Description
Globally we have a marketplace built around continued economic growth, withtrade between countries continuing to transcend national boundaries where barrierspreviously existed.
ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC
TRANSPORT AND COMMUNICATIONS BULLETIN
FOR ASIA AND THE PACIFIC
No. 70
Logistics for the Efficient Transportation
of Domestic Goods
UNITED NATIONS
ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC
TRANSPORT AND COMMUNICATIONS BULLETIN
FOR ASIA AND THE PACIFIC
No. 70
Logistics for the Efficient Transportation
of Domestic Goods
UNITED NATIONS
New York, 2001
ST/ESCAP/SER.E/70
UNITED NATIONS PUBLICATION
Sales No.
Copyright @ United Nations
ISBN: ISSN:
ESCAP WORKS TOWARDS REDUCING POVERTY
AND MANAGING GLOBALIZATION
The designations employed and the presentation of the material in this
publication do not imply the expression of any opinion whatsoever on the part of the
Secretariat of the United Nations concerning the legal status of any country, territory,
city or area or of its authorities, or concerning the delimitation of its frontiers or
boundaries.
The opinions, figures and estimates set forth in this publication are the
responsibility of the author, and should not necessarily be considered as reflecting the
views or carrying the endorsement of the United Nations.
Mention of firm names and commercial products does not imply the endorsement
of the United Nations.
ii
Editorial Statement
The Transport and Communications Bulletin for Asia and the Pacific is a journal
published once a year by the Transport, Communications, Tourism and Infrastructure
Development Division (TCTIDD) of the Economic and Social Commission for Asia and the
Pacific (ESCAP). The main objectives of the Bulletin are to provide a medium for the
sharing of knowledge, experience, ideas, policy options, and information on the development
of transport infrastructure and services in the Asian and Pacific region; to stimulate policy-
oriented research; and to increase awareness of transport policy issues and responses. It is
hoped that the Bulletin will help to widen and deepen debate on issues of interest and concern
in the transport sector.
Each volume of the Bulletin focuses on a particular theme of interest, primarily in the
transport sector. The themes for the last two issues of the Bulletin were urban transport and
the participatory approach to transport infrastructure development. The theme chosen for this
issue (No. 70) is logistics for the efficient transportation of domestic goods. Four articles
which focus on some of the issues in domestic transport logistics and two good practices in
the region have been selected. The first discusses some general issues in the logistics area
and suggests actions to address them. The second discusses the possible gains in
environmental improvement through reductions in emissions from the road transport sector at
the macro level by improving efficiency in the logistics sector in Korea. The third and fourth
are on good practices in logistics in Thailand, one in the rural area and one in the urban area.
All the articles are policy oriented. It is expected that they will generate further debate on the
issues that have been discussed and increase awareness of their policy implications and
responses.
The Bulletin welcomes analytical articles on topics that are currently at the forefront
of transport infrastructure development and services in the region and on policy analysis and
best practices. Articles should be based on original research and should have analytical
depth. Empirically based articles should emphasize policy implications emerging from the
analysis. Book reviews are also welcome. See inside back cover for guidelines on
contributing articles.
Manuscripts should be addressed to:
The Editor
Transport and Communications Bulletin for Asia and the Pacific
General Transport Section
Transport, Communications, Tourism, and
Infrastructure Development Division
ESCAP
United Nations Building
Rajadamnern Nok Avenue
Bangkok 10200
Thailand
Fax: (662) 288 1000; (662) 280 6042
Email: [email protected]
iii
TRANSPORT AND COMMUNICATIONS BULLETIN
FOR ASIA AND THE PACIFIC
NO. 70
CONTENTS
Page
Des Powell
GOVERNMENTS AND INDUSTRY WORKING TOGETHER
TO IMPLEMENT MODERN LOGISTICS 1
Sungwon Lee
IMPROVING EFFICIENCY IN THE LOGISTICS SECTOR FOR
SUSTAINABLE TRANSPORT DEVELOPMENT IN THE REPUBLIC
OF KOREA 17
Paitoon Chetthamrongchai, Aroon Auansakul and Decha Supawan
ASSESSING THE TRANSPORTATION PROBLEMS OF THE SUGAR CANE
INDUSTRY IN THAILAND 31
Kiyoshi Takahashi and Ackchai Sirikupanichkul
THE EFFECTS OF PUBLIC TRUCK TERMINAL POLICIES ON AIR
POLLUTION IN THE BANGKOK METROPOLITAN AREA 41
iv
Transport and Communications Bulletin for Asia and the Pacific No.70, 2001
GOVERNMENTS AND INDUSTRY WORKING TOGETHER TO IMPLEMENT
MODERN LOGISTICS
Des Powell*
ABSTRACT
Globally we have a marketplace built around continued economic growth, with
trade between countries continuing to transcend national boundaries where barriers
previously existed.
Globalization is a two-edged sword in that it provides opportunities to maximize
comparative advantage, but it also intensifies competition. Therefore it is critical that
Governments recognize the changes as they impact on areas that include investment,
economic growth and infrastructure development.
Companies are using logistics as a key business tool to enable them to penetrate
markets and improve returns. They are utilizing regional supply chains to challenge the
status quo in terms of manufacturing locations, distribution channels, the number of
suppliers and information systems. This has meant in many cases an evolution to
intermodalism, a rationalization of suppliers in industry structure terms and an increase
in outsourcing.
It is therefore important that Governments and industry work together to
effectively manage the changes that will facilitate improved performance. These areas
include the practical implementation of logistics, integrated infrastructure and policy
development, the removal of impediments, information technology and communications,
maximizing the benefits of foreign investment and managing the change.
I. BUSINESS TODAY
Any discussion about achieving improvement in logistics needs to be built on an
understanding of what trends are driving business as a whole. Governments need to be aware
of these trends so as to respond with appropriate policies. These trends should also guide
Governments when considering how to work with industry to maximize the country’s
international competitiveness.
1
*
Managing Director, Powell Management Services Pty. Ltd., PO Box 5254, Victoria 3206, Australia.
The first of these is the changing marketplace at global, regional and local levels.
Globally we have a marketplace built on continued economic growth, with trade between
countries transcending national boundaries, where barriers previously existed. Multinational
companies (MNCs) continue to grow through acquisitions and mergers as they build brands.
Increasingly information technology (IT) and communications have become powerhouse
sectors, not just in terms of business efficiency, but also in terms of being central to new
business models.
Globalization is a two-edged sword in that it provides opportunities but also
intensifies competition, therefore it is critical that Governments recognize these changes and
interpret their likely impact when considering policy formulation. Companies operating
globally are closely assessing each market’s attractiveness when making strategic decisions
regarding investment. In some cases, because of finite resources, this is leading to
withdrawals from certain markets in order to focus on core growth regions.
Companies continue to strive to create customer value by a combination of
differentiation and lowest cost as they pursue market growth and improved returns. As a
consequence, logistics and supply chain management is increasing in importance as a means
of delivering value in the international business arena. These market-driven dynamics have
resulted in customers demanding more from logistics globally, which is impacting at a
regional and local level.
Regionally we have observed the emergence of regional logistics planning, where
cross-border transactions between subsidiaries of multinationals account for an increasing
amount of international trade. This has facilitated the benefits of economies of scale from
large production runs using high technology. This is resulting in some production sites
becoming points of single or reduced product range. The outsourcing of logistics continues to
grow strongly, with companies seeking to accelerate the uptake of modern logistics skills by
standardizing processes and technology, developing formal account management
relationships and managing single suppliers across regions. The regional approach aims to
bring about market growth at lower cost and thereby deliver improved shareholder returns.
The Asian economic crisis of the late 1990s acted as a catalyst for companies seeking
transformational change. Now that growth is returning to the region the possibilities of
change will increase exponentially, challenging the status quo for many existing trading
patterns, arrangements and relationships. Issues such as manufacturing locations, product
range, distribution channels, the role of distributors, the number and quality of suppliers and
the integrated systems technology are being continually re-evaluated.
At a local level these trends translate into continued industry reform and restructuring
often at a pace quicker than in the past. The 1990s also saw social issues such as the
environment, employment and social justice become increasingly relevant. Business is also
requiring Governments to respond to economic and social trends through policy initiatives in
respect to industry regulation, free trade, financial reform, taxation, social policies and
infrastructure investment.
In dealing with these dynamics a major issue for Government and business is to
effectively manage that change. The speed of business, the competitive environment and the
deregulation of world trade require strong leadership at all levels. Those in senior roles often
expect change to be automatically embraced, but such is not the case. Leadership often
2
determines the effectiveness of the strategies and tactics adopted by Governments and
businesses. This is critical, yet change management is often given little thought or resource
allocation. The issue is addressed in section V. F of this paper.
II. LOGISTICS TRENDS
Logistics is increasing its impact on business, as it creates value for companies and
assists in delivering improved profits. The application of logistics varies across continents.
Modern logistics is generally a new concept in Asia, with the focus on the basic transport
processes of road, rail, air and sea. These processes have in some areas been integrated into
what is known as multimodal transport.
The following two figures demonstrate two views of logistics.Figure 1 outlines the
functional approach that is generally adopted in Asia. The attributes of this approach focus on
the individual operational aspects of transportation, where operational excellence is the
dominant capability.
Source: Hong Kong Trade Development Council. China’s freight forwarding and logistics: The path after entry to WTO,
Research Report, July 2000.
Figure 1. An Asian view of logistics
3
Figure 2 reflects a contemporary Western view of logistics. This model focuses on the customer’s perspective, from the point of
supply through to the end user. The objective is to deliver superior value at the lowest cost. The competencies required depend upon
building strong customer partnerships, client-specific solutions, and innovation and supply-chain systems integration. This model clearly
takes a holistic approach and is the trend in modern economies.
MANUFACTURE
Information
Ware-
housing
Customer
service
Call
centres
Regional
consolidation
Distribution
centre
Local and
regional
distribution
Courier
route trade
Linehaul
•Road
•Rail
•Sea
•Air
Order
management
planning and
processing
Kitting
Labelling
Processing
Inventory
management
C
U
S
T
O
M
E
R
S
Material
IMPORT/EXPORT
5
Figure 2. Supply-chain services: A contemporary Western view of logistics
Prior to assessing how logistics in Asia could move from its current stage of
development, it is appropriate to consider how logistics has developed recently in
some other regions.
A. Europe
The development of a single pan-European market remains the major
influencing factor. This is placing pressure on traditional domestic logistics players to
decide whether they can be a pan-European operator or carve out a product or service
niche on a local level. This has led to industry consolidation, with smaller-sized
operators being acquired by regional and global operators to fill a capability gap or
geographical sector.
A major influence has been increasing competition as the prospect of postal
liberalization in Europe (planned for 2003) has activated expansion from domestic
monopolies to international service providers pursuing major growth. This is again in
response to customer demands for increased geographical reach, a greater level of
service capabilities and technology that integrates with their systems.
E-commerce although still in its infancy, is expected to generate growth;
Scandinavian countries are leading the way with more Internet users per capita than
the United States of America. This environment has led to those companies wishing
to survive having to re-invent themselves from pure trucking (that is, asset-based) into
IT-intensive logistics (that is, service-based) providers. This transformation has been
rewarded by improved profits and increasing value on the share market.
B. North America
The growth in logistics as a specialist activity has been based on a strong
presence of third-party providers (3PLs) that is, specialist logistics providers). 3PLs
have been able to integrate warehousing and transportation activities. They were able
to do so by using systems, initiatives such as dynamic route planning. This offered
considerable benefits to customers in terms of providing seamless service and
managing inventory. This integration has now developed to the point that multi-client
networks can be sustained.
In the context of providing an integrated process, the management of
information has become as important as the management of the operating processes,
as suppliers seek to reduce inventory and provide flexibility in supply to customers.
This creates value for their customers through cost reduction and facilitates increased
market penetration.
This has required the development of customer-specific solutions based on a
deep understanding of customer behaviour from the point of supply right through to
the end user. Consequently, predicting and managing customer behaviour, together
with providing integrated technology solutions, are capabilities that are differentiating
logistics suppliers.
5
C. Australia
Companies continue to use outsourcing (growing at 10 per cent per year) as a
means of enabling logistics to create value. This has led to a rationalization of
suppliers as customers aim to standardize and initiate actions to more effectively
manage suppliers. Customers continue to require innovation and demand low cost
and this requires traditionally based transport companies to move from an operational
focus to demonstrating how they can add value through the total logistics process.
This has involved major investment to develop innovative equipment and an
upgrading of technology. Providers are also challenged to respond to customers’
requirements to manage inventory as a key means of reducing cost within their
business.
Many Australian companies have moved their manufacturing offshore and,
given its position as a net importer, Australia is often at the end of a supply chain. In
terms of logistics, Australia is mature and Asia immature, yet Australia depends on
Asia in a trade and supply-chain sense.
This is resulting in competition intensifying from 3PLs and international
forwarders who have built relationships at a global and regional level and whose
customers require a presence in Australia. International postal companies from the
Netherlands and Germany have acquired logistics operations and major shipping
companies continue to invest so as to vertically integrate from shipping into broader
logistics solutions. This environment and the withdrawal from some sectors by
traditional major players have resulted in a re-ordering of the Australian market.
D. Asia
The double-digit growth of the 1980s and early 1990s slowed owing to the
Asian financial crisis that occurred in 1997. However, growth is returning and
logistics is again high on the agenda as companies pursue market penetration and cost
reduction. The introduction of modern logistics techniques to Asia has generally
been done by those MNCs manufacturing or retailing, or both, fast-moving consumer
goods. These companies have utilized modern logistics techniques to deal with the
high levels of growth and a more demanding customer base. However, issues such as
appropriate management, adequate technology and critical mass to justify the
economics of central distribution centres have an important influence on the speed of
logistics development. While the crisis has slowed the momentum of the mid 1990s,
logistics is now emerging as a key tool in creating value.
This is occurring as global companies pursue regional solutions from a
manufacturing and supply-chain perspective. This has led to decisions in respect to
restructuring of manufacturing locations and redefining what products are sourced
from what countries. They also are reviewing their historic distribution channels as
the role of trading companies as distributors are being reassessed. Distributors have
generally acted in both the sale and physical distribution functions, but some MNCs
now believe it is strategically important to manage sales directly and to utilize
specialist logistics firms for distribution.
6
This issue is often impacted on by government legislation in respect to foreign
investment. The aftermath of the Asian financial crisis has resulted in a new wave of
foreign investment as the majority of countries have freed up their foreign investment
policy. As an example, in Thailand the freeing-up allowed Mayne Nickless, an
Australian 3PL, to negotiate a majority foreign-owned joint venture. This was
essential to meet customer expectations and to enable the board of directors of the
company to have the confidence that adequate returns could be achieved in a country
that they were entering for the first time.
These regional snapshots indicate five significant observations relating to the
impact of logistics in Asia:
(a) Regional logistics strategies do play an important role in companies achieving
their profit targets through market growth and the lowering of total cost;
(b) Companies have used the outsourcing of the logistics functions to 3PLs as a
means of accelerating the take-up of modern logistics techniques;
(c) Industry rationalization has occurred in most countries, both from a customer
and logistics-supplier perspective;
(d) The new concepts of logistics as they apply to modern economies demand an
improvement of skills in management, information and other key capability areas;
(e) Governments can influence logistics development.
It is these observations that are discussed later in this article.
III. THE IMPORTANCE OF LOGISTICS TO GOVERNMENT
There is also evidence that, while the provision of integrated logistics is
generally a new concept in Asia, Governments have been focusing on improving the
management and efficiency of the transport sector.
Governments are now recognizing its value to domestic companies in
improving their profit performance. It is recognized that in utilizing logistics to create
value, domestic firms will also improve their international competitiveness. This is
critical to underpinning a country’s planned future economic growth. One example of
this increasing importance is China, where a China Daily article of 6 June 2000
reported a government official as stating that China’s logistics industry had not kept
pace with the country’s rapid economic development and the shift to a market
economy. The article stressed the importance of a rapid development of the logistics
industry to improve the quality and structure of the national economy. It put forward
the view that the development of the logistics industry was necessary to meet the
expected demands of growth in international trade expected from China’s proposed
entry to the World Trade Organization (WTO).
There is also recognition of the emergence of e-commerce, which is expected
to expedite the growth of modern logistics. One cannot pick up a logistics magazine
7
or look at a conference agenda without seeing it in a pre-eminent position. Other
technology initiatives such as the Global Positioning System and intelligent transport
technology for toll collection, electronic data interchange, and for monitoring and
charging are other rapidly developing areas of interest to Governments.
These issues indicate that the potential value of logistics as a value-creating
business tool is understood at a government level. This reinforces the importance of
moving to the contemporary Western model referred to in figure 2.
IV. A SELF-TEST FOR GOVERNMENTS
Governments, upon recognizing the importance of logistics, need to ensure
that they conduct a frank assessment of their own situation. Such an assessment must
take into account links to the marketplace (globally, regionally and locally) and
industry generally.
To assist this, listed below is a range of questions that could be used in order
to facilitate discussion that can assist in establishing the current situation. They are not
meant to cover all the issues but are provided as a stimulus for discussion between
Government and industry as a starting point for development an integrated plan.
! Do Governments understand the dynamics of today’s marketplace?
! Is there adequate practical and commercial knowledge in the
bureaucracy?
! Are there a significant number of industry leaders?
! How developed is the concept of modern logistics in the industry?
! Is there an integrated reform agenda with targets and measures that
support a common vision?
! Is the investment in infrastructure adequate to support growth and
reforms?
! Is infrastructure investment based on appropriate economic
considerations?
! Are safety and environmental considerations adequate in logistics
planning?
! Is the regulatory environment stimulating the desired outcome?
! Is industry taking the lead in self-regulation and setting industry
standards?
! Is funding delivering practical outcomes?
! Do modes complement the shared vision rather than simply compete?
! Are taxes and charges being used to stimulate efficiency?
! Are efficiency targets in place for government departments?
! Is there an adequate consultation process with industry?
! Do best practice projects exist in conjunction with industry?
! Do economic development strategies adequately consider logistics
issues?
! Do foreign investment regulations adequately support logistics
development?
! Does appropriate education exist across the logistics industry?
8
! Does technology coordination exist?
V. POSSIBLE INSIGHTS TO ASSIST LOGISTICS DEVELOPMENT
IN ASIAN COUNTRIES
Although the challenges for Asian countries are considerable, they are
achievable. Multiple initiatives need to be put in place concurrently. Integrating an
agreed action plan becomes a key role for Government. I would like to comment on a
number of key areas and offer some observations that may assist those considering
how to move forward. They include:
(a) The practical implementation of the concept of logistics;
(b) Integrated infrastructure policy and development;
(c) Removing impediments to logistics;
(d) Information technology and communications;
(e) Maximizing the benefits of foreign investment;
(f) The ability to manage change.
A. The practical implementation of the concept of logistics
The provision of modern logistics is a new concept in many parts of Asia.
The transport sector is often viewed as a set of individual industries such as trucking,
warehousing and freight forwarding, rather than as an integrated system which
manages products and processes through the manufacturing and distribution process.
The business objective of logistics is to support growth in profits and market share.
The shift in business thinking is being driven by customers who now assess
logistics from the perspective of product flowing from the point of supply through to
the customers. While evolution will support such a shift over time, customers and
shareholders are demanding accelerated change. To that end I would advocate the
consideration of initiatives such as attracting foreign investment that introduce
logistics skills and educating the workforce on logistics:
(a) Attracting foreign investment that introduces logistics skills
The introduction of logistics to help local companies achieve increased
international trade and profits can be accelerated by the specific targeting of foreign
investment that brings with it modern logistics know-how. This would include the
application of technology (warehouse management systems), the use of modern
materials-handling equipment, the restructuring of traditional sales and physical
distribution methods and skilled expatriates who could assist in the education of the
local workforce. Such foreign investor firms are also likely to have relationships with
freight forwarders and logistics providers, or both, that have the global and regional
reach necessary to support export market expansion.
Given the trends in globalization it is also appropriate to consider MNCs
which, through deregulation in either specific industry areas or in areas such as
retailing and distribution, can now access critical mass in respect to the number of
sites. This will support the viability of central and regional distribution centres and
9
provides the underpinning volume for an effective distribution network. This will be
a key initiative in logistics development.
The targeting of foreign investment with logistics skills will accelerate the
implementation of logistics practices. The business culture of these firms is also likely
to be of significant benefit in driving growth. The targeting will be critical, as the
matching of the logistics skills with the correct market opportunity will be important
to ensure the viability of those enterprises. This is critical, as already in Asia there is
significant foreign investment by a range of companies and issues such as joint
venture suitability, access to the market, lack of scale and demand for short-term
returns may currently be limiting the benefit of that investment. Governments may
therefore give consideration to a strategic review with target foreign companies,
including existing investors, aimed at packaging proposals to support the area of
growth that is being targeted.
Another aspect that could be considered is the attracting of 3PL operators to
the country. 3PLs have the capacity to upgrade skills in both the domestic and export
markets.
A report in the McKinsey Quarterly estimated the 3PL market would grow 5
to 10 times faster over the next decade than the traditional freight forwarding market.
In fact, evidence suggests that many large global players are migrating from a
transport and freight forwarding focus by establishing specialist 3PL divisions within
their organizations.
3PLs attempt to differentiate themselves from traditional transport companies
by including engineers, business consulting, materials’ handling, industry-specific
skills, change management, business modelling, IT and management accounting.
Such a multi-skilled resourcing approach enables them to have the necessary business
perspective to be part of their customers’ solution to the problem of delivering
improved market performance.
Matching of domestic companies in growth industries with foreign companies
from 3PLs and freight forwarding markets can accelerate the change to modern
logistics thinking. It also has the benefits of increasing employment and providing
the workforce with skills in critical capabilities. Our own experience in Thailand and
Malaysia has been that numbers of employees grow, the skills of operational
workforce are improved using technology implementation and middle management
capabilities are developed. These are significant benefits.
(b) Education in logistics
The education and skilling of the workforce is critical to building capability.
Five opportunities exist to educate different segments as to the role of logistics, its
application and development.
(i) Tertiary alliances
A number of international tertiary institutions have, during the 1990s
developed specific logistics programmes with strong reputations. Establishing
10
alliances with those institutions could result in programmes that introduce
recent graduates to the country and could also include delivery of these
programmes in Asian countries. There are a number of well-known
institutions in the United Kingdom of Great Britain and Northern Ireland,
North America and Australia that could be of value in establishing an
appropriate alliance.
(ii) Operational training
A number of countries also conduct a range of programmes that
provide specific industry skills training, commencing at industry entry level.
Governments should consider the development of an alliance with a suitable
institution for skills training in areas including warehousing, materials
handling equipment and transport management. Such providers are often
accredited through industry training bodies and alliances to enable transfer of
training materials should be considered.
(iii) Exchanges
Governments could give consideration to fostering exchanges between
local companies and overseas firms who have reputations for logistics skills in
the targeted industries. These exchanges could also be at government level,
which could introduce government officials to business trends in other
countries that deal with policy formulation in respect to transport and logistics.
This may be very valuable in helping to integrate government departments and
manage change.
(iv) Projects
Governments may wish to consider developing skills through specific
projects. This could involve specialist resources being brought in initially to
guide project planning and then via the Internet, videos and communication to
provide ongoing mentoring. Such projects could seek support from 3PLs and
freight forwarders who may be prepared to commit resources in order to
develop the country’s knowledge of logistics. Encouraging business to make a
commitment to the development of the industry is important.
Another approach to project education could be the use of expert skills
to guide the demonstration of best practice approaches to logistics. The
Government, working together with business, could nominate a target industry
and support the development of a specific best-practice logistics project. This
could fund the expert skills on for example a 6- to 12-month basis and then the
project would be used to demonstrate initiatives to the wider business
community. Government could also include support to such projects in terms
of incentives or other resources.
A best-practice programme has been used in Australia by the
Government to introduce new management techniques. Initially starting in the
manufacturing sector, it spread into the retail and services sectors. A further
example is the “supermarket-to-Asia” project facilitated by the Australian
11
Federal Government, which has worked in partnership with Australian
industry to develop a business plan for Australian exports, with a major
emphasis on the role of logistics. This particular project approach is well
structured on the federal level, with a supporting structure of State air- and
sea-freight councils. It has the added advantage of involving business
commitment and is a practical example of industry learning in a practical
sense. Again such projects have significant demonstration value and as a
consequence the Australian Federal Government has recently announced a
considerable increase in funding for appropriate project-based logistics
development. It also has announced the development of an action agenda for
the freight transport logistics industry.
(v) General education among industry
Another important issue is the development of knowledge among
domestic firms in respect to the benefits of logistics. If Governments wish this
to change, an active education programme among those sectors where growth
is expected is essential. One example was a white goods manufacturer
operating in Asia with a US$ 2 billion annual turnover and growing at 30 per
cent per annum. It had five product streams and five separate approaches to
logistics and distribution, five warehouses, five sets of sales strategies, five
approaches to sets of purchasing negotiations and five sets of inventory
management. This kind of duplication and lack of integration is a significant
disadvantage in the marketplace and is likely to reduce the company’s
international competitiveness.
In this example, centralized coordination of logistics would result in
improved asset utilization, less warehouse space, improved purchasing power
and, in all probability, streamlined delivery patterns. These would all be
critical elements in supporting export growth targets. Enterprises such as this
need to be educated as to the benefits of adopting modern logistics practices.
Governments have a role in facilitating this.
B. Integrated infrastructure policy and development
It appears that Governments generally acknowledge that infrastructure plays
an important role in underpinning the ability to cope with projected growth. It
therefore must be a priority to integrate infrastructure development so as to maximize
the benefits of investment.
Observations show that the separation of ministries, unspecified funding
allocations and a lack of formal transport planning can all minimize the impact of
infrastructure investment. The reality of the private sector now funding infrastructure
development adds another complication that needs to be appropriately managed.
Consideration needs to be given by Governments to the establishment of
transport planning task forces that can sit above functional department structures
(often multiple) and aside from the vested interests of individual enterprises in order
to assess projects on the basis of regional and national importance.
12
Governments should endeavour to develop infrastructure plans based on
economic considerations and consider all modes from a complementary point of view.
They should also consider other initiatives such as inland container depots and
transport interchanges, as well as streamlining processes and regulations for the
integration of cargo across all modes. The standardizing of documents and consistent
regulations relating to items such as dangerous goods can make it easier for
businesses to operate.
A key initiative could be the establishment of a reform platform for
regulations that impede logistics. This would require government departments to
consult with shippers, transport operators, freight forwarders and their associations, as
well as liaise across other government departments to ensure that barriers are
removed.
Again, Australia offers some examples of industry input. A recent initiative
was the establishment of freight action advisory groups. Governments should consider
forming an advisory or reference group of industry and users who can come together
on a regular basis to advise government agencies on trends and impediments.
Governments and industry working together can offer significant benefits to all
parties.
C. Removing impediments to logistics
A key issue identified earlier in the paper was the separation of departments,
the role of provincial and local regulations and the split between the management of
internal and external trade. These present a range of impediments to implementing
integrated logistics and impact on international competitiveness.
This issue is not unique to Asian countries. Only in recent years has Australia
initiated a national programme with the support of State Governments to standardize
national road regulations in order to facilitate improved efficiency and
competitiveness. The National Road Transport Commission has been the vehicle for
reform and over the last few years has worked with industry and State Governments
to develop reform agendas that have made considerable progress.
This process has in fact resulted in industry having to take on greater
responsibility. The result has been that industry, via the Australian Trucking
Association, has developed an effective National Peak Lobbying body that is now the
bridge between Government and industry. This has led to industry-driven initiatives in
truck safety, driver heath, fatigue management, technical coordination, codes of
conduct and tax reform. A critical element in sustaining this level of industry
involvement relates to delivering outputs of demonstrable value to the industry,
funding links between Government and industry, and delivering benefits to those
sections of industry that lift standards. The air- and sea-freight councils mentioned
above are also active in developing reform agenda in respect to barriers to
development.
There are a number of examples across Asia where processes and systems are
not consistent across departments. A recent example relates to lack of consistency in
customs processes and driver and truck records in a country. As a result, the
13
maximum asset utilization possible from a truck fleet was 45 per cent. The
development of a consistent process in such a situation would be an ideal opportunity
for a project between Government and industry.
In that case, the inability of the operator to service customers was limited by
the non-availability of trucks (when they were sitting idle) with a resultant reduction
in service levels. Such reductions in service levels cause delays in the supply chain of
up to 25 per cent and uncertainty of supply times for customers. In addition, higher
prices may have to be changed for transport services to achieve a suitable return on
the investment made.
Ultimately time delays, the higher costs of doing business and uncertainty
caused by these types of procedural issues can cause current and potential investors to
review their investment decisions and lead them to consider investing in other regions
or countries.
Reform in these areas should be a priority for Governments, as industry has
expectations that protocols will be improved. Action task forces that include industry
participation should be considered as a means of removing such barriers and driving
efficiency to support country’s expected trade growth.
It would also be expected that a reduction in the impediments would not result
in any major employment issue, as economic growth and the redeployment of staff to
other key areas requiring efficiency improvement would result in an overall benefit.
D. Information technology and communications
IT and communications have been identified as crucial to the development of
modern logistics; in some countries the poor reliability and high cost of IT services is
hampering that development.
I heard of a case recently where a 3PL was operating an MNC warehouse and
had planned to connect a warehouse management system at multiple sites so as to
enable all sites to accurately advise of warehouse capacity, location of stock,
inventory on hand, and so forth. Currently the lack of reliable IT connections across
multiple sites means enquiries from customers and staff cannot be answered speedily
and therefore time and resources are wasted.
The experience of that company was that the reliability of existing lines was so
poor that improvements were prohibitively expensive. They stated that the high cost
of installing lines and local calls is a barrier. They also stated that the lack of
reliability remains a major issue as lines are used for computer transfer of data and
that it was not uncommon for 56 Kb/s modems to be working at only between 2 and
10 per cent of capability.
This is not the quality of infrastructure on which to base an industry for which
the effective and efficient transfer of information is critical. Its improvement must
become a priority from both a service and a cost point of view. It will be absolutely
essential in order to have the capability to take up e-commerce. While it is recognized
that e-commerce will have a major impact on logistics, I have not chosen to discuss it
14
in detail in this article as the focus here is on the basics which must be in place to
support such developments as e-commerce.
E. Maximizing the benefits of foreign investment
The insight I would wish to offer does not relate to the specific strategies or
the merits of policy proposals under consideration by Governments, but rather to the
issue of support services. While the general direction of foreign investment policy
can be clear, implementation of the changes requires a major shift in the practices,
skills and culture of agencies and departments dealing with foreign enterprises.
Governments need to ensure that training and education on these changes are
comprehensive and that there is a change in culture from what is often a single
departmental mentality to one that has as its prime goal the encouragement and
support of business. Making it easy to do business should become a major theme.
Any freeing-up of foreign investment would bring with it major pressures on
standardizing procedures and rules so as to ensure consistent implementation. This
would need to include a significant education element for both local and foreign
entities. It is also important that Governments acknowledge that freeing-up would
require consideration of a shift from a strict enforcement of institutional requirements
to one where industry introduces self-regulation via accreditation programmes and
other initiatives such as codes of conduct among industry participants. This would be
very relevant to the transport and freight-forwarding sector. The establishment of
industry-driven initiatives in this area, based on international standards, would make
business easier and allow the focus of enforcement on those who do not comply.
Speed in dealing with industry would also be an issue. Currently dealings
with Government departments in some countries are considered slow by industry.
Governments may wish to consider re-engineering key business services to a best-
practice model so as to set a standard that would encourage investment. The setting
of benchmarks can be a valuable tool in raising standards.
Governments should give consideration to encouraging service providers in
industries associated with logistics to develop industry associations that can assist
Governments in coordinating with industry. This would help with the establishment of
standards consistent with international standards (in terms of documents, service and
so forth) that should be supported by government legislation in respect to sanctions
and penalties.
A particular emphasis could be in the area of advice in respect to joint
ventures. Governments may wish to consider how it may promote “best practice” in
order to develop effective joint ventures. It would be our belief that increased foreign
investment may be followed by a high level of frustration between joint venture
partners. It is my observation that in Asia joint ventures can be valuable in creating a
successful business. Foreign and local partners often have different expectations about
how things should be done. Therefore, the time taken to obtain a correct match in
skills, strategic intent and culture may often be a long one. The issues of management
control, dividend policy, veto rights, pre-emptive rights, management decision-
making, the use of expatriates, ongoing research and development are often glossed
over. The Western tendency is to rush, often without time for the development of
15
proper relationship and trust. Like many aspects of business the success of a joint
venture depends on trust and stability. Initiatives Governments could take in this
regard would assist in maximizing the benefits of foreign investment.
F. The ability to manage change
In considering in broad terms the desired role of logistics in supporting
economic development, it is important to be realistic as to what can be achieved and
in what timeframe. The consequence, however, of the rapidly changing global and
regional environment is that it will be critical for Governments to work concurrently
at a range of levels within both Government and business.
As stated at the outset of this paper, for Governments to achieve the objective
of change, management must receive the appropriate level of attention. The global
and regional environment would continue to change. The ability to manage this
change will be as much about culture and leadership as it is about strategies and
tactics. Establishing a shared vision at both government and business levels will be
critical. While the pressure for change as a result of globalization might be clear to
the Government, unless that change is communicated and understood at all levels its
intended benefits might not be achieved. A clear plan involving key industry sectors
and leaders may be an essential step in demonstrating leadership in areas such as
logistics.
At a personal level, individuals do not act unless they feel a pressure for
change. This often only occurs as the result of a major crisis that impacts on them
from a financial or job security viewpoint. Until individuals decide to act differently
as a result of the changes around them, little may change. An imperative for change
has to exist and those implementing that change should ensure that any plans go to all
levels of government and business. Governments must ensure that they adequately
align their business community and workforce with any new directions they adopt.
The skilling of management and workforce will also be important in
developing the competencies and capabilities required. Strong leadership by
management at all levels is critical so that those at an operational level in either
business or Government see the commitment to change coming from the top.
Communication and the involvement of staff and customers are often critical to
getting the necessary buy-in for change.
CONCLUSION
Logistics does have the capacity to be of significant value to both
Governments and industry. It is an essential tool for companies to achieve increased
market penetration and improved returns. Logistics suppliers that innovate, integrate
and work with their customers are making significant progress.
The challenge is for Governments and industry to work together to educate
companies in the use of modern logistics skills, encourage the transformation of
traditional transportation operations into logistics providers, develop infrastructure
(including IT) and manage the change.
16
Transport and Communications Bulletin for Asia and the Pacific No.70, 2001
IMPROVING EFFICIENCY IN THE LOGISTICS SECTOR FOR SUSTAINABLE
TRANSPORT DEVELOPMENT IN THE REPUBLIC OF KOREA
Sungwon Lee
*
ABSTRACT
Freight transportation has increased very rapidly in the Republic of Korea owing to
economic growth and expanding international trade. However, the freight transport sector
in the Republic of Korea has been regarded as inefficient and the inefficiencies can be
attributed to many factors, including an outdated regulatory framework, business practices
and a lack of proper infrastructure. Since freight transport demand is derived from
economic activities that are expected to grow in the future, improving efficiency in the sector
has important implications for sustainable transport development in the country.
In the present paper, the past trends and characteristics of domestic freight
transportation in Korea are examined. The modal shares of domestic freight transport are
analysed and future freight volumes by different modes are estimated, based on current
trends and an alternative scenario in consideration of the proposals for future investment in
transport infrastructure development. The effects in terms of greenhouse gas emissions for
these two alternative future freight transport conditions are examined. The causes of
inefficiency in the freight transport sector in the Republic of Korea, which includes
infrastructure capacity problems, regulatory framework and business practices, are also
discussed.
The previous and ongoing efforts to improve efficiency in the logistics sector through
policy measures are discussed. The policy measures focus mainly on a modal shift to
environment-friendly modes, infrastructure provision and enhancing operational efficiency.
Finally, an estimate of the potential reduction in CO
2
emissions as a result of these efforts is
presented.
*
Head, Transport Environment Research Division, The Korea Transport Institute, Daewha-Dong, Ilsan-
Gu, Koyang City, Kyunggi-Do, Republic of Korea.
17
INTRODUCTION
Freight transportation has increased very rapidly in the Republic of Korea owing to
fast economic growth and expanding international trade. It has provided indispensable
service to economic growth. However, it has also been regarded as relatively inefficient. The
inefficiencies can be attributed to many factors, including an outdated regulatory framework,
business practices and a lack of proper infrastructure. Since freight transport demand is
derived from economic activities that are expected to grow in the future as well, improving
efficiency in the freight transport sector has important implications for sustainable transport
development in general.
In the present paper, the past trends and characteristics of domestic freight
transportation in the Republic of Korea are examined. The modal shares of domestic freight
transport are analysed and future freight volumes by different modes are estimated, based on
current trends and an alternative scenario in consideration of the proposals for future
investment in transport infrastructure development. The causes of inefficiency in the sector
are then discussed, including regulatory regimes, business practices, the lack of
standardization in logistics facilities and equipment and the lack of an integrated logistics
information system. Finally, past and present policy measures to improve efficiency in the
logistics sector in the Republic of Korea and the potential impact of these efforts on energy
consumption and the environment, particularly in terms of a reduction in greenhouse gas
emissions are examined.
I. CHARACTERISTICS OF FREIGHT TRANSPORT IN KOREA
During the eleven-year period between 1988 and 1999, the growth in domestic freight
movement showed a high positive correlation with the growth of real gross domestic product
(GDP). Up to 1997, freight transportation increased very rapidly along with the increase in
GDP levels. However, the domestic freight transport volume dropped dramatically in 1998
owing to the economic crisis and has not yet recovered its previous level. Table 1 shows real
GDP and domestic freight movement in the Republic of Korea by year.
Table 1. Change in real GDP and domestic freight in the Republic of Korea, 1988-1999
Year
Real GDP
(billions of won)
Annual change in
real GDP
(percentage)
Domestic freight
(millions of ton-km)
Annual change in
domestic freight
(percentage)
1988 226,543.2 - 59,047 -
1989 241,006.9 6.38 61,522 4.19
1990 263,430.4 9.30 65,704 6.80
1991 287,737.9 9.23 74,091 12.76
1992 303,383.9 5.44 90,268 21.83
1993 320,044.2 5.49 96,438 6.84
1994 346,448.1 8.25 97,782 1.39
1995 377,349.8 8.92 110,722 13.23
1996 402,821.2 6.75 114,367 3.29
1997 423,006.7 5.01 121,899 6.59
1998 398,312.6 -5.84 87,316 -28.37
1999 436,798.5 9.66 86,525 - 0.91
Source: Lee, Sungwon, Myungnee Lee and others, 2001. Macroeconomic impact analysis of environmental regulations
in the transport sector, internal document (Korea Transport Institute).
18
Freight transportation in the Republic of Korea has several distinctive characteristics.
The most salient trend in the domestic freight transport in the Republic of Korea is the ever-
growing role of road transport, both in terms of absolute tonnage transported and its modal
share. The dominance of road freight transport has been led by the explosive increase in
private truck operations in domestic freight movement. Contrary to the dominance of road
freight transport, the role of rail transport, which is considered as more environment-friendly,
has shrunk, both in terms of tonnage transported and its modal share. The reduced role of rail
is owing partly to capacity constraints, as more time slots have been assigned for passenger
services while the total rail capacity has remained virtually the same. Another important
environment-friendly mode, maritime transport, has been able to maintain its relatively stable
modal share in freight transportation in recent years. Freight transportation by air has
increased in absolute terms, but its modal share is still negligible in the domestic sector.
Table 2 shows the trend of freight modal share during the last 11 years.
Table 2. Modal share of domestic freight movement in the Republic of Korea,
1988-1999
(Millions of ton-km and percentage)
Year Road Rail Maritime Air Total
1988 28,603 (48.44) 13,784 (23.34) 16,617 (28.14) 43 (0.07) 59,047 (100.00)
1989 30,002 (48.77) 13,605 (22.11) 17,852 (29.02) 63 (0.10) 61,522 (100.00)
1990 30,842 (46.94) 13,663 (20.79) 21,127 (32.15) 72 (0.11) 65,704 (100.00)
1991 34,781 (46.94) 14,494 (19.56) 24,737 (33.39) 79 (0.11) 74,091 (100.00)
1992 39,910 (44.21) 14,256 (15.79) 36,008 (39.89) 94 (0.10) 90,268 (100.00)
1993 43,210 (44.81) 14,658 (15.20) 38,465 (39.89) 105 (0.11) 96,438 (100.00)
1994 48,661 (49.76) 14,070 (14.39) 34,935 (35.73) 116 (0.12) 97,782 (100.00)
1995 52,825 (47.71) 13,838 (12.50) 43,936 (39.68) 123 (0.11) 110,722 (100.00)
1996 54,834 (47.95) 12,947 (11.32) 46,452 (40.62) 134 (0.12) 114,367 (100.00)
1997 63,741 (52.29) 12,710 (10.43) 45,299 (37.16) 149 (0.12) 121,899 (100.00)
1998 43,343 (49.64) 10,372 (11.88) 33,461 (38.32) 140 (0.16) 87,316 (100.00)
1999 42,603 (49.23) 10,072 (11.64) 33,699 (38.95) 151 (0.18) 86,525 (100.00)
Source: Lee, Sungwon, Myungnee Lee and others, 2001. Macroeconomic impact analysis of environmental regulations
in the transport sector, internal document (Korea Transport Institute).
In road transport, only about one fifth of freight is moved by commercial carriers,
which are regarded as more energy efficient owing to their higher load factor. Most of the
remaining freight is transported by privately owned trucks which are less efficient and cause
more damage to the environment. The prevalence of less efficient private freight transport is
one of the major causes of energy inefficiency in the transport sector.
19
Until recently, the commercial freight industry in the Republic of Korea was
protected by a strict licensing system. It also suffered from the collusive behaviour of the
operators. As a result, the industry lost its competitiveness. Like other industries under entry
regulations and price control, the domestic freight transport industry has suffered from low
productivity and service levels. Nor has the industry been responsive to changing consumer
needs. As a result, many consumers have turned away from commercial freight transporters
and relied on their own private freight transportation, which has ultimately led to the
dominance of private transporters.
In general, the logistics sector in the Republic of Korea can be regarded as relatively
inefficient compared with the advanced countries. Logistics costs in the Republic of Korea
are estimated at over 16 per cent of GDP as of 1995, which is at least 50 per cent more than
those of the United States of America.
1
The major causes of inefficiency are the shortage of
logistics-related infrastructure, operational problems and the problem of economies of scale
in logistics firms, which are mainly small and medium-sized.
All the major freight-related infrastructure, that is, railways, highways, seaports and
airports, is experiencing capacity problems. The capacity-related problems are causing
congestion and creating bottlenecks along the major arteries of freight transportation. Rail
freight transportation is a particular case in point. It has been severely squeezed to
accommodate an increased number of passenger services, which has caused severe capacity
constraints and consequent falls in market share and the volume of freight transported.
Other logistics-related facilities such as freight terminals and storage facilities also have
capacity constraints. Infrastructure capacity problems, which result in bottlenecks and
congestion, are the main sources of high logistics costs. Besides increasing costs, they also
have adverse implications for energy consumption and the environment.
From an operational perspective, there are also other sources of inefficiency in
domestic freight transportation. The state of utilization of IT is one such important area.
There are noticeable gaps in the utilization of IT among logistics service providers of
different transportation modes. Electronic information systems have often been developed by
IT firms in isolation from each other. As a result, data and information are not shared or
cannot be exchanged. This deficiency in logistics information systems has led to unnecessary
delays in freight transportation, overstocking of inventories, a low load factor and inefficient
trucking operations, all of which have contributed to higher costs. Another very important
problem that needs urgent attention is the lack of standardization in logistics-related facilities
and equipment. Logistics can be regarded as a system that needs centralized operation and
management. Standardizing logistics-related equipment and facilities could improve overall
efficiency in freight transportation.
Last, the slow progress made in improving logistics information systems and
standardizing logistic-related facilities and equipment has been largely attributed to the fact
that most logistics firms in the Republic of Korea are small and medium-sized businesses.
The lack of economies of scale and reliability problems associated with small logistics firms
have often provided a strong incentive for manufacturing firms in the Republic of Korea to
set up their own logistics division or even to operate their own freight vehicle fleets.
1
Logistics costs are defined here as the sum of transportation and storage-related costs.
20
II. THE GROWTH OF ROAD FREIGHT TRANSPORT AND ITS
IMPLICATIONS FOR SUSTAINABLE TRANSPORT
DEVELOPMENT
Freight transport demand, by nature, is a derived demand that may be affected by
various socio-economic factors and the level of economic activity. Forecasting of underlying
variables representing these factors, therefore, should precede the forecasting of freight
transport demand. Table 3 shows forecasting of key economic indicators that are considered
relevant in estimating domestic freight transport demand. Among the economic indicators,
the vehicle ownership rate has been estimated by a lagged power growth function, where
vehicle ownership approaches a pre-assumed saturation point. The function had a stock
adjustment term, considered real per capita GDP as a purchasing power proxy, and the
vehicle ownership cost was represented by the sum of vehicle purchase cost and annual fuel
cost (Lee and others 1999). For estimation purposes, real per capita GDP and fuel prices have
been assumed to increase at 3 per cent per annum over the next 20-year period.
The vehicle ownership rate is estimated to increase from about one vehicle for every
four persons in 2000 to about two vehicles for every five persons in 2020. The forecast
vehicle ownership rates are presented in table 3 along with forecast population and number of
registered vehicles.
Table 3. Key economic indicators, 2000-2020
1995 2000 2005 2010 2015 2020
Population
(Thousands of persons)
45,093 47,274 49,123 50,618 51,677 52,358
Per capita GDP
(Thousands of won)
8,459.1 9,101.2 10,550.8 12,231.3 14179.4 16,437.9
Vehicle ownership rate
(per person)
0.1878 0.2444 0.2862 0.3263 0.3643 0.3994
Vehicle registration
(Thousands of vehicles)
8,469 11,555 14,061 16,516 18,828 20,909
Source: Lee, Sungwon, Meeyoung Shin and others,1999. Comprehensive policy measures for environment-friendly
transport (Korea Transport Institute).
The total vehicle mileage for each vehicle type is estimated by using the forecast
number of vehicles and the estimated average vehicle mileage. Average vehicle mileage
has been estimated by fitting a growth curve that best explained the past trend. It may be
noted here that the estimated average annual vehicle mileage decreases as the number of
vehicles increases. Table 4 presents the estimated total vehicle mileage by vehicle type up to
2020. As shown in the table, the total truck mileage is expected to almost double in the 20-
year period between 2000 and 2020. The predominance of private trucks in freight
transportation is expected to continue during this period.
21
Table 4. Estimated vehicle mileage, 2000-2020
(Millions of km)
1999 2000 2005 2010 2015 2020
Private passenger car 145,679 150,566 179,162 209,209 237,600 263,099
Taxi 22,265 22,871 26,757 31,086 35,251 39,019
Passenger
car
SUV
a/
7,601 7,856 9,348 10,915 12,397 13,727
Small and medium private 12,541 13,528 17,138 20,402 23,511 26,331
Heavy-duty private 2,640 2,848 3,608 4,295 4,950 5,543
Small and medium
commercial
202 218 278 332 382 428
Bus
Heavy-duty commercial 3,753 4,062 5,179 6,173 7,114 7,967
Small and medium private 41,881 45,254 57,542 68,557 79,011 88,489
Heavy-duty private 2,435 2,631 3,345 3,986 4,594 5,145
Small and medium
commercial
3,154 3,413 4,352 5,187 5,978 6,695
Truck
Heavy-duty commercial 6,308 6,827 8,705 10,374 11,956 13,391
a/
SUV: sports utility vehicles such as four-wheel drive jeeps.
Greenhouse gas emissions have been estimated by vehicle type according to the
revised Intergovernmental Panel on Climate Change guidelines and relevant emission factors
of representative vehicle type (IPCC 1996). Table 5 presents the estimation results. In 2020,
emissions by freight vehicles of CO
2
, which is the most important greenhouse gas, are
estimated to account for about 31 per cent of total emissions, compared with 38.7 per cent in
1999 (Lee, Lee and others 2001). Although the freight transport sector is not expected to
grow as much as the transport sector as a whole, managing freight transport demand remains
crucial to reducing overall energy consumption and the adverse environmental impacts
caused by emissions from transport vehicles.
The forecast of freight transport modal shares up to 2020 is presented in table 6. The
forecast is based on the assumption that the current trend will continue and new infrastructure
will be constructed to satisfy the increase in demand. This forecast can therefore be
considered as a baseline case against which the effects of policy measures can be analysed.
Freight transport is expected to almost double during the next two decades if the current
trend continues. The environmental burden imposed by freight transport will therefore be
much greater in the future and therefore special efforts will be required to ensure sustainable
transport development in the Republic of Korea.
22
Table 5. Estimation of greenhouse gas emissions, 2000-2020
(Thousands of tons)
Year NO
x
CH
4
NMVOC CO N
2
O CO
2
Passenger 1999 119.5 4.0 100.0 535.3 0.1 28,885.0
car 2000 126.8 4.3 106.4 570.8 6.3 30,991.0
2005 156.9 5.4 133.8 723.3 8.4 40,526.7
2010 189.3 6.6 164.1 894.3 11.0 51,638.3
2015 220.8 7.7 191.4 1043.0 12.8 60,223.5
2020 246.4 8.5 213.6 1164.2 14.3 67,218.4
Bus 1999 53.0 0.6 16.3 71.6 0.1 8,374.5
2000 56.2 0.6 17.4 76.3 0.4 8,891.4
2005 62.3 0.7 19.8 87.0 0.4 9,953.4
2010 68.8 0.8 21.9 96.1 0.4 10,997.4
2015 79.4 0.9 25.3 110.8 0.5 12,681.8
2020 87.1 1.0 27.7 121.6 0.6 13,916.9
Truck 1999 154.3 2.6 30.3 132.7 0.1 23,534.4
2000 162.1 2.8 31.8 139.4 1.3 24,717.2
2005 169.8 2.9 33.4 146.5 1.4 25,921.6
2010 187.6 3.2 36.9 161.9 1.5 28,640.5
2015 216.4 3.7 42.6 186.7 1.7 33,027.0
2020 237.4 4.0 46.7 204.9 1.9 36,243.7
Total 1999 326.8 7.2 146.6 739.7 0.3 60,794.0
2000 345.1 7.7 155.7 786.6 7.9 64,599.6
2005 389.0 9.0 187.0 956.8 10.2 76,401.7
2010 445.8 10.6 222.9 1,152.3 13.0 91,276.1
2015 516.5 12.3 259.2 1,340.5 15.1 105,932.3
2020 571.0 13.6 288.1 1,490.6 16.8 117,379.1
CH
4
:
methane; CO: carbon monoxide; CO
2
: carbon dioxide; N
2
O: nitrous oxide; NMVOCs: non-methane volatile organic
compounds; NO
x
: oxides of nitrogen
Table 6. Baseline forecast of domestic freight transport in the Republic of Korea,
2000-2020*
(Millions of ton-km and percentage modal share)
Year Road Rail Maritime Air Total
2000 43,883 (49.23) 10,375 (11.64) 34,712 (38.95) 156 (0.18) 89,126 (100.00)
2005 51,066 (49.23) 12,073 (11.64) 40,394 (38.95) 182 (0.18) 103,715 (100.00)
2010 59,791 (49.23) 14,136 (11.64) 47,295 (38.95) 213 (0.18) 121,435 (100.00)
2015 70,462 (49.23) 16,659 (11.64) 55,736 (38.95) 251 (0.18) 143,108 (100.00)
2020 83,597 (49.23) 19,764 (11.64) 66,125 (38.95) 298 (0.18) 169,784 (100.00)
* This forecast represents the baseline case under the assumption that current modal share will be maintained in the future.
23
III. POLICIES FOR IMPROVING EFFICIENCY IN FREIGHT TRANSPORT
Improving efficiency in freight transportation can be approached in various ways. The
improvement of vehicle efficiency could be a major area of development. Possible
measures include improving the aerodynamics of the vehicle design, increasing engine
efficiency, or developing alternative fuel vehicles that are less polluting and more
environment-friendly. Transport policy measures could also help to improve efficiency in
freight transportation. Such measures could include policies in favour of a modal shift to
more energy-efficient modes, investments in infrastructure expansion and regulatory reforms
to promote efficiency and competitiveness in the freight transport industry. Although vehicle
efficiency is important in securing environmental sustainability, the present paper focuses on
policy-oriented measures in discussing the efforts of the Republic of Korea for sustainable
transport development through improvements in the logistics sector.
The Government of the Republic of Korea recognizes the importance of logistics-
related problems in the country and has enacted several pieces of legislation and made long-
term plans to improve efficiency in the sector. In 1995, the Logistics Facilitation Act was
revised and the Distribution Centre Development Act was passed in order to provide
financial incentives to developers. In 1997, the Freight Industry Act was passed in order to
ease the entry regulations governing entry into the industry. These pieces of legislation
were intended to facilitate the development of logistics-related infrastructure and to
deregulate the freight industry in order to increase the efficiency of the logistics sector and
thereby strengthen the overall competitiveness of the Republic of Korea economy (Transport
Yearbook 1998).
Energy efficiency in freight transportation can be achieved by a modal shift to a more
energy-efficient means of transportation such as rail. In order to ease railway capacity
constraints such as those mentioned earlier, 23 new railway lines with a total length of 3,870
km are being planned, among them the Seoul to Pusan High Speed Rail Link (Ministry of
Construction and Transport 1999). It is expected that the expanded railway network would
relieve capacity constraints and be able to reverse the current trend and increase the market
share of rail in domestic freight transportation.
In order to remove bottlenecks along the major arteries of freight transportation,
major investments in road transport infrastructure are also planned. By 2011, 33 new
expressways are to be constructed, with a total length of 3,383 km. In the air transportation
sector, three new airports and the expansion of nine major domestic airports are also planned.
In the water transport sector, four new seaport developments and the expansion of seven
24
seaports are currently under way.
In the area of logistics-related infrastructure development, eight integrated freight
terminals and four inland container depots are being constructed. These new facilities are
expected to lower logistics costs, improve overall efficiency and contribute to regional
development.
For logistics information system development, an integrated logistics information
system is being developed in three stages. The integrated system is intended to enable
electronic data interchange (EDI) and provide freight traffic information such as real-time
freight and vehicle location. In the first stage of development (1996-1998) overall planning
and construction of the main EDI centre were completed; in the second (1998–2000)
commercial EDI service was planned and in the third stage (2001–2015) further development
of commercial EDI service and development of several local EDI centres are planned.
2
The Government and the private sector are also pursuing the standardization of
logistics-related facilities and equipment. The Government has adopted the “unit load system
rule” that provides standardized specifications for containers, loading equipment, freight
trucks and freight packages. Tax exemption for investments in logistics standardization is
also allowed, in order to enhance the standardization process.
Meanwhile, government regulations on the logistics industry have been relaxed. The
complicated classification system in the freight transport industry has been repealed and
regulations on entry to the industry via a system of licences have been replaced by a less
stringent registration system which allows entry into the industry by firms meeting specified
minimum requirements. Previously, entry into the freight transport industry required certain
amount of minimum endowed capital as well as a minimum number of freight trucks and
parking and other related facilities. Before 1999, the minimum capital requirement for the
regular freight liners was 300 million won and the minimum fleet requirement was 30 trucks.
Even when all of these requirements were met, the licensing of a new freight operator was a
long and strict process.
Since freight modal shares can be influenced by infrastructure development and
policy instruments, long-term freight modal shares have been estimated taking into account
future infrastructure investments and changes in policy. Table 7 gives such a freight modal
2
For further information on EDI in freight transportation in the Republic of Korea, refer to Kwon, O.,
1997. “Proposed advanced commercial operations in the Republic of Korea”, Transportation Research Record
1602, (Transportation Research Board, Washington, DC).
25
share estimation. Most investments planned in the logistics sector are geared to expanding
the role of energy efficient transport modes such as railways and maritime transport. These
investments are intended to shift a part of the road freight traffic to railways and water
transport.
Table 7. Long-term forecast of domestic freight transportation in the
Republic of Korea taking into account major investments
in infrastructure development, 2000-2020
(Millions of ton-km and percentage modal share)
Year Road Rail Maritime Air Total
2000 43,285 (48.57) 10,700 (12.01) 34,976 (39.25) 164 (0.19) 89,126 (100.00)
2005 46,860 (45.18) 14,483 (13.96) 42,126 (40.62) 245 (0.24) 103,715 (100.00)
2010 50,730 (41.77) 19,601 (16.14) 50,737 (41.78) 366 (0.31) 121,435 (100.00)
2015 54,921 (38.37) 26,529 (18.53) 61,109 (42.71) 548 (0.39) 143,108 (100.00)
2020 59,457 (35.02) 35,906 (21.15) 73,601 (43.35) 820 (0.49) 169,784 (100.00)
Note: The road freight forecasting has been done by the author. Rail and other modal shares have also been estimated by
the author, taking into account infrastructure investments in “National logistics visions and policies for the twenty-
first century” (Korea Transport Institute 1999).
In table 7, it can be seen that the share of rail freight transport is expected to grow
rapidly. This is because the high speed rail link currently under construction would relieve
some existing rail capacity from passenger transport to freight transport. Freight transport by
air is also expected to grow rapidly, but the absolute tonnage transported is expected to
remain small. The share of road freight transport is expected to decrease over the next 20
years as rail and maritime transport expand. Although losing market share, road freight
transport would still experience significant growth in absolute terms owing to growth in
overall freight movement demand.
The expected changes in freight modal shares will have a favourable impact on the
environment: they are expected to increase energy efficiency and thereby help in reducing the
greenhouse gas emissions produced by the transport sector. Estimates of CO
2
emissions
from freight transportation have been made for this alternative scenario of modal shares and
are presented in table 8. The estimation takes into account the current energy efficiency of
different modes and forecast changes in modal share. The energy efficiency of different
modes has been calculated and checked against the current energy consumption statistics for
accuracy. Table 8 shows the potential greenhouse gas (CO
2
) reductions up to 2020 owing to
changes in freight modal shares. It is estimated that a reduction of CO
2
emissions of up to
6.54 per cent can be achieved in the transport sector by the proposed investments and the
26
consequent modal shift.
Table 8. CO
2
emissions by type of domestic freight transport and their reduction
potential, 2000-2020
(Thousands of tonnes of carbon)
2000 2005 2010 2015 2020
Road (private) 5,409 6,294 7,370 8,685 10,304
Road (commercial) 1,203 1,400 1,639 1,931 2,291
Rail 74 86 101 119 141
Maritime 347 404 473 557 661
Air 63 73 86 101 120
Baseline
Total by freight
transport
7,096 8,257 9,668 11,394 13,518
Road (private) 5,409 6,049 6,446 6,525 6,604
Road (commercial) 1,203 1,318 2,222 2,847 3,541
Rail 74 104 134 182 246
Maritime 347 400 437 532 647
Air 63 101 146 197 266
Modal shift
policy as in
“National
logistics visions
and policy for
the twenty-first
century”
(Korea
Transport
Institute, 1999)
Total by freight
transport
7,096 7,973 9,387 10,282 11,304
Reduction potential - 284 282 1,111 2,214
Total emissions by the transport sector 18,681 22056 26,565 30,855 33,869
Reduction rate (percentage)
- 1.06 3.60 6.54
Source: Lee, Sungwon, Myungmee Lee and others, 2001. Macroeconomic impact analysis of environment regulation in
the transport sector, internal document (Korea Transport Institute).
27
CONCLUSION
Freight transportation is indispensable to economic activities. However, it also
imposes a great burden on the environment through harmful emissions. As freight
transportation demand is dependent mainly on economic activities, it is expected to increase
further as the economy grows. It is estimated that overall domestic freight transportation
demand will increase by about 196 per cent over the next twenty-year period. If the current
trend continues, greenhouse gas emissions by the freight transport sector are expected to
increase by about 190 per cent over the same period. However, with the construction of new
railways and other planned major infrastructure projects, the share of rail in domestic freight
transportation is expected to increase by 9.51 per cent, while the share of road transport is
expected to decrease significantly during this period. This shift in modal shares could have a
positive impact on greenhouse gas emissions, which may be reduced by about 6.54 per cent
of the estimated total emissions from the transport sector.
Owing to the derived nature of demand, reducing the adverse environmental impacts
of freight transportation is regarded as very difficult. The current policy measures for
sustainable development in domestic freight transportation in the Republic of Korea focus
mainly on a modal shift to environment-friendly modes. However, policies for increasing
operational efficiency in freight transportation are also being pursued. These include the
development of an integrated logistics information system, deregulation of the freight
transport industry and standardization of logistics-related facilities and equipment. With the
expected changes in modal shares brought about by these policy measures, energy
consumption and the resulting adverse impacts on the environment could be significantly
reduced.
28
REFERENCES
Intergovernmental Panel on Climate Change (IPCC), 1996. Revised 1996 IPCC Guidelines
for National Greenhouse Gas Inventories: Greenhouse Gas Inventory Reference Manual, vol.
3 (Geneva). Available online at <http://www.ipcc-nggip.iges.or.jp/public/gl/invs6.htm>(12
September 2001).
Lee, Sungwon, Meeyoung Shin and others, 1999. Comprehensive policy measures for
environment-friendly transport, (Korea Transport Institute).
Lee, Sungwon, Myungmee Lee and others, 2001. Macroeconomic impact analysis of
environmental regulations in the transport sector, internal document (Korea Transport
Institute).
Ministry of Construction and Transport, 1999. National strategy for transport arteries,
(Republic of Korea Ministry of Construction and Transport, Seoul).
Korea Transport Institute, 1999. National logistics visions and policies for the twenty-first
century.
Transport Yearbook, 1998. (Transport Newspaper Company).
29
30
Transport and Communications Bulletin for Asia and the Pacific No.70, 2001
ASSESSING THE TRANSPORTATION PROBLEMS OF THE SUGAR CANE
INDUSTRY IN THAILAND
Paitoon Chetthamrongchai,
*
Aroon Auansakul
**
and Decha Supawan
***
ABSTRACT
Transportation has a fundamental role in the economic development of all
countries. It is not just a means to service commuting people, but also to collect products
and materials from producers and distribute them to consumers. Transportation has
become a significant factor affecting the production costs of commodities. The
production of sugar cane in Thailand is no exception. The cost of transporting sugar
cane from the farm gate to the mills is quite high, owing to the multiple transport
facilities and time-consuming activities involved in the delivery process. The total
transportation expenditure was estimated at 5,708 million baht for the crop year 1999-
2000. The average cost per transaction incurred by farmers (excluding other labour
costs) was in the range of 180-220 baht per ton in 1999. A large portion of this cost
comprises truck rental and driver wages. These two elements together represent a high
proportion of the overall production cost. The transportation issue has been overlooked
in many industrial sectors and in the agricultural sector, in particular. The purpose of
this paper is to present the findings of a study on the transportation and other relevant
costs of sugar cane production. The findings and the subsequent recommendations could
be considered for the enhancement of welfare of the sugar cane farmers and the
increased efficiency of the industry in general and may also be applied to other agro-
based industries facing similar problems.
*
Economist, Bureau of Agricultural Economic Research.
**
Director of National Resources Economics Research Section, Bureau of Agricultural Economics
Research.
***
Director of Bureau of Agricultural Economics Research.
31
INTRODUCTION
Transportation is an essential element of the production-distribution chain. Delays in
transportation are of serious concern since they affect production costs, which are eventually
reflected in the consumer price. The present paper focuses on the assessment of transportation
costs in the sugar cane industry, since they have been found to be very high in proportion to
other variable costs. Owing to constraints, the study focuses only on the north-east region of
Thailand. Data were collected through interviews with sugar-mill owners, sugar cane growers
and truck operators. The study recommends a strategy for the establishment of an effective
management mechanism in the delivery process of sugar cane products.
I. THE SUGAR INDUSTRY IN THAILAND
The sugar industry in Thailand has been growing rapidly, both in sugar cane
production and in sugar mill expansion. Demand from domestic and international markets has
been rising and has contributed to the economic growth of the nation. Sugar cane growing
and processing into raw sugar is one of the largest industries in the country. Thailand is one
of the largest sugar exporters in the world. The total export of white and raw sugar was 3.22
million tons in 2000. The Office of the Cane and Sugar Board under the Ministry of Industry
has reported the total value of sugar exports for the crop-year 1998-1999 at 21.21 billion
baht.
Cultivated in 5.62 million rais of land (1 hectare = 6.5 rais), total sugar cane
production during the crop-year 1999-2000 was 53.10 million tons (see table 1), 20.26 per
cent higher than the production of 44.17 million tons of the previous year. The Office of the
Cane and Sugar Board reported total sales of sugar cane of nearly 24 billion baht for the crop-
year 1999-2000. That year, the estimated cost of transportation for carrying sugar cane to the
mills in the north-east was 2,379.18 million baht, which accounted for 41.68 per cent of the
total transportation cost of sugar cane for the whole country (see table 2).
Table 1. Production of sugar cane and sugar, 1995/96-1999/2000
Year of
production
Planting area
(millions of
rais)
Sugar cane
(millions
of tons)
Average
yield
(ton/rai)
Sweetness
(CCS)
a/
Sugar
(millions
of tons)
Sugar
productivity
(kg/ton)
1995/96 6.53 57.69 8.84 11.84 6.03 104.45
1996/97 5.89 56.24 9.56 11.78 5.82 103.47
1997/98 5.75 42.20 7.34 11.10 4.00 97.02
1998/99 5.45 44.17 8.10 11.66 5.20 103.72
1999/00 5.62 53.12 9.45 11.70 5.51 103.89
Source: Office of the Cane and Sugar Board, Ministry of Industry, Thailand.
a/
CCS is a measurement of sucrose content in cane, which can be refined into a form of white sugar if milling and
purification processes are carried out according to standard procedures.
32
Table 2. Transportation costs of sugar cane by region in Thailand
for the crop-year 1999-2000
Area
Sugar cane production
(millions of tons)
Transportation costs
(millions of baht)
North
Central
East
North-east
10.71
18.00
3.52
20.87
1,065.22
1,849.68
413.92
2,379.18
Total
53.10
5,708.00
Source: Office of the Cane and Sugar Board, Ministry of Industry, Thailand.
The price of sugar cane is based on the provisional price announced by the
Government and the quality and sweetness as measured by Commercial Cane Sugar (CCS).
1
Cane with a higher CCS will fetch a higher price. In addition, the purity of the cane juice is
also taken into account in setting the price. Freshly cut sugar cane has higher purity and
produces more sugar than older sugar cane. Deterioration in the quality of sugar cane can also
be caused by improper harvesting and delays during handling and transportation. These
factors influence the price and thus the income of the sugar cane farmers.
II. STUDY RESULTS
The present study focuses on the operation of the sugar cane industry in the north-east
region of Thailand, covering the provinces of Nakhon Phanom, Sakol Nakhon, Nong Khai,
Udon Thani, Nong Bua Lam Phu, Loei, Mukdahan, Yasothon, Amnat Charoen, Kalasin,
Khon Kaen, Maha Sarakam, Roi Et, Buri Ram, Chaiyaphum and Nakhon Ratchasima. The
total sugar cane planting area in the region is 2.18 million rais. The region produced 21.51
million tons of sugar cane during the crop-year 1999-2000, representing 38.35 per cent of the
country’s total production. Udon Thani produced 5.23 million tons of sugar cane, making it
the largest producing province in the region. Most of the cane-growing farms are owned and
operated by individual families. It was also found that total transportation expenditure for the
region was the highest in comparison to other regions.
1
CCS is a measurement of sucrose content in cane, which can be refined into a form of white sugar if milling and
purification processes are carried out according to standard procedures.
33
A. Cane and sugar industry in the north-east region
A total of 13 sugar mills are located in the seven provinces of Buri Ram, Udon Thani,
Mukdahan, Kalasin, Khon Kaen, Chaiyaphum, and Nakhon Ratchasima of the north-east
region.
The Office of the Cane and Sugar Board under the Ministry of Industry reported that
during the crop-year 1998-1999 the most cultivated variety in this region was Phill 66-07,
which occupied more than 40 per cent of the total planted area. The second most commonly
cultivated variety was U-Thong I, which accounted for 13 per cent, and other varieties
combined accounted for the remaining 47 per cent. The 13 sugar mills in the region processed
21.51 million tons of sugar cane into raw sugar (0.649 million tons), refined sugar (10.985
million tons), white refined sugar (2.843 million tons), and molasses (0.917 million tons) (see
table 3).
Table 3. Total sugar production in the north--east region, 1999/2000
Mills
Raw sugar
(tons)
Refined sugar
(tons)
White refined
sugar (tons)
Molasses
(tons)
E-SAAN Sugar Industry 26,036 - - 8,000
Mitr Phu Veang 34,324 1,278,167 - 83,524
Khon Kaen 107,799 909,615 800,705 108,507
Kumpawapi 82,331 628,302 113,080 66,121
Kaset Phol 56,265 560,934 - 62,410
Rerm Udom 68,927 892,258 - 72,774
Burirum 19,453 775,281 - 44,421
Saha Ruang 8,555 767,422 - 37,485
United Framer and
Industry
62,186 906,859 976,736 91,121
Korat Industry 61,955 1,908,066 119,708 121,101
Ratchasima 95,614 641,339 400,045 90,236
Nong Yai 8,804 858,733 257,732 73,055
Mid Kalasin 16,496 857,723 174,944 58,014
Total 648,745 10,984,699 2,842,950 916,769
Source: Office of the Cane and Sugar Board, Ministry of Industry., Thailand.
B. Transport operations of sugar cane in the north-east region
Most sugar cane growers in the region are small farmers operating with their own
families. Since most of them do not possess a truck and normally have only a small or a
traditional multi-purpose vehicle, they have to pay the cost of transportation of the sugar cane
from their farm to the mills. However, both small and large farmers face a common problem
of transportation as the delivery of sugar cane per transaction requires a bulk carrier. They are
required to rent a truck and pay hired labourers for cutting of sugarcane and loading the truck.
At the beginning and end of the season, the sugar mills face an inadequate supply of
raw materials for crushing, whereas during the peak season supply is higher than the capacity
of the mills. At that time hundreds of trucks can be seen queuing in front of the mills, waiting
to unload sugar cane.
34
Truck owners normally operate their businesses as middlemen by charging for
transport services per ton. They also face problems of delays during transportation and
excessive time spent at the mills waiting to unload the raw sugar cane. Truck drivers might
spend up to 24 hours for just one transaction. This, of course, has an impact on the cost of
transportation. If the mills could manage the flow of trucks and unloading operations more
efficiently, the cost of sugar production would be lower.
The study found that all of the three parties involved, that is, sugar mill owners, cane
farmers and truck operators are affected by the problem of transportation, which eventually
affects the cost of sugar production. It was found that the cost of transportation was high
compared to other costs. In the crop-year 1999 the average cost of transportation in this
region was 180-220 baht per ton.
C. The sugar cane delivery system
Both small and large farmers usually deliver sugar cane to the mills in either 10- or 6-
wheel trucks which have legal loading limits of 21 tons and 10 tons respectively. However,
trucks are always overloaded to keep down the cost of transportation and to maintain sugar
cane quality. Many small growers cannot manage a bulk carriage by themselves and need to
hire outside workers for help. The existing system has also led farmers to harvest prematurely
in order to fill in the bulk capacity and thus economize on transportation. A worse situation
occurs for small farmers operating far from the mills, who do not grow enough for a full truck
load of sugar cane, which may eventually force them to give up growing sugar cane.
D. The high cost of production: cutting and loading
Table 4 below shows that labour costs represent slightly over 45 per cent of the total
production cost per rai. Cutting and loading costs represent the highest portion of the
variable cost. Since the transporting of raw materials requires bulk carriage, growers may not
always have sufficient family members to do the work, forcing them to hire extra workers for
cutting and loading. The labour cost for cutting and loading is estimated at 85 baht per ton,
which is about 13-14 per cent of the total cost, but it can be even higher, depending on the
number of cutting days required. Moreover, farmers have to pay at least 180-220 baht per ton
in transportation costs, which are not dependent upon distance. Total labour costs for cutting,
loading and transportation are in the range of 265-305 baht per ton. These costs represent 43-
48 per cent of total costs and represent a significant proportion of the production costs for
small and self-owned and operated families (see table 5).
35
Table 4. Cost of sugar cane production in the north-east region, crop-year 1999/2000
Items
Canes
cultivated
in first
year
(baht/rai)
Percentage
of total
production
costs
Canes
cultivated
in second
year
(baht/rai)
Percentage
of total
production
cost
Canes
cultivated in
third year
(baht/rai)
Percentage
of total
production
cost
Cutting and loading 1,071.49 21.05 781,09 32.42 819.39 34.39
Other labour costs 1,199.70 23.57 307.37 12.76 238.00 9.99
1. Total labour costs 2,271.19 44.63 1,088.46 45.17 1,057.39 44.37
2. Materials 1,812.39 35.61 630.31 26.16 603.33 25.32
3. Other variable costs 412.92 8.11 170.72 7.09 157.13 6.59
Total variable costs 4,496.50 88.36 1,889.49 78.42 1,817.85 76.29
1. Depreciation of
agricultural tools
205.39 0.04 159.96 6.64 214.56 9.00
2. Land rental 387.15 7.61 360.1 14.94 350.52 14.71
3. Opportunity costs 0.02 0.00 0.02 0.00 0.02 0.00
Total fixed costs 592.56 11.64 520.08 21.58 565.10 23.71
Total production costs 5,089.06 100.00 2,409.57 100.00 2,382.95 100.00
Source: Office of the Cane and Sugar Board, Ministry of Industry, Thailand, survey carried out in 1999/2000-2001.
Note: The costs presented in this table do not include transportation.
Table 5. Average costs of sugar cane production in the north-east region, 1999/2000
Items
Average cost of cane
production over three-year
period
(baht per rai)
Percentage of total
production costs
1. Total labour costs 1,472.35 44.70
2. Materials 1,015.34 30.83
3. Other variable costs 246.92 7.50
Total variable costs 2,734.61 83.02
1. Depreciation of agricultural tools 193.30 5.87
2. Land rental 365.92 11.11
Total fixed costs 559.25 16.98
Production costs 3,293.86 100.00
Average output tons per rai: 7.75
Average cutting and loading costs
(baht/ton)
85.00 13.00-14.00
Average other costs 340.14 53.00-56.00
Cost of production (baht/ton) 425.14 66.00-70.00
Transportation costs (baht/ton) 180.00-220.00 30.00-34.00
Total costs (baht/ton) 606.14-646.14 100.00
Source: Office of the Cane and Sugar Board, Ministry of Industry, Thailand, survey carried out in 1999/2000-2001.
36
E. Queuing operations
Although most farmers in the region have contracts with certain mills, some trade and
deliver sugar cane to any mill. However, they have to wait in a queue prior to unloading their
sugar cane at the mill. Trucks unload on a first-come-first-serve basis. It may take up to 30
hours to complete the handling process, which raises the cost of transportation. To cut costs,
farmers should have alternative choices of where they could deliver their product and thus
change to mills with shorter queues. This kind of practice could, however, give rise to another
problem. If sugar mills faced uncertainty as to whether they would be able to utilize their full
capacity for crushing, they may resort to imposing higher prices in order to compensate for
the uncertainty in supply of sugarcane from farmers.
III. THE LOADING STATION STRATEGY
The Office of Agricultural Economics under the Ministry of Agriculture and
Cooperatives, in close cooperation with the sugar mill owners has developed a “loading
station strategy” to reduce the costs of transportation in the sugar cane industry.
A “loading station” is an area prepared for loading activities. It should be located in
the neighborhood of the growers in order to facilitate a smooth supply of cane to the mills
and reduce the costs of transportation borne by the farmers. Currently, only one loading
station has been established, in Khon Kaen Province. The station is owned and operated by a
mill and is located just less than 100 km from it. The initial investment was approximately 11
million bath, which paid for the construction of facilities, the procurement of equipment such
as an overhead crane and a weighbridge, and building and land costs. Over 80 per cent of the
province’s sugar cane farmers use this facility and they deliver approximately 2,000-3,000
tons of sugar cane per day. Most of the farmers can rely on their own resources. The station
also enables the mill to reach its target level of capacity utilization. The idea behind the
loading station is to help small sugar cane growers to reduce their cutting and loading and
transportation costs, which can represent 20 per cent or more of total costs. The decrease in
costs means higher earnings for sugar cane farmers.
Figure 1 is a flow chart illustrating a loading station operation. Ideally, the loading
station is a market trading spot for all sugar cane growers, and particularly for small farmers.
They transport sugar cane from their farms to the station in their own vehicles and need only
rely on family labour. The mill collects the sugar cane from the station and arranges onward
transportation to the processing plant. Farmers pay a standard cost of 85 baht per ton to the
mill for the transportation from the loading station to the processing plant. Under this new
scheme, farmers and truck drivers save time and costs, since they no longer have to wait in
line to deliver their product. Under the former, traditional system farmers delivered their
product directly from their farms to the mills by bulk carriers and had to bear the whole cost
themselves.
37
New system
45 baht/ton 85 baht/ton
Mill
Loading
station Growers
Delivery directly from farm to mill
(180-220 baht/ton)
Traditional system
Figure 1. Loading station model: A cost-saving approach to sugar-cane transportation
There are three major benefits of supplying sugar cane to mills through loading
stations. First, as already discussed, it reduces transportation costs significantly and can help
maintain steady supplies of sugar cane to the mills. Second, it enables farmers to use land
and other resources more efficiently and, by assuring them a higher income, encourages them
to continue to grow sugar cane. Third, small farms owned and operated by family members
can rely on their own labour for cutting and loading and thereby save at least another 85 baht
per ton (see table 6).
Table 6. Comparison of sugar-cane transportation costs under the traditional system
and the loading station system in north-east Thailand
Through loading station
Cost item
Traditional
system
(baht/ton)
Hired labour
(baht/ton)
Own labour
(baht/ton)
Cutting and loading 85 85 -
Cost of transportation
from farm to station
- 45 45
Cost of Transportation
from station to mill
(charged by the mill)
- 85 85
Cost of Transportation
from farm to mill
180-220 - -
Total costs
265-305 215 130
38
The system of loading stations allows farmers to harvest a small amount of sugar cane
at a time and use their own vehicles instead of renting a large truck. The loading station
strategy also brings social benefits, as small farmers can operate and produce sugar cane by
using their own family labour; they do not need to employ outside labour for cutting and
loading since they can harvest little by little. In addition, they can find a market to sell their
products more easily.
Owing to the fact that labour costs for cutting and loading are relatively high, the
Office of Agricultural Economics and the Ministry of Agriculture and Cooperatives
recommend vehicle- and labour-sharing among growers within a village for further savings in
cost. Alternatively, the Government could consider providing loans to small farmers to buy
trucks for use within the village and from farm to loading station. To obtain further benefits
from loading stations, they could be managed through farmers’ cooperatives or other suitable
institutions that could protect the small farmers’ interests.
CONCLUSIONS AND RECOMMENDATIONS
The success of the sugar cane industry in Thailand is built upon best practices in
production, handling and marketing. However, further improvements in the overall efficiency
of the industry and improvements in the welfare of sugar cane farmers are possible through a
reduction in the transportation costs of sugar cane, which appears to be an important
component of the total cost of production. Loading stations, which would benefit all the
parties involved, that is, growers, truck operators, and mills, are proposed as a possible
solution to the problem. Small farmers who rely on their own family labour would be
expected to benefit the most from their introduction. A delivery system using loading
stations has the potential to reduce transportation costs significantly and ensure better
management of the supply chain. The system could also be considered for other similar agro-
food sectors in Thailand. However, it is recommended that an in-depth study be undertaken to
cover all regions in the country. A further study should also investigate the possibility of
cooperation between agro-food industries for more efficient management of the supply chain.
39
40
Transport and Communications Bulletin for Asia and the Pacific No.70, 2001
THE EFFECTS OF PUBLIC TRUCK TERMINAL POLICIES ON AIR
POLLUTION IN THE BANGKOK METROPOLITAN AREA
Kiyoshi Takahashi* and Ackchai Sirikupanichkul**
ABSTRACT
The present study was undertaken to examine the potential effects on air pollution
and traffic movement in the city of the three newly established public truck terminals in
Bangkok. The findings of the study reveal that the patterns of freight movement differ from
one distribution channel to another. These channels are categorized as traditional trade,
wholesale and retail markets, and modern trading through chains of superstores and
convenience stores. An estimation of the emission loads from truck transportation was
made by using empirical models and the geographic information system. The findings
show that oxides of nitrogen (NO
x
) are the major emission load generated from trucks
(61.73 tons per day), followed by carbon monoxide (CO) (37.72 tons per day). Emissions
of NO
x
from heavy-duty diesel vehicles (HDDV) are approximately twice as high as those
from light-duty diesel trucks (LDDT), despite the fact that the vehicle kilometre travel
(VKT) of LDDTs is 7.3 times higher than that of HDDVs. Finally, the potential effects of
truck restriction policies on air pollution after the establishment of public truck terminals
are assessed through simulation studies. The results of simulation show that such truck
terminals could help decrease VKT of HDDVs, but would increase VKT of LDDTs.
Consequently, the terminals could help reduce emission loads of NO
x
by 825
per cent and Suspended Particulate Matter (SPM) by 860 per cent from their present
levels. However, emission loads of CO and hydrocarbons (HC) would be higher owing to
the increase in VKT of LDDTs. This increase in levels of CO and HC is not so important,
since the number of LDDTs in Bangkok is much smaller than the number of cars, which
generate much higher volumes of CO and HC. The current 24-hour truck restriction on
the Outer Ring Road core is more effective in reducing NO
x
and SPM than that on the
Inner Ring Road core. Further policies need to be formulated to promote the usage of
truck terminals, which can lead to further reductions of NO
x
and SPM.
* Associate Professor, School of Civil Engineering, Asian Institute of Technology, P.O. Box 4, Klong
Luang, Pathumthani 12120, Thailand.
** Research Associate, School of Civil Engineering, Asian Institute of Technology, P.O. Box 4, Klong
Luang, Pathumthani 12120, Thailand.
41
I. OVERVIEW
Most of the freight traffic in Bangkok is generated by conventional wholesale and
retail markets, private truck terminals, freight forwarders, factories and modern trade. The
conventional wholesale markets are usually located inside the Inner Ring Road core. Most
of the markets are categorized by type of goods: flower, vegetables, clothing, and so forth.
These markets are under the management of either the Bangkok Metropolitan
Administration (BMA) or the private sector. Recently, the construction of inner and outer
ring road networks has made it possible to introduce large-scale, modern wholesale
markets in suburban areas of Bangkok such as Simoom Muang and Talad Thai. At these
markets agricultural products from other regions, are traded. The Government supports
and promotes them because of their potentials to reduce the freight traffic volume in
central areas of Bangkok. They provide more systematic and larger storage and handling
areas for the massive volume of goods from the provinces.
Non-perishable goods such as clothing, groceries and processed foods are traded
mainly inside the city. Commercial buildings are utilized as storehouses. Traffic volumes
and the frequency of loading and unloading activities generated by these markets are less
than those generated by markets of perishable goods, since non-perishable commodities
can be kept in storage for longer periods. However, most of the trucks used in the
wholesale markets are of medium and large types (6- and 10-wheeled trucks). The major
problem of the wholesale markets is the lack of parking space. As a result, some loading
and unloading activities take place at the roadside which obstructs the passage of other
road users. The construction of multi-storey structures is one solution to the parking
problem of these markets, for it could provide more space for parking and cargo storage.
Other problems of the markets include poor accessibility and problems caused by truck
ban regulations.
The conventional retail markets are scattered all over Bangkok, especially in
residential and commercial areas. They are usually open from early morning until midday.
Goods are transferred from these markets to vendors, hawkers, restaurants, hotels,
hospitals, and supermarkets in small vehicles. Some markets are called “talad nud”, where
various commodities such as vegetables, fruits, clothes, plants, pets, and so forth are sold
on specific days fixed by the market manager. Several foreign companies have introduced
modern trading through chains of superstores and convenience stores. Freight forwarding
and logistics systems play an important role in this type of trading. The transport
operations serving this type of trading are more efficient than the two other types discussed
earlier. Interested readers are referred to Sirikijpanichkul (2000) for more details about
freight forwarding and logistics operations in Bangkok.
The rapid economic growth and urban sprawl of Bangkok have resulted in higher
volumes of inner city freight transportation. The increased usage of trucks, especially
heavy trucks, has a major impact on traffic conditions, road safety and the environment of
the city. To address the negative effects of heavy truck movements, the Government has
formulated a number of truck operation policies and taken other measures. Time-based
truck restrictions, zonal restrictions, and three suburban truck terminals have been
introduced in order to restrict heavy trucks from entering the inner city. However, these
policies and measures have strengthened the role of smaller trucks and vans in transporting
goods in inner Bangkok.
42
The main objective of this study was to examine the effects of the new public truck
terminals on air pollution in Bangkok. The paper is organized as follows: the first section
provides an overview of present freight transportation arrangements in Bangkok, a
statement of the problem and the objectives of the study. The second section is a review of
the literature concerning a freight transportation model, an emission model and previous
studies. The freight transportation plans and policies for Bangkok are presented in the third
section. The results of the estimation of emission loads from existing truck-based freight
transportation are presented in the fourth section. The fifth section summarizes the
possible effects on emission loads after the introduction of public truck terminals in
Bangkok. Finally, conclusions are drawn and some recommendations are presented for
consideration by the concerned authorities.
II. LITERATURE REVIEW
A. Freight transportation model
There are differences between the forecasting models used in urban freight
transportation planning and the ones used in urban transportation planning, although the
process of modelling may be similar. The major problem in developing an urban freight
transport demand model is the lack of freight movement data at all spatial levels. The
availability of appropriate data directly affects the choice of techniques (Memmott 1983).
A number of actors are involved in freight transportion, such as industrial firms, shippers,
carriers and logistics service providers, which is another factor that complicates freight
transport demand modelling.
There are two basic types of model that can represent traffic flow on road
networks: traffic assignment models and traffic simulation models. The traffic assignment
models have a limited range of applications owing to their inherent theoretical properties.
The simulation models are further classified into two types: micro-simulation models such
as NETSIM (network simulator) (Lieberman 1981) and macro-simulation models such as
CONTRAM (contiuous traffic assignment model) (Leonard and Gower 1982). Some other
types of model were also developed to represent the relationship between performance of
road systems and other factors: for example, congestion functions to indicate the
relationship between demand and performance of a road system. In this type, link cost
function and cost models provide information on the cost of transporting goods by
alternative routes, and by using different terminals and different types of vehicle (Jara Diaz
1982).
Most of the freight demand models developed have followed the conventional four-
step modelling process, with some adaptations specific to freight, such as the models
developed by Van Es in 1982, Kim and Hinkle in 1982, Friesz, Tobin and Harker in 1983
and Harker in 1985 (Ortúzar and Willumsen 1996). The models can be either trip-based or
goods-flow based. Boerkamps and Binsbergen (1999) suggest that the trip-based models
are not able to evaluate new transport systems. For goods-flow based models, goods flows
are modelled based on their production or distribution, or both, and consumption points
(shops or consumers). A vehicle-loading model assigns goods flows from origin to
comsumption points. Finally, the flows are assigned to the road network.
43
B. Emission model
The diesel engine is a major source of air pollution owing to exhaust emissions of
oxides of nitrogen (NO
x
), carbon monoxide (CO), Suspended Particulate Matter (SPM),
sulphur dioxide (SO
2
) and volatile organic compounds (VOCs). The high levels of NO
x
emissions from heavy-duty vehicles are explained by the characteristics of diesel engines:
they run at higher combustion chamber pressures and temperatures than petrol engines.
The conditions of combustion are conducive to high levels of NO
x
emissions. SPM in
diesel exhaust originates mainly from unburned fuel and engine oil (Weaver and
Klausmeier 1988 and Conte 1990).
Studies have been carried out to investigate the relationship between road traffic
operating conditions and emission loads. Two main emission models developed in the
United States of America are currently in use: the Enviromental Protection Agency Mobile
Source Emission Factor Model (EPA MOBILE), which is the most widely used, and the
California Air Resources Board Emission Factor Model (CARB EMFAC), which is used
in California. The structures of both models are the same. Activity-specific emission rates
estimated by the models are multiplied by vehicle activities to provide emission outputs by
pollutant (that is, grams per vehicle-mile for MOBILE and grams per vehicle-hour and per
vehicle trip for EMFAC) (Guensler 1993). Baseline emission rates are derived from a
laboratory test procedure known as the federal test procedure (FTP). The FTP driving
cycle consists of a sequence of accelerations, decelerations, cruise speeds and idling based
on actual home-to-work commuter trips in the 1960s on Los Angeles freeways and surface
arterials (EPA 1993).
C. Previous studies in Bangkok
Emissions from on-road vehicles can be determined from vehicle mileage travel
(VMT) and the emission factors of pollutants. Hanson and Lopez (1992) estimated the
emission factors of CO. Later, Boontherawara (1994) developed the emission factors of
NO
x,
which depend on temperature, vapour pressure, speed, operating mode, altitude, age
of vehicle, and so on. However, the most important determining factor of the emission rate
is vehicle speed (EPA 1996). Chulalongkorn University conducted a study to develop an
emission database as an input to the “Airviro” computer program. The database of Airviro
can be updated and used to estimate the emission load and its dispersion. The road network
and traffic data needed for the program include hourly volume, traffic composition, speed,
and average daily traffic (ADT). The emission load is finally estimated by the program
from data on fuel consumption, traffic characteristics and VKT (Pollution Control
Department 1994).
Tanadtang (1999) conducted a study on the effects of traffic on air quality through
driving cycle tests by measuring and evaluating the exhaust emissions of petrol vehicles on
congested and uncongested roads, suburban roads and expressways in Bangkok.
Muttamara and Leong (2000) measured exhaust emissions from petrol vehicles in
Bangkok by chassis dynamometer. A fleet of 10 vehicles of different models, years and
manufacturers was selected for the purpose of measuring air pollutants in exhaust fumes.
They found that average CO and HC emissions from 1990-1992 cars were 32.3-64.2 and
1.82-2.98 gm per km respectively and decreased to 17.8-40.71 and 0.75-1.88 gm per km
respectively for the newer 1994-1995 cars. The results also indicated that air pollutant
emissions significantly increase with increases in mileage and the age of the car. The study
44
also confirmed that there is a correlation between average air pollutant concentration and
traffic speed.
III. FREIGHT TRANSPORTATION PLANS AND POLICIES IN BANGKOK
The restriction of truck movements was the first measure implemented to reduce
the traffic load of heavy trucks in Bangkok. Restrictions have been in place since 1989.
Four- and six-wheeled trucks are prohibited from entering the Bangkok metropolitan area
at the peak hours of between 6 and 9 in the morning and 4 and 8 in the evening. Ten-
wheeled and larger trucks have extended hours of restriction: they are banned between 6
and 10 in the morning and 3 and 9 in the evening. However, on-street parking of heavy
trucks during the unrestricted hours continues to have adverse effects on other road users.
To alleviate this problem, public truck terminals were proposed in 1969, and feasibility
studies on truck terminals were subsequently carried out. These studies also considered
land acquisition problems, the possibility of granting concessions to the private sector and
the construction process. Finally, three public truck terminals were constructed and
opened for operation in June 2000. These three public truck terminals are located in the
north (Pathumthani), the east (Ladkrabang), and the west (Buddha Monthon) of Bangkok,
as shown in figure 1. The truck terminals are aimed at reducing the number of heavy trucks
and the enhancement of the air quality in the city area. Since the introduction of the three
terminals there have been some significant changes in truck ban measures: in addition to
the existing policy of restriction by hours of the day, new bans have been proposed based
on spatial zones, defined by the Outer and Inner Ring Roads.
The zonal truck-ban policy is to be implemented in four phases. In the first phase,
all trucks with 10 wheels or more were not allowed to park inside the 45-sq-km truck-free
zone of Bangkok, as shown in figure 2. This was implemented in June 2000. This truck-
free zone was extended up to the Inner Ring Road (113-sq-km) in September 2000 in the
second phase. Finally, trucks with 10 wheels or more will be totally prohibited from
entering the Inner and Outer Ring Road areas in the third and fourth phases respectively.
However, as these bans could seriously affect the truck operators located inside the city,
the Department of Land Transport has requested the Ministry of Industry to conduct a
study on the movements of commodities in the inner areas, the location of truck operators
and their fleets and other matters that could be adversely affected in the third and fourth
phases of zonal truck bans. The study would, inter alia, identify the preventive measures to
address the negative effects on freight operations caused by the proposed bans in the last
two phases.
45
Khlong Luang
Northern Truck
Terminal
Inland
Container Depot (ICD)
Rom Klao
Eastern Truck Terminal
Bu Buddha Monthon
Western Truck
Terminal
Figure 1. Inner and Outer Ring Roads, ports and freight terminals in Bangkok
Bangkok
International
Airport
Eastern Outer Ring
Road (37)
(In Service)
Western Outer
Ring Road (37)
(In Service)
Southern Outer Ring Road (37)
(Under Construction)
Inner Ring
Road Core
Second
Bangkok
International
Airport
Port Motorway (36)
46
Samsen Rd. – Phra Sumen Rd. -
Maharad Rd.
Charoen Krung Rd.– Rama IV Rd.
Ratchadaphisek Rd.– Asok Rd.
Chao Khun Thahan Rd.-Pradipat Rd.-Sutthisan Winitchai Rd.
Truck
Truck-free zone
Figure 2. Truck-free zone implemented in June 2000
Besides zonal restrictions, some truck routes have been designated to enable truck
access to ports and freight terminals located within the restricted area. Such routes include
the Outer Ring Road and all links between ports and expressway access roads (Department
of Land Transport 1999a).
IV. ESTIMATION OF EMISSION LOADS FROM TRUCK-BASED FREIGHT
TRANSPORTATION IN BANGKOK
A. Data collection
In order to estimate emission loads from truck-based freight transportation, a study
was carried out, including all 50 administrative districts of Bangkok. They were encoded
to simplify the origin-destination (O-D) study. Twelve major markets and two private
truck terminals were selected as survey locations for the collection of data on freight
movement and other related information through a questionnaire. The selection of the
survey locations was based on size, location and type of market, as shown in table 1.
After defining the survey locations, a questionnaire was designed. General
questions and those on freight transportation data and freight transportation problems were
incorporated. The general questions related to the type of business (retail, wholesale,
factory, farm and garden, freight forwarder, or other); the type of commodity (vegetables,
clothes and leather, fresh food, fruits, processed foods, meat and fish, flowers, rice, sugar
and flour, manufactured products, or other); and the type of vehicle (pick-up, 4-, 6- or 10-
wheeled truck, or van). Freight transportation data included distance travelled per day and
per week, origin and destination, number of trips per day, age of vehicle, trip frequency per
week, refuelling, load factor, loading and unloading time, and travel time.
47
Table 1. Emission load survey locations by type of market
Location * Size of market
No
Outer Ring
Road Core
Inner Ring
Road Core
Large
(over 20,000 sq. m)
Medium
(5,001 – 20,000 sq. m)
Small
(less than 5,000 sq. m)
1 Inside Inside -
4
( 3 wholesale, 1 weekend )
2
( 1wholesale, 1 private
truck terminal )
2 Inside On -
1
(wholesale)
-
3 Inside Outside
1
(wholesale )
-
3
( weekend )
4 On Outside -
1
( retail market )
-
5 Outside Outside - -
2
( 1 weekend market, 1
private truck terminal )
Total 14
Notes: * See locations of Outer and Inner Ring Road in figure 1.
One thousand two hundred (1200) questionnaires were distributed and collected
from truck users at 14 survey locations in November and December 1999. After
screening, 910 valid questionnaires were accepted for analysis.
Data collected from secondary sources included truck registration numbers from
1981 to 1999, emission factors of LDDTs and HDDVs, and the estimated number of trucks
using the public truck terminals. These data were obtained from the Department of Land
Transport (1999b), the Pollution Control Department (1994), and the Japan International
Cooperation Agency (1992) respectively. Geographic information on Bangkok from
SmartMap
TM
( a GIS-based program) was applied to estimate VKT. There are two
methods to estimate VKT: the average daily traffic (ADT) method and the method based
on a distance-travelled analysis. The second was selected for this study because of the lack
of the necessary traffic data for the first method. For travel time, the interview technique
was applied. The whole process of data analysis is shown in figure 3.
B. Some general characteristics of freight traffic
It was found that the small pick-up truck was the major type of vehicle used in
freight transportation (93.8 per cent), followed by 6-wheeled trucks (4.2 per cent). Other
types formed the rest. Most of the trucks carried goods from factories, wholesalers, and
warehouses and truck terminals to vendors, fresh markets and retail or grocery shops. The
load factor of trucks carrying manufactured products was highest (88.3 per cent), followed
by fruits (85.9 per cent), and clothes and leather (82.8 per cent). In terms of origin, trucks
from factories had the highest load factor (88.4 per cent), followed by trucks from
warehouses or truck terminals (88.1 per cent) and wholesalers (86.8 per cent).
The peak hours for truck movements to and from fresh markets were between 5
and 8 in the morning. For processed food and clothes markets as well as private truck
terminals, the peak hours were between 10 and 12 in the morning.
48
49
D
a
t
a
C
o
l
l
e
c
t
i
o
n
Q
u
e
s
t
i
o
n
n
a
i
r
e
O
D
S
u
r
v
e
y
,
N
u
m
b
e
r
o
f
S
t
o
p
s
p
e
r
D
a
y
G
e
n
e
r
a
l
I
n
f
o
r
m
a
t
i
o
n
D
i
s
t
a
n
c
e
T
r
a
v
e
l
e
d
E
x
p
e
c
t
e
d
V
a
l
u
e
f
r
o
m
S
e
l
e
c
t
e
d
D
i
s
t
r
i
b
u
t
i
o
n
C
u
r
v
e
A
v
e
r
a
g
e
o
f
M
i
n
i
m
u
m
D
i
s
t
a
n
c
e
T
r
a
v
e
l
e
d
G
I
S
C
a
l
i
b
r
a
t
e
d
A
v
e
r
a
g
e
D
i
s
t
a
n
c
e
T
r
a
v
e
l
e
d
p
e
r
D
a
y
A
g
e
o
f
V
e
h
i
c
l
e
C
o
h
o
r
t
S
u
r
v
i
v
a
l
A
n
a
l
y
s
i
s
C
o
h
o
r
t
S
u
r
v
i
v
a
l
R
a
t
i
o
N
u
m
b
e
r
o
f
T
r
u
c
k
R
e
g
i
s
t
r
a
t
i
o
n
f
r
o
m
D
L
T
N
u
m
b
e
r
o
f
T
r
u
c
k
s
R
u
n
n
i
n
g
i
n
t
h
e
H
o
r
i
z
o
n
Y
e
a
r
F
r
e
q
u
e
n
c
y
o
f
T
r
i
p
s
p
e
r
W
e
e
k
P
r
o
b
a
b
i
l
i
t
y
o
f
T
r
i
p
M
a
k
i
n
g
V
e
h
i
c
l
e
K
i
l
o
m
e
t
e
r
s
T
r
a
v
e
l
e
d
(
V
K
T
)
p
e
r
D
a
y
T
r
a
v
e
l
T
i
m
e
A
v
e
r
a
g
e
T
r
a
v
e
l
S
p
e
e
d
P
a
t
h
L
e
n
g
t
h
E
m
i
s
s
i
o
n
F
a
c
t
o
r
f
r
o
m
P
C
D
R
e
g
r
e
s
s
i
o
n
A
n
a
l
y
s
i
s
R
e
g
r
e
s
s
i
v
e
F
u
n
c
t
i
o
n
s
o
f
E
m
i
s
s
i
o
n
F
a
c
t
o
r
s
R
e
l
e
v
a
n
t
E
m
i
s
s
i
o
n
F
a
c
t
o
r
s
a
t
t
h
e
A
v
e
r
a
g
e
T
r
a
v
e
l
S
p
e
e
d
E
m
i
s
s
i
o
n
L
o
a
d
s
A
v
e
r
a
g
e
o
f
M
i
n
i
m
u
m
D
i
s
t
a
n
c
e
T
r
a
v
e
l
l
e
d
D
i
s
t
a
n
c
e
T
r
a
v
e
l
l
e
d
C
a
l
i
b
r
a
t
e
d
A
v
e
r
a
g
e
D
i
s
t
a
n
c
e
T
r
a
v
e
l
l
e
d
p
e
r
D
a
y
V
e
h
i
c
l
e
K
i
l
o
m
e
t
r
e
s
T
r
a
v
e
l
l
e
d
(
V
K
T
)
p
e
r
d
a
y
F
i
g
u
r
e
3
.
T
h
e
p
r
o
c
e
s
s
o
f
d
a
t
a
a
n
a
l
y
s
i
s
i
n
e
m
i
s
s
i
o
n
l
o
a
d
s
u
r
v
e
y
N
o
t
e
:
D
L
T
:
D
e
p
a
r
t
m
e
n
t
o
f
L
a
n
d
T
r
a
n
s
p
o
r
t
;
G
I
S
:
g
e
o
g
r
a
p
h
i
c
i
n
f
o
r
m
a
t
i
o
n
s
y
s
t
e
m
:
O
D
:
o
r
i
g
i
n
-
d
e
s
t
i
n
a
t
i
o
n
;
P
C
D
:
P
o
l
l
u
t
i
o
n
C
o
n
t
r
o
l
D
e
p
a
r
t
m
e
n
t
C. Estimation of vehicle kilometer travel
VKT and travel speed are the two important parameters for the estimation of
emission loads. In this study, data on distance travelled per day was validated by Chi-
square (!2) goodness-of-fit test. A logarithmic normal distribution model best fitted the
collected data. Reference is made to Sirikijpanichkul (2000) for details on the model. The
average value was 74.761 kilometres at 0.05 significance level. It was verified later by
using GIS. A distance matrix of Bangkok was established using SmartMap. This matrix
was developed to provide distances between each pair of the 50 administrative areas in
Bangkok based on their assumed central reference positions. An O-D table developed from
the survey was then overlapped on the matrix. Consequently, the average shortest distance
per trip was obtained. The average shortest distance travelled per day was calculated from
the average number of trips per day multiplied by the average shortest distance per trip.
The analysis shows that the average shortest distance of travel per day is 33.504
kilometres. When disaggregated by type of vehicle, the modelled average travel distances
of LDDTs and HDDVs were found to be 53.700 and 63.119 kilometres respectively.
The age of vehicle and trip frequency per week were used as inputs for estimating
the number of trucks running in the base year (1999). A survival rate matrix for different
age groups of trucks was developed by using the cohort survival technique (Ortúzar and
Willumsen 1996). The matrix of truck population by age and for each category was
developed from the vehicle registration data. To get the estimated number of trucks by
category in the base year, the survival rate matrix was multiplied by the truck population
matrix. Summation of the numbers of truck in both the categories gave the estimated total
number of trucks running in 1999.
The data on trip frequency per week were used for the calculation of probability of
trip-making by a truck. Finally, VKT per day for HDDVs and LDDTs were calculated by
multiplying the modelled average distance travelled per day for each category by the
corresponding number of trucks running in the base year and their probability of trip-
making as shown in table 3.
50
Table 2. Number of truck registrations from 1983 to 1999
Year
Number of truck
registrations
Number of heavy-duty
diesel vehicles
Number of light-duty
diesel trucks
Increase in number of
heavy-duty diesel
vehicles
Increase in number
of light-duty diesel
trucks
1999 788,493 118,656 669,837 14,112 75,220
1998 699,161 104,544 594,617 -5,910 41,782
1997 663,289 110,454 552,835 3,657 98,595
1996 561,037 106,797 454,240 15,370 51,560
1995 494,107 91,427 402,680 8,177 78,778
1994 407,152 83,250 323,902 -7,099 51,712
1993 362,539 90,349 272,190 5,401 80,282
1992 276,856 84,948 191,908 2,938 41,977
1991 231,941 82,010 149,931 -26,096 63,725
1990 194,312 108,106 86,206 22,716 8,807
1989 162,789 85,390 77,399 5,544 20,866
1988 136,379 79,846 56,533 11,835 10,290
1987 114,254 68,011 46,243 2,433 16,103
1986 95,718 65,578 30,140 1,663 13,865
1985 80,190 63,915 16,275 9,721 3,289
1984 67,180 54,194 12,986 2,354 8,545
1983 56,281 51,840 4,441 - -
Source: Department of Land Transport (1999).
Table 3. Calculation of vehicle kilometres travelled per day by the estimated
number of trucks running in 1999
Vehicle
type
Number of trucks
running in 1999
(1)
Probability of
trip-making
(2)
Average distance
travelled per day
(kilometres per day)
(3)
Vehicle kilometres
travel per day
(vehicle–kilometres per day)
(4) = (1) x (2) x (3)
LDDT 342,194 0.7761 53.700 14,261,472
HDDV 40,755 0.7594 63.119 1,953,492
51
D. Estimation of emission loads
The emission factor (in grams per kilometre) of each pollutant depends on the type
of vehicle and the travel speed. Sources of emission were broadly categorized into LDDT
(pick-up truck and van) and HDDV (6- and 10-wheeled trucks). In this study, travel speed
was calculated from distance travelled and travel time. Distance travelled was obtained by
tracing the route of O-D survey data on a GIS database. Data on travel time was collected
from the questionnaire. A logarithmic normal distribution model was fitted to the
estimated travel speed. The model was validated by Chi-square (!2) goodness-of-fit test.
The average value was 36.22 kilometres per hour at 0.05 significance level. The average
travel speeds of LDDTs and HDDVs were 36.07 and 39.37 kilometres per hour
respectively. The average speed of HDDVs was higher than that of LDDTs owing to the
fact that HDDVs could enter the city only during off-peak hours.
The emission factor of each pollutant was obtained from emission factor charts
developed by the Pollution Control Department (1994) as shown in figure 4. It was
assumed that emission factors would be similar to those based on the driving conditions as
used in the above mentioned study by the Pollution Control Department. The emission
loads were finally calculated by multiplying VKT per day by the corresponding emission
factors at the average travel speed. The results of emission load estimation are shown in
table 4.
As shown in table 4, NO
x
is the major emission load generated by HDDVs,
followed by CO, HC and SPM, in that order. On the other hand, LDDTs emit CO at the
highest level, followed by NO
x
, HC and SPM.
HDDVs generate very high levels of NO
x.
It is noteworthy that the total NO
x
generated by HDDVs is approximately double that of LDDTs, despite the fact that the
mileage of LDDTs is 7.3 times higher than HDDVs. Total SPM from HDDVs is also
much higher than that from LDDTs.
52
0.26 0.26 0.26 0.26 0.26 0.26 0.26
2.55
2.25
2.00
1.81
1.54
1.31
1.90
1.62
1.40
1.21
0.94
0.75
0.62
5.14
4.02
3.19
2.58
1.78
1.05
1.38
1.32
0
1
2
3
4
5
6
0 10 20 30 40 50 60
SPM
NOx
HC
CO
2.71 2.71 2.71 2.71 2.71 2.71
39.27
34.53
30.78
27.82
23.68
21.29
20.22
10.43
8.90
7.67
6.66
5.15
29.69
23.19
18.43
14.91
10.29
7.61
6.05
2.71
4.12
3.41
0
5
10
15
20
25
30
35
40
45
0 10 20 30 40 50 60
SPM
NOx
HC
CO
?
?
?
?
?
?
?
?
Legend
? SPM: Suspended Particulate Matter
? NO
x
: Oxides of nitrogen
? HC : Hydrocarbon
? CO : Carbon monoxide
E
m
i
s
s
i
o
n
F
a
c
t
o
r
(
g
m
/
k
m
E
m
i
s
s
i
o
n
F
a
c
t
o
r
(
g
m
/
k
m
)
Speed (km/hr)
Speed (kph)
HDDV
Heavy-duty diesel vehicles
Legend
? SPM: Suspended Particulate Matter
? NO
x
: Oxides of nitrogen
? HC : Hydrocarbon
? CO : Carbon monoxide
E
m
i
s
s
i
o
n
F
a
c
t
o
r
(
g
m
/
k
m
E
m
i
s
s
i
o
n
F
a
c
t
o
r
(
g
m
/
k
m
)
Speed (kph)
Speed (kph)
LDDT
Light-duty diesel trucks
Source: Pollution Control Department, Thailand (1994).
Figure 4. Emission factors of light-duty diesel trucks and heavy-duty diesel vehicles
53
Table 4. Emission load generated by trucks running in the
Bangkok Metropolitan Area
Vehicle class
VKT
per day
Average
travel
speed
(kph)
Emission factor
(grams per vehicle
kilometre)
Emission load
(kilograms per day)
CO 1.5481 22,078
NO
x
1.4416 20,559
HC 0.7583 10,814
Light-duty diesel trucks
(pick-up truck and van)
14,261,472 36.07
SPM 0.2600 3,708
NO
x
21.0747 41,169
CO 8.0073 15,642
HC 4.0497 7,911
Heavy-duty diesel vehicle
(6- and 10-wheeled trucks)
1,953,492 39.37
SPM 2.7100 5,294
V. THE POTENTIAL EFFECTS OF PUBLIC TRUCK TERMINALS ON
EMISSION LOADS
The estimated number of truck trips from the three public truck terminals in the
year 2000 was used for the calculation of emission loads. The Japan International
Cooperation Agency (1992) simulated five scenarios based on the proposed truck ban
measures after the opening of the truck terminals. The scenarios were as follows:
Case 1: existing condition with 2.8 per cent use ratio.
Case 2a: 24-hour heavy truck restriction in the inner area with 100 per cent use
ratio.
Case 2b: 24-hour heavy truck restriction in the inner area with 2.8 per cent use
ratio.
Case 3a: 24-hour heavy truck restriction in the outer area with 100 per cent use
ratio.
Case 3b: 24-hour heavy truck restriction in the outer area with 2.8 per cent use
ratio.
The predicted number of truck trips using each public truck terminal in the year
2000 is shown in table 5 (JICA 1992). Four commodity types were considered in the
study: processed food, clothes and leather, manufacturing products and miscellaneous
goods. After the opening of the truck terminals, the number of heavy trucks running inside
Bangkok would reduce. However, the number of delivery trucks (LDDTs) transporting
goods from truck terminals to destinations inside Bangkok would increase. In addition, the
distance travelled by LDDTs would also increase, owing to the longer average distances
between the truck terminals and destinations inside the metropolitan area than before.
The three public truck terminals are located in the Don Muang, Thavee Watthana
and Ladkrabang areas respectively. From the distance matrix, distance ratios were
calculated by dividing the average distance between Don Muang, Thavee Watthana and
Ladkrabang and the other administrative areas by the average distance between all
administrative areas. For example, the ratio of distance for the northern public truck
54
terminal North is
. 3399 . 1
234 . 16
752 . 21
"
The average distance travelled per day for 1.6 ton
delivery trucks and the distance ratio at each terminal are shown in table 5.
Table 5. Distance travelled per day of delivery trucks using
three public truck terminals
Scenario
(1)
Truck
terminal
(2)
Number of 1.6
ton delivery
trucks
(vehicle trips
per day)
(3)
Percentage of
1.6 ton
delivery trucks
using each
terminal
(4)
Distance
ratio
(5)
Existing
distance
travelled
per day
(km/day)
(6)
Adjusted
distance
travelled
per day
(km/day)
(7) = (5) x (6)
North 1,454 40.45 1.3399 77.432
West 1,054 29.32 1.4004 80.928
East 1,087 30.23 1.6399
57.789
94.766
Case 1
Total 3,596 100.00 Average 83.697
North 7,181 37.08 1.3399 77.432
West 4,828 24.93 1.4004 80.928
East 7,357 37.99 1.6399
57.789
94.766
Case 2a
Total 19,367 100.00 Average 84.886
North 5,956 36.74 1.3399 77.432
West 4,073 25.13 1.4004 80.928
East 6,182 38.13 1.6399
57.789
94.766
Case 2b
Total 16,211 100.00 Average 84.920
North 14,049 42.35 1.3399 77.432
West 9,336 28.14 1.4004 80.928
East 9,791 29.51 1.6399
57.789
94.766
Case 3a
Total 33,176 100.00 Average 83.532
North 11,529 42.30 1.3399 77.432
West 7,679 28.17 1.4004 80.928
East 8,049 29.53 1.6399
57.789
94.766
Case 3b
Total 27,258 100.00 Average 83.536
Source: Japan International Cooperation Agency 1992.
55
The possible effects of truck terminals on vehicle mileage and emission loads are
presented in tables 6 and 7. It is observed that after the implementation of public truck
terminals, the mileage of HDDVs would slightly decrease, while the mileage of LDDTs
would greatly increase. The results also show that the truck terminals could reduce
emission loads of NO
x
and SPM in Bangkok owing to the lower mileage of HDDVs.
However, emission loads of CO and HC would significantly increase, owing to the
increased mileage of smaller delivery trucks.
The results also indicate that a 24-hour truck restriction on the Outer Ring Road
core would be more effective in reducing NO
x
and SPM emissions than a restriction on the
Inner Ring Road. The percentage of emission reduction, however, depends on truck
terminal usage. The higher the usage of the truck terminal, the larger is the potential
emission reduction.
Table 6. Estimation of increased vehicle-kilometres travelled per day of delivery
trucks and heavy trucks for each truck ban scenario
Vehicle type/ scenario Estimated number of
truck trips using public
truck terminals
Average distance
travelled per day
(kilometres per day)
Increased vehicle
kilometres per day
Delivery Truck
(1.6 Tons per vehicle)
Case 1 3,596 83.697 300,942
Case 2a 19,367 84.886 1,643,971
Case 2b 16,211 84.920 1,376,666
Case 3a 33,176 83.532 2,771,265
Case 3b 27,258 83.536 2,276,978
Heavy Truck
(10.5 tons per vehicle)
Case 1 548 63.119 -34,583
Case 2a 2,951 63.119 -186,273
Case 2b 2,470 63.119 -155,922
Case 3a 5,055 63.119 -319,094
Case 3b 4,154 63.119 -262,166
Source: Japan International Cooperation Agency 1992.
56
Table 7. Net increment of NO
x
, CO, HC and SPM (in kilograms per day) after the
introduction of public truck terminals in Bangkok
Scenario NO
x
CO HC SPM
Case 1 -295 189 88 -15
Case 2b -1,301 (-341) 883 (+367) 412 (+368) -65 (-333 )
Case 2a -1,556 (-427) 1,053 (+457) 492 (+459) -77 (-413 )
Case 3b -2,243 (-660) 1,426 (+654) 665 (+656) -118 (-687)
Case 3a -2,730 (-825) 1,735 (+818) 809 (+819) -144 (-860 )
Note: The figures in parentheses indicate the change in emission load compared with the case 1 scenario.
CONCLUSIONS AND RECOMMENDATIONS
This study was conducted to examine the possible effects of public truck terminals
on traffic movement and the environment of Bangkok. An estimation of the emission
loads from truck transportation was made by using empirical models and the geographic
information system.
The findings of the study show that NO
x
are the major emission load generated by
trucks (61.73 tons per day), followed by CO (37.72 tons per day). NO
x
emissions from
heavy-duty diesel vehicles are approximately double those from light-duty diesel trucks,
despite the mileage of LDDTs being 7.3 times higher than the mileage of HDDVs. The
public truck terminals could have a considerable impact on the air quality of Bangkok.
They would slightly decrease the mileage of HDDVs, but increase the mileage of LDDTs.
This could help reduce emission loads of NO
x
by as much as 825 per cent and SPM by 860
per cent from their respective base levels. However, emission loads of CO and HC would
become much higher, owing to the increased mileage of smaller delivery trucks. However,
the overall impact of increases in emission loads of CO and HC is not expected to be very
significant as there are fewer diesel pick-up trucks in Bangkok than cars, which generate
much higher volumes of CO and HC (Department of Land Transport 1999b). The 24-hour
truck restriction on the Outer Ring Road core is more effective in reducing NO
x
and SPM
than the restriction on the Inner Ring Road.
57
1.98
2.03
1.68
1.97
1.49
2.05
2.64
0.00
0.50
1.00
1.50
2.00
2.50
3.00
R
a
t
i
o
o
f
d
e
l
i
v
e
r
y
t
r
u
c
k
s
t
o
h
e
a
v
y
t
r
u
c
k
s
6647
5793
6005
6427
6813
8839
11253
3360
2856
3583
3256
4587
4310 4266
0
2000
4000
6000
8000
10000
12000
N
u
m
b
e
r
o
f
T
r
u
c
k
s
Pick-up and Van
Heavy Truck
N
u
m
b
e
r
o
f
t
r
u
c
k
s
R
a
t
i
o
o
f
d
e
l
i
v
e
r
y
t
r
u
c
k
s
t
o
h
e
a
v
y
t
r
u
c
k
s
Aug 2000 Sep 2000 Oct 2000 Nov 2000 Dec 2000 Jan 2001 Feb 2001
Month
Aug 2000 Sept 2000 Oct 2000 Nov 20000 Dec 2000 Jan 2001 Feb 2001
Month
Source: Department of Land Transport, Thailand (2001).
Figure 5. Number of delivery trucks and heavy trucks using the western public truck
terminal from August 2000 to February 2001
Aug 2000 Sep 2000 Oct 2000 Nov 2000 Dec 2000 Jan 2001 Feb 2001
Month
Aug 2000 Sept 2000 Oct 2000 Nov 20000 Dec 2000 Jan 2001 Feb 2001
Month
Source: Department of Land Transport, Thailand (2001)
Figure 6. Ratio of delivery trucks to heavy trucks using the western public truck
terminal from August 2000 to February 2001
58
In addition, the higher the usage of the truck terminal, the greater is the reduction in NO
x
and SPM.
The study reveals some promising positive effects of the truck terminals. However,
some problems are challenging the success of this policy. Terminal usage is not as high as
was originally predicted. The most serious problem faced by the truck operators is the
increase in operating costs. They claim that additional costs include terminal rental cost,
parking fees, the purchasing of new delivery trucks, and so forth. The number of delivery
trucks using the western public truck terminal in December 2000 was 220 vehicles per day,
which was only 5.4 per cent of the predicted volume for Case 2b of table 6. Nevertheless,
the number of delivery trucks using the terminals increased sharply in the following
months. It is observed that the ratio of delivery trucks to heavy trucks using the truck
terminals also rose, as shown in figure 6. This trend indicates the consolidation of cargo
handling. Since greater usage of the truck terminals could contribute to significant
improvements in air quality in Bangkok, actions need to be considered to promote their
usage. To enhance the usage of public truck terminals further, some measures may be
considered as follows:
(a) The Government could encourage factories in inner areas to move out to industrial
zones established near the public truck terminals. If needed, new zones could be
established by the Government to ensure a reasonable land price and the availability of all
the necessary physical infrastructure;
(b) Logistics facilities for chilled and frozen goods could be developed in public truck
terminals;
(c) The road network and other infrastructure facilities linking the truck terminals and
industrial zones could be improved to provide greater accessibility, wider coverage and
faster movement.
The lessons learned should be useful for the proposed regional truck terminals in
different parts of the country, which include truck terminals in the north at Chiang Mai, in
central Thailand at Nakhon Sawan, in the north-east at Khon Kaen and Nakhon
Ratchasima, and in the south at Had Yai and Songkhla.
ACKNOWLEDGEMENTS
The authors would like to express their appreciation to the officials of the
Department of Land Transport, the Pollution Control Department, and the executive
managers of all related private companies for their kindness in offering useful data for and
cooperating with the survey.
59
REFERENCES
Boerkamps, J. and Binsbergen, A.V., 1999. Goodtrip – A New Approach for Modeling
and Evaluating Urban Goods Distribution. Proceedings of the First International
Conference on City Logistics: City Logistics I: 175-186. Cairns, Australia: Institute of
Systems Science Research.
Boontherawara, N., 1994. Traffic Crisis and Air Pollution in Bangkok. TEI Quarterly
Environment Journal, 2, 3: PP. 4-37.
Conte, F. 1990. Trucking in the ‘90s: Emissions. Owner Operator, September: pp. 58-65.
Department of Land Transport (DLT), 1999a. The Greater Bangkok Truck Terminal,
Bangkok: Department of Land Transport (In Thai).
Department of Land Transport (DTL), 1999b. Road Transport Statistics, Bangkok:
Department of Land Transport, Technical and Planning Division, Transport Statistics Sub-
division (In Thai).
Environmental Protection Agency (EPA), 1993. Federal Test Procedure Review Project:
Preliminary Technical Report. Office of Mobile Sources.
Environmental Protection Agency (EPA), 1996. National Air Pollutant Emission Trends.
Procedures Document for 1990-1996: pp. 4-244.
Friesz, T.L., Tobin, R. and Harker, P., 1983. Predictive Intercity Freight Network Models:
The State of the Art. Transportation Research, 17A, 6: pp. 409-17.
Guensler, R., 1993. Transportation Data Needs for Evolving Emission Inventory Models.
Institute of Transportation Studies, University of California, Davis.
Hanson, M.E. and Lopez, R.W., 1992. Methodology for Evaluating Urban Transportation
Energy-Environment Strategies: Case Study for Bangkok, Transportation Research
Record 1372: pp. 53-61.
Harker, P.T., 1985. The State of the Art in the Predictive Analysis of Freight Transport
Systems. Transport Reviews, 5,2: pp. 143-64.
Japan International Cooperation Agency, 1992. The Study on Greater Bangkok Truck
Terminal in the Kingdom of Thailand: Final Report, Vol. 2. Bangkok: Department of Land
Transport.
Jara Diaz, S.R., 1982. The Estimation of Transport Cost Functions: A Methodological
Review. Transport Reviews 2: pp. 257-278.
Kim, T.J. and Hinkle, J., 1982. Model for Statewide Freight Transportation Planning.
Transportation Research Record 889: pp. 15-19.
Leonard, D. R. and Gower, P., 1982. User Guide to CONTRAM Version 4. TRRL
Suupplementary Report 735, Transport and Road Research Laboratory. Crowthorne.
60
Lieberman, E., 1981. Enhanced NETSIM Program. Transporation Research Board Special
Report 194, 32-5.
Memmott, F.W., 1983. Application of Statewide Freight Demand Forecasting Techniques.
National Cooperative Highway Research Program Report 260: pp. 9-43.
Muttamara, S. and Leong, S.T., 2000. Monitoring and Assessment of Exhaust Emission in
Bangkok Street Air. Environmental Monitoring and Assessment 60: pp. 163-180.
Ortúzar, J. de D. and Willumsen, L. G., 1996. Modeling Transport, 2
nd
Edition.
(Chichester: John Wiley & Sons).
Pollution Control Department (PCD), 1994. Air Emission Database of Vehicles and
Industry in Bangkok Metropolitan Region 1992: Final Report. Bangkok: Pollution Control
Department, Ministry of Science, Technology and Environment, September.
Sirikijpanichkul, A., 2000. Estimation of Emission Loads from Truck-based Freight
Transportation in Bangkok Metropolitan Area. AIT Thesis, GE99-19. Bangkok: Asian
Institute of Technology.
Tanadtang, P., 1999. The Effect of Traffic on Vehicle Emissions in Bangkok. AIT RSPR,
TE99-2. Bangkok: Asian Institute of Technology.
Van Es, J.V., 1982. Freight Transport, an Evaluation. ECMT Round Table 58, European
Conference of Ministers of Transport, Paris.
Weaver, C.S., and Klausmeier, R.F., 1988. Heavy-Duty Diesel Vehicle Inspection and
Maintenance Study. Final Report: Quantifying the Problem II. Sacramento, California:
Radian Corporation.
61
doc_158538271.pdf
Globally we have a marketplace built around continued economic growth, withtrade between countries continuing to transcend national boundaries where barrierspreviously existed.
ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC
TRANSPORT AND COMMUNICATIONS BULLETIN
FOR ASIA AND THE PACIFIC
No. 70
Logistics for the Efficient Transportation
of Domestic Goods
UNITED NATIONS
ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC
TRANSPORT AND COMMUNICATIONS BULLETIN
FOR ASIA AND THE PACIFIC
No. 70
Logistics for the Efficient Transportation
of Domestic Goods
UNITED NATIONS
New York, 2001
ST/ESCAP/SER.E/70
UNITED NATIONS PUBLICATION
Sales No.
Copyright @ United Nations
ISBN: ISSN:
ESCAP WORKS TOWARDS REDUCING POVERTY
AND MANAGING GLOBALIZATION
The designations employed and the presentation of the material in this
publication do not imply the expression of any opinion whatsoever on the part of the
Secretariat of the United Nations concerning the legal status of any country, territory,
city or area or of its authorities, or concerning the delimitation of its frontiers or
boundaries.
The opinions, figures and estimates set forth in this publication are the
responsibility of the author, and should not necessarily be considered as reflecting the
views or carrying the endorsement of the United Nations.
Mention of firm names and commercial products does not imply the endorsement
of the United Nations.
ii
Editorial Statement
The Transport and Communications Bulletin for Asia and the Pacific is a journal
published once a year by the Transport, Communications, Tourism and Infrastructure
Development Division (TCTIDD) of the Economic and Social Commission for Asia and the
Pacific (ESCAP). The main objectives of the Bulletin are to provide a medium for the
sharing of knowledge, experience, ideas, policy options, and information on the development
of transport infrastructure and services in the Asian and Pacific region; to stimulate policy-
oriented research; and to increase awareness of transport policy issues and responses. It is
hoped that the Bulletin will help to widen and deepen debate on issues of interest and concern
in the transport sector.
Each volume of the Bulletin focuses on a particular theme of interest, primarily in the
transport sector. The themes for the last two issues of the Bulletin were urban transport and
the participatory approach to transport infrastructure development. The theme chosen for this
issue (No. 70) is logistics for the efficient transportation of domestic goods. Four articles
which focus on some of the issues in domestic transport logistics and two good practices in
the region have been selected. The first discusses some general issues in the logistics area
and suggests actions to address them. The second discusses the possible gains in
environmental improvement through reductions in emissions from the road transport sector at
the macro level by improving efficiency in the logistics sector in Korea. The third and fourth
are on good practices in logistics in Thailand, one in the rural area and one in the urban area.
All the articles are policy oriented. It is expected that they will generate further debate on the
issues that have been discussed and increase awareness of their policy implications and
responses.
The Bulletin welcomes analytical articles on topics that are currently at the forefront
of transport infrastructure development and services in the region and on policy analysis and
best practices. Articles should be based on original research and should have analytical
depth. Empirically based articles should emphasize policy implications emerging from the
analysis. Book reviews are also welcome. See inside back cover for guidelines on
contributing articles.
Manuscripts should be addressed to:
The Editor
Transport and Communications Bulletin for Asia and the Pacific
General Transport Section
Transport, Communications, Tourism, and
Infrastructure Development Division
ESCAP
United Nations Building
Rajadamnern Nok Avenue
Bangkok 10200
Thailand
Fax: (662) 288 1000; (662) 280 6042
Email: [email protected]
iii
TRANSPORT AND COMMUNICATIONS BULLETIN
FOR ASIA AND THE PACIFIC
NO. 70
CONTENTS
Page
Des Powell
GOVERNMENTS AND INDUSTRY WORKING TOGETHER
TO IMPLEMENT MODERN LOGISTICS 1
Sungwon Lee
IMPROVING EFFICIENCY IN THE LOGISTICS SECTOR FOR
SUSTAINABLE TRANSPORT DEVELOPMENT IN THE REPUBLIC
OF KOREA 17
Paitoon Chetthamrongchai, Aroon Auansakul and Decha Supawan
ASSESSING THE TRANSPORTATION PROBLEMS OF THE SUGAR CANE
INDUSTRY IN THAILAND 31
Kiyoshi Takahashi and Ackchai Sirikupanichkul
THE EFFECTS OF PUBLIC TRUCK TERMINAL POLICIES ON AIR
POLLUTION IN THE BANGKOK METROPOLITAN AREA 41
iv
Transport and Communications Bulletin for Asia and the Pacific No.70, 2001
GOVERNMENTS AND INDUSTRY WORKING TOGETHER TO IMPLEMENT
MODERN LOGISTICS
Des Powell*
ABSTRACT
Globally we have a marketplace built around continued economic growth, with
trade between countries continuing to transcend national boundaries where barriers
previously existed.
Globalization is a two-edged sword in that it provides opportunities to maximize
comparative advantage, but it also intensifies competition. Therefore it is critical that
Governments recognize the changes as they impact on areas that include investment,
economic growth and infrastructure development.
Companies are using logistics as a key business tool to enable them to penetrate
markets and improve returns. They are utilizing regional supply chains to challenge the
status quo in terms of manufacturing locations, distribution channels, the number of
suppliers and information systems. This has meant in many cases an evolution to
intermodalism, a rationalization of suppliers in industry structure terms and an increase
in outsourcing.
It is therefore important that Governments and industry work together to
effectively manage the changes that will facilitate improved performance. These areas
include the practical implementation of logistics, integrated infrastructure and policy
development, the removal of impediments, information technology and communications,
maximizing the benefits of foreign investment and managing the change.
I. BUSINESS TODAY
Any discussion about achieving improvement in logistics needs to be built on an
understanding of what trends are driving business as a whole. Governments need to be aware
of these trends so as to respond with appropriate policies. These trends should also guide
Governments when considering how to work with industry to maximize the country’s
international competitiveness.
1
*
Managing Director, Powell Management Services Pty. Ltd., PO Box 5254, Victoria 3206, Australia.
The first of these is the changing marketplace at global, regional and local levels.
Globally we have a marketplace built on continued economic growth, with trade between
countries transcending national boundaries, where barriers previously existed. Multinational
companies (MNCs) continue to grow through acquisitions and mergers as they build brands.
Increasingly information technology (IT) and communications have become powerhouse
sectors, not just in terms of business efficiency, but also in terms of being central to new
business models.
Globalization is a two-edged sword in that it provides opportunities but also
intensifies competition, therefore it is critical that Governments recognize these changes and
interpret their likely impact when considering policy formulation. Companies operating
globally are closely assessing each market’s attractiveness when making strategic decisions
regarding investment. In some cases, because of finite resources, this is leading to
withdrawals from certain markets in order to focus on core growth regions.
Companies continue to strive to create customer value by a combination of
differentiation and lowest cost as they pursue market growth and improved returns. As a
consequence, logistics and supply chain management is increasing in importance as a means
of delivering value in the international business arena. These market-driven dynamics have
resulted in customers demanding more from logistics globally, which is impacting at a
regional and local level.
Regionally we have observed the emergence of regional logistics planning, where
cross-border transactions between subsidiaries of multinationals account for an increasing
amount of international trade. This has facilitated the benefits of economies of scale from
large production runs using high technology. This is resulting in some production sites
becoming points of single or reduced product range. The outsourcing of logistics continues to
grow strongly, with companies seeking to accelerate the uptake of modern logistics skills by
standardizing processes and technology, developing formal account management
relationships and managing single suppliers across regions. The regional approach aims to
bring about market growth at lower cost and thereby deliver improved shareholder returns.
The Asian economic crisis of the late 1990s acted as a catalyst for companies seeking
transformational change. Now that growth is returning to the region the possibilities of
change will increase exponentially, challenging the status quo for many existing trading
patterns, arrangements and relationships. Issues such as manufacturing locations, product
range, distribution channels, the role of distributors, the number and quality of suppliers and
the integrated systems technology are being continually re-evaluated.
At a local level these trends translate into continued industry reform and restructuring
often at a pace quicker than in the past. The 1990s also saw social issues such as the
environment, employment and social justice become increasingly relevant. Business is also
requiring Governments to respond to economic and social trends through policy initiatives in
respect to industry regulation, free trade, financial reform, taxation, social policies and
infrastructure investment.
In dealing with these dynamics a major issue for Government and business is to
effectively manage that change. The speed of business, the competitive environment and the
deregulation of world trade require strong leadership at all levels. Those in senior roles often
expect change to be automatically embraced, but such is not the case. Leadership often
2
determines the effectiveness of the strategies and tactics adopted by Governments and
businesses. This is critical, yet change management is often given little thought or resource
allocation. The issue is addressed in section V. F of this paper.
II. LOGISTICS TRENDS
Logistics is increasing its impact on business, as it creates value for companies and
assists in delivering improved profits. The application of logistics varies across continents.
Modern logistics is generally a new concept in Asia, with the focus on the basic transport
processes of road, rail, air and sea. These processes have in some areas been integrated into
what is known as multimodal transport.
The following two figures demonstrate two views of logistics.Figure 1 outlines the
functional approach that is generally adopted in Asia. The attributes of this approach focus on
the individual operational aspects of transportation, where operational excellence is the
dominant capability.
Source: Hong Kong Trade Development Council. China’s freight forwarding and logistics: The path after entry to WTO,
Research Report, July 2000.
Figure 1. An Asian view of logistics
3
Figure 2 reflects a contemporary Western view of logistics. This model focuses on the customer’s perspective, from the point of
supply through to the end user. The objective is to deliver superior value at the lowest cost. The competencies required depend upon
building strong customer partnerships, client-specific solutions, and innovation and supply-chain systems integration. This model clearly
takes a holistic approach and is the trend in modern economies.
MANUFACTURE
Information
Ware-
housing
Customer
service
Call
centres
Regional
consolidation
Distribution
centre
Local and
regional
distribution
Courier
route trade
Linehaul
•Road
•Rail
•Sea
•Air
Order
management
planning and
processing
Kitting
Labelling
Processing
Inventory
management
C
U
S
T
O
M
E
R
S
Material
IMPORT/EXPORT
5
Figure 2. Supply-chain services: A contemporary Western view of logistics
Prior to assessing how logistics in Asia could move from its current stage of
development, it is appropriate to consider how logistics has developed recently in
some other regions.
A. Europe
The development of a single pan-European market remains the major
influencing factor. This is placing pressure on traditional domestic logistics players to
decide whether they can be a pan-European operator or carve out a product or service
niche on a local level. This has led to industry consolidation, with smaller-sized
operators being acquired by regional and global operators to fill a capability gap or
geographical sector.
A major influence has been increasing competition as the prospect of postal
liberalization in Europe (planned for 2003) has activated expansion from domestic
monopolies to international service providers pursuing major growth. This is again in
response to customer demands for increased geographical reach, a greater level of
service capabilities and technology that integrates with their systems.
E-commerce although still in its infancy, is expected to generate growth;
Scandinavian countries are leading the way with more Internet users per capita than
the United States of America. This environment has led to those companies wishing
to survive having to re-invent themselves from pure trucking (that is, asset-based) into
IT-intensive logistics (that is, service-based) providers. This transformation has been
rewarded by improved profits and increasing value on the share market.
B. North America
The growth in logistics as a specialist activity has been based on a strong
presence of third-party providers (3PLs) that is, specialist logistics providers). 3PLs
have been able to integrate warehousing and transportation activities. They were able
to do so by using systems, initiatives such as dynamic route planning. This offered
considerable benefits to customers in terms of providing seamless service and
managing inventory. This integration has now developed to the point that multi-client
networks can be sustained.
In the context of providing an integrated process, the management of
information has become as important as the management of the operating processes,
as suppliers seek to reduce inventory and provide flexibility in supply to customers.
This creates value for their customers through cost reduction and facilitates increased
market penetration.
This has required the development of customer-specific solutions based on a
deep understanding of customer behaviour from the point of supply right through to
the end user. Consequently, predicting and managing customer behaviour, together
with providing integrated technology solutions, are capabilities that are differentiating
logistics suppliers.
5
C. Australia
Companies continue to use outsourcing (growing at 10 per cent per year) as a
means of enabling logistics to create value. This has led to a rationalization of
suppliers as customers aim to standardize and initiate actions to more effectively
manage suppliers. Customers continue to require innovation and demand low cost
and this requires traditionally based transport companies to move from an operational
focus to demonstrating how they can add value through the total logistics process.
This has involved major investment to develop innovative equipment and an
upgrading of technology. Providers are also challenged to respond to customers’
requirements to manage inventory as a key means of reducing cost within their
business.
Many Australian companies have moved their manufacturing offshore and,
given its position as a net importer, Australia is often at the end of a supply chain. In
terms of logistics, Australia is mature and Asia immature, yet Australia depends on
Asia in a trade and supply-chain sense.
This is resulting in competition intensifying from 3PLs and international
forwarders who have built relationships at a global and regional level and whose
customers require a presence in Australia. International postal companies from the
Netherlands and Germany have acquired logistics operations and major shipping
companies continue to invest so as to vertically integrate from shipping into broader
logistics solutions. This environment and the withdrawal from some sectors by
traditional major players have resulted in a re-ordering of the Australian market.
D. Asia
The double-digit growth of the 1980s and early 1990s slowed owing to the
Asian financial crisis that occurred in 1997. However, growth is returning and
logistics is again high on the agenda as companies pursue market penetration and cost
reduction. The introduction of modern logistics techniques to Asia has generally
been done by those MNCs manufacturing or retailing, or both, fast-moving consumer
goods. These companies have utilized modern logistics techniques to deal with the
high levels of growth and a more demanding customer base. However, issues such as
appropriate management, adequate technology and critical mass to justify the
economics of central distribution centres have an important influence on the speed of
logistics development. While the crisis has slowed the momentum of the mid 1990s,
logistics is now emerging as a key tool in creating value.
This is occurring as global companies pursue regional solutions from a
manufacturing and supply-chain perspective. This has led to decisions in respect to
restructuring of manufacturing locations and redefining what products are sourced
from what countries. They also are reviewing their historic distribution channels as
the role of trading companies as distributors are being reassessed. Distributors have
generally acted in both the sale and physical distribution functions, but some MNCs
now believe it is strategically important to manage sales directly and to utilize
specialist logistics firms for distribution.
6
This issue is often impacted on by government legislation in respect to foreign
investment. The aftermath of the Asian financial crisis has resulted in a new wave of
foreign investment as the majority of countries have freed up their foreign investment
policy. As an example, in Thailand the freeing-up allowed Mayne Nickless, an
Australian 3PL, to negotiate a majority foreign-owned joint venture. This was
essential to meet customer expectations and to enable the board of directors of the
company to have the confidence that adequate returns could be achieved in a country
that they were entering for the first time.
These regional snapshots indicate five significant observations relating to the
impact of logistics in Asia:
(a) Regional logistics strategies do play an important role in companies achieving
their profit targets through market growth and the lowering of total cost;
(b) Companies have used the outsourcing of the logistics functions to 3PLs as a
means of accelerating the take-up of modern logistics techniques;
(c) Industry rationalization has occurred in most countries, both from a customer
and logistics-supplier perspective;
(d) The new concepts of logistics as they apply to modern economies demand an
improvement of skills in management, information and other key capability areas;
(e) Governments can influence logistics development.
It is these observations that are discussed later in this article.
III. THE IMPORTANCE OF LOGISTICS TO GOVERNMENT
There is also evidence that, while the provision of integrated logistics is
generally a new concept in Asia, Governments have been focusing on improving the
management and efficiency of the transport sector.
Governments are now recognizing its value to domestic companies in
improving their profit performance. It is recognized that in utilizing logistics to create
value, domestic firms will also improve their international competitiveness. This is
critical to underpinning a country’s planned future economic growth. One example of
this increasing importance is China, where a China Daily article of 6 June 2000
reported a government official as stating that China’s logistics industry had not kept
pace with the country’s rapid economic development and the shift to a market
economy. The article stressed the importance of a rapid development of the logistics
industry to improve the quality and structure of the national economy. It put forward
the view that the development of the logistics industry was necessary to meet the
expected demands of growth in international trade expected from China’s proposed
entry to the World Trade Organization (WTO).
There is also recognition of the emergence of e-commerce, which is expected
to expedite the growth of modern logistics. One cannot pick up a logistics magazine
7
or look at a conference agenda without seeing it in a pre-eminent position. Other
technology initiatives such as the Global Positioning System and intelligent transport
technology for toll collection, electronic data interchange, and for monitoring and
charging are other rapidly developing areas of interest to Governments.
These issues indicate that the potential value of logistics as a value-creating
business tool is understood at a government level. This reinforces the importance of
moving to the contemporary Western model referred to in figure 2.
IV. A SELF-TEST FOR GOVERNMENTS
Governments, upon recognizing the importance of logistics, need to ensure
that they conduct a frank assessment of their own situation. Such an assessment must
take into account links to the marketplace (globally, regionally and locally) and
industry generally.
To assist this, listed below is a range of questions that could be used in order
to facilitate discussion that can assist in establishing the current situation. They are not
meant to cover all the issues but are provided as a stimulus for discussion between
Government and industry as a starting point for development an integrated plan.
! Do Governments understand the dynamics of today’s marketplace?
! Is there adequate practical and commercial knowledge in the
bureaucracy?
! Are there a significant number of industry leaders?
! How developed is the concept of modern logistics in the industry?
! Is there an integrated reform agenda with targets and measures that
support a common vision?
! Is the investment in infrastructure adequate to support growth and
reforms?
! Is infrastructure investment based on appropriate economic
considerations?
! Are safety and environmental considerations adequate in logistics
planning?
! Is the regulatory environment stimulating the desired outcome?
! Is industry taking the lead in self-regulation and setting industry
standards?
! Is funding delivering practical outcomes?
! Do modes complement the shared vision rather than simply compete?
! Are taxes and charges being used to stimulate efficiency?
! Are efficiency targets in place for government departments?
! Is there an adequate consultation process with industry?
! Do best practice projects exist in conjunction with industry?
! Do economic development strategies adequately consider logistics
issues?
! Do foreign investment regulations adequately support logistics
development?
! Does appropriate education exist across the logistics industry?
8
! Does technology coordination exist?
V. POSSIBLE INSIGHTS TO ASSIST LOGISTICS DEVELOPMENT
IN ASIAN COUNTRIES
Although the challenges for Asian countries are considerable, they are
achievable. Multiple initiatives need to be put in place concurrently. Integrating an
agreed action plan becomes a key role for Government. I would like to comment on a
number of key areas and offer some observations that may assist those considering
how to move forward. They include:
(a) The practical implementation of the concept of logistics;
(b) Integrated infrastructure policy and development;
(c) Removing impediments to logistics;
(d) Information technology and communications;
(e) Maximizing the benefits of foreign investment;
(f) The ability to manage change.
A. The practical implementation of the concept of logistics
The provision of modern logistics is a new concept in many parts of Asia.
The transport sector is often viewed as a set of individual industries such as trucking,
warehousing and freight forwarding, rather than as an integrated system which
manages products and processes through the manufacturing and distribution process.
The business objective of logistics is to support growth in profits and market share.
The shift in business thinking is being driven by customers who now assess
logistics from the perspective of product flowing from the point of supply through to
the customers. While evolution will support such a shift over time, customers and
shareholders are demanding accelerated change. To that end I would advocate the
consideration of initiatives such as attracting foreign investment that introduce
logistics skills and educating the workforce on logistics:
(a) Attracting foreign investment that introduces logistics skills
The introduction of logistics to help local companies achieve increased
international trade and profits can be accelerated by the specific targeting of foreign
investment that brings with it modern logistics know-how. This would include the
application of technology (warehouse management systems), the use of modern
materials-handling equipment, the restructuring of traditional sales and physical
distribution methods and skilled expatriates who could assist in the education of the
local workforce. Such foreign investor firms are also likely to have relationships with
freight forwarders and logistics providers, or both, that have the global and regional
reach necessary to support export market expansion.
Given the trends in globalization it is also appropriate to consider MNCs
which, through deregulation in either specific industry areas or in areas such as
retailing and distribution, can now access critical mass in respect to the number of
sites. This will support the viability of central and regional distribution centres and
9
provides the underpinning volume for an effective distribution network. This will be
a key initiative in logistics development.
The targeting of foreign investment with logistics skills will accelerate the
implementation of logistics practices. The business culture of these firms is also likely
to be of significant benefit in driving growth. The targeting will be critical, as the
matching of the logistics skills with the correct market opportunity will be important
to ensure the viability of those enterprises. This is critical, as already in Asia there is
significant foreign investment by a range of companies and issues such as joint
venture suitability, access to the market, lack of scale and demand for short-term
returns may currently be limiting the benefit of that investment. Governments may
therefore give consideration to a strategic review with target foreign companies,
including existing investors, aimed at packaging proposals to support the area of
growth that is being targeted.
Another aspect that could be considered is the attracting of 3PL operators to
the country. 3PLs have the capacity to upgrade skills in both the domestic and export
markets.
A report in the McKinsey Quarterly estimated the 3PL market would grow 5
to 10 times faster over the next decade than the traditional freight forwarding market.
In fact, evidence suggests that many large global players are migrating from a
transport and freight forwarding focus by establishing specialist 3PL divisions within
their organizations.
3PLs attempt to differentiate themselves from traditional transport companies
by including engineers, business consulting, materials’ handling, industry-specific
skills, change management, business modelling, IT and management accounting.
Such a multi-skilled resourcing approach enables them to have the necessary business
perspective to be part of their customers’ solution to the problem of delivering
improved market performance.
Matching of domestic companies in growth industries with foreign companies
from 3PLs and freight forwarding markets can accelerate the change to modern
logistics thinking. It also has the benefits of increasing employment and providing
the workforce with skills in critical capabilities. Our own experience in Thailand and
Malaysia has been that numbers of employees grow, the skills of operational
workforce are improved using technology implementation and middle management
capabilities are developed. These are significant benefits.
(b) Education in logistics
The education and skilling of the workforce is critical to building capability.
Five opportunities exist to educate different segments as to the role of logistics, its
application and development.
(i) Tertiary alliances
A number of international tertiary institutions have, during the 1990s
developed specific logistics programmes with strong reputations. Establishing
10
alliances with those institutions could result in programmes that introduce
recent graduates to the country and could also include delivery of these
programmes in Asian countries. There are a number of well-known
institutions in the United Kingdom of Great Britain and Northern Ireland,
North America and Australia that could be of value in establishing an
appropriate alliance.
(ii) Operational training
A number of countries also conduct a range of programmes that
provide specific industry skills training, commencing at industry entry level.
Governments should consider the development of an alliance with a suitable
institution for skills training in areas including warehousing, materials
handling equipment and transport management. Such providers are often
accredited through industry training bodies and alliances to enable transfer of
training materials should be considered.
(iii) Exchanges
Governments could give consideration to fostering exchanges between
local companies and overseas firms who have reputations for logistics skills in
the targeted industries. These exchanges could also be at government level,
which could introduce government officials to business trends in other
countries that deal with policy formulation in respect to transport and logistics.
This may be very valuable in helping to integrate government departments and
manage change.
(iv) Projects
Governments may wish to consider developing skills through specific
projects. This could involve specialist resources being brought in initially to
guide project planning and then via the Internet, videos and communication to
provide ongoing mentoring. Such projects could seek support from 3PLs and
freight forwarders who may be prepared to commit resources in order to
develop the country’s knowledge of logistics. Encouraging business to make a
commitment to the development of the industry is important.
Another approach to project education could be the use of expert skills
to guide the demonstration of best practice approaches to logistics. The
Government, working together with business, could nominate a target industry
and support the development of a specific best-practice logistics project. This
could fund the expert skills on for example a 6- to 12-month basis and then the
project would be used to demonstrate initiatives to the wider business
community. Government could also include support to such projects in terms
of incentives or other resources.
A best-practice programme has been used in Australia by the
Government to introduce new management techniques. Initially starting in the
manufacturing sector, it spread into the retail and services sectors. A further
example is the “supermarket-to-Asia” project facilitated by the Australian
11
Federal Government, which has worked in partnership with Australian
industry to develop a business plan for Australian exports, with a major
emphasis on the role of logistics. This particular project approach is well
structured on the federal level, with a supporting structure of State air- and
sea-freight councils. It has the added advantage of involving business
commitment and is a practical example of industry learning in a practical
sense. Again such projects have significant demonstration value and as a
consequence the Australian Federal Government has recently announced a
considerable increase in funding for appropriate project-based logistics
development. It also has announced the development of an action agenda for
the freight transport logistics industry.
(v) General education among industry
Another important issue is the development of knowledge among
domestic firms in respect to the benefits of logistics. If Governments wish this
to change, an active education programme among those sectors where growth
is expected is essential. One example was a white goods manufacturer
operating in Asia with a US$ 2 billion annual turnover and growing at 30 per
cent per annum. It had five product streams and five separate approaches to
logistics and distribution, five warehouses, five sets of sales strategies, five
approaches to sets of purchasing negotiations and five sets of inventory
management. This kind of duplication and lack of integration is a significant
disadvantage in the marketplace and is likely to reduce the company’s
international competitiveness.
In this example, centralized coordination of logistics would result in
improved asset utilization, less warehouse space, improved purchasing power
and, in all probability, streamlined delivery patterns. These would all be
critical elements in supporting export growth targets. Enterprises such as this
need to be educated as to the benefits of adopting modern logistics practices.
Governments have a role in facilitating this.
B. Integrated infrastructure policy and development
It appears that Governments generally acknowledge that infrastructure plays
an important role in underpinning the ability to cope with projected growth. It
therefore must be a priority to integrate infrastructure development so as to maximize
the benefits of investment.
Observations show that the separation of ministries, unspecified funding
allocations and a lack of formal transport planning can all minimize the impact of
infrastructure investment. The reality of the private sector now funding infrastructure
development adds another complication that needs to be appropriately managed.
Consideration needs to be given by Governments to the establishment of
transport planning task forces that can sit above functional department structures
(often multiple) and aside from the vested interests of individual enterprises in order
to assess projects on the basis of regional and national importance.
12
Governments should endeavour to develop infrastructure plans based on
economic considerations and consider all modes from a complementary point of view.
They should also consider other initiatives such as inland container depots and
transport interchanges, as well as streamlining processes and regulations for the
integration of cargo across all modes. The standardizing of documents and consistent
regulations relating to items such as dangerous goods can make it easier for
businesses to operate.
A key initiative could be the establishment of a reform platform for
regulations that impede logistics. This would require government departments to
consult with shippers, transport operators, freight forwarders and their associations, as
well as liaise across other government departments to ensure that barriers are
removed.
Again, Australia offers some examples of industry input. A recent initiative
was the establishment of freight action advisory groups. Governments should consider
forming an advisory or reference group of industry and users who can come together
on a regular basis to advise government agencies on trends and impediments.
Governments and industry working together can offer significant benefits to all
parties.
C. Removing impediments to logistics
A key issue identified earlier in the paper was the separation of departments,
the role of provincial and local regulations and the split between the management of
internal and external trade. These present a range of impediments to implementing
integrated logistics and impact on international competitiveness.
This issue is not unique to Asian countries. Only in recent years has Australia
initiated a national programme with the support of State Governments to standardize
national road regulations in order to facilitate improved efficiency and
competitiveness. The National Road Transport Commission has been the vehicle for
reform and over the last few years has worked with industry and State Governments
to develop reform agendas that have made considerable progress.
This process has in fact resulted in industry having to take on greater
responsibility. The result has been that industry, via the Australian Trucking
Association, has developed an effective National Peak Lobbying body that is now the
bridge between Government and industry. This has led to industry-driven initiatives in
truck safety, driver heath, fatigue management, technical coordination, codes of
conduct and tax reform. A critical element in sustaining this level of industry
involvement relates to delivering outputs of demonstrable value to the industry,
funding links between Government and industry, and delivering benefits to those
sections of industry that lift standards. The air- and sea-freight councils mentioned
above are also active in developing reform agenda in respect to barriers to
development.
There are a number of examples across Asia where processes and systems are
not consistent across departments. A recent example relates to lack of consistency in
customs processes and driver and truck records in a country. As a result, the
13
maximum asset utilization possible from a truck fleet was 45 per cent. The
development of a consistent process in such a situation would be an ideal opportunity
for a project between Government and industry.
In that case, the inability of the operator to service customers was limited by
the non-availability of trucks (when they were sitting idle) with a resultant reduction
in service levels. Such reductions in service levels cause delays in the supply chain of
up to 25 per cent and uncertainty of supply times for customers. In addition, higher
prices may have to be changed for transport services to achieve a suitable return on
the investment made.
Ultimately time delays, the higher costs of doing business and uncertainty
caused by these types of procedural issues can cause current and potential investors to
review their investment decisions and lead them to consider investing in other regions
or countries.
Reform in these areas should be a priority for Governments, as industry has
expectations that protocols will be improved. Action task forces that include industry
participation should be considered as a means of removing such barriers and driving
efficiency to support country’s expected trade growth.
It would also be expected that a reduction in the impediments would not result
in any major employment issue, as economic growth and the redeployment of staff to
other key areas requiring efficiency improvement would result in an overall benefit.
D. Information technology and communications
IT and communications have been identified as crucial to the development of
modern logistics; in some countries the poor reliability and high cost of IT services is
hampering that development.
I heard of a case recently where a 3PL was operating an MNC warehouse and
had planned to connect a warehouse management system at multiple sites so as to
enable all sites to accurately advise of warehouse capacity, location of stock,
inventory on hand, and so forth. Currently the lack of reliable IT connections across
multiple sites means enquiries from customers and staff cannot be answered speedily
and therefore time and resources are wasted.
The experience of that company was that the reliability of existing lines was so
poor that improvements were prohibitively expensive. They stated that the high cost
of installing lines and local calls is a barrier. They also stated that the lack of
reliability remains a major issue as lines are used for computer transfer of data and
that it was not uncommon for 56 Kb/s modems to be working at only between 2 and
10 per cent of capability.
This is not the quality of infrastructure on which to base an industry for which
the effective and efficient transfer of information is critical. Its improvement must
become a priority from both a service and a cost point of view. It will be absolutely
essential in order to have the capability to take up e-commerce. While it is recognized
that e-commerce will have a major impact on logistics, I have not chosen to discuss it
14
in detail in this article as the focus here is on the basics which must be in place to
support such developments as e-commerce.
E. Maximizing the benefits of foreign investment
The insight I would wish to offer does not relate to the specific strategies or
the merits of policy proposals under consideration by Governments, but rather to the
issue of support services. While the general direction of foreign investment policy
can be clear, implementation of the changes requires a major shift in the practices,
skills and culture of agencies and departments dealing with foreign enterprises.
Governments need to ensure that training and education on these changes are
comprehensive and that there is a change in culture from what is often a single
departmental mentality to one that has as its prime goal the encouragement and
support of business. Making it easy to do business should become a major theme.
Any freeing-up of foreign investment would bring with it major pressures on
standardizing procedures and rules so as to ensure consistent implementation. This
would need to include a significant education element for both local and foreign
entities. It is also important that Governments acknowledge that freeing-up would
require consideration of a shift from a strict enforcement of institutional requirements
to one where industry introduces self-regulation via accreditation programmes and
other initiatives such as codes of conduct among industry participants. This would be
very relevant to the transport and freight-forwarding sector. The establishment of
industry-driven initiatives in this area, based on international standards, would make
business easier and allow the focus of enforcement on those who do not comply.
Speed in dealing with industry would also be an issue. Currently dealings
with Government departments in some countries are considered slow by industry.
Governments may wish to consider re-engineering key business services to a best-
practice model so as to set a standard that would encourage investment. The setting
of benchmarks can be a valuable tool in raising standards.
Governments should give consideration to encouraging service providers in
industries associated with logistics to develop industry associations that can assist
Governments in coordinating with industry. This would help with the establishment of
standards consistent with international standards (in terms of documents, service and
so forth) that should be supported by government legislation in respect to sanctions
and penalties.
A particular emphasis could be in the area of advice in respect to joint
ventures. Governments may wish to consider how it may promote “best practice” in
order to develop effective joint ventures. It would be our belief that increased foreign
investment may be followed by a high level of frustration between joint venture
partners. It is my observation that in Asia joint ventures can be valuable in creating a
successful business. Foreign and local partners often have different expectations about
how things should be done. Therefore, the time taken to obtain a correct match in
skills, strategic intent and culture may often be a long one. The issues of management
control, dividend policy, veto rights, pre-emptive rights, management decision-
making, the use of expatriates, ongoing research and development are often glossed
over. The Western tendency is to rush, often without time for the development of
15
proper relationship and trust. Like many aspects of business the success of a joint
venture depends on trust and stability. Initiatives Governments could take in this
regard would assist in maximizing the benefits of foreign investment.
F. The ability to manage change
In considering in broad terms the desired role of logistics in supporting
economic development, it is important to be realistic as to what can be achieved and
in what timeframe. The consequence, however, of the rapidly changing global and
regional environment is that it will be critical for Governments to work concurrently
at a range of levels within both Government and business.
As stated at the outset of this paper, for Governments to achieve the objective
of change, management must receive the appropriate level of attention. The global
and regional environment would continue to change. The ability to manage this
change will be as much about culture and leadership as it is about strategies and
tactics. Establishing a shared vision at both government and business levels will be
critical. While the pressure for change as a result of globalization might be clear to
the Government, unless that change is communicated and understood at all levels its
intended benefits might not be achieved. A clear plan involving key industry sectors
and leaders may be an essential step in demonstrating leadership in areas such as
logistics.
At a personal level, individuals do not act unless they feel a pressure for
change. This often only occurs as the result of a major crisis that impacts on them
from a financial or job security viewpoint. Until individuals decide to act differently
as a result of the changes around them, little may change. An imperative for change
has to exist and those implementing that change should ensure that any plans go to all
levels of government and business. Governments must ensure that they adequately
align their business community and workforce with any new directions they adopt.
The skilling of management and workforce will also be important in
developing the competencies and capabilities required. Strong leadership by
management at all levels is critical so that those at an operational level in either
business or Government see the commitment to change coming from the top.
Communication and the involvement of staff and customers are often critical to
getting the necessary buy-in for change.
CONCLUSION
Logistics does have the capacity to be of significant value to both
Governments and industry. It is an essential tool for companies to achieve increased
market penetration and improved returns. Logistics suppliers that innovate, integrate
and work with their customers are making significant progress.
The challenge is for Governments and industry to work together to educate
companies in the use of modern logistics skills, encourage the transformation of
traditional transportation operations into logistics providers, develop infrastructure
(including IT) and manage the change.
16
Transport and Communications Bulletin for Asia and the Pacific No.70, 2001
IMPROVING EFFICIENCY IN THE LOGISTICS SECTOR FOR SUSTAINABLE
TRANSPORT DEVELOPMENT IN THE REPUBLIC OF KOREA
Sungwon Lee
*
ABSTRACT
Freight transportation has increased very rapidly in the Republic of Korea owing to
economic growth and expanding international trade. However, the freight transport sector
in the Republic of Korea has been regarded as inefficient and the inefficiencies can be
attributed to many factors, including an outdated regulatory framework, business practices
and a lack of proper infrastructure. Since freight transport demand is derived from
economic activities that are expected to grow in the future, improving efficiency in the sector
has important implications for sustainable transport development in the country.
In the present paper, the past trends and characteristics of domestic freight
transportation in Korea are examined. The modal shares of domestic freight transport are
analysed and future freight volumes by different modes are estimated, based on current
trends and an alternative scenario in consideration of the proposals for future investment in
transport infrastructure development. The effects in terms of greenhouse gas emissions for
these two alternative future freight transport conditions are examined. The causes of
inefficiency in the freight transport sector in the Republic of Korea, which includes
infrastructure capacity problems, regulatory framework and business practices, are also
discussed.
The previous and ongoing efforts to improve efficiency in the logistics sector through
policy measures are discussed. The policy measures focus mainly on a modal shift to
environment-friendly modes, infrastructure provision and enhancing operational efficiency.
Finally, an estimate of the potential reduction in CO
2
emissions as a result of these efforts is
presented.
*
Head, Transport Environment Research Division, The Korea Transport Institute, Daewha-Dong, Ilsan-
Gu, Koyang City, Kyunggi-Do, Republic of Korea.
17
INTRODUCTION
Freight transportation has increased very rapidly in the Republic of Korea owing to
fast economic growth and expanding international trade. It has provided indispensable
service to economic growth. However, it has also been regarded as relatively inefficient. The
inefficiencies can be attributed to many factors, including an outdated regulatory framework,
business practices and a lack of proper infrastructure. Since freight transport demand is
derived from economic activities that are expected to grow in the future as well, improving
efficiency in the freight transport sector has important implications for sustainable transport
development in general.
In the present paper, the past trends and characteristics of domestic freight
transportation in the Republic of Korea are examined. The modal shares of domestic freight
transport are analysed and future freight volumes by different modes are estimated, based on
current trends and an alternative scenario in consideration of the proposals for future
investment in transport infrastructure development. The causes of inefficiency in the sector
are then discussed, including regulatory regimes, business practices, the lack of
standardization in logistics facilities and equipment and the lack of an integrated logistics
information system. Finally, past and present policy measures to improve efficiency in the
logistics sector in the Republic of Korea and the potential impact of these efforts on energy
consumption and the environment, particularly in terms of a reduction in greenhouse gas
emissions are examined.
I. CHARACTERISTICS OF FREIGHT TRANSPORT IN KOREA
During the eleven-year period between 1988 and 1999, the growth in domestic freight
movement showed a high positive correlation with the growth of real gross domestic product
(GDP). Up to 1997, freight transportation increased very rapidly along with the increase in
GDP levels. However, the domestic freight transport volume dropped dramatically in 1998
owing to the economic crisis and has not yet recovered its previous level. Table 1 shows real
GDP and domestic freight movement in the Republic of Korea by year.
Table 1. Change in real GDP and domestic freight in the Republic of Korea, 1988-1999
Year
Real GDP
(billions of won)
Annual change in
real GDP
(percentage)
Domestic freight
(millions of ton-km)
Annual change in
domestic freight
(percentage)
1988 226,543.2 - 59,047 -
1989 241,006.9 6.38 61,522 4.19
1990 263,430.4 9.30 65,704 6.80
1991 287,737.9 9.23 74,091 12.76
1992 303,383.9 5.44 90,268 21.83
1993 320,044.2 5.49 96,438 6.84
1994 346,448.1 8.25 97,782 1.39
1995 377,349.8 8.92 110,722 13.23
1996 402,821.2 6.75 114,367 3.29
1997 423,006.7 5.01 121,899 6.59
1998 398,312.6 -5.84 87,316 -28.37
1999 436,798.5 9.66 86,525 - 0.91
Source: Lee, Sungwon, Myungnee Lee and others, 2001. Macroeconomic impact analysis of environmental regulations
in the transport sector, internal document (Korea Transport Institute).
18
Freight transportation in the Republic of Korea has several distinctive characteristics.
The most salient trend in the domestic freight transport in the Republic of Korea is the ever-
growing role of road transport, both in terms of absolute tonnage transported and its modal
share. The dominance of road freight transport has been led by the explosive increase in
private truck operations in domestic freight movement. Contrary to the dominance of road
freight transport, the role of rail transport, which is considered as more environment-friendly,
has shrunk, both in terms of tonnage transported and its modal share. The reduced role of rail
is owing partly to capacity constraints, as more time slots have been assigned for passenger
services while the total rail capacity has remained virtually the same. Another important
environment-friendly mode, maritime transport, has been able to maintain its relatively stable
modal share in freight transportation in recent years. Freight transportation by air has
increased in absolute terms, but its modal share is still negligible in the domestic sector.
Table 2 shows the trend of freight modal share during the last 11 years.
Table 2. Modal share of domestic freight movement in the Republic of Korea,
1988-1999
(Millions of ton-km and percentage)
Year Road Rail Maritime Air Total
1988 28,603 (48.44) 13,784 (23.34) 16,617 (28.14) 43 (0.07) 59,047 (100.00)
1989 30,002 (48.77) 13,605 (22.11) 17,852 (29.02) 63 (0.10) 61,522 (100.00)
1990 30,842 (46.94) 13,663 (20.79) 21,127 (32.15) 72 (0.11) 65,704 (100.00)
1991 34,781 (46.94) 14,494 (19.56) 24,737 (33.39) 79 (0.11) 74,091 (100.00)
1992 39,910 (44.21) 14,256 (15.79) 36,008 (39.89) 94 (0.10) 90,268 (100.00)
1993 43,210 (44.81) 14,658 (15.20) 38,465 (39.89) 105 (0.11) 96,438 (100.00)
1994 48,661 (49.76) 14,070 (14.39) 34,935 (35.73) 116 (0.12) 97,782 (100.00)
1995 52,825 (47.71) 13,838 (12.50) 43,936 (39.68) 123 (0.11) 110,722 (100.00)
1996 54,834 (47.95) 12,947 (11.32) 46,452 (40.62) 134 (0.12) 114,367 (100.00)
1997 63,741 (52.29) 12,710 (10.43) 45,299 (37.16) 149 (0.12) 121,899 (100.00)
1998 43,343 (49.64) 10,372 (11.88) 33,461 (38.32) 140 (0.16) 87,316 (100.00)
1999 42,603 (49.23) 10,072 (11.64) 33,699 (38.95) 151 (0.18) 86,525 (100.00)
Source: Lee, Sungwon, Myungnee Lee and others, 2001. Macroeconomic impact analysis of environmental regulations
in the transport sector, internal document (Korea Transport Institute).
In road transport, only about one fifth of freight is moved by commercial carriers,
which are regarded as more energy efficient owing to their higher load factor. Most of the
remaining freight is transported by privately owned trucks which are less efficient and cause
more damage to the environment. The prevalence of less efficient private freight transport is
one of the major causes of energy inefficiency in the transport sector.
19
Until recently, the commercial freight industry in the Republic of Korea was
protected by a strict licensing system. It also suffered from the collusive behaviour of the
operators. As a result, the industry lost its competitiveness. Like other industries under entry
regulations and price control, the domestic freight transport industry has suffered from low
productivity and service levels. Nor has the industry been responsive to changing consumer
needs. As a result, many consumers have turned away from commercial freight transporters
and relied on their own private freight transportation, which has ultimately led to the
dominance of private transporters.
In general, the logistics sector in the Republic of Korea can be regarded as relatively
inefficient compared with the advanced countries. Logistics costs in the Republic of Korea
are estimated at over 16 per cent of GDP as of 1995, which is at least 50 per cent more than
those of the United States of America.
1
The major causes of inefficiency are the shortage of
logistics-related infrastructure, operational problems and the problem of economies of scale
in logistics firms, which are mainly small and medium-sized.
All the major freight-related infrastructure, that is, railways, highways, seaports and
airports, is experiencing capacity problems. The capacity-related problems are causing
congestion and creating bottlenecks along the major arteries of freight transportation. Rail
freight transportation is a particular case in point. It has been severely squeezed to
accommodate an increased number of passenger services, which has caused severe capacity
constraints and consequent falls in market share and the volume of freight transported.
Other logistics-related facilities such as freight terminals and storage facilities also have
capacity constraints. Infrastructure capacity problems, which result in bottlenecks and
congestion, are the main sources of high logistics costs. Besides increasing costs, they also
have adverse implications for energy consumption and the environment.
From an operational perspective, there are also other sources of inefficiency in
domestic freight transportation. The state of utilization of IT is one such important area.
There are noticeable gaps in the utilization of IT among logistics service providers of
different transportation modes. Electronic information systems have often been developed by
IT firms in isolation from each other. As a result, data and information are not shared or
cannot be exchanged. This deficiency in logistics information systems has led to unnecessary
delays in freight transportation, overstocking of inventories, a low load factor and inefficient
trucking operations, all of which have contributed to higher costs. Another very important
problem that needs urgent attention is the lack of standardization in logistics-related facilities
and equipment. Logistics can be regarded as a system that needs centralized operation and
management. Standardizing logistics-related equipment and facilities could improve overall
efficiency in freight transportation.
Last, the slow progress made in improving logistics information systems and
standardizing logistic-related facilities and equipment has been largely attributed to the fact
that most logistics firms in the Republic of Korea are small and medium-sized businesses.
The lack of economies of scale and reliability problems associated with small logistics firms
have often provided a strong incentive for manufacturing firms in the Republic of Korea to
set up their own logistics division or even to operate their own freight vehicle fleets.
1
Logistics costs are defined here as the sum of transportation and storage-related costs.
20
II. THE GROWTH OF ROAD FREIGHT TRANSPORT AND ITS
IMPLICATIONS FOR SUSTAINABLE TRANSPORT
DEVELOPMENT
Freight transport demand, by nature, is a derived demand that may be affected by
various socio-economic factors and the level of economic activity. Forecasting of underlying
variables representing these factors, therefore, should precede the forecasting of freight
transport demand. Table 3 shows forecasting of key economic indicators that are considered
relevant in estimating domestic freight transport demand. Among the economic indicators,
the vehicle ownership rate has been estimated by a lagged power growth function, where
vehicle ownership approaches a pre-assumed saturation point. The function had a stock
adjustment term, considered real per capita GDP as a purchasing power proxy, and the
vehicle ownership cost was represented by the sum of vehicle purchase cost and annual fuel
cost (Lee and others 1999). For estimation purposes, real per capita GDP and fuel prices have
been assumed to increase at 3 per cent per annum over the next 20-year period.
The vehicle ownership rate is estimated to increase from about one vehicle for every
four persons in 2000 to about two vehicles for every five persons in 2020. The forecast
vehicle ownership rates are presented in table 3 along with forecast population and number of
registered vehicles.
Table 3. Key economic indicators, 2000-2020
1995 2000 2005 2010 2015 2020
Population
(Thousands of persons)
45,093 47,274 49,123 50,618 51,677 52,358
Per capita GDP
(Thousands of won)
8,459.1 9,101.2 10,550.8 12,231.3 14179.4 16,437.9
Vehicle ownership rate
(per person)
0.1878 0.2444 0.2862 0.3263 0.3643 0.3994
Vehicle registration
(Thousands of vehicles)
8,469 11,555 14,061 16,516 18,828 20,909
Source: Lee, Sungwon, Meeyoung Shin and others,1999. Comprehensive policy measures for environment-friendly
transport (Korea Transport Institute).
The total vehicle mileage for each vehicle type is estimated by using the forecast
number of vehicles and the estimated average vehicle mileage. Average vehicle mileage
has been estimated by fitting a growth curve that best explained the past trend. It may be
noted here that the estimated average annual vehicle mileage decreases as the number of
vehicles increases. Table 4 presents the estimated total vehicle mileage by vehicle type up to
2020. As shown in the table, the total truck mileage is expected to almost double in the 20-
year period between 2000 and 2020. The predominance of private trucks in freight
transportation is expected to continue during this period.
21
Table 4. Estimated vehicle mileage, 2000-2020
(Millions of km)
1999 2000 2005 2010 2015 2020
Private passenger car 145,679 150,566 179,162 209,209 237,600 263,099
Taxi 22,265 22,871 26,757 31,086 35,251 39,019
Passenger
car
SUV
a/
7,601 7,856 9,348 10,915 12,397 13,727
Small and medium private 12,541 13,528 17,138 20,402 23,511 26,331
Heavy-duty private 2,640 2,848 3,608 4,295 4,950 5,543
Small and medium
commercial
202 218 278 332 382 428
Bus
Heavy-duty commercial 3,753 4,062 5,179 6,173 7,114 7,967
Small and medium private 41,881 45,254 57,542 68,557 79,011 88,489
Heavy-duty private 2,435 2,631 3,345 3,986 4,594 5,145
Small and medium
commercial
3,154 3,413 4,352 5,187 5,978 6,695
Truck
Heavy-duty commercial 6,308 6,827 8,705 10,374 11,956 13,391
a/
SUV: sports utility vehicles such as four-wheel drive jeeps.
Greenhouse gas emissions have been estimated by vehicle type according to the
revised Intergovernmental Panel on Climate Change guidelines and relevant emission factors
of representative vehicle type (IPCC 1996). Table 5 presents the estimation results. In 2020,
emissions by freight vehicles of CO
2
, which is the most important greenhouse gas, are
estimated to account for about 31 per cent of total emissions, compared with 38.7 per cent in
1999 (Lee, Lee and others 2001). Although the freight transport sector is not expected to
grow as much as the transport sector as a whole, managing freight transport demand remains
crucial to reducing overall energy consumption and the adverse environmental impacts
caused by emissions from transport vehicles.
The forecast of freight transport modal shares up to 2020 is presented in table 6. The
forecast is based on the assumption that the current trend will continue and new infrastructure
will be constructed to satisfy the increase in demand. This forecast can therefore be
considered as a baseline case against which the effects of policy measures can be analysed.
Freight transport is expected to almost double during the next two decades if the current
trend continues. The environmental burden imposed by freight transport will therefore be
much greater in the future and therefore special efforts will be required to ensure sustainable
transport development in the Republic of Korea.
22
Table 5. Estimation of greenhouse gas emissions, 2000-2020
(Thousands of tons)
Year NO
x
CH
4
NMVOC CO N
2
O CO
2
Passenger 1999 119.5 4.0 100.0 535.3 0.1 28,885.0
car 2000 126.8 4.3 106.4 570.8 6.3 30,991.0
2005 156.9 5.4 133.8 723.3 8.4 40,526.7
2010 189.3 6.6 164.1 894.3 11.0 51,638.3
2015 220.8 7.7 191.4 1043.0 12.8 60,223.5
2020 246.4 8.5 213.6 1164.2 14.3 67,218.4
Bus 1999 53.0 0.6 16.3 71.6 0.1 8,374.5
2000 56.2 0.6 17.4 76.3 0.4 8,891.4
2005 62.3 0.7 19.8 87.0 0.4 9,953.4
2010 68.8 0.8 21.9 96.1 0.4 10,997.4
2015 79.4 0.9 25.3 110.8 0.5 12,681.8
2020 87.1 1.0 27.7 121.6 0.6 13,916.9
Truck 1999 154.3 2.6 30.3 132.7 0.1 23,534.4
2000 162.1 2.8 31.8 139.4 1.3 24,717.2
2005 169.8 2.9 33.4 146.5 1.4 25,921.6
2010 187.6 3.2 36.9 161.9 1.5 28,640.5
2015 216.4 3.7 42.6 186.7 1.7 33,027.0
2020 237.4 4.0 46.7 204.9 1.9 36,243.7
Total 1999 326.8 7.2 146.6 739.7 0.3 60,794.0
2000 345.1 7.7 155.7 786.6 7.9 64,599.6
2005 389.0 9.0 187.0 956.8 10.2 76,401.7
2010 445.8 10.6 222.9 1,152.3 13.0 91,276.1
2015 516.5 12.3 259.2 1,340.5 15.1 105,932.3
2020 571.0 13.6 288.1 1,490.6 16.8 117,379.1
CH
4
:
methane; CO: carbon monoxide; CO
2
: carbon dioxide; N
2
O: nitrous oxide; NMVOCs: non-methane volatile organic
compounds; NO
x
: oxides of nitrogen
Table 6. Baseline forecast of domestic freight transport in the Republic of Korea,
2000-2020*
(Millions of ton-km and percentage modal share)
Year Road Rail Maritime Air Total
2000 43,883 (49.23) 10,375 (11.64) 34,712 (38.95) 156 (0.18) 89,126 (100.00)
2005 51,066 (49.23) 12,073 (11.64) 40,394 (38.95) 182 (0.18) 103,715 (100.00)
2010 59,791 (49.23) 14,136 (11.64) 47,295 (38.95) 213 (0.18) 121,435 (100.00)
2015 70,462 (49.23) 16,659 (11.64) 55,736 (38.95) 251 (0.18) 143,108 (100.00)
2020 83,597 (49.23) 19,764 (11.64) 66,125 (38.95) 298 (0.18) 169,784 (100.00)
* This forecast represents the baseline case under the assumption that current modal share will be maintained in the future.
23
III. POLICIES FOR IMPROVING EFFICIENCY IN FREIGHT TRANSPORT
Improving efficiency in freight transportation can be approached in various ways. The
improvement of vehicle efficiency could be a major area of development. Possible
measures include improving the aerodynamics of the vehicle design, increasing engine
efficiency, or developing alternative fuel vehicles that are less polluting and more
environment-friendly. Transport policy measures could also help to improve efficiency in
freight transportation. Such measures could include policies in favour of a modal shift to
more energy-efficient modes, investments in infrastructure expansion and regulatory reforms
to promote efficiency and competitiveness in the freight transport industry. Although vehicle
efficiency is important in securing environmental sustainability, the present paper focuses on
policy-oriented measures in discussing the efforts of the Republic of Korea for sustainable
transport development through improvements in the logistics sector.
The Government of the Republic of Korea recognizes the importance of logistics-
related problems in the country and has enacted several pieces of legislation and made long-
term plans to improve efficiency in the sector. In 1995, the Logistics Facilitation Act was
revised and the Distribution Centre Development Act was passed in order to provide
financial incentives to developers. In 1997, the Freight Industry Act was passed in order to
ease the entry regulations governing entry into the industry. These pieces of legislation
were intended to facilitate the development of logistics-related infrastructure and to
deregulate the freight industry in order to increase the efficiency of the logistics sector and
thereby strengthen the overall competitiveness of the Republic of Korea economy (Transport
Yearbook 1998).
Energy efficiency in freight transportation can be achieved by a modal shift to a more
energy-efficient means of transportation such as rail. In order to ease railway capacity
constraints such as those mentioned earlier, 23 new railway lines with a total length of 3,870
km are being planned, among them the Seoul to Pusan High Speed Rail Link (Ministry of
Construction and Transport 1999). It is expected that the expanded railway network would
relieve capacity constraints and be able to reverse the current trend and increase the market
share of rail in domestic freight transportation.
In order to remove bottlenecks along the major arteries of freight transportation,
major investments in road transport infrastructure are also planned. By 2011, 33 new
expressways are to be constructed, with a total length of 3,383 km. In the air transportation
sector, three new airports and the expansion of nine major domestic airports are also planned.
In the water transport sector, four new seaport developments and the expansion of seven
24
seaports are currently under way.
In the area of logistics-related infrastructure development, eight integrated freight
terminals and four inland container depots are being constructed. These new facilities are
expected to lower logistics costs, improve overall efficiency and contribute to regional
development.
For logistics information system development, an integrated logistics information
system is being developed in three stages. The integrated system is intended to enable
electronic data interchange (EDI) and provide freight traffic information such as real-time
freight and vehicle location. In the first stage of development (1996-1998) overall planning
and construction of the main EDI centre were completed; in the second (1998–2000)
commercial EDI service was planned and in the third stage (2001–2015) further development
of commercial EDI service and development of several local EDI centres are planned.
2
The Government and the private sector are also pursuing the standardization of
logistics-related facilities and equipment. The Government has adopted the “unit load system
rule” that provides standardized specifications for containers, loading equipment, freight
trucks and freight packages. Tax exemption for investments in logistics standardization is
also allowed, in order to enhance the standardization process.
Meanwhile, government regulations on the logistics industry have been relaxed. The
complicated classification system in the freight transport industry has been repealed and
regulations on entry to the industry via a system of licences have been replaced by a less
stringent registration system which allows entry into the industry by firms meeting specified
minimum requirements. Previously, entry into the freight transport industry required certain
amount of minimum endowed capital as well as a minimum number of freight trucks and
parking and other related facilities. Before 1999, the minimum capital requirement for the
regular freight liners was 300 million won and the minimum fleet requirement was 30 trucks.
Even when all of these requirements were met, the licensing of a new freight operator was a
long and strict process.
Since freight modal shares can be influenced by infrastructure development and
policy instruments, long-term freight modal shares have been estimated taking into account
future infrastructure investments and changes in policy. Table 7 gives such a freight modal
2
For further information on EDI in freight transportation in the Republic of Korea, refer to Kwon, O.,
1997. “Proposed advanced commercial operations in the Republic of Korea”, Transportation Research Record
1602, (Transportation Research Board, Washington, DC).
25
share estimation. Most investments planned in the logistics sector are geared to expanding
the role of energy efficient transport modes such as railways and maritime transport. These
investments are intended to shift a part of the road freight traffic to railways and water
transport.
Table 7. Long-term forecast of domestic freight transportation in the
Republic of Korea taking into account major investments
in infrastructure development, 2000-2020
(Millions of ton-km and percentage modal share)
Year Road Rail Maritime Air Total
2000 43,285 (48.57) 10,700 (12.01) 34,976 (39.25) 164 (0.19) 89,126 (100.00)
2005 46,860 (45.18) 14,483 (13.96) 42,126 (40.62) 245 (0.24) 103,715 (100.00)
2010 50,730 (41.77) 19,601 (16.14) 50,737 (41.78) 366 (0.31) 121,435 (100.00)
2015 54,921 (38.37) 26,529 (18.53) 61,109 (42.71) 548 (0.39) 143,108 (100.00)
2020 59,457 (35.02) 35,906 (21.15) 73,601 (43.35) 820 (0.49) 169,784 (100.00)
Note: The road freight forecasting has been done by the author. Rail and other modal shares have also been estimated by
the author, taking into account infrastructure investments in “National logistics visions and policies for the twenty-
first century” (Korea Transport Institute 1999).
In table 7, it can be seen that the share of rail freight transport is expected to grow
rapidly. This is because the high speed rail link currently under construction would relieve
some existing rail capacity from passenger transport to freight transport. Freight transport by
air is also expected to grow rapidly, but the absolute tonnage transported is expected to
remain small. The share of road freight transport is expected to decrease over the next 20
years as rail and maritime transport expand. Although losing market share, road freight
transport would still experience significant growth in absolute terms owing to growth in
overall freight movement demand.
The expected changes in freight modal shares will have a favourable impact on the
environment: they are expected to increase energy efficiency and thereby help in reducing the
greenhouse gas emissions produced by the transport sector. Estimates of CO
2
emissions
from freight transportation have been made for this alternative scenario of modal shares and
are presented in table 8. The estimation takes into account the current energy efficiency of
different modes and forecast changes in modal share. The energy efficiency of different
modes has been calculated and checked against the current energy consumption statistics for
accuracy. Table 8 shows the potential greenhouse gas (CO
2
) reductions up to 2020 owing to
changes in freight modal shares. It is estimated that a reduction of CO
2
emissions of up to
6.54 per cent can be achieved in the transport sector by the proposed investments and the
26
consequent modal shift.
Table 8. CO
2
emissions by type of domestic freight transport and their reduction
potential, 2000-2020
(Thousands of tonnes of carbon)
2000 2005 2010 2015 2020
Road (private) 5,409 6,294 7,370 8,685 10,304
Road (commercial) 1,203 1,400 1,639 1,931 2,291
Rail 74 86 101 119 141
Maritime 347 404 473 557 661
Air 63 73 86 101 120
Baseline
Total by freight
transport
7,096 8,257 9,668 11,394 13,518
Road (private) 5,409 6,049 6,446 6,525 6,604
Road (commercial) 1,203 1,318 2,222 2,847 3,541
Rail 74 104 134 182 246
Maritime 347 400 437 532 647
Air 63 101 146 197 266
Modal shift
policy as in
“National
logistics visions
and policy for
the twenty-first
century”
(Korea
Transport
Institute, 1999)
Total by freight
transport
7,096 7,973 9,387 10,282 11,304
Reduction potential - 284 282 1,111 2,214
Total emissions by the transport sector 18,681 22056 26,565 30,855 33,869
Reduction rate (percentage)
- 1.06 3.60 6.54
Source: Lee, Sungwon, Myungmee Lee and others, 2001. Macroeconomic impact analysis of environment regulation in
the transport sector, internal document (Korea Transport Institute).
27
CONCLUSION
Freight transportation is indispensable to economic activities. However, it also
imposes a great burden on the environment through harmful emissions. As freight
transportation demand is dependent mainly on economic activities, it is expected to increase
further as the economy grows. It is estimated that overall domestic freight transportation
demand will increase by about 196 per cent over the next twenty-year period. If the current
trend continues, greenhouse gas emissions by the freight transport sector are expected to
increase by about 190 per cent over the same period. However, with the construction of new
railways and other planned major infrastructure projects, the share of rail in domestic freight
transportation is expected to increase by 9.51 per cent, while the share of road transport is
expected to decrease significantly during this period. This shift in modal shares could have a
positive impact on greenhouse gas emissions, which may be reduced by about 6.54 per cent
of the estimated total emissions from the transport sector.
Owing to the derived nature of demand, reducing the adverse environmental impacts
of freight transportation is regarded as very difficult. The current policy measures for
sustainable development in domestic freight transportation in the Republic of Korea focus
mainly on a modal shift to environment-friendly modes. However, policies for increasing
operational efficiency in freight transportation are also being pursued. These include the
development of an integrated logistics information system, deregulation of the freight
transport industry and standardization of logistics-related facilities and equipment. With the
expected changes in modal shares brought about by these policy measures, energy
consumption and the resulting adverse impacts on the environment could be significantly
reduced.
28
REFERENCES
Intergovernmental Panel on Climate Change (IPCC), 1996. Revised 1996 IPCC Guidelines
for National Greenhouse Gas Inventories: Greenhouse Gas Inventory Reference Manual, vol.
3 (Geneva). Available online at <http://www.ipcc-nggip.iges.or.jp/public/gl/invs6.htm>(12
September 2001).
Lee, Sungwon, Meeyoung Shin and others, 1999. Comprehensive policy measures for
environment-friendly transport, (Korea Transport Institute).
Lee, Sungwon, Myungmee Lee and others, 2001. Macroeconomic impact analysis of
environmental regulations in the transport sector, internal document (Korea Transport
Institute).
Ministry of Construction and Transport, 1999. National strategy for transport arteries,
(Republic of Korea Ministry of Construction and Transport, Seoul).
Korea Transport Institute, 1999. National logistics visions and policies for the twenty-first
century.
Transport Yearbook, 1998. (Transport Newspaper Company).
29
30
Transport and Communications Bulletin for Asia and the Pacific No.70, 2001
ASSESSING THE TRANSPORTATION PROBLEMS OF THE SUGAR CANE
INDUSTRY IN THAILAND
Paitoon Chetthamrongchai,
*
Aroon Auansakul
**
and Decha Supawan
***
ABSTRACT
Transportation has a fundamental role in the economic development of all
countries. It is not just a means to service commuting people, but also to collect products
and materials from producers and distribute them to consumers. Transportation has
become a significant factor affecting the production costs of commodities. The
production of sugar cane in Thailand is no exception. The cost of transporting sugar
cane from the farm gate to the mills is quite high, owing to the multiple transport
facilities and time-consuming activities involved in the delivery process. The total
transportation expenditure was estimated at 5,708 million baht for the crop year 1999-
2000. The average cost per transaction incurred by farmers (excluding other labour
costs) was in the range of 180-220 baht per ton in 1999. A large portion of this cost
comprises truck rental and driver wages. These two elements together represent a high
proportion of the overall production cost. The transportation issue has been overlooked
in many industrial sectors and in the agricultural sector, in particular. The purpose of
this paper is to present the findings of a study on the transportation and other relevant
costs of sugar cane production. The findings and the subsequent recommendations could
be considered for the enhancement of welfare of the sugar cane farmers and the
increased efficiency of the industry in general and may also be applied to other agro-
based industries facing similar problems.
*
Economist, Bureau of Agricultural Economic Research.
**
Director of National Resources Economics Research Section, Bureau of Agricultural Economics
Research.
***
Director of Bureau of Agricultural Economics Research.
31
INTRODUCTION
Transportation is an essential element of the production-distribution chain. Delays in
transportation are of serious concern since they affect production costs, which are eventually
reflected in the consumer price. The present paper focuses on the assessment of transportation
costs in the sugar cane industry, since they have been found to be very high in proportion to
other variable costs. Owing to constraints, the study focuses only on the north-east region of
Thailand. Data were collected through interviews with sugar-mill owners, sugar cane growers
and truck operators. The study recommends a strategy for the establishment of an effective
management mechanism in the delivery process of sugar cane products.
I. THE SUGAR INDUSTRY IN THAILAND
The sugar industry in Thailand has been growing rapidly, both in sugar cane
production and in sugar mill expansion. Demand from domestic and international markets has
been rising and has contributed to the economic growth of the nation. Sugar cane growing
and processing into raw sugar is one of the largest industries in the country. Thailand is one
of the largest sugar exporters in the world. The total export of white and raw sugar was 3.22
million tons in 2000. The Office of the Cane and Sugar Board under the Ministry of Industry
has reported the total value of sugar exports for the crop-year 1998-1999 at 21.21 billion
baht.
Cultivated in 5.62 million rais of land (1 hectare = 6.5 rais), total sugar cane
production during the crop-year 1999-2000 was 53.10 million tons (see table 1), 20.26 per
cent higher than the production of 44.17 million tons of the previous year. The Office of the
Cane and Sugar Board reported total sales of sugar cane of nearly 24 billion baht for the crop-
year 1999-2000. That year, the estimated cost of transportation for carrying sugar cane to the
mills in the north-east was 2,379.18 million baht, which accounted for 41.68 per cent of the
total transportation cost of sugar cane for the whole country (see table 2).
Table 1. Production of sugar cane and sugar, 1995/96-1999/2000
Year of
production
Planting area
(millions of
rais)
Sugar cane
(millions
of tons)
Average
yield
(ton/rai)
Sweetness
(CCS)
a/
Sugar
(millions
of tons)
Sugar
productivity
(kg/ton)
1995/96 6.53 57.69 8.84 11.84 6.03 104.45
1996/97 5.89 56.24 9.56 11.78 5.82 103.47
1997/98 5.75 42.20 7.34 11.10 4.00 97.02
1998/99 5.45 44.17 8.10 11.66 5.20 103.72
1999/00 5.62 53.12 9.45 11.70 5.51 103.89
Source: Office of the Cane and Sugar Board, Ministry of Industry, Thailand.
a/
CCS is a measurement of sucrose content in cane, which can be refined into a form of white sugar if milling and
purification processes are carried out according to standard procedures.
32
Table 2. Transportation costs of sugar cane by region in Thailand
for the crop-year 1999-2000
Area
Sugar cane production
(millions of tons)
Transportation costs
(millions of baht)
North
Central
East
North-east
10.71
18.00
3.52
20.87
1,065.22
1,849.68
413.92
2,379.18
Total
53.10
5,708.00
Source: Office of the Cane and Sugar Board, Ministry of Industry, Thailand.
The price of sugar cane is based on the provisional price announced by the
Government and the quality and sweetness as measured by Commercial Cane Sugar (CCS).
1
Cane with a higher CCS will fetch a higher price. In addition, the purity of the cane juice is
also taken into account in setting the price. Freshly cut sugar cane has higher purity and
produces more sugar than older sugar cane. Deterioration in the quality of sugar cane can also
be caused by improper harvesting and delays during handling and transportation. These
factors influence the price and thus the income of the sugar cane farmers.
II. STUDY RESULTS
The present study focuses on the operation of the sugar cane industry in the north-east
region of Thailand, covering the provinces of Nakhon Phanom, Sakol Nakhon, Nong Khai,
Udon Thani, Nong Bua Lam Phu, Loei, Mukdahan, Yasothon, Amnat Charoen, Kalasin,
Khon Kaen, Maha Sarakam, Roi Et, Buri Ram, Chaiyaphum and Nakhon Ratchasima. The
total sugar cane planting area in the region is 2.18 million rais. The region produced 21.51
million tons of sugar cane during the crop-year 1999-2000, representing 38.35 per cent of the
country’s total production. Udon Thani produced 5.23 million tons of sugar cane, making it
the largest producing province in the region. Most of the cane-growing farms are owned and
operated by individual families. It was also found that total transportation expenditure for the
region was the highest in comparison to other regions.
1
CCS is a measurement of sucrose content in cane, which can be refined into a form of white sugar if milling and
purification processes are carried out according to standard procedures.
33
A. Cane and sugar industry in the north-east region
A total of 13 sugar mills are located in the seven provinces of Buri Ram, Udon Thani,
Mukdahan, Kalasin, Khon Kaen, Chaiyaphum, and Nakhon Ratchasima of the north-east
region.
The Office of the Cane and Sugar Board under the Ministry of Industry reported that
during the crop-year 1998-1999 the most cultivated variety in this region was Phill 66-07,
which occupied more than 40 per cent of the total planted area. The second most commonly
cultivated variety was U-Thong I, which accounted for 13 per cent, and other varieties
combined accounted for the remaining 47 per cent. The 13 sugar mills in the region processed
21.51 million tons of sugar cane into raw sugar (0.649 million tons), refined sugar (10.985
million tons), white refined sugar (2.843 million tons), and molasses (0.917 million tons) (see
table 3).
Table 3. Total sugar production in the north--east region, 1999/2000
Mills
Raw sugar
(tons)
Refined sugar
(tons)
White refined
sugar (tons)
Molasses
(tons)
E-SAAN Sugar Industry 26,036 - - 8,000
Mitr Phu Veang 34,324 1,278,167 - 83,524
Khon Kaen 107,799 909,615 800,705 108,507
Kumpawapi 82,331 628,302 113,080 66,121
Kaset Phol 56,265 560,934 - 62,410
Rerm Udom 68,927 892,258 - 72,774
Burirum 19,453 775,281 - 44,421
Saha Ruang 8,555 767,422 - 37,485
United Framer and
Industry
62,186 906,859 976,736 91,121
Korat Industry 61,955 1,908,066 119,708 121,101
Ratchasima 95,614 641,339 400,045 90,236
Nong Yai 8,804 858,733 257,732 73,055
Mid Kalasin 16,496 857,723 174,944 58,014
Total 648,745 10,984,699 2,842,950 916,769
Source: Office of the Cane and Sugar Board, Ministry of Industry., Thailand.
B. Transport operations of sugar cane in the north-east region
Most sugar cane growers in the region are small farmers operating with their own
families. Since most of them do not possess a truck and normally have only a small or a
traditional multi-purpose vehicle, they have to pay the cost of transportation of the sugar cane
from their farm to the mills. However, both small and large farmers face a common problem
of transportation as the delivery of sugar cane per transaction requires a bulk carrier. They are
required to rent a truck and pay hired labourers for cutting of sugarcane and loading the truck.
At the beginning and end of the season, the sugar mills face an inadequate supply of
raw materials for crushing, whereas during the peak season supply is higher than the capacity
of the mills. At that time hundreds of trucks can be seen queuing in front of the mills, waiting
to unload sugar cane.
34
Truck owners normally operate their businesses as middlemen by charging for
transport services per ton. They also face problems of delays during transportation and
excessive time spent at the mills waiting to unload the raw sugar cane. Truck drivers might
spend up to 24 hours for just one transaction. This, of course, has an impact on the cost of
transportation. If the mills could manage the flow of trucks and unloading operations more
efficiently, the cost of sugar production would be lower.
The study found that all of the three parties involved, that is, sugar mill owners, cane
farmers and truck operators are affected by the problem of transportation, which eventually
affects the cost of sugar production. It was found that the cost of transportation was high
compared to other costs. In the crop-year 1999 the average cost of transportation in this
region was 180-220 baht per ton.
C. The sugar cane delivery system
Both small and large farmers usually deliver sugar cane to the mills in either 10- or 6-
wheel trucks which have legal loading limits of 21 tons and 10 tons respectively. However,
trucks are always overloaded to keep down the cost of transportation and to maintain sugar
cane quality. Many small growers cannot manage a bulk carriage by themselves and need to
hire outside workers for help. The existing system has also led farmers to harvest prematurely
in order to fill in the bulk capacity and thus economize on transportation. A worse situation
occurs for small farmers operating far from the mills, who do not grow enough for a full truck
load of sugar cane, which may eventually force them to give up growing sugar cane.
D. The high cost of production: cutting and loading
Table 4 below shows that labour costs represent slightly over 45 per cent of the total
production cost per rai. Cutting and loading costs represent the highest portion of the
variable cost. Since the transporting of raw materials requires bulk carriage, growers may not
always have sufficient family members to do the work, forcing them to hire extra workers for
cutting and loading. The labour cost for cutting and loading is estimated at 85 baht per ton,
which is about 13-14 per cent of the total cost, but it can be even higher, depending on the
number of cutting days required. Moreover, farmers have to pay at least 180-220 baht per ton
in transportation costs, which are not dependent upon distance. Total labour costs for cutting,
loading and transportation are in the range of 265-305 baht per ton. These costs represent 43-
48 per cent of total costs and represent a significant proportion of the production costs for
small and self-owned and operated families (see table 5).
35
Table 4. Cost of sugar cane production in the north-east region, crop-year 1999/2000
Items
Canes
cultivated
in first
year
(baht/rai)
Percentage
of total
production
costs
Canes
cultivated
in second
year
(baht/rai)
Percentage
of total
production
cost
Canes
cultivated in
third year
(baht/rai)
Percentage
of total
production
cost
Cutting and loading 1,071.49 21.05 781,09 32.42 819.39 34.39
Other labour costs 1,199.70 23.57 307.37 12.76 238.00 9.99
1. Total labour costs 2,271.19 44.63 1,088.46 45.17 1,057.39 44.37
2. Materials 1,812.39 35.61 630.31 26.16 603.33 25.32
3. Other variable costs 412.92 8.11 170.72 7.09 157.13 6.59
Total variable costs 4,496.50 88.36 1,889.49 78.42 1,817.85 76.29
1. Depreciation of
agricultural tools
205.39 0.04 159.96 6.64 214.56 9.00
2. Land rental 387.15 7.61 360.1 14.94 350.52 14.71
3. Opportunity costs 0.02 0.00 0.02 0.00 0.02 0.00
Total fixed costs 592.56 11.64 520.08 21.58 565.10 23.71
Total production costs 5,089.06 100.00 2,409.57 100.00 2,382.95 100.00
Source: Office of the Cane and Sugar Board, Ministry of Industry, Thailand, survey carried out in 1999/2000-2001.
Note: The costs presented in this table do not include transportation.
Table 5. Average costs of sugar cane production in the north-east region, 1999/2000
Items
Average cost of cane
production over three-year
period
(baht per rai)
Percentage of total
production costs
1. Total labour costs 1,472.35 44.70
2. Materials 1,015.34 30.83
3. Other variable costs 246.92 7.50
Total variable costs 2,734.61 83.02
1. Depreciation of agricultural tools 193.30 5.87
2. Land rental 365.92 11.11
Total fixed costs 559.25 16.98
Production costs 3,293.86 100.00
Average output tons per rai: 7.75
Average cutting and loading costs
(baht/ton)
85.00 13.00-14.00
Average other costs 340.14 53.00-56.00
Cost of production (baht/ton) 425.14 66.00-70.00
Transportation costs (baht/ton) 180.00-220.00 30.00-34.00
Total costs (baht/ton) 606.14-646.14 100.00
Source: Office of the Cane and Sugar Board, Ministry of Industry, Thailand, survey carried out in 1999/2000-2001.
36
E. Queuing operations
Although most farmers in the region have contracts with certain mills, some trade and
deliver sugar cane to any mill. However, they have to wait in a queue prior to unloading their
sugar cane at the mill. Trucks unload on a first-come-first-serve basis. It may take up to 30
hours to complete the handling process, which raises the cost of transportation. To cut costs,
farmers should have alternative choices of where they could deliver their product and thus
change to mills with shorter queues. This kind of practice could, however, give rise to another
problem. If sugar mills faced uncertainty as to whether they would be able to utilize their full
capacity for crushing, they may resort to imposing higher prices in order to compensate for
the uncertainty in supply of sugarcane from farmers.
III. THE LOADING STATION STRATEGY
The Office of Agricultural Economics under the Ministry of Agriculture and
Cooperatives, in close cooperation with the sugar mill owners has developed a “loading
station strategy” to reduce the costs of transportation in the sugar cane industry.
A “loading station” is an area prepared for loading activities. It should be located in
the neighborhood of the growers in order to facilitate a smooth supply of cane to the mills
and reduce the costs of transportation borne by the farmers. Currently, only one loading
station has been established, in Khon Kaen Province. The station is owned and operated by a
mill and is located just less than 100 km from it. The initial investment was approximately 11
million bath, which paid for the construction of facilities, the procurement of equipment such
as an overhead crane and a weighbridge, and building and land costs. Over 80 per cent of the
province’s sugar cane farmers use this facility and they deliver approximately 2,000-3,000
tons of sugar cane per day. Most of the farmers can rely on their own resources. The station
also enables the mill to reach its target level of capacity utilization. The idea behind the
loading station is to help small sugar cane growers to reduce their cutting and loading and
transportation costs, which can represent 20 per cent or more of total costs. The decrease in
costs means higher earnings for sugar cane farmers.
Figure 1 is a flow chart illustrating a loading station operation. Ideally, the loading
station is a market trading spot for all sugar cane growers, and particularly for small farmers.
They transport sugar cane from their farms to the station in their own vehicles and need only
rely on family labour. The mill collects the sugar cane from the station and arranges onward
transportation to the processing plant. Farmers pay a standard cost of 85 baht per ton to the
mill for the transportation from the loading station to the processing plant. Under this new
scheme, farmers and truck drivers save time and costs, since they no longer have to wait in
line to deliver their product. Under the former, traditional system farmers delivered their
product directly from their farms to the mills by bulk carriers and had to bear the whole cost
themselves.
37
New system
45 baht/ton 85 baht/ton
Mill
Loading
station Growers
Delivery directly from farm to mill
(180-220 baht/ton)
Traditional system
Figure 1. Loading station model: A cost-saving approach to sugar-cane transportation
There are three major benefits of supplying sugar cane to mills through loading
stations. First, as already discussed, it reduces transportation costs significantly and can help
maintain steady supplies of sugar cane to the mills. Second, it enables farmers to use land
and other resources more efficiently and, by assuring them a higher income, encourages them
to continue to grow sugar cane. Third, small farms owned and operated by family members
can rely on their own labour for cutting and loading and thereby save at least another 85 baht
per ton (see table 6).
Table 6. Comparison of sugar-cane transportation costs under the traditional system
and the loading station system in north-east Thailand
Through loading station
Cost item
Traditional
system
(baht/ton)
Hired labour
(baht/ton)
Own labour
(baht/ton)
Cutting and loading 85 85 -
Cost of transportation
from farm to station
- 45 45
Cost of Transportation
from station to mill
(charged by the mill)
- 85 85
Cost of Transportation
from farm to mill
180-220 - -
Total costs
265-305 215 130
38
The system of loading stations allows farmers to harvest a small amount of sugar cane
at a time and use their own vehicles instead of renting a large truck. The loading station
strategy also brings social benefits, as small farmers can operate and produce sugar cane by
using their own family labour; they do not need to employ outside labour for cutting and
loading since they can harvest little by little. In addition, they can find a market to sell their
products more easily.
Owing to the fact that labour costs for cutting and loading are relatively high, the
Office of Agricultural Economics and the Ministry of Agriculture and Cooperatives
recommend vehicle- and labour-sharing among growers within a village for further savings in
cost. Alternatively, the Government could consider providing loans to small farmers to buy
trucks for use within the village and from farm to loading station. To obtain further benefits
from loading stations, they could be managed through farmers’ cooperatives or other suitable
institutions that could protect the small farmers’ interests.
CONCLUSIONS AND RECOMMENDATIONS
The success of the sugar cane industry in Thailand is built upon best practices in
production, handling and marketing. However, further improvements in the overall efficiency
of the industry and improvements in the welfare of sugar cane farmers are possible through a
reduction in the transportation costs of sugar cane, which appears to be an important
component of the total cost of production. Loading stations, which would benefit all the
parties involved, that is, growers, truck operators, and mills, are proposed as a possible
solution to the problem. Small farmers who rely on their own family labour would be
expected to benefit the most from their introduction. A delivery system using loading
stations has the potential to reduce transportation costs significantly and ensure better
management of the supply chain. The system could also be considered for other similar agro-
food sectors in Thailand. However, it is recommended that an in-depth study be undertaken to
cover all regions in the country. A further study should also investigate the possibility of
cooperation between agro-food industries for more efficient management of the supply chain.
39
40
Transport and Communications Bulletin for Asia and the Pacific No.70, 2001
THE EFFECTS OF PUBLIC TRUCK TERMINAL POLICIES ON AIR
POLLUTION IN THE BANGKOK METROPOLITAN AREA
Kiyoshi Takahashi* and Ackchai Sirikupanichkul**
ABSTRACT
The present study was undertaken to examine the potential effects on air pollution
and traffic movement in the city of the three newly established public truck terminals in
Bangkok. The findings of the study reveal that the patterns of freight movement differ from
one distribution channel to another. These channels are categorized as traditional trade,
wholesale and retail markets, and modern trading through chains of superstores and
convenience stores. An estimation of the emission loads from truck transportation was
made by using empirical models and the geographic information system. The findings
show that oxides of nitrogen (NO
x
) are the major emission load generated from trucks
(61.73 tons per day), followed by carbon monoxide (CO) (37.72 tons per day). Emissions
of NO
x
from heavy-duty diesel vehicles (HDDV) are approximately twice as high as those
from light-duty diesel trucks (LDDT), despite the fact that the vehicle kilometre travel
(VKT) of LDDTs is 7.3 times higher than that of HDDVs. Finally, the potential effects of
truck restriction policies on air pollution after the establishment of public truck terminals
are assessed through simulation studies. The results of simulation show that such truck
terminals could help decrease VKT of HDDVs, but would increase VKT of LDDTs.
Consequently, the terminals could help reduce emission loads of NO
x
by 825
per cent and Suspended Particulate Matter (SPM) by 860 per cent from their present
levels. However, emission loads of CO and hydrocarbons (HC) would be higher owing to
the increase in VKT of LDDTs. This increase in levels of CO and HC is not so important,
since the number of LDDTs in Bangkok is much smaller than the number of cars, which
generate much higher volumes of CO and HC. The current 24-hour truck restriction on
the Outer Ring Road core is more effective in reducing NO
x
and SPM than that on the
Inner Ring Road core. Further policies need to be formulated to promote the usage of
truck terminals, which can lead to further reductions of NO
x
and SPM.
* Associate Professor, School of Civil Engineering, Asian Institute of Technology, P.O. Box 4, Klong
Luang, Pathumthani 12120, Thailand.
** Research Associate, School of Civil Engineering, Asian Institute of Technology, P.O. Box 4, Klong
Luang, Pathumthani 12120, Thailand.
41
I. OVERVIEW
Most of the freight traffic in Bangkok is generated by conventional wholesale and
retail markets, private truck terminals, freight forwarders, factories and modern trade. The
conventional wholesale markets are usually located inside the Inner Ring Road core. Most
of the markets are categorized by type of goods: flower, vegetables, clothing, and so forth.
These markets are under the management of either the Bangkok Metropolitan
Administration (BMA) or the private sector. Recently, the construction of inner and outer
ring road networks has made it possible to introduce large-scale, modern wholesale
markets in suburban areas of Bangkok such as Simoom Muang and Talad Thai. At these
markets agricultural products from other regions, are traded. The Government supports
and promotes them because of their potentials to reduce the freight traffic volume in
central areas of Bangkok. They provide more systematic and larger storage and handling
areas for the massive volume of goods from the provinces.
Non-perishable goods such as clothing, groceries and processed foods are traded
mainly inside the city. Commercial buildings are utilized as storehouses. Traffic volumes
and the frequency of loading and unloading activities generated by these markets are less
than those generated by markets of perishable goods, since non-perishable commodities
can be kept in storage for longer periods. However, most of the trucks used in the
wholesale markets are of medium and large types (6- and 10-wheeled trucks). The major
problem of the wholesale markets is the lack of parking space. As a result, some loading
and unloading activities take place at the roadside which obstructs the passage of other
road users. The construction of multi-storey structures is one solution to the parking
problem of these markets, for it could provide more space for parking and cargo storage.
Other problems of the markets include poor accessibility and problems caused by truck
ban regulations.
The conventional retail markets are scattered all over Bangkok, especially in
residential and commercial areas. They are usually open from early morning until midday.
Goods are transferred from these markets to vendors, hawkers, restaurants, hotels,
hospitals, and supermarkets in small vehicles. Some markets are called “talad nud”, where
various commodities such as vegetables, fruits, clothes, plants, pets, and so forth are sold
on specific days fixed by the market manager. Several foreign companies have introduced
modern trading through chains of superstores and convenience stores. Freight forwarding
and logistics systems play an important role in this type of trading. The transport
operations serving this type of trading are more efficient than the two other types discussed
earlier. Interested readers are referred to Sirikijpanichkul (2000) for more details about
freight forwarding and logistics operations in Bangkok.
The rapid economic growth and urban sprawl of Bangkok have resulted in higher
volumes of inner city freight transportation. The increased usage of trucks, especially
heavy trucks, has a major impact on traffic conditions, road safety and the environment of
the city. To address the negative effects of heavy truck movements, the Government has
formulated a number of truck operation policies and taken other measures. Time-based
truck restrictions, zonal restrictions, and three suburban truck terminals have been
introduced in order to restrict heavy trucks from entering the inner city. However, these
policies and measures have strengthened the role of smaller trucks and vans in transporting
goods in inner Bangkok.
42
The main objective of this study was to examine the effects of the new public truck
terminals on air pollution in Bangkok. The paper is organized as follows: the first section
provides an overview of present freight transportation arrangements in Bangkok, a
statement of the problem and the objectives of the study. The second section is a review of
the literature concerning a freight transportation model, an emission model and previous
studies. The freight transportation plans and policies for Bangkok are presented in the third
section. The results of the estimation of emission loads from existing truck-based freight
transportation are presented in the fourth section. The fifth section summarizes the
possible effects on emission loads after the introduction of public truck terminals in
Bangkok. Finally, conclusions are drawn and some recommendations are presented for
consideration by the concerned authorities.
II. LITERATURE REVIEW
A. Freight transportation model
There are differences between the forecasting models used in urban freight
transportation planning and the ones used in urban transportation planning, although the
process of modelling may be similar. The major problem in developing an urban freight
transport demand model is the lack of freight movement data at all spatial levels. The
availability of appropriate data directly affects the choice of techniques (Memmott 1983).
A number of actors are involved in freight transportion, such as industrial firms, shippers,
carriers and logistics service providers, which is another factor that complicates freight
transport demand modelling.
There are two basic types of model that can represent traffic flow on road
networks: traffic assignment models and traffic simulation models. The traffic assignment
models have a limited range of applications owing to their inherent theoretical properties.
The simulation models are further classified into two types: micro-simulation models such
as NETSIM (network simulator) (Lieberman 1981) and macro-simulation models such as
CONTRAM (contiuous traffic assignment model) (Leonard and Gower 1982). Some other
types of model were also developed to represent the relationship between performance of
road systems and other factors: for example, congestion functions to indicate the
relationship between demand and performance of a road system. In this type, link cost
function and cost models provide information on the cost of transporting goods by
alternative routes, and by using different terminals and different types of vehicle (Jara Diaz
1982).
Most of the freight demand models developed have followed the conventional four-
step modelling process, with some adaptations specific to freight, such as the models
developed by Van Es in 1982, Kim and Hinkle in 1982, Friesz, Tobin and Harker in 1983
and Harker in 1985 (Ortúzar and Willumsen 1996). The models can be either trip-based or
goods-flow based. Boerkamps and Binsbergen (1999) suggest that the trip-based models
are not able to evaluate new transport systems. For goods-flow based models, goods flows
are modelled based on their production or distribution, or both, and consumption points
(shops or consumers). A vehicle-loading model assigns goods flows from origin to
comsumption points. Finally, the flows are assigned to the road network.
43
B. Emission model
The diesel engine is a major source of air pollution owing to exhaust emissions of
oxides of nitrogen (NO
x
), carbon monoxide (CO), Suspended Particulate Matter (SPM),
sulphur dioxide (SO
2
) and volatile organic compounds (VOCs). The high levels of NO
x
emissions from heavy-duty vehicles are explained by the characteristics of diesel engines:
they run at higher combustion chamber pressures and temperatures than petrol engines.
The conditions of combustion are conducive to high levels of NO
x
emissions. SPM in
diesel exhaust originates mainly from unburned fuel and engine oil (Weaver and
Klausmeier 1988 and Conte 1990).
Studies have been carried out to investigate the relationship between road traffic
operating conditions and emission loads. Two main emission models developed in the
United States of America are currently in use: the Enviromental Protection Agency Mobile
Source Emission Factor Model (EPA MOBILE), which is the most widely used, and the
California Air Resources Board Emission Factor Model (CARB EMFAC), which is used
in California. The structures of both models are the same. Activity-specific emission rates
estimated by the models are multiplied by vehicle activities to provide emission outputs by
pollutant (that is, grams per vehicle-mile for MOBILE and grams per vehicle-hour and per
vehicle trip for EMFAC) (Guensler 1993). Baseline emission rates are derived from a
laboratory test procedure known as the federal test procedure (FTP). The FTP driving
cycle consists of a sequence of accelerations, decelerations, cruise speeds and idling based
on actual home-to-work commuter trips in the 1960s on Los Angeles freeways and surface
arterials (EPA 1993).
C. Previous studies in Bangkok
Emissions from on-road vehicles can be determined from vehicle mileage travel
(VMT) and the emission factors of pollutants. Hanson and Lopez (1992) estimated the
emission factors of CO. Later, Boontherawara (1994) developed the emission factors of
NO
x,
which depend on temperature, vapour pressure, speed, operating mode, altitude, age
of vehicle, and so on. However, the most important determining factor of the emission rate
is vehicle speed (EPA 1996). Chulalongkorn University conducted a study to develop an
emission database as an input to the “Airviro” computer program. The database of Airviro
can be updated and used to estimate the emission load and its dispersion. The road network
and traffic data needed for the program include hourly volume, traffic composition, speed,
and average daily traffic (ADT). The emission load is finally estimated by the program
from data on fuel consumption, traffic characteristics and VKT (Pollution Control
Department 1994).
Tanadtang (1999) conducted a study on the effects of traffic on air quality through
driving cycle tests by measuring and evaluating the exhaust emissions of petrol vehicles on
congested and uncongested roads, suburban roads and expressways in Bangkok.
Muttamara and Leong (2000) measured exhaust emissions from petrol vehicles in
Bangkok by chassis dynamometer. A fleet of 10 vehicles of different models, years and
manufacturers was selected for the purpose of measuring air pollutants in exhaust fumes.
They found that average CO and HC emissions from 1990-1992 cars were 32.3-64.2 and
1.82-2.98 gm per km respectively and decreased to 17.8-40.71 and 0.75-1.88 gm per km
respectively for the newer 1994-1995 cars. The results also indicated that air pollutant
emissions significantly increase with increases in mileage and the age of the car. The study
44
also confirmed that there is a correlation between average air pollutant concentration and
traffic speed.
III. FREIGHT TRANSPORTATION PLANS AND POLICIES IN BANGKOK
The restriction of truck movements was the first measure implemented to reduce
the traffic load of heavy trucks in Bangkok. Restrictions have been in place since 1989.
Four- and six-wheeled trucks are prohibited from entering the Bangkok metropolitan area
at the peak hours of between 6 and 9 in the morning and 4 and 8 in the evening. Ten-
wheeled and larger trucks have extended hours of restriction: they are banned between 6
and 10 in the morning and 3 and 9 in the evening. However, on-street parking of heavy
trucks during the unrestricted hours continues to have adverse effects on other road users.
To alleviate this problem, public truck terminals were proposed in 1969, and feasibility
studies on truck terminals were subsequently carried out. These studies also considered
land acquisition problems, the possibility of granting concessions to the private sector and
the construction process. Finally, three public truck terminals were constructed and
opened for operation in June 2000. These three public truck terminals are located in the
north (Pathumthani), the east (Ladkrabang), and the west (Buddha Monthon) of Bangkok,
as shown in figure 1. The truck terminals are aimed at reducing the number of heavy trucks
and the enhancement of the air quality in the city area. Since the introduction of the three
terminals there have been some significant changes in truck ban measures: in addition to
the existing policy of restriction by hours of the day, new bans have been proposed based
on spatial zones, defined by the Outer and Inner Ring Roads.
The zonal truck-ban policy is to be implemented in four phases. In the first phase,
all trucks with 10 wheels or more were not allowed to park inside the 45-sq-km truck-free
zone of Bangkok, as shown in figure 2. This was implemented in June 2000. This truck-
free zone was extended up to the Inner Ring Road (113-sq-km) in September 2000 in the
second phase. Finally, trucks with 10 wheels or more will be totally prohibited from
entering the Inner and Outer Ring Road areas in the third and fourth phases respectively.
However, as these bans could seriously affect the truck operators located inside the city,
the Department of Land Transport has requested the Ministry of Industry to conduct a
study on the movements of commodities in the inner areas, the location of truck operators
and their fleets and other matters that could be adversely affected in the third and fourth
phases of zonal truck bans. The study would, inter alia, identify the preventive measures to
address the negative effects on freight operations caused by the proposed bans in the last
two phases.
45
Khlong Luang
Northern Truck
Terminal
Inland
Container Depot (ICD)
Rom Klao
Eastern Truck Terminal
Bu Buddha Monthon
Western Truck
Terminal
Figure 1. Inner and Outer Ring Roads, ports and freight terminals in Bangkok
Bangkok
International
Airport
Eastern Outer Ring
Road (37)
(In Service)
Western Outer
Ring Road (37)
(In Service)
Southern Outer Ring Road (37)
(Under Construction)
Inner Ring
Road Core
Second
Bangkok
International
Airport
Port Motorway (36)
46
Samsen Rd. – Phra Sumen Rd. -
Maharad Rd.
Charoen Krung Rd.– Rama IV Rd.
Ratchadaphisek Rd.– Asok Rd.
Chao Khun Thahan Rd.-Pradipat Rd.-Sutthisan Winitchai Rd.
Truck
Truck-free zone
Figure 2. Truck-free zone implemented in June 2000
Besides zonal restrictions, some truck routes have been designated to enable truck
access to ports and freight terminals located within the restricted area. Such routes include
the Outer Ring Road and all links between ports and expressway access roads (Department
of Land Transport 1999a).
IV. ESTIMATION OF EMISSION LOADS FROM TRUCK-BASED FREIGHT
TRANSPORTATION IN BANGKOK
A. Data collection
In order to estimate emission loads from truck-based freight transportation, a study
was carried out, including all 50 administrative districts of Bangkok. They were encoded
to simplify the origin-destination (O-D) study. Twelve major markets and two private
truck terminals were selected as survey locations for the collection of data on freight
movement and other related information through a questionnaire. The selection of the
survey locations was based on size, location and type of market, as shown in table 1.
After defining the survey locations, a questionnaire was designed. General
questions and those on freight transportation data and freight transportation problems were
incorporated. The general questions related to the type of business (retail, wholesale,
factory, farm and garden, freight forwarder, or other); the type of commodity (vegetables,
clothes and leather, fresh food, fruits, processed foods, meat and fish, flowers, rice, sugar
and flour, manufactured products, or other); and the type of vehicle (pick-up, 4-, 6- or 10-
wheeled truck, or van). Freight transportation data included distance travelled per day and
per week, origin and destination, number of trips per day, age of vehicle, trip frequency per
week, refuelling, load factor, loading and unloading time, and travel time.
47
Table 1. Emission load survey locations by type of market
Location * Size of market
No
Outer Ring
Road Core
Inner Ring
Road Core
Large
(over 20,000 sq. m)
Medium
(5,001 – 20,000 sq. m)
Small
(less than 5,000 sq. m)
1 Inside Inside -
4
( 3 wholesale, 1 weekend )
2
( 1wholesale, 1 private
truck terminal )
2 Inside On -
1
(wholesale)
-
3 Inside Outside
1
(wholesale )
-
3
( weekend )
4 On Outside -
1
( retail market )
-
5 Outside Outside - -
2
( 1 weekend market, 1
private truck terminal )
Total 14
Notes: * See locations of Outer and Inner Ring Road in figure 1.
One thousand two hundred (1200) questionnaires were distributed and collected
from truck users at 14 survey locations in November and December 1999. After
screening, 910 valid questionnaires were accepted for analysis.
Data collected from secondary sources included truck registration numbers from
1981 to 1999, emission factors of LDDTs and HDDVs, and the estimated number of trucks
using the public truck terminals. These data were obtained from the Department of Land
Transport (1999b), the Pollution Control Department (1994), and the Japan International
Cooperation Agency (1992) respectively. Geographic information on Bangkok from
SmartMap
TM
( a GIS-based program) was applied to estimate VKT. There are two
methods to estimate VKT: the average daily traffic (ADT) method and the method based
on a distance-travelled analysis. The second was selected for this study because of the lack
of the necessary traffic data for the first method. For travel time, the interview technique
was applied. The whole process of data analysis is shown in figure 3.
B. Some general characteristics of freight traffic
It was found that the small pick-up truck was the major type of vehicle used in
freight transportation (93.8 per cent), followed by 6-wheeled trucks (4.2 per cent). Other
types formed the rest. Most of the trucks carried goods from factories, wholesalers, and
warehouses and truck terminals to vendors, fresh markets and retail or grocery shops. The
load factor of trucks carrying manufactured products was highest (88.3 per cent), followed
by fruits (85.9 per cent), and clothes and leather (82.8 per cent). In terms of origin, trucks
from factories had the highest load factor (88.4 per cent), followed by trucks from
warehouses or truck terminals (88.1 per cent) and wholesalers (86.8 per cent).
The peak hours for truck movements to and from fresh markets were between 5
and 8 in the morning. For processed food and clothes markets as well as private truck
terminals, the peak hours were between 10 and 12 in the morning.
48
49
D
a
t
a
C
o
l
l
e
c
t
i
o
n
Q
u
e
s
t
i
o
n
n
a
i
r
e
O
D
S
u
r
v
e
y
,
N
u
m
b
e
r
o
f
S
t
o
p
s
p
e
r
D
a
y
G
e
n
e
r
a
l
I
n
f
o
r
m
a
t
i
o
n
D
i
s
t
a
n
c
e
T
r
a
v
e
l
e
d
E
x
p
e
c
t
e
d
V
a
l
u
e
f
r
o
m
S
e
l
e
c
t
e
d
D
i
s
t
r
i
b
u
t
i
o
n
C
u
r
v
e
A
v
e
r
a
g
e
o
f
M
i
n
i
m
u
m
D
i
s
t
a
n
c
e
T
r
a
v
e
l
e
d
G
I
S
C
a
l
i
b
r
a
t
e
d
A
v
e
r
a
g
e
D
i
s
t
a
n
c
e
T
r
a
v
e
l
e
d
p
e
r
D
a
y
A
g
e
o
f
V
e
h
i
c
l
e
C
o
h
o
r
t
S
u
r
v
i
v
a
l
A
n
a
l
y
s
i
s
C
o
h
o
r
t
S
u
r
v
i
v
a
l
R
a
t
i
o
N
u
m
b
e
r
o
f
T
r
u
c
k
R
e
g
i
s
t
r
a
t
i
o
n
f
r
o
m
D
L
T
N
u
m
b
e
r
o
f
T
r
u
c
k
s
R
u
n
n
i
n
g
i
n
t
h
e
H
o
r
i
z
o
n
Y
e
a
r
F
r
e
q
u
e
n
c
y
o
f
T
r
i
p
s
p
e
r
W
e
e
k
P
r
o
b
a
b
i
l
i
t
y
o
f
T
r
i
p
M
a
k
i
n
g
V
e
h
i
c
l
e
K
i
l
o
m
e
t
e
r
s
T
r
a
v
e
l
e
d
(
V
K
T
)
p
e
r
D
a
y
T
r
a
v
e
l
T
i
m
e
A
v
e
r
a
g
e
T
r
a
v
e
l
S
p
e
e
d
P
a
t
h
L
e
n
g
t
h
E
m
i
s
s
i
o
n
F
a
c
t
o
r
f
r
o
m
P
C
D
R
e
g
r
e
s
s
i
o
n
A
n
a
l
y
s
i
s
R
e
g
r
e
s
s
i
v
e
F
u
n
c
t
i
o
n
s
o
f
E
m
i
s
s
i
o
n
F
a
c
t
o
r
s
R
e
l
e
v
a
n
t
E
m
i
s
s
i
o
n
F
a
c
t
o
r
s
a
t
t
h
e
A
v
e
r
a
g
e
T
r
a
v
e
l
S
p
e
e
d
E
m
i
s
s
i
o
n
L
o
a
d
s
A
v
e
r
a
g
e
o
f
M
i
n
i
m
u
m
D
i
s
t
a
n
c
e
T
r
a
v
e
l
l
e
d
D
i
s
t
a
n
c
e
T
r
a
v
e
l
l
e
d
C
a
l
i
b
r
a
t
e
d
A
v
e
r
a
g
e
D
i
s
t
a
n
c
e
T
r
a
v
e
l
l
e
d
p
e
r
D
a
y
V
e
h
i
c
l
e
K
i
l
o
m
e
t
r
e
s
T
r
a
v
e
l
l
e
d
(
V
K
T
)
p
e
r
d
a
y
F
i
g
u
r
e
3
.
T
h
e
p
r
o
c
e
s
s
o
f
d
a
t
a
a
n
a
l
y
s
i
s
i
n
e
m
i
s
s
i
o
n
l
o
a
d
s
u
r
v
e
y
N
o
t
e
:
D
L
T
:
D
e
p
a
r
t
m
e
n
t
o
f
L
a
n
d
T
r
a
n
s
p
o
r
t
;
G
I
S
:
g
e
o
g
r
a
p
h
i
c
i
n
f
o
r
m
a
t
i
o
n
s
y
s
t
e
m
:
O
D
:
o
r
i
g
i
n
-
d
e
s
t
i
n
a
t
i
o
n
;
P
C
D
:
P
o
l
l
u
t
i
o
n
C
o
n
t
r
o
l
D
e
p
a
r
t
m
e
n
t
C. Estimation of vehicle kilometer travel
VKT and travel speed are the two important parameters for the estimation of
emission loads. In this study, data on distance travelled per day was validated by Chi-
square (!2) goodness-of-fit test. A logarithmic normal distribution model best fitted the
collected data. Reference is made to Sirikijpanichkul (2000) for details on the model. The
average value was 74.761 kilometres at 0.05 significance level. It was verified later by
using GIS. A distance matrix of Bangkok was established using SmartMap. This matrix
was developed to provide distances between each pair of the 50 administrative areas in
Bangkok based on their assumed central reference positions. An O-D table developed from
the survey was then overlapped on the matrix. Consequently, the average shortest distance
per trip was obtained. The average shortest distance travelled per day was calculated from
the average number of trips per day multiplied by the average shortest distance per trip.
The analysis shows that the average shortest distance of travel per day is 33.504
kilometres. When disaggregated by type of vehicle, the modelled average travel distances
of LDDTs and HDDVs were found to be 53.700 and 63.119 kilometres respectively.
The age of vehicle and trip frequency per week were used as inputs for estimating
the number of trucks running in the base year (1999). A survival rate matrix for different
age groups of trucks was developed by using the cohort survival technique (Ortúzar and
Willumsen 1996). The matrix of truck population by age and for each category was
developed from the vehicle registration data. To get the estimated number of trucks by
category in the base year, the survival rate matrix was multiplied by the truck population
matrix. Summation of the numbers of truck in both the categories gave the estimated total
number of trucks running in 1999.
The data on trip frequency per week were used for the calculation of probability of
trip-making by a truck. Finally, VKT per day for HDDVs and LDDTs were calculated by
multiplying the modelled average distance travelled per day for each category by the
corresponding number of trucks running in the base year and their probability of trip-
making as shown in table 3.
50
Table 2. Number of truck registrations from 1983 to 1999
Year
Number of truck
registrations
Number of heavy-duty
diesel vehicles
Number of light-duty
diesel trucks
Increase in number of
heavy-duty diesel
vehicles
Increase in number
of light-duty diesel
trucks
1999 788,493 118,656 669,837 14,112 75,220
1998 699,161 104,544 594,617 -5,910 41,782
1997 663,289 110,454 552,835 3,657 98,595
1996 561,037 106,797 454,240 15,370 51,560
1995 494,107 91,427 402,680 8,177 78,778
1994 407,152 83,250 323,902 -7,099 51,712
1993 362,539 90,349 272,190 5,401 80,282
1992 276,856 84,948 191,908 2,938 41,977
1991 231,941 82,010 149,931 -26,096 63,725
1990 194,312 108,106 86,206 22,716 8,807
1989 162,789 85,390 77,399 5,544 20,866
1988 136,379 79,846 56,533 11,835 10,290
1987 114,254 68,011 46,243 2,433 16,103
1986 95,718 65,578 30,140 1,663 13,865
1985 80,190 63,915 16,275 9,721 3,289
1984 67,180 54,194 12,986 2,354 8,545
1983 56,281 51,840 4,441 - -
Source: Department of Land Transport (1999).
Table 3. Calculation of vehicle kilometres travelled per day by the estimated
number of trucks running in 1999
Vehicle
type
Number of trucks
running in 1999
(1)
Probability of
trip-making
(2)
Average distance
travelled per day
(kilometres per day)
(3)
Vehicle kilometres
travel per day
(vehicle–kilometres per day)
(4) = (1) x (2) x (3)
LDDT 342,194 0.7761 53.700 14,261,472
HDDV 40,755 0.7594 63.119 1,953,492
51
D. Estimation of emission loads
The emission factor (in grams per kilometre) of each pollutant depends on the type
of vehicle and the travel speed. Sources of emission were broadly categorized into LDDT
(pick-up truck and van) and HDDV (6- and 10-wheeled trucks). In this study, travel speed
was calculated from distance travelled and travel time. Distance travelled was obtained by
tracing the route of O-D survey data on a GIS database. Data on travel time was collected
from the questionnaire. A logarithmic normal distribution model was fitted to the
estimated travel speed. The model was validated by Chi-square (!2) goodness-of-fit test.
The average value was 36.22 kilometres per hour at 0.05 significance level. The average
travel speeds of LDDTs and HDDVs were 36.07 and 39.37 kilometres per hour
respectively. The average speed of HDDVs was higher than that of LDDTs owing to the
fact that HDDVs could enter the city only during off-peak hours.
The emission factor of each pollutant was obtained from emission factor charts
developed by the Pollution Control Department (1994) as shown in figure 4. It was
assumed that emission factors would be similar to those based on the driving conditions as
used in the above mentioned study by the Pollution Control Department. The emission
loads were finally calculated by multiplying VKT per day by the corresponding emission
factors at the average travel speed. The results of emission load estimation are shown in
table 4.
As shown in table 4, NO
x
is the major emission load generated by HDDVs,
followed by CO, HC and SPM, in that order. On the other hand, LDDTs emit CO at the
highest level, followed by NO
x
, HC and SPM.
HDDVs generate very high levels of NO
x.
It is noteworthy that the total NO
x
generated by HDDVs is approximately double that of LDDTs, despite the fact that the
mileage of LDDTs is 7.3 times higher than HDDVs. Total SPM from HDDVs is also
much higher than that from LDDTs.
52
0.26 0.26 0.26 0.26 0.26 0.26 0.26
2.55
2.25
2.00
1.81
1.54
1.31
1.90
1.62
1.40
1.21
0.94
0.75
0.62
5.14
4.02
3.19
2.58
1.78
1.05
1.38
1.32
0
1
2
3
4
5
6
0 10 20 30 40 50 60
SPM
NOx
HC
CO
2.71 2.71 2.71 2.71 2.71 2.71
39.27
34.53
30.78
27.82
23.68
21.29
20.22
10.43
8.90
7.67
6.66
5.15
29.69
23.19
18.43
14.91
10.29
7.61
6.05
2.71
4.12
3.41
0
5
10
15
20
25
30
35
40
45
0 10 20 30 40 50 60
SPM
NOx
HC
CO
?
?
?
?
?
?
?
?
Legend
? SPM: Suspended Particulate Matter
? NO
x
: Oxides of nitrogen
? HC : Hydrocarbon
? CO : Carbon monoxide
E
m
i
s
s
i
o
n
F
a
c
t
o
r
(
g
m
/
k
m
E
m
i
s
s
i
o
n
F
a
c
t
o
r
(
g
m
/
k
m
)
Speed (km/hr)
Speed (kph)
HDDV
Heavy-duty diesel vehicles
Legend
? SPM: Suspended Particulate Matter
? NO
x
: Oxides of nitrogen
? HC : Hydrocarbon
? CO : Carbon monoxide
E
m
i
s
s
i
o
n
F
a
c
t
o
r
(
g
m
/
k
m
E
m
i
s
s
i
o
n
F
a
c
t
o
r
(
g
m
/
k
m
)
Speed (kph)
Speed (kph)
LDDT
Light-duty diesel trucks
Source: Pollution Control Department, Thailand (1994).
Figure 4. Emission factors of light-duty diesel trucks and heavy-duty diesel vehicles
53
Table 4. Emission load generated by trucks running in the
Bangkok Metropolitan Area
Vehicle class
VKT
per day
Average
travel
speed
(kph)
Emission factor
(grams per vehicle
kilometre)
Emission load
(kilograms per day)
CO 1.5481 22,078
NO
x
1.4416 20,559
HC 0.7583 10,814
Light-duty diesel trucks
(pick-up truck and van)
14,261,472 36.07
SPM 0.2600 3,708
NO
x
21.0747 41,169
CO 8.0073 15,642
HC 4.0497 7,911
Heavy-duty diesel vehicle
(6- and 10-wheeled trucks)
1,953,492 39.37
SPM 2.7100 5,294
V. THE POTENTIAL EFFECTS OF PUBLIC TRUCK TERMINALS ON
EMISSION LOADS
The estimated number of truck trips from the three public truck terminals in the
year 2000 was used for the calculation of emission loads. The Japan International
Cooperation Agency (1992) simulated five scenarios based on the proposed truck ban
measures after the opening of the truck terminals. The scenarios were as follows:
Case 1: existing condition with 2.8 per cent use ratio.
Case 2a: 24-hour heavy truck restriction in the inner area with 100 per cent use
ratio.
Case 2b: 24-hour heavy truck restriction in the inner area with 2.8 per cent use
ratio.
Case 3a: 24-hour heavy truck restriction in the outer area with 100 per cent use
ratio.
Case 3b: 24-hour heavy truck restriction in the outer area with 2.8 per cent use
ratio.
The predicted number of truck trips using each public truck terminal in the year
2000 is shown in table 5 (JICA 1992). Four commodity types were considered in the
study: processed food, clothes and leather, manufacturing products and miscellaneous
goods. After the opening of the truck terminals, the number of heavy trucks running inside
Bangkok would reduce. However, the number of delivery trucks (LDDTs) transporting
goods from truck terminals to destinations inside Bangkok would increase. In addition, the
distance travelled by LDDTs would also increase, owing to the longer average distances
between the truck terminals and destinations inside the metropolitan area than before.
The three public truck terminals are located in the Don Muang, Thavee Watthana
and Ladkrabang areas respectively. From the distance matrix, distance ratios were
calculated by dividing the average distance between Don Muang, Thavee Watthana and
Ladkrabang and the other administrative areas by the average distance between all
administrative areas. For example, the ratio of distance for the northern public truck
54
terminal North is
. 3399 . 1
234 . 16
752 . 21
"
The average distance travelled per day for 1.6 ton
delivery trucks and the distance ratio at each terminal are shown in table 5.
Table 5. Distance travelled per day of delivery trucks using
three public truck terminals
Scenario
(1)
Truck
terminal
(2)
Number of 1.6
ton delivery
trucks
(vehicle trips
per day)
(3)
Percentage of
1.6 ton
delivery trucks
using each
terminal
(4)
Distance
ratio
(5)
Existing
distance
travelled
per day
(km/day)
(6)
Adjusted
distance
travelled
per day
(km/day)
(7) = (5) x (6)
North 1,454 40.45 1.3399 77.432
West 1,054 29.32 1.4004 80.928
East 1,087 30.23 1.6399
57.789
94.766
Case 1
Total 3,596 100.00 Average 83.697
North 7,181 37.08 1.3399 77.432
West 4,828 24.93 1.4004 80.928
East 7,357 37.99 1.6399
57.789
94.766
Case 2a
Total 19,367 100.00 Average 84.886
North 5,956 36.74 1.3399 77.432
West 4,073 25.13 1.4004 80.928
East 6,182 38.13 1.6399
57.789
94.766
Case 2b
Total 16,211 100.00 Average 84.920
North 14,049 42.35 1.3399 77.432
West 9,336 28.14 1.4004 80.928
East 9,791 29.51 1.6399
57.789
94.766
Case 3a
Total 33,176 100.00 Average 83.532
North 11,529 42.30 1.3399 77.432
West 7,679 28.17 1.4004 80.928
East 8,049 29.53 1.6399
57.789
94.766
Case 3b
Total 27,258 100.00 Average 83.536
Source: Japan International Cooperation Agency 1992.
55
The possible effects of truck terminals on vehicle mileage and emission loads are
presented in tables 6 and 7. It is observed that after the implementation of public truck
terminals, the mileage of HDDVs would slightly decrease, while the mileage of LDDTs
would greatly increase. The results also show that the truck terminals could reduce
emission loads of NO
x
and SPM in Bangkok owing to the lower mileage of HDDVs.
However, emission loads of CO and HC would significantly increase, owing to the
increased mileage of smaller delivery trucks.
The results also indicate that a 24-hour truck restriction on the Outer Ring Road
core would be more effective in reducing NO
x
and SPM emissions than a restriction on the
Inner Ring Road. The percentage of emission reduction, however, depends on truck
terminal usage. The higher the usage of the truck terminal, the larger is the potential
emission reduction.
Table 6. Estimation of increased vehicle-kilometres travelled per day of delivery
trucks and heavy trucks for each truck ban scenario
Vehicle type/ scenario Estimated number of
truck trips using public
truck terminals
Average distance
travelled per day
(kilometres per day)
Increased vehicle
kilometres per day
Delivery Truck
(1.6 Tons per vehicle)
Case 1 3,596 83.697 300,942
Case 2a 19,367 84.886 1,643,971
Case 2b 16,211 84.920 1,376,666
Case 3a 33,176 83.532 2,771,265
Case 3b 27,258 83.536 2,276,978
Heavy Truck
(10.5 tons per vehicle)
Case 1 548 63.119 -34,583
Case 2a 2,951 63.119 -186,273
Case 2b 2,470 63.119 -155,922
Case 3a 5,055 63.119 -319,094
Case 3b 4,154 63.119 -262,166
Source: Japan International Cooperation Agency 1992.
56
Table 7. Net increment of NO
x
, CO, HC and SPM (in kilograms per day) after the
introduction of public truck terminals in Bangkok
Scenario NO
x
CO HC SPM
Case 1 -295 189 88 -15
Case 2b -1,301 (-341) 883 (+367) 412 (+368) -65 (-333 )
Case 2a -1,556 (-427) 1,053 (+457) 492 (+459) -77 (-413 )
Case 3b -2,243 (-660) 1,426 (+654) 665 (+656) -118 (-687)
Case 3a -2,730 (-825) 1,735 (+818) 809 (+819) -144 (-860 )
Note: The figures in parentheses indicate the change in emission load compared with the case 1 scenario.
CONCLUSIONS AND RECOMMENDATIONS
This study was conducted to examine the possible effects of public truck terminals
on traffic movement and the environment of Bangkok. An estimation of the emission
loads from truck transportation was made by using empirical models and the geographic
information system.
The findings of the study show that NO
x
are the major emission load generated by
trucks (61.73 tons per day), followed by CO (37.72 tons per day). NO
x
emissions from
heavy-duty diesel vehicles are approximately double those from light-duty diesel trucks,
despite the mileage of LDDTs being 7.3 times higher than the mileage of HDDVs. The
public truck terminals could have a considerable impact on the air quality of Bangkok.
They would slightly decrease the mileage of HDDVs, but increase the mileage of LDDTs.
This could help reduce emission loads of NO
x
by as much as 825 per cent and SPM by 860
per cent from their respective base levels. However, emission loads of CO and HC would
become much higher, owing to the increased mileage of smaller delivery trucks. However,
the overall impact of increases in emission loads of CO and HC is not expected to be very
significant as there are fewer diesel pick-up trucks in Bangkok than cars, which generate
much higher volumes of CO and HC (Department of Land Transport 1999b). The 24-hour
truck restriction on the Outer Ring Road core is more effective in reducing NO
x
and SPM
than the restriction on the Inner Ring Road.
57
1.98
2.03
1.68
1.97
1.49
2.05
2.64
0.00
0.50
1.00
1.50
2.00
2.50
3.00
R
a
t
i
o
o
f
d
e
l
i
v
e
r
y
t
r
u
c
k
s
t
o
h
e
a
v
y
t
r
u
c
k
s
6647
5793
6005
6427
6813
8839
11253
3360
2856
3583
3256
4587
4310 4266
0
2000
4000
6000
8000
10000
12000
N
u
m
b
e
r
o
f
T
r
u
c
k
s
Pick-up and Van
Heavy Truck
N
u
m
b
e
r
o
f
t
r
u
c
k
s
R
a
t
i
o
o
f
d
e
l
i
v
e
r
y
t
r
u
c
k
s
t
o
h
e
a
v
y
t
r
u
c
k
s
Aug 2000 Sep 2000 Oct 2000 Nov 2000 Dec 2000 Jan 2001 Feb 2001
Month
Aug 2000 Sept 2000 Oct 2000 Nov 20000 Dec 2000 Jan 2001 Feb 2001
Month
Source: Department of Land Transport, Thailand (2001).
Figure 5. Number of delivery trucks and heavy trucks using the western public truck
terminal from August 2000 to February 2001
Aug 2000 Sep 2000 Oct 2000 Nov 2000 Dec 2000 Jan 2001 Feb 2001
Month
Aug 2000 Sept 2000 Oct 2000 Nov 20000 Dec 2000 Jan 2001 Feb 2001
Month
Source: Department of Land Transport, Thailand (2001)
Figure 6. Ratio of delivery trucks to heavy trucks using the western public truck
terminal from August 2000 to February 2001
58
In addition, the higher the usage of the truck terminal, the greater is the reduction in NO
x
and SPM.
The study reveals some promising positive effects of the truck terminals. However,
some problems are challenging the success of this policy. Terminal usage is not as high as
was originally predicted. The most serious problem faced by the truck operators is the
increase in operating costs. They claim that additional costs include terminal rental cost,
parking fees, the purchasing of new delivery trucks, and so forth. The number of delivery
trucks using the western public truck terminal in December 2000 was 220 vehicles per day,
which was only 5.4 per cent of the predicted volume for Case 2b of table 6. Nevertheless,
the number of delivery trucks using the terminals increased sharply in the following
months. It is observed that the ratio of delivery trucks to heavy trucks using the truck
terminals also rose, as shown in figure 6. This trend indicates the consolidation of cargo
handling. Since greater usage of the truck terminals could contribute to significant
improvements in air quality in Bangkok, actions need to be considered to promote their
usage. To enhance the usage of public truck terminals further, some measures may be
considered as follows:
(a) The Government could encourage factories in inner areas to move out to industrial
zones established near the public truck terminals. If needed, new zones could be
established by the Government to ensure a reasonable land price and the availability of all
the necessary physical infrastructure;
(b) Logistics facilities for chilled and frozen goods could be developed in public truck
terminals;
(c) The road network and other infrastructure facilities linking the truck terminals and
industrial zones could be improved to provide greater accessibility, wider coverage and
faster movement.
The lessons learned should be useful for the proposed regional truck terminals in
different parts of the country, which include truck terminals in the north at Chiang Mai, in
central Thailand at Nakhon Sawan, in the north-east at Khon Kaen and Nakhon
Ratchasima, and in the south at Had Yai and Songkhla.
ACKNOWLEDGEMENTS
The authors would like to express their appreciation to the officials of the
Department of Land Transport, the Pollution Control Department, and the executive
managers of all related private companies for their kindness in offering useful data for and
cooperating with the survey.
59
REFERENCES
Boerkamps, J. and Binsbergen, A.V., 1999. Goodtrip – A New Approach for Modeling
and Evaluating Urban Goods Distribution. Proceedings of the First International
Conference on City Logistics: City Logistics I: 175-186. Cairns, Australia: Institute of
Systems Science Research.
Boontherawara, N., 1994. Traffic Crisis and Air Pollution in Bangkok. TEI Quarterly
Environment Journal, 2, 3: PP. 4-37.
Conte, F. 1990. Trucking in the ‘90s: Emissions. Owner Operator, September: pp. 58-65.
Department of Land Transport (DLT), 1999a. The Greater Bangkok Truck Terminal,
Bangkok: Department of Land Transport (In Thai).
Department of Land Transport (DTL), 1999b. Road Transport Statistics, Bangkok:
Department of Land Transport, Technical and Planning Division, Transport Statistics Sub-
division (In Thai).
Environmental Protection Agency (EPA), 1993. Federal Test Procedure Review Project:
Preliminary Technical Report. Office of Mobile Sources.
Environmental Protection Agency (EPA), 1996. National Air Pollutant Emission Trends.
Procedures Document for 1990-1996: pp. 4-244.
Friesz, T.L., Tobin, R. and Harker, P., 1983. Predictive Intercity Freight Network Models:
The State of the Art. Transportation Research, 17A, 6: pp. 409-17.
Guensler, R., 1993. Transportation Data Needs for Evolving Emission Inventory Models.
Institute of Transportation Studies, University of California, Davis.
Hanson, M.E. and Lopez, R.W., 1992. Methodology for Evaluating Urban Transportation
Energy-Environment Strategies: Case Study for Bangkok, Transportation Research
Record 1372: pp. 53-61.
Harker, P.T., 1985. The State of the Art in the Predictive Analysis of Freight Transport
Systems. Transport Reviews, 5,2: pp. 143-64.
Japan International Cooperation Agency, 1992. The Study on Greater Bangkok Truck
Terminal in the Kingdom of Thailand: Final Report, Vol. 2. Bangkok: Department of Land
Transport.
Jara Diaz, S.R., 1982. The Estimation of Transport Cost Functions: A Methodological
Review. Transport Reviews 2: pp. 257-278.
Kim, T.J. and Hinkle, J., 1982. Model for Statewide Freight Transportation Planning.
Transportation Research Record 889: pp. 15-19.
Leonard, D. R. and Gower, P., 1982. User Guide to CONTRAM Version 4. TRRL
Suupplementary Report 735, Transport and Road Research Laboratory. Crowthorne.
60
Lieberman, E., 1981. Enhanced NETSIM Program. Transporation Research Board Special
Report 194, 32-5.
Memmott, F.W., 1983. Application of Statewide Freight Demand Forecasting Techniques.
National Cooperative Highway Research Program Report 260: pp. 9-43.
Muttamara, S. and Leong, S.T., 2000. Monitoring and Assessment of Exhaust Emission in
Bangkok Street Air. Environmental Monitoring and Assessment 60: pp. 163-180.
Ortúzar, J. de D. and Willumsen, L. G., 1996. Modeling Transport, 2
nd
Edition.
(Chichester: John Wiley & Sons).
Pollution Control Department (PCD), 1994. Air Emission Database of Vehicles and
Industry in Bangkok Metropolitan Region 1992: Final Report. Bangkok: Pollution Control
Department, Ministry of Science, Technology and Environment, September.
Sirikijpanichkul, A., 2000. Estimation of Emission Loads from Truck-based Freight
Transportation in Bangkok Metropolitan Area. AIT Thesis, GE99-19. Bangkok: Asian
Institute of Technology.
Tanadtang, P., 1999. The Effect of Traffic on Vehicle Emissions in Bangkok. AIT RSPR,
TE99-2. Bangkok: Asian Institute of Technology.
Van Es, J.V., 1982. Freight Transport, an Evaluation. ECMT Round Table 58, European
Conference of Ministers of Transport, Paris.
Weaver, C.S., and Klausmeier, R.F., 1988. Heavy-Duty Diesel Vehicle Inspection and
Maintenance Study. Final Report: Quantifying the Problem II. Sacramento, California:
Radian Corporation.
61
doc_158538271.pdf