More efficiency for airfreight
Thailand is working hard on repositioning itself as a key international cargo hub. ITJ correspondent Michael Mackey spoke to the managers making things happen there.
A proposed new cooperation agreement between Munich airport and the state-owned entities Airports of Thailand (AOT) and Thai Airways International has been designed to move the latter more into the focus of the global airfreight industry. Officials from both companies recently presented details of the undertaking in Bangkok. The approach looks to new business lines – especially in the field of temperature-controlled activities, cooperation with freight forwarders and the improved use of resources, such as IT, staff and space at existing facilities. This last point should allow for the strong development of the perishables sector, an element that has long been undervalued in Thailand’s air cargo sector.
The goals are ambitious, however, with plans to make Bangkok the first certified hub in Thailand, AOT president Nitinai Sirismatthakarn told a conference in Bangkok recently. “We expect to have all agricultural products inspected in Bangkok before they’re exported to Europe,” he said. “We believe that the cost of exporting agricultural products will thus be significantly reduced,” he added, but did not volunteer any further details.
Consolidate to export
Dumrungchai Sawangcharoen, managing director of the country’s flag carrier Thai’s department for cargo and mail, did explain in an interview, in contrast, that AOT is planning to cooperate with Munich airport to enable European quarantine officers to be based at Bangkok airport and to carry out pre-quarantine processes first-hand in Thailand. “As soon as a shipment arrives in Munich – or any the other airport, such as Frankfurt – the workers there won’t have to do anything about quarantine,” Sawangcharoen continued. The aim is to improve the export of perishables from Thailand. Thai is set to create its own perishables village by consolidating its scattered refrigerator centres, Sawangcharoen added.
Other temperature-controlled lines are also prominent in the new approach. Thai has set up a team to establish a new temperature product, with pharmaceuticals very much in mind. Another plan envisages the acquisition of the good distribution practices certificate for pharmaceuticals (GDP), expected to be completed by the end of 2018.
Among other ideas being considered by the airline is a plan for a direct-order wing. This would see Thai working with a partner to move goods door-to-door. Sawangcharoen reminded his audience that Thai introduced a new IT system, including a mobile app, in 2015, which enables more and better use of information technology, including more efficient revenue management thanks to web-based technology.
Partnerships will kick in at two different levels. One is at what Sawangcharoen called the ‘foundation’ level, with forwarders who already have close relationships with Thai. “We’re going to deepen relations and exchange ideas more, so that we can extend the scope and range our services constructively.” There are also some plans for a partnership with a Chinese or Japanese carrier in the frame, and beyond that for a strategic global alliance.
Support from government initiatives
Planned infrastructure initiatives from the Thai government will help. Chief amongst these is a so-called Eastern Economic Corridor (EEC), which has been designed to make Thailand’s northeastern coast a high-tech value-adding industrial belt. Support for air cargo will come from the development of the airport at U-Tapao, southeast of Bangkok – even though this project is not without some hurdles. U-Tapao is owned by the Royal Thai Navy, a potentially rather difficult partner.
Another problem has additionally arisen, howhowever. Thailand’s military government has asked for a study on what Thai plans for U-Tapao, but with a very tight timeline – the report supposed to be finished by the turn of this year, and implementation is due in 2018. “I’m not sure we can do it,” said a Thai official who preferred not to be named.
Looking into the concrete advantages
“We have to look at which full-freighter operators want to fly into U-Tapao and carry goods from the EEC,” said Sawangcharoen, adding that Chinese firms are very much at the top of this list. “We’ve talked to Lazada,” he added, “but we’re at a very early stage yet.”
There is more too, with a new airport being planned for Phang Nga, in the south of the country, not far from Phuket, where space, especially for logistics, is very limited. Two markets have been identified as having cargo potential. One is seafood bound for Hong Kong and Japan, and the other one is for cross-border trucking trade from Penang (Malaysia), likely to focus on high-value electronics. “It could be promising on account of the many flights to and from Phuket,” Sawangcharoen said – and he might as well be commenting on Thailand’s future as an air cargo hub.