Thai logistics majors launch cold chain delivery business
The new joint venture, Fuze Post, began operations on Sept. 1 in Bangkok and other major cities. (Screenshot from Thailand Post’s website)
APORNRATH PHOONPHONGPHIPHAT, Nikkei staff writer | Thailand
BANGKOK — Three rival logistics companies in Thailand have joined forces to launch a delivery business for frozen and refrigerated foods, the demand for which is rising due to COVID-19.
State-owned mail carrier Thailand Post has set up a joint venture with e-commerce logistics startup Flash Express and listed JWD InfoLogistics in a major alliance between three fierce competitors.
Thailand Post President Danan Suphatthaphan said the joint venture will focus on cold chain logistics under the name Fuze Post. It began operations on Sept. 1 in Bangkok, Chiangmai, Nongkhai, Surat Thani, Phuket, Trat and Chonburi.
Fuze Post will initially service the business-to-business market, focusing on restaurant chains, cloud kitchens, hospitals and similar operations. Later, it will expand into business-to-consumer cold-package delivery, which has skyrocketed along with the rise of e-commerce and pandemic-related demand for home deliveries. Danan plans to expand further domestically before launching in other regional markets.
Analysts warn that cold chain logistics in Thailand will see more competition over the next few years as other companies are expected to enter the market. “Cold chain delivery companies will be asked to handle goods of various temperatures and sizes as the consumer base increases, forcing them to deal with rising costs and quality issues,” said an analyst at SCB’s Economic Intelligence Center.
“Fuze Post pulls together the strength and expertise from the top three logistics companies to offer seamless cold chain express services, which are exhibiting solid growth,” Danan explained.
Chavanin Bunditkitsada, CEO of JWD InfoLogistics, said the company has more than 25 years of experience in cold chain logistics and supply chains, as well as a long history of running warehouses nationwide. He emphasized the synergy with Thailand Post and its large delivery staff of over 20,000.
Flash Express — Thailand’s first unicorn — has modernized e-commerce delivery technologies and applications to handle the increased demand.
According to SCB, Thailand’s cold chain logistics market was worth around 26 billion baht ($800 million) in 2017 and is forecast to hit 34 billion baht this year. Annual market growth between 2019 and 2022 is expected to hit 8%.
Fuze Post will likely face stiffer competition in the short term. Thai e-commerce delivery company Kerry Express announced in June that it was starting cold chain delivery by the second half of 2021.
Thailand’s industrial conglomerate Siam Cement Group is also a major player after tying up with Japan’s Nichirei Logistics Group, and has had a presence in the cold chain market since 2016.