JWD, a leading fully integrated in-land logistics service provider, becoming the first mover by inaugurating the first LCL hub on a 6,000sq m plot in Laem Chabang Port, Chon Buri, where consolidation services will be provided to small LCL exporters before the containers are loaded on board the vessels. The company expects to earn THB 60 million in full-year revenue from the hub. Last year’s overall LCL export volume stood at about 200,000 containers, an annualised growth rate of 5%.
Mr Charvanin Bunditkitsada, Chairman of the Executive Committee and Chief Executive Officer (CEO) of JWD InfoLogistics Public Company Limited (JWD), a leading fully integrated in-land logistics service provider, revealed the progress of the less container load (or LCL) freight consolidation hub project, stating that the company has applied for and eventually obtained a permit to operate an export container inspection and stuffing site from Thailand’s Customs Department, and noted that it will be the first operator of such hub within the free zone of Laem Chabang Port, Chon Buri. He expected that commercial operation of the hub would begin in May, and added that no additional capital expenditure is involved as the hub is situated on a 6,000sq m space where a warehouse is being closed for renovation.
The principal target customers for the hub will be major forwarders/consolidators of cargoes from domestic manufacturers. The secondary targets will be small forwarders who export cargoes in relatively small quantities and need consolidation services prior to container loading on board the vessels in Laem Chabang Port. Overall LCL export volume reached 200,000 containers per year. Per-container service revenue was approximately THB 5,500 to THB 6,000, which reflected the need for excellent management to ensure accuracy and precision in the consolidation of cargoes from exporters.
The Laem Chabang LCL hub will increase the options available and add convenience to exporters considerably. Its location in Laem Chabang port, the port of loading preferred by most exporters in Thailand, will help in saving the time and cost required for logistics activities. Currently only two LCL hubs exist in the country – one in Bangkok (or Khlong Toei) Port and the other at the Inland Container Depot (or ICD), Lat Krabang – and most LCL containers are transported to await loading on board at Laem Chabang Port.
“We strive to position ourselves as the ‘first mover’, being the first to explore businesses and territories. The LCL hub is an example, as we are going to be the first operator of such hub in Laem Chabang Port. Given our more than 15 years of experience in Full Container Load (or FCL) business, as well as our talented team and excellent equipment, we are confident in our ability to run the hub to serve our customers efficiently”, said he.
The CEO confirmed his belief that JWD’s LCL hub – due to its location in Laem Chabang Port, Thailand’s main port for export – will prove a great choice for small exporters. He forecasted approximately THB 60 million in full-year revenue from warehouse space rental and stuffing services, and added that LCL offers the opportunity to record high per-container service revenues and attractive gross profit margins.
Last year’s overall export volume for small exporters might not be very high, especially when compared with the level of approximately seven million containers as recorded for large exporters, but the segment is growing, with an annualised growth rate of at least 5%. There are signs of sustained growth momentum in the future, with the emergence of a great number of small business firms, including start-ups, and their strong demand for export in relatively small quantities. As for competition, entry by competitors is expected; to win the permit to operate an LCL hub in Laem Chabang Port, however, one needs to hold a free-zone commercial operator’s licence for the port, as required by the Customs Department.