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Logistics Development through EWEC. By Kenan Institute Asia Shangri-La Hotel, Chiangmai Mar 18,2008. Background. Thai-Laos Friendship Bridge was opened in Dec 2006 East-West Economic Corridor Myanmar, Thai, Laos, Vietnam, Cambodia and Yunan. Background. EWEC Route.

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logistics development through ewec

Logistics Development through EWEC


Kenan Institute Asia

Shangri-La Hotel, Chiangmai

Mar 18,2008


Thai-Laos Friendship Bridge was opened in Dec 2006

East-West Economic Corridor

Myanmar, Thai, Laos, Vietnam, Cambodia and Yunan

ewec route
EWEC Route
  • In Myanmar 50 km.
  • In Thailand 900 km.
  • In Laos 237 km.
  • In Vietnam 273 km.

Total 1450 km.

  • Route no. 9 is intersect with road no. 13 at Seno and intersect with road no.1 in Vietnam and able to go to Danang
  • Instead of Laem Chabang, Exporter in NE has option in Using Danang Port 500 km. away
  • ADB to promote the growth of GMS (by connecting Asian 450, China 1300 and India 1000 million people)
distance and time usage
Distance and Time usage

Mukdaharn to Savannakhet only a bridge

Savannakhet to Dansavan 4.5 hours approx. 237 KM,

Laobao to Hue, 4 hours approx. 163 KM

Hue to Danang, 2 hours approx. 100 KM

Total from Mukdaharn to Danang 500 KM,10.5 hours

  • Study the impact of the opening of the 2nd Friendship Bridge and the highway across Laos for movement of goods between Thailand, Laos and Vietnam
  • Make recommendations to the Lao and Thai governments to improve the benefits of the new route
  • Make recommendations for Thai and Lao businesses on use of the route
people moving into thailand
People moving into Thailand

2006: 192,158 people

2007: 347,522 people

people moving out of thailand
People moving out of Thailand

2006: 196,065 people

2007: 366,702 people

import incoming transit goods
Import & Incoming Transit Goods

Import Oct 06-Sep 07 amount 9,605 mil. Baht

Import Oct 05-Sep 06 amount 2,318 mil.Baht

export outgoing transit goods
Export & Outgoing Transit Goods

Export Oct 06-Sep 07 amount 6,144 mil. Baht

Export Oct 05-Sep 06 amount 6,140 mil.Baht

project findings
Project Findings
  • Exports from Thailand to Laos increased 10% for the first 4 months after the bridge opening
  • Imports to Thailand from Laos increased more than 2,226% when compared month by month (copper was the import that increased the most)
  • Transit goods from other countries moving from Thailand to Laos more than doubled
project findings17
Project Findings
  • Current trucking regulations restrict efficient movement of goods along the new route
    • Thai trucks cannot go into Vietnam
    • Vietnamese trucks cannot go into Thailand
    • Lao truck can go into both countries, but Lao trucks are inadequate in number and inferior in quality and capacity
project finding
Project Finding
  • Customs documentation and processes increase shipping times – sometimes by days
  • Very few cargo ships stop at Danang port
  • Due to customs delays, unofficial and official fees, trucking costs and shipping costs the new route currently provides no cost advantage over shipping from northeastern Thailand through Laem Chabang
project finding22
Project Finding
  • Savan – Seno Special Economic Zone provides 10 years of tax incentives compared to 8 years in Thailand and 4 years in Vietnam
  • Laos has the lowest unskilled labor costs but lacks adequate skilled labor
  • Thai tourist visits to Laos increased significantly

To improve export value from Thailand

  • To Government
    • Shorten document preparation and cargo inspection time and fee costs
    • Improve multi modal transport: Rail from East and North-East to land road at Mukdahan using rail shippable containers

To improve export from Thailand

  • To logistics provider
    • LSP should take an active role in meeting with governments to reduce regulatory obstacles
    • Improve staff capability with training
    • Improve utilization of trucks currently returning empty
    • Establish container yards to facilitate transition to trucks of different gauge or different nationality
project finding analyze
Project Finding - Analyze

Laos gains little benefit from the route

  • Because of the short distance, tourists can have breakfast in Mukdaharn and lunch in Hue, Vietnam
  • Some interesting tourist attractions but the sites are not well managed and very few marketing
  • Savan – Seno Special Economic Zone still just empty land
  • Very few hotels along the route -- the best hotel is only 3 stars and provides little incentive to tourists
recommendations on laos benefits
Recommendations on Laos benefits

For Lao Government

  • Warehouse locations need to be identified and incentives provided for warehouses and container
  • Encourage establishment of joint venture logistics providers along the route to take advantage of fact that Lao trucks can go into both Thailand and Vietnam
  • Encourage establishment of roadside services including gasoline stations and rest stops
recommendations on laos benefits27
Recommendations on Laos benefits

For Savan–Seno Special Economic Zone

  • Infrastructure in the zone needs to be ready
  • Incentives offered must be concrete and not undercut by local government taxes and restrictions
  • Rules and regulations on crossing border should facilitate the transportation of goods
  • Need to develop skilled labor
recommendations on laos benefits28
Recommendations on Laos benefits
  • Develop good marketing strategy to promote the zone
  • Invite investment in duty free shops and department stores
recommendations on laos benefits30
Recommendations on Laos benefits
  • Tourism
    • Government should develop tourism by:
    • Provide incentives to build hotels
    • Improve road condition with good signboards
    • Improve tourism facilities – rest rooms, markets, hotels, tourist attractions
recommendations on laos benefits31
Recommendations on Laos benefits
  • Simplify the visa on arrival service
  • Provide money exchange services
  • Market tourism more actively
  • Focus on sustainable tourism, eco-tourism
private firms cooperation
Private Firms Cooperation

1) Seeking area of mutual benefit

2) Each Association or Industries arrange group of meeting

3) Association push and support Gov with enough info and country benefit

4) Research for specific topic and industry should be done

Thai Firms

Vietnam Firms

Lao Firms

internal logistics
Internal Logistics
  • Enterprise level
  • Inventory Management
  • Sales Forecasting
  • Packaging
  • Time of Delivery
  • CRM, SRM