Local freight truck operators have expressed concerns that their businesses are suffering due to an influx of trucks from China, alongside the operations of Chinese warehouses and freight companies utilizing Thai nominees.
Thongyoo Kongkhan, chairman of the Land Transport Federation of Thailand (LTFT), called on the government to intervene and safeguard local truck operators. He intends to send a letter requesting a meeting with Transport Minister Suriya Jungrungreangkit to discuss potential solutions to this issue.
Mr. Thongyoo accused Chinese businessmen of establishing warehouses and running comprehensive freight truck operations with the assistance of Thai nominees. He noted that the implementation of the ASEAN-China Free Trade Agreement (ACFTA) has facilitated a surge in Chinese exports to Thailand, transported by trucks imported from China, which are predominantly owned by nominee companies.
“It is estimated that Chinese trucks represent about 1% of the total truck population in Thailand, which equates to roughly 10,000 units. This number is likely to continue growing at approximately 1% annually,” the LTFT chairman stated.
He further mentioned that nearly half of the trucks owned by LTFT members have been idled due to rising diesel prices, lowered hiring rates, and an increase in transport fees of 3-9%.
Additionally, he expressed concerns about price undercutting in delivery service fees by Chinese truck operators.
“If the government does not implement effective countermeasures, this situation will significantly impact local logistics and truck entrepreneurs. The federation will send a letter to transportation officials requesting a meeting to address this issue,” said the LTFT chief, noting that other agenda items will include the importation of trucks and the establishment of extensive warehouses by foreign entities, which he believes is excessive and detrimental to ten-wheeler operators in Thailand.
Compliance Required
In response, the Department of Land Transport (DLT) issued a statement referencing Section 24 of the 1979 Land Transport Act, which mandates that any legal entity seeking a license to operate non-fixed-route delivery trucks must register under Thai law, maintain its head office in Thailand, have at least half of its board members as Thai nationals, and ensure that a minimum of 51% of the company’s capital is owned by Thai individuals. The DLT emphasized that license applications are rigorously examined and approved in accordance with these regulations.
Regarding the concerns surrounding Chinese warehouses or import-export businesses suspected of using Thai nominees, the DLT plans to request oversight from the commerce and finance ministries to prevent any disadvantages to local truck companies.
As for the operation of Chinese trucks in Thailand, the DLT clarified that registration for freight trucks does not restrict the country of manufacture, provided the vehicles meet specifications and are imported legally. Currently, there are approximately 8,473 registered freight trucks from Chinese manufacturers, some of which have established production facilities in Thailand.
“The delivery firms have the freedom to select trucks from any manufacturer that aligns with their cost structure and business needs,” the statement asserted.
Under the memorandum of understanding (MOU) for the “early harvest” implementation of the cross-border transport facilitation agreement, signed by transport ministers from six Greater Mekong Subregion (GMS) countries, each member nation (excluding Myanmar) can issue a maximum of 500 cross-border road transport permits for its freight operators.
Eleven Thai freight operators, boasting a total of 458 trucks, have applied for these permits and are expected to begin operations next month, as per the DLT.
