A Symphony-in-Steel Case
By Alan M. Field
Project cargo services provider FLS has ridden Thailand’s burgeoning steel industry, aligning its expertise with the country’s challenges.
Francesco Jose Rivi, FLS’s Italian-born director of business development, described Thailand as a "great country" despite its ups and downs. After bouncing back from the Asian crisis of the late 1990s, Thailand’s project cargo sector – mainly targeting imported shipments – has grown apace with the spectacular expansion of Thailand’s industrial and power infrastructure. Between 1980 and 2016, Thailand’s per capita income grew from just US$682 to US$5,900.
Ambitious and costly – US$2.5 billion – expansion plans for the nearby port of Laem Chabang will spur further activity in project cargo, as well as in the container traffic sector, Rivi said. Laem Chabang Port, or LCP, already handles more total cargo than any U.S. port except the Los Angeles-Long Beach complex. LCP, which occupies 2,572 acres (1,041 hectares), is already capable of handling the largest post-panamax vessels.
Roll-on, roll-off volumes at LCP have increased steadily from 897,000 vehicles in 2011 to about 1.3 million in 2016. Last year, 98 percent of all Thai-assembled vehicles were exported from LCP, which is within 150 miles of the major exporters of Ford, GM, Honda, Isuzu, Mazda, Mitsubishi, Nissan and Toyota.
FLS was founded in 1993 by Swiss-born Martin Haeberli, the company’s chairman, who came to Thailand in the late 1980s. Its headquarters in Laem Chabang was the company’s first office, and still its largest.
When Rivi joined in 2010, there were 20 people in the company, and it was the company’s only office "even though FLS was established already as one of the most reliable companies in the region," he said. The weak Thai bhat at that time made Thailand attractive for engineering companies from the U.S. and Europe. Now, FLS has more than 90 employees, including 45 people in Thailand alone.
The key to the company’s continued success, he explained, is its team’s knowledge, flexibility and high commitment to the company. Another key of FLS’s success is its insistence on getting everyone in the firm – not just its sales staff – involved in selling FLS’s services to potential customers. "In our business, we say that everyone can sell, and that’s the truth of our business.
Success In Steel
Rivi said Thailand’s reputation for high-quality workmanship of locally made steel structures is a key reason why Thailand, long known as a sleepy, sun-drenched vacation spot, began to take off in the project cargo sector in 2000, and has remained strong, despite some glitches along the way. Another strong point is the country’s skilled labor force in the industrial sector.
"There are a lot of steel fabricators around here that are producing quite a lot of modules – steel structures, pressure vessels, modules," fabricated from steel, mainly imported from other countries, Rivi said. FLS’s exports are mainly those steel structures and pressure vessels.
"In terms of project cargo, I believe in the potential of this country, and I’m still looking forward to seeing the benefits of the ASEAN trade bloc community for Thailand," Rivi said.
That said, FLS is not active only in Thailand. While maintaining its headquarters at Laem Chabang, FLS opened its first foreign office in Vietnam in 2011, recognizing the "great potential" of that neighboring nation, Rivi said. That office has since expanded to five employees and is said to be "well established in the very tough Vietnamese market."
Following the success of its Vietnam office, FLS has opened one new office almost every year: 2012 in Australia, 2014 in Singapore, 2015 in Indonesia, 2016 in the U.S., and 2017 in Taiwan.
One point of concern for FLS in Thailand is limited infrastructure for delivering oversized cargo from project fabricators to the ports.
"You see a lot of flyovers of 5.5 meters – where breakbulk cargo sometimes means pieces that are 6 meters high, or 7 meters or more. That creates a barrier," Rivi said. Further, over the last few months, there have been indications that Thailand’s Department of Highways, which distributes permits, is fully enforcing a road transportation law that dates back to the late 1970s which has presented problems. "The law does not take into account transportation by hydraulic trailers," Rivi said. "And when you want to transport heavy, bulky items, you need hydraulic trailers."
In order to obtain a road permit from the Department of Highways in Bangkok, each transportation project must have a feasibility study, which is costly to produce.
"We have to subcontract an engineer to do a bridge study to assess the capability of the bridges along the route to bear the cargo weight, plus the trailer, and the whole process (feasibility study and road permit) can take us up to three months." Thereafter, the project cargo mover must use the specific number of axle lines advised and required by the Department of Highways to perform the move. Rivi said he fears that Thailand-based projects could lose their competitiveness as a result of the long lag times required for getting such permits as the market shifts towards moving larger and heavier cargoes.
Alan M. Field has reported on trade, logistics and related technologies from numerous countries in North America, Latin America and East Asia (Japan, Taiwan and Korea) over two decades.
Image credit: FLS
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