In the past few years, both public and private sectors have recognized the need for a modal shift, away from inland and towards rail and water transportation.Though the latter modes of transport are the more cost-efficient when compared to land, the lack of links has put users off and no logistics costs have been reduced significantly.
 
 However, a more orchestrated drive to enhance national logistics was carried out last year by state and private organizations,with a budget of almost 5.4 billion baht.
 
 The driving force was the National Economic and Social Development Office.The office proposed the Logistics Development Master Plan (2007 - 2011) which aims to reduce national logistics costs from 19% per GDP down to 16% per GDP by 2011 and was endorsed by the Cabinet in February 2007. The strategic agenda aims to create: improved logistics efficiency in industry; improved efficiency in transport and logistics, improvements in the logistics serviceproviders business,enhanced trade facilitation and better human resources.
 
 Some developments have already taken place. Rail and water transportation was given a high priority with the aim of providing cost-efficient transport for five products,namely rice, sugar, tapioca starch, rubber and iron. The aim was to promote a modal shift by having cooperated efforts from agencies. The Ministry of Transport has issued a white paper to pave the way for sustainable transportation development and will encourage more participation from the private sector. It has also worked on amending laws and regulations that hinder import/export and has submitted a new Logistics Act to be approved by the Office of the Council of State.
 
 Meanwhile the Office of Trade Logistics will give priority to the building of human resources logistics with training projects which would be promoted in provinces more this year, according to Dr. Chakrit Duangphastra, director of the Logistics Service Provider Promotion Group, Office of Trade Logistics.
 
 The Thai National Shippers’ Council (TNSC) has also played a crucial role in strengthening the country’s logistics strategy. The council, in cooperation with the Japan Institute of Logistics System (JILS), held workshops and training projects focusing on increasing the abilities of logistics personnel. The Logistics Qualification System Program is planned for October this year with support from the Japanese External Trade Organization (JETRO).
 
 Yoo Chienyuenpong, chairman of the Land Transport Federation of Thailand,said the slow progress of national logistics development had been due to too many studies. “We spent too much time on feasibility studies. This didn’t keep pace with the global trade scene, which changes fast. When the time to put this into practice comes, the study would be outdated,” he said.
 
 He added there was no need to invest in new infrastructure schemes, as improvements to waterways would be of more use "Canals and rivers need to be dredged to facilitate waterway transportation while current ports’ facilities and capacity will be improved. This will encourage more usage of this mode, which is cheaper than road networks, especially for agricultural products. There’s no need to invest in huge infrastructure projects," he suggested.
 
 Mr. Yoo supported the construction of small distribution centerss instead of big ones in provinces where factories are located.
 
 Chockchai Compiranonta, president of R & C Intertrans Co., Ltd. agreed. "Having smaller container yards (CY) which are scattered close to the industry areas would be more practical for manufacturers and logistics providers than a huge one located too far away. A few big CYs built by the state agencies were ignored since they were located over 25 kilometers from the industrial area, making the logistics costs high."
 
 Though it was agreed that rail transport, with its huge capacity, is a more attractive mode, unreliable timing and a lack of modal connections have been an obstacle. Such inconvenience makes doorto-door service impossible.
 
 The national logistics system would have progressed more significantly if it had been carried out with an integrated vision,according to Dr. Maitree Srinarawat, director general of the Transport and Traffic Policy and Planning Office.
 
 "There should be a strategic plan with identified roles for both public and private sectors to avoid repetition," he said.
 
 To quicken the logistics development,Techa Bonnyachai, vice chairman of the Thai National Shippers’ Council (TNSC), said amendments of laws and regulations that hindered import/export should be quickened up so that Thai operators will have a more competitive edge in the global market.
 
 "TNSC has highlighted 55 troubled laws and 24 of these were amended in recent years. We hope the 21 remaining ones will be amended within this year," he said.
 
 The need to reduce logistics costs and create value-added for the logistics industry was highlighted after the Institute of Management Development (IMD) lowered Thailand’s competitiveness ranking from 29th to 33rd last year. Dr. Narongchai Akrasanee, chairman of the Export-Import Bank of Thailand, said the country’scompetitiveness for 2008 would continue to fall.
 
 This view was shared by TNSC chairman Suchart Chantaranakaracha,who forecast that Thai exports for the new year would be slower as export growth in major markets like the US, Europe and Japan also cooled.
 
 "The strong baht, fuel hikes and emerging exporting countries like China,India and Vietnam will cool Thai exports," said Mr. Suchart. He said exports of garments, frozen shrimps, vegetables and fruit to Japan would be increased as the result of the Japan-Thailand Economic Partnership Agreement (JTEPA).
 
 TNSC chairman also said the private sectors could not wait for governmental support alone. "The global trade has changed so much. Thai exporters must adapt to the new challenges," he said.