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Thailand: UTCC notes higher costs for SMEs
Small and medium-sized enterprises (SMEs) that provide logistics, transport and service systems by themselves shoulder higher costs than outsourcing, according to a survey by the University of the Thai Chamber of Commerce (UTCC).
The survey on logistics adoption and management of Thai SMEs showed logistics cost accounts for 30.6% of small business operators’ total costs for those that offer such service themselves, but only 13.3% for those that outsource, said Saowanee Thairungroj, president of UTCC.
UTCC and the state-owned Small and Medium Enterprise Development Bank of Thailand (SME Bank) jointly surveyed 1,221 SMEs.
Raw material and product procurement firms represented 26.5% of the respondents, delivery firms were 23%, inventory 18.8%, packaging 12.5%, export and import documentation 7.23%, production planning 6.63%, and product claim management made up the remainder.
Most respondents said they were involved with several aspects of logistics other than delivery, which they wanted to outsource, she said.
Some 46% said the importance of logistics is mid-level, but believed it will become very important in the next six to 12 months, said Ms Saowanee.
Transport and service cost makes up 19% of total costs for operators that offer it themselves, and 15.8% of total costs for those that outsource.
Thanavath Phonvichai, vice-president for research at UTCC, said business structures determine whether SMEs provide logistics and transport service by themselves.
For the correspondents that outsource delivery service, he said 20.4% use Thailand Post, 20.1% use Kerry, 16.8% use the Transport Co, and the remainder use others including Line Man.
The logistics costs of SMEs, particularly small ones, are relatively high, he said. Large companies’ logistics costs account for 10% of total costs, while small SMEs’ stand at 20%, said Mr Thanavath.
SME Bank president Mongkol Leelatham said the bank will use the survey results to develop products to support SMEs creating logistics systems.
Source: https://www.bangkokpost.com/business/news/1566818/utcc-notes-higher-costs-for-smes