TNT to triple Thai Ops

Kingdom to be firm’s fastest-growing market in Asia, overtaking IndonesiaTNT, the world’s leading express and logistics company, plans to triple its local business in three years, making this its fastest-growing market in Asia.

Thailand now competes neck and neck with Indonesia for the honours, said Winfried Kiesbueye, general manager of TNT Logistics (Thailand).

The rapid growth is driven by its logistics business, which is expected to contribute more than half of TNT’s total revenues in two years.

“Both Thailand and Indonesia are emerging markets for logistics, and they are changing from traditional to a more modernised environment,” Kiesbueye said.

TNT launched its logistics business here five years ago, but it has only taken off in the past 18 months.

“We [were able to] double our logistics business last year, and we expect to do it again this year,” Kiesbueye said.

Logistics now accounts for 43 per cent of TNT’s total business in Thailand while 45 per cent comes from international express and 12 per cent from domestic express services.

“Logistics is growing faster than international express, which is growing by 15 to 20 per cent,” Kiesbueye said.

Last year TNT bought a local express company, Traffic Express International (TEI)sub’s note: needed for caption, which offers express distribution here for parcels and freight.

“With the acquisition, we are now able to offer door-to-door delivery overnight to all postal codes in Thailand together with Web-based track-and-trace facilities,” Kiesbueye said.

To keep up with the booming logistics business, TNT will increase its local logistics hubs, including office and warehouse facilities, from the current nine locations to 15 in three to four months and up to 25 by the end of next year.

Its workforce here has grown from 320 people 18 months ago to 850 today and is expected to exceed 1,000 by the end of this year.

“Our logistics service would serve high-value cargo and commodities such as semiconductors, telecommunications and computer equipment, and electronic and automation spare parts,” Kiesbueye said.

“We are in a good position to grow as the local market requires good logistics solutions.”

With efficient logistics in place, a company could reduce its inventory levels by 60 to 70 per cent and cut delivery lead time in half. The total supply chain cost could also be reduced by 25 to 50 per cent in the long term.

The country’s entire logistics market should be worth about US$4 billion (Bt170 billion) based on its gross domestic product of $113 billion, Kiesbueye said.

Local companies are looking to outsource logistics functions to service-providers with expertise in the area. Three to four other major players are in the market providing different logistics solutions, he said.

“The outsourcing activities in the supply-chain system are expected to grow 25 to 40 per cent a year.”