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Optimising steel hub location in Thailand

Keywords: steel hub , steel industry , logistics , Laem Cha Bang seaport , Map Ta Phut seaport , Prachuab seaport

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Abstract:

The optimal location of a steel hub in Thailand was analysed by applying aspecific research methodology designed to evaluate locations near the seaports. The growth of Thailand’s steel industry has become a centre of attention in the last decade, resulting in substantial efforts to form a distribution service centre to minimise the logistic costs associated with handling large steel flows in the future. The main analysis of the steel hublocation focused on areas situated near Laem Cha Bang, Map Ta Phut and Prachuab ports since these top three ports are considered important in terms of their steel throughput in Thailand. The transport costs associated with the shipment and inland transport together with port tariffs were calculated for the proposed scenarios of steel hub establishment andthese were compared with the existing situation without steel hub. The findings showed that a steel hub located near Laem Cha Bang port was the optimal option involving a saving of 9.4% on the total system costs incurred under the existing situation.

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