In the constantly expanding sector of agricultural logistics, Thailand plays an important role in feeding the world. Agriculture accounts for over one third of the total employment picture in Thailand.
As the world’s largest exporter of several food products, including shrimp, canned pineapple and tuna, agricultural logistics Thailand plays a key component within the Thai economy.
Key Factors of agricultural logistics Thailand
One of the leading trading partners with Thailand is the USA. Thailand ranks as one of the top 12 suppliers of agricultural products to the USA. These USA imports are heavily focused on forestry and seafood products.
Given the above, there are issues regarding tariff rates of agricultural products sold into the USA. While Thailand has free trade agreements with other trading partners such as China, Japan, and Australia, these same agreements aren’t available to use for agricultural trade with USA. Other issues impacting trade between Thailand and the USA include:
- Import controls
- Non – harmonized food standards
- Arbitrary tariff rate administration
Opportunities for Growth
While Thailand’s food processing sector is growing at a fast rate, it is felt that this will increase the demand for imported agricultural items grown in the USA. These items include wheat, food additives, and dairy products.
Challenges
To successfully manage agricultural logistics, Thailand’s freight forwarding providers are focused on 5 key areas:
- Speed – many of the fresh fruits, flowers and vegetables exported by Thai farmers require specialized transport solutions. Air freight is often a mandatory mode of transport considering the long distances Thailand is from its larger markets in Europe and the USA.
- Refrigeration – meats and many seafood products depend on sophisticated refrigeration during land and ocean transport. Containerized refrigeration capabilities on ocean going transports enable large quantities of frozen chicken and pork exports from Thailand to the EU.
- Cost – As Thailand’s agricultural industry is competing on a global stage, managing the costs associated with packaging, hauling, and shipping of agricultural goods is always a key factor in growth potential of these items.
- Quality of the service – The need to work closely with a competent logistics service provider is a key component of success in any agricultural products marketing strategy. Strong ongoing business relationships are of prime importance.
While the challenges are significant, Thailand is well positioned to expand exports of agricultural products in the future. To that end, the management at Eagles Air & Sea are constantly looking for ways to improve the service level provided to our partners in the agricultural products industry.
