BMI's Executive Summary

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Vietnam's city of Da Nang was in August 2007 reported to have put forward a proposal to build an additional trans-Asian highways running from Vietnam through Laos to Thailand, and to be known as the Second East-West Corridor (EWEC-2). The city's authorities suggested that the route should run from Tien Sa port in Da Nang through existing highways 14B and 14D to Dakt-oc on the border with Laos, onwards through Sekong and Pakse in Laos, and finally to Bangkok via the Thai cities of Chongmek and Nakhon. Le Huu Doc, deputy director of the Da Nang Planning and Investment Department, was quoted as saying that the project would boost the economic development of Vietnam's central provinces and of the Boloven Highlands in Laos, where there was potential for the development of tourism and hydropower projects. The project, he said, should be included in the Greater Mekong Subregion (GMS) programme, which is supported by the Asian Development Bank (ADB) and which is designed to support regional economic development. Thailand is a participant in the GMS programme. Thailand and Laos opened a 1.6km bridge in December 2006, connecting the two South East Asian neighbours as part of a project to improve transportation and trade among countries across the Mekong Delta region. These links say officials will ‘improve transportation of goods, strengthen economic co-operation and trade ties' across the Mekong region. In this report, BMI concludes that domestic political and investment uncertainties will hold back road haulage growth somewhat in our 2007-2011 forecast period, although partly because of regional developments it will still hit an annual average of 5.5%, measured in tonne-km.

BMI's forecast is based on a variety of factors. We recently adjusted our Thai GDP growth outlook, raising it to an average of 4.9% over the next five years, up from 4.3% previously. Although road haulage traffic will grow faster than the economy as a whole, our latest figure has been trimmed a little to reflect the slowdown in the road-building programme due to budget uncertainties and ongoing congestion and high petrol prices. Pushing in the other direction is the fact that Thailand remains an intensive user of road freight versus other transport modes, and will continue doing so as demand remains strong. Road haulage will be driven upwards as the development of highway links across the Mekong delta open up new roadbased export routes.

Across all modes, total freight will grow by an annual average of 5.8% in 2007-2011. This is quite a bullish figure. Even taking into account the negative impact of ongoing disruption following the switch in September 2006 to a new international airport in Bangkok, high jet-fuel costs and other issues, we still expect the strongest growth to be registered in airfreight turnover. This is based on what we see as the big surge in the regional air cargo business, driven by the expansion of new commercial lines and deregulation of routes and airport slots. Airfreight turnover will grow by an average annual rate of 7.8% in the forecast period. Thailand's maritime cargo will grow by an annual average of 5.7% during the forecast period. Container traffic will expand somewhat faster, with the total number of 20-foot equivalent units (TEUs) handled growing at an average annual rate of 8.2%. Railway freight traffic should expand at a lower rate of 5.2% per annum.

BMI's freight transport business environment composite score for Thailand comes out at 41.0 (out of a theoretical maximum of 70.0), which places in a second tier among its regional peers, just behind the top scorers, Australia, China, Malaysia and Singapore. Thailand's best performance is in areas such as freight growth, infrastructure growth and the transport intensity index (a measure of the dynamism of foreign trade). Areas in which it could do better include long-term political and economic risk and the regulatory environment.

The total value of transport and communications GDP will rise to US$27.5bn in nominal terms by 2011, representing 8.7% of Thailand's GDP. The transport and communications sector employed 1.03mn people, or 3.0% of the labour force, in 2006. We see the figure rising to 1.09mn by 2011, remaining at 3.0% of the labour force.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Thailand Airports SWOT

Thailand Economic SWOT

Chapter 3 - Business Environment Overview

Table: Asia Pacific Freight Business Environment Ranking

Business Environment Rankings

Economics – Long-Term Risk

Politics – Long-Term Risk

Freight Transport Growth

Transport Infrastructure Growth

Regulatory Environment

Competitive Environment

Transport Intensity Index

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Corruption

Red Tape

Labour Force

Chapter 4 - Industry Trends And Developments

Road

Rail

Air

Sea

Logistics

Chapter 5 - Industry Forecast Scenario

Macroeconomic Outlook

Table: GDP, Output And Population

Chapter 6 - Country Snapshot: Thailand Demographic Data

Section 1: Population

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption And Stratification

Table: Wages Per Year

Chapter 7 - Transport Outlook

Table: Freight Carried (domestic and international):

Table: Thailand Transport And Communications Sector Historical Data and Forecasts

Chapter 8 - Trade Environment

Table: Value of Imports By Category (US$mn)

Table: Value of Exports By Category (US$mn)

Table: Top Export Destinations, US$mn

Table: Export Trade, % y-o-y

Table: Top Import Sources

Table: Import Trade, % y-o-y

Trade Regime

Overview

Trade Agreements

Tariffs

Chapter 9 - Market Overview

Multimodal

Road

Infrastructure

Competitive Landscape: Road

Rail

Infrastructure

Competitive Landscape: Rail

Company Profiles

Air

Infrastructure

Competitive Landscape: Aviation

Company Profiles

Water

Infrastructure

Competitive Landscape: Maritime

Company Profiles

Pipelines

Infrastructure

Chapter 10 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Transport Industry

Sources

Chapter 11 - Appendix: Regional Demographic Data

Table: Manufacturing Wages (ave per annum), US$

Table: Population

Table: Household Spending Per Capita, US$

Table: Private Consumption Per Capita, US$ PPP

Table: Market Size, GDP, US$bn

Competitive Landscape for Asia Freight Transport Reports: Sample of Companies Ranked

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Analysis of latest projects across the freight transport sector – road, rail, air, sea, logistics – including market overview which provides an outline of the key elements driving development. SWOT analysis of the state’s business environment, transport sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Asian Freight Transport Sources

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BMI's Asian Freight Transport Reports are based on an extensive network of multilateral organisations, government departments, freight transport industry associations, chambers of commerce and company reports. Information sources include: