North

South

DC.

Suraththani Hub

Logistics practices Hub and Spoke and Window delivery

Logistics practices Continuous move


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Before

Samparn LardKrabang

Saraburi

Minimize Deadhead & Combine transport

Empty load

SamparnLard

Krabang

SaraburiC-Move

Full load

Dead head

Logistics practices Continuous move

Logistics practices Multi modal transportation


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Logistics practices Multi modal transportation

Poipet

Ho Chi Minh

City

Phnom Penh

Kam PongSom Port

Kampot

Building Material Product

Gypsum ore

Bagged Cement


Gypsum board


Bagged Cement

Bagged Cement

OMP Port

Advantages

Reduce road congestion

Reduces carbon emissions

Increased weight capacity

Truck Mode

Train Mode

Waterway Mode

Limitations Rail infrastructure not always

conductive due to low bridges and

different width of rail among

countries

Inland waterways susceptible to

tidal influences

Disadvantages

Possible journey time increase

Double handling cost

Logistics practices Multi modal transportation (Sea Air Air Truck)
http://www.iconarchive.com/show/transport-icons-by-icons-land/RecoveryTruck-icon.htmlhttp://www.iconarchive.com/show/transport-icons-by-icons-land/RecoveryTruck-icon.htmlhttp://www.tincpro.com/Gypsum_board_series/Gypsum_board_series2012-9-25/436.htmlhttp://www.tincpro.com/Gypsum_board_series/Gypsum_board_series2012-9-25/436.htmlhttp://www.iconarchive.com/show/transport-icons-by-icons-land/RecoveryTruck-icon.htmlhttp://www.iconarchive.com/show/transport-icons-by-icons-land/RecoveryTruck-icon.htmlhttp://www.tincpro.com/Gypsum_board_series/Gypsum_board_series2012-9-25/436.htmlhttp://www.iconarchive.com/show/transport-icons-by-icons-land/RecoveryTruck-icon.htmlhttp://images.wikia.com/cityville/images/b/b0/Warehouse-icon.png


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Logistics practices Multi modal transportation (Sea-Air, Air-Truck)

35% of the total value goods

moved is by air freight.

60% of air freight is carried on

passenger aircraft.

Sea-Air = Vessel + Aircraft

Air-Truck= Aircraft + Truck

Since air mode needs road

transportation on either side

(Origin or Destination), airport

having a lot of road going throughwill be advantageous.

Thai government is considering to

upgrade Phitsanulok airport to

international airport since it is a

center of many road access

Combining shipment to one

airport and then distributed crosscountries by trucks is going to

increase when road is improved,

and custom procedure is

simplified.

International airport

Port

Road

Phitsanulok

Logistics practices Backhauling management


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Logistics practices Backhauling management

Poipet

OMP Port

Phnom Penh

Kam PongSom Port

Waste Paper

Fertilizer

Truck Mode

Benefits

Improve truck utilization

Reduce cost

Reduce carbon emissions

Reduce fuel consumption

Logistics practices Example of logistic practices in Cambodia
http://images.wikia.com/cityville/images/b/b0/Warehouse-icon.pnghttp://www.iconarchive.com/show/transport-icons-by-icons-land/RecoveryTruck-icon.htmlhttp://www.iconarchive.com/show/transport-icons-by-icons-land/RecoveryTruck-icon.htmlhttp://images.wikia.com/cityville/images/b/b0/Warehouse-icon.png


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Cambodia

Warehouse

Poipet

Crossdocking

Siemreap

Destination

Product: Bag Cement , Roof tiles , Sanitary Ware

Backhaul ManagementFrom Siemreap-Poipet

Crossdocking

Destination

Port120 Km.

Cambodia

Port

Thailand Phnom penhPoipetWarehouse

Continuous moveRoof tiles to Siemreap

Example of cross-docking and backhaul

Example of cross-docking and contd move Product: Bag Cement , Roof tiles , Sanitary Ware

Logistics practices Example of logistic practices in Cambodia

Agenda:


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3.2 IT in logistics





Logistics practices IT in Logistics


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Logistics practices IT in Logistics

TMS

Logistics

NetworkDatabase

GPS/RFID

DigitalMap

Order

StagingSystem

SAP : SD,MM,

FI, WMS

DocumentManagement

E-Ordering

External

CustomerSystem

IT PlatformSystem Objective

E-Ordering Order receiving via internet

SAP Order checking : Credit , Product availability

Digital Map Plot destination

Order Staging System (OSS) Split order

Transportation Management System (TMS) Optimize load& Tender

Logistics Network Database (LND) Assign registered truck / driver

GPS / RFID Status Tracking

Document Management System (DMS) Tracking return document

Logistics practices IT in Logistics: Basic needs for IT Supports


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Chiangmai HubNonsomboon Hub

HadyaiHubMetro

angsit

BangkaenRamintra

BungkumBangkapi

Sapansung

Ramkumhang

Minburi Nongjok

Ladkrabang

Ladlumkaew

Pakgred

Nontburi

Banggray

Thinoi

Bangbuatong

Pinglownanakornchaisri

Boromratchachonnanee

Puttamontonsai 2

Petkasame

Nonkam

PrakanongBangna

Bangple

Bangsaotong

KlongtonKlongtoey

Pravest

Srinakarin

Samutprakarn

Bang

koknoiBangkokyai

Jomtong

Bangkuntian

ThonburiPrapadang

Suksawas

Ratburana

Rat.

LadprowHuykhang

Pomprab

Mahaprutaram

SatornBangkolam

Yanawa

Samkok

Patumtani

Klong Lhang

Thunyaburi

LumlugkaDonmuang

Jatujak

Prachachun,Bangsu

Phayati

TL

C

C

West

Lower

North

LowerNortheast

East

UpperNortheast

UpperNorth

South

DC.

Suraththani Hub

Complicated logistics network

Various type and size of trucks

Different customers needs

The restriction related to transportation (eg. Truck ban time and zone)

Cost efficiency

Logistics practices IT in Logistics: Basic needs for IT Supports

Logistics practices IT in Logistics: Digital map


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Logistics practices IT in Logistics: Digital map

Logistics practices IT in Logistics: Transportation Management System


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System Function

Automate routing by optimization

function

Job assignment based on

- Customers requested date

- Transport condition & restriction

- Product condition (weight &

volume)

- Truck availabilities by equipment

type

- Origin & Destination condition

Web-based status tracking

Digital map printing via internet (plotby customer)

Truck and Driver controlling by

Logistics Network Database (LND)

Document controlling by Document

Return System

Automate Billing

Logistics practices IT in Logistics: Transportation Management System

TMS is Transportation Management System designed for Third Party Logistics Providers to execute and

manage the full life cycle of the transportation process, from order management through load processing,

customer service and financial settlement.

Web-based

Logistics practices IT in Logistics: Transportation Management System function


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Logistics Planners:- Order Splitting- Load Build (Manual or Auto)- Load Tender

Customer, MFG, DSSC:- Create Sales Orders

- Mark ship-to location

Carriers:- Tender Response(Accepted or Rejected)

- Print Shipment Doc.- Assign truck to pickup goods

Plants:- Good Issue

CTL Accounting:- Create AP / AR

Transportation Management System (TMS)

TransportationDocument return




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Optimization

Shipper / Consignee Facilities

Appointments Dock Restrictions

Hours of Operation

Carrier Restrictions

Loading

Unloading Restrictions

Shipment Parameters Delivery Window

Pick-up Window

Classification

Dimensions

Weight

Count

Carrier

Tariffs/Rates

Service Level

Conditions

Options

Lanes

Rates

Carriers

Restrictions

Hubs/Terminals

Hours of OperationPerformance Metrics

Equipment Availability

Each Shipment is Dispatched with the

Best Service at the Lower Cost

End Results

Optimized Loads

Route optimization by Transportation Management System (TMS)Logistics practices IT in Logistics: Transportation Management System function

Logistics practices IT in Logistics: Warehouse Management System


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Warehouse Activities

Prepare goods

to be loaded

on truck Pack Goods

Picking List

Pick goods

from picking listIssue PickingList Issue Stock

Replenishment MonitorStock Level

Receive Stock Assign Location Keep Goods Count Stock ReportStock Balance

Logistics practices IT in Logistics: Warehouse Management System

Logistics practices IT in Logistics: Warehouse Management System application


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og st cs p act ces og st cs a e ouse a age e t Syste app cat o

Receiving Put-away Packing Weighting

Warehouse Activities

After Loading Truck ScaleBefore Loading

4B090125-00001

H5604F

3 cm.

2 cm.

Logistics practices IT in Logistics: Import & Export paperless with e-Custom


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EZYPLUS Ex/ImEZYPLUS Ex/Im

Web Service

Client (2)RTC

3. Create shipment list

4. Approve &Digital Sign

7.) data and documentaionsent back to web

1.) SendINVOICE CSV fileto supplier

6.) Receive confirmation fromcustom department

Import &Export web

Web Service

SCTL

Web ServiceClient(1)

INVOICECSV file

G/WTIFFA

(Web Tracking)

5. Data sent tocustom department

/SCT&CTL

EzyPlus

2. Upload Invoice CSV fileto system

g p g p p p p

Logistics practices IT in Logistics: GPS system


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g p g y

Hardware

Mobile GPS for general truck

Flexible to relocate among truck

Fixed GPS Module with sensor Signal loading/unloading status

Control driving behavior

Bulk Cement Truck

Lighter

Mobile GPS

Fixed GPS Module with

water level sensor and

solar cellSignal loaded/empty

lighter

Use solar cell for power

supply while operate

anchorage point

Software

Feature

Real time Truck / Lighter status tracking

Interface with TMS system : on/off duty , loaded/empty

Standard feature

Additional featureFeature

Estimated time arrival

Alert via e-mail / SMS

Wrong destination

Out of route

Delay delivery

Over speed limit

Enter to restricted areaReport

Utilization

Driver performance

TruckLighter

Logistics practices IT in Logistics: GPS Application : Track & Trace


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g p g pp

Show current location

Display current location

Display routing

Display remaining

distance

Logistics practices IT in Logistics: GPS Application : Proactive Monitoring


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g p g pp g

Over Speed Limit

Over speed Location



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g p g pp g

Restricted Area

Enter Restricted Area



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Unloading outside assigned destination

Alertpoint

Destination

Logistics practices IT in Logistics: GPS Application : Backhaul management


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No. of Lighter and status

Loaded small barge

Empty small barge

Vessel

Agenda:


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1.3 Regional trade agreements, macro economic forecast and effects analysis1.4 Geographical locations interesting for further study








3.2 IT in logistics





Logistics practices Green logistics


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The Wheel of Green Logistics

Optimize

storage space

Optimize good

movement and

handling

Reduce

inventory

Renewable &

Efficient

Energy usage

Construct

Green

Warehouse

Appropriate

mode

selection

Maximize

utilizationReduce

movement &

optimize

routes

Fleet

Management

Reduce Fossil

fuelConsumption

Reverse

Logistics

Green

Warehousing

Green

Transportation

Pollution

prevention

Emission

control

Reduce cost

Fast

deliveries

Green

Logistics

Vehicle monitoring system

Aerodynamic vehicles

Drivers training

Reduction in

empty running

Larger vehicles

Alternatives fuels(Natural gas

vehicle, NGV)

Multimodal

operation

Logistics practices Green logistics


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Aerodynamic vehiclesLarge vehicles

(Allowing in Australia, New Zealand)

Natural gas vehicles (NGV)

Logistics practices Green logistics: A case study of unloading clinker and coal


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Dust Control

Install Bag Filter for collecting dust1

Investment 10 Million Baht

Electricity cost 300,000 Baht/month

Power 3,500 CFM

Install dust measurement2

Schedule port cleaning time3

Entrance and roadcleaning 08.00-09.00 a.m.

Vacuum truck 10.00-11.00a.m.

Water spraying 13.00-14.00p.m.Vacuum truck 15.00-16.00p.m.

Entrance and road cleaning 16.00-17.00p.m.

Cleaning wheel-cleaning pool 16.00-17.00p.m



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Set up procedure4

Clinker Coal

1) Trucks needs to totally get inside before

unloading, Then close a curtain

2) Barge needs to be covered by canvasduring loading

3) Open bag filter during loading and unloading

1) Cover barge with canvas all time during

unloading

2) Spray water during unloading3) Specify the area ofBackhoe to prevent

splatter

Dust Control



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Clarifier

Water out pipeWater Treatment

Water treatment system

Pond (1) : filter oilPond(2) : filter resolvent chemicalsPond(3): Temporary leave

After cleaning, waterwill be moved to

natural well.

Logistics practices Safety management


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Factors influence transportation safety

Engineering

Automotive engineering (Truck)

Roadway and traffic engineering Road user

Driver performance

Driver behavior

Truck

Traffic management

Driver

TruckPhysical inspection /Tire and equipment

Install GPS for monitoring and limiting driving speed

Driver

Wear uniform and PPE

Needs to have training and orientation before driving

Drug Test and Alcohol Test

Tool Box (Monthly training)



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Traffic management

o Specify the safety parking area

oLimit driving speedoSet up traffic sign

oInstall flashing light at the entrance



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Crisis Management seminar

Simulate the emergency situations

- Fire

- Riot

- The contamination of cargoes in sea or river

Agenda:

1 Hi h l l i t d


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3.2 IT in logistics





Logistics practices Corporate social responsibility


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Improving sport field for local people Build a library

Organizing the sport activities in the evening and health check activities in holiday

Agenda:

1 High level macro economics study


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3.2 IT in logistics





The collaboration between Thailand and Cambodia towards to operational excellence


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The collaboration

towards Operational

excellence

Infrastructure

Foster linkage of rail androad

Study potential area ofinternational hub Prepare rail and port

facilities to avoidcongestion

Sharing information ofport shut down andfuture renovation plan

Network and knowledge sharing

Logistics operators sharingnetwork and knowledge

Industrial operator sharing theirtransportation demand androutes

Regulation

Harmonizing regulations andsetting the same criteria, eg.custom, loading weight,safety, driving speed.

Human capital

Setting up international labor

center to increase driversand unloading staff.

System integration

Introducing IT in logisticsby government support

Applying EDI (ElectronicData Interchange)

Agenda:

1 High level macro economics study


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3.2 IT in logistics





Export Logistics Model Award (ELMA)


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From Thailand Logistics Model Award

to

ELMA

2007

Beginning of the award

2007-2010

National Standard

2011

InternationalStandard

To upgrade the award program to meet international standard

To help LSPs and Exporters increase logistic efficiency throughcomprehensive health-check program

To enhance competitiveness of LSPs and Exporters in theinternational arena.

2011ELMAAward

Objectives

Comprehensive

Award Program

Export Logistics Model Award (ELMA) - Criteria


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Following International Logistic Standard

Cross-Committee Evaluation

ELMA

MalcolmBaldridge

SCOR Model

AcademicPanel

LSP Panel

Committeesfor

ExportersAcademicPanel

User Panel

Committeesfor

LSPs

Export Logistics Model Award (ELMA) - Award Categories


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Small-Medium

(5 awards)

LSPs

(3 awards)

Exporters

(2 awards)

Large

(5 awards)

LSPs

(3 awards)

Exporters

(2 awards)

Certificates for

those who are

scored over 80%,

Awards forwinners

1 2

If you are looking for partners, looking for ELMA.

Export Logistics Model Award (ELMA) - Benefits to Award Participants


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Benchmarking companys operation with INTERNATIONAL Standard

Making effort to compete with yourself and striving for improvement

Defining the opportunity to increase efficiency in logistic operationOverall Health Check

For Exporters

ELMA will increase the presence of the company into theinternational arena, while heightening the level of competitivenessamongst others.

ELMA will help exporters gain confidence from importers/buyers

For LSPs

ELMA will guarantee the quality of your operation while opening thegateway to international logistic network

Valuable Marketing tool

Award recipients will become the brand ambassador of ELMA

Your company will be presented and highlighted with DEP logisticsactivities

Improving corporate image and overall PR gain

Brand Ambassador


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THANK YOU!

Q&A

Logistic Opportunities for Collaboration Between Cambodia and Thailand 20012013 Final

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