Distribution

Thailand's food import and distribution system is undergoing significant change.
The change is due to the emergence of large retail chains and greater emphasis on centralized purchasing.
Traditionally, goods were passed through importers who in-turn passed the goods to distributors. This is beginning to change as players in this sector are by-passed.
There is an increasing move to direct purchasing from manufacturers.
Typically in Thailand, only a small proportion of goods pass through wholesalers.
Distribution routes depend on type of product:

Agents import and distribute food ingredients.
The agent may be responsible for building the profile of the product – but generally many lack the depth of technical expertise that a dedicated technical sales force possess.

Agents pass the product to local distributors or distribute using their own marketing and delivery resources. The typical customer bases for this route are smaller processors, those new to exporting or those servicing the local market.
Direct importation by end-user from supplier.

This sector mainly uses food service companies for procurement of locally manufactured products and imported items. Perishable items are obtained directly from local suppliers (or wet market) by the food outlet (restaurant, fast-food center, hotel).

Distribution: importers to distributors to a central warehouse or direct to retail outlets. The foodstuffs will be kept in the importers warehouse, distributors warehouse or central warehouse before delivery.
Also direct purchasing from the manufacture or principal.

Infrastructure

Bangkok (Klong Toey) Port located 32 km upstream the Chao Phrya River was formally Thailand's major port – this status has now moved to Laem Chabang Port.
Bangkok Port is well equipped with handling equipment, tug boats and storage facilities.
The port can accommodate 38 ships. Klong Toey wharves – East Quay and West Quay - have ten berths for conventional ships, six for container ships and two for lighters. Midstream dolphins and mooring buoys provide space for an additional 20 vessels.
In 1999, Bangkok port was visited by 2,175 ships and handled 1,052,566 Teus (498,867 inward and 553,699 outward).
Ships mooring away from the wharves are serviced by a fleet of privately operated lighters.
The port is able to handle various types of freight, but the business is mainly in containers. However, Bangkok Port can only cater to smaller ships, the channel at the entrance of the Chao Phraya River allows in vessels that are up to 172 meters in length, 8.2 meters in draft and 12,000 dead weight tons in capacity.
The Port Authority of Thailand is the principle operator in Bangkok.

Laem Chabang port is situated on the Eastern Seaboard – South East of Bangkok.
This port can accommodate larger ships and caters to conventional, container and bulk cargo.
The port can accommodate vessels of up to 300 meters in length, 14 meters in draft and 50,000 dwt in capacity.
There are 10 terminals mostly operated by private companies. Birthing facilities at the port include 1 multipurpose terminal (conventional or container ships, 50,000 DWT), 5 container terminals (container ships 33,000 DWT), 1 coastal terminal (domestic ships of 1,000 DWT), 1 service boat berth (service boat 1,000 DWT), 1 agri-bulk terminal (ships 40,000 DWT) and 1 general cargo terminal (vessels of 70,000 DWT).
In 1999, 4,909 ships visited the port (including 3,646 container, 225 general cargo, and 112 bulk cargo). Cargo handled by the port included 954,002.7 metric tons of general cargo (131,935.7MT inward and 822,067 MT outward) and containers 2,244,373 TEU's (1,068,500 outward and 1,150,879 outward).

Shipping prices have recently fallen for the major routes as cartels are challenged by the entrance of new smaller operators. Eight non-conference foreign-flag carriers have entered the Thai market, stimulated by the attractiveness of the market. As a result, an additional eight ships now visit Thai ports each week.
Early in 1999, the charges on American routes serving Thailand ranged from US$2,600 to $2,750 per 40-foot container, and from $2,000 to $2,500 per 20-foot unit. By year end, the charge for a 20-foot container on American routes was between $1,700 and $1,800.
A number of super-panamax Gcorrect, with a capacity to handle 6,000 containers are scheduled to come into service later this year. It is predicted that this will cause an oversupply of cargo space, further forcing down charges.
Goods within the country are transported by rail, inland waterway or road.
Most food processors are within 500 km of Bangkok and the major ports - the average cost of a full container from Lampang to Bangkok (550 km) is about US $500.

Distribution of frozen goods is limited to supermarkets in Bangkok and larger cities – the cold chain is not fully established in rural areas.
The cold chain from the ports to Bangkok is not completely intact. Refrigerated containers are well maintained when in the port, but after leaving the gates problems occur.
Even importers who place products in refrigerated storage do so only after accsssive handling and transportation without proper refrigeration.
Many importers will open containers at the port and distribute goods directly from there - un-refigerated.
Losses due to heat and humidity stress are large for domestically produced goods (destined for the local market)- shrink losses of 30 -40% are reported.
Local producers, focused on export maintain strict cold chain conditions.
Retail venues (wet markets street stalls, etc.) where temperate fruit and vegetables are often sold do not have refrigerated facilities and supermarkets often place such produce in chill rooms that are not humidity controlled.
Dry goods have a greater distribution range.

Recently, logistic operations have been established inline with changes in the retail and service sectors. The emphasis is to improve supply chain efficiency.

Winstore Co. Ltd was formed last year – they will initially concentrate on servicing convenience stores.
BIG C opened its won fresh-food distribution center late last year. This will supply 80% of the fresh produce required by Big C.
TOPS has established dedicated distribution centers at Mahachai (perishable goods) and bang Bua Tong (dry goods). In addition Logistic Specialists (Thailand) Co. was established to service the supermarkets requirements.