Best Logistics Technology supports cross-border delivery from Thailand to Cambodia.
In addition, it also does cross border deliveries to China, Malaysia, Vietnam and Laos and Myanmar is the next destination
Best Logistics Technology (Thailand), the operator of express delivery service Best Express, is expanding its reach on large goods shipment services and factory customers while gearing up to optimise its work processes in the face of intense competition and business challenges.
Best Express started operations in Thailand in 2020, the first overseas investment destination by its Chinese parent Best Inc, which is one of the top three smart logistics and supply chain operators in that country. The firm set out a budget of 5 billion baht for investment in Thailand from 2020 to 2025.
Best Express ranks in the top five express delivery service providers in Thailand and aims to reach the top three by 2025, said Jason Qian, chief executive and president of Best Logistics Technology (Thailand).
“Thailand’s express delivery segment will continue to grow despite challenges brought by economic turmoil affecting the volume of parcels being shipped, particularly from e-commerce channels. I expect the situation will rebound in the second half of this year,” he said.
In 2021, the local express delivery market was valued at 50 billion baht, about half of the total logistics segment. In Thailand, 914 million parcels were shipped last year with an 8% unit market share by Best Express.
The firm operates two main business units: Best Express for express delivery services and Best Supply Chain for warehouse management and cross-border services.
Best Express, which has around 1,000 franchisees across the country, last year handled around 300,000 parcels per day and it aims to double that tally this year, said Mr Qian.
The firm is expanding its reach to large item delivery, including items weighing up to 300 kilogrammes, to serve rising demand, he said. This segment includes furniture and large consumer electronic products.
The company is also gearing up to serve delivery for factories including multiple parcels, particularly in the automotive and electronics sectors, said Mr Qian. These factories can send their items to multiple destinations on one bill.
“We chose Thailand as the first country for expansion a few years ago due to the geographic advantage,” said Mr Qian. “We will continue to expand our footprint in the region to support cross-border e-commerce growth.”
The company’s cross-border delivery system assists clients in calculating related taxes and shipping fees, he said.
The Regional Comprehensive Economic Partnership (RCEP) trade pact comprising 15 countries, including China and Asean member states, came into force at the beginning of this year, forming the world’s biggest free trade area.
According to the World Bank, the agreement covers 2.3 billion people or 30% of the global population and contributes US$25.8 trillion or 30% of the global GDP. The group also accounts for $12.7 trillion or more than ¼ of the global trade in goods and services.
The agreement aims to eliminate 90% of the tariffs on imports among members and improve the supply chain process.
“This pact will help fuel growth in cross-border e-commerce,” said Mr Qian.
The company wants to invest more in fulfilment centres in various countries and connect with Chinese e-marketplaces to support product delivery to Asean, he said.
Mr Qian said e-commerce accounts for only 8% of Thailand’s total retail market, compared with 50% in China and 30% in the EU and US.
“I think Thailand’s online retail can make up 20-30% of the total retail market within five years,” he said.
To boost e-commerce growth, it is important to reduce transport cost and enhance physical transport facilities, said Mr Qian.
“In China, we have multiple types of transport networks and economy of scale in terms of population. We embrace technologies to increase efficiency and use optimisation strategy to help lower delivery cost,” he said.
Mr Qian said the company will adopt automated machinery to reduce labour cost and increase efficiency. High import taxes for automated machinery could be a challenge, he said, but if this burden is eased it could stimulate businesses to invest more in new technology.
Since last year, Best Express has deployed electric tricycles to support delivery in Pattaya. Using electric vehicles (EVs) for delivery is still challenging because of the lack of charging points, said Mr Qian.
The government’s recent EV incentive package is useful as it could subsidise the cost of EVs, he said.
The company is scaling up efforts to optimise its process and sorting centres as well as embrace automation and artificial intelligence technology to help reduce total cost for delivery services amid intense competition, said Mr Qian.
This article was first published in Bangkok Post. All contents and images are copyright to their respective owners and sources.
