Thailand Post, a state enterprise that provides postal services, is scaling up efforts to optimise its delivery service efficiency in what is called a "parcel-defined logistics strategy" in a bid to level up its operating margins amid intense competition in the sector.
The strategy is meant to ensure the most effective logistics process, ranging from packaging and space management to route optimisation and last-mile delivery.
Retail business is expected to generate 15% of Thailand Post's revenue this year, up from 10% last year.
The company is also exploring opportunities in connection with food delivery and the electric vehicle (EVs) business at present to drive growth.
Dhanant Subhadrabandhu, chief executive of Thailand Post, said the express delivery and logistics business has seen intense competition and challenges, including increasing costs, the pandemic and a price war.
A surge in oil prices has increased the firm's fuel cost by 30%, he said.
The company has been using EVs for its operations for some years with the number of electric vans for delivery projected to reach 250 by the end of this year and 500 next year, he said.
Some 30 postal workers already use electric motorcycles on their delivery routes.
Mr Dhanant was speaking at a press briefing about the company's operational plan for the second half of this year.
He said the company is pushing for optimisation of its operation and management amid various challenges while trying to achieve digital transformation mission.
"The amount of work for investigating damaged and delayed parcels decreased 46% in the first quarter this year from the amount in fourth quarter last year, despite the number of delivered parcels surging 15%," said Mr Dhanant.
The company is expanding its logistics business to meet more specific demand for sellers in order to avoid competition.
"The margin in express delivery business is declining due to a predatory pricing strategy used by competitors. But we have to fight with a more diversified offering and better service quality while growing new revenue potential," he said.
According to Mr Dhanant, Thailand Post is in talks with Transport Co and the State Railway of Thailand for cooperation to compliment the company's logistics ecosystem.
"Buses and trains have a large amount of space that can be used to add value," he said.
The company is also in talks with the operators in food delivery and EV business for cooperation and the discussions are expected to be concluded by this year, he said.
Mr Dhanant said Thailand Post can help expand food delivery business with existing players but he did not elaborate on such a cooperation, only saying that a small operator could be its target.
Discussions have also been held with National Telecom (NT) about the EV business as both Thailand Post and NT use a large number of vehicles in their daily operations.
Thailand Post can be part of EV business landscape, but not a developer, he said, without elaborating the details.
According to Mr Dhanant, overall the logistics business in country last year was worth around 100 billion baht, a rise of 19% year-on-year.
From 2022 to 2024, the express delivery market is forecast to have average annual growth of 11.2%.
