Thai Airways continues to face public-facing challenges, with the latest challenge surrounding its TG Cargo warehouse.
Congestion, delays and stranded cargo at Thai Airways’ TG Cargo warehouse at Suvarnabhumi Airport are sending shockwaves through logistics firms, manufacturers and the Thai economy at large.
In an interview with THE STANDARD WEALTH, Choodech Kongsoontorn, Managing Director of Group Business Development at WICE Logistics, said the congestion has been steadily building and became a full-blown crisis during the floods.
“Although the warehouse has since resumed operations, the backlog hasn’t all cleared,” he said, pointing to the sharp rise in air cargo volumes as the main cause.
The problem is that goods arrive but Thai Airways cannot deliver them to customers. Cargo flows into the warehouse with nothing flowing out, until the space is full.
A full warehouse can’t take new shipments. The source said this echoes the earlier flood crisis and could lead to a cargo embargo. That time, Airports of Thailand (AOT) stepped in with extra space so goods could be moved out of the break-bulk warehouse, where pallets are unpacked.
The delays start with how the warehouse works. Cargo usually arrives on pallets, and a single pallet can hold goods for several customers. Thai Airways staff must unpack each pallet, sort the contents into different storage points, and then phone each customer to say their goods are ready for collection.
Much of the rise came from data centers and electronics shipments in Thailand, which require large-scale equipment imports. As most cargo is urgent and runs on short lead times, especially across segments such as semiconductor, medical equipment and even fresh goods, when one component in the chain experiences a jam, goods can pile up quickly and escalate.
It’s not as straightforward as an influx of goods, though, as Choodech points out three structural shortcomings that have gradually been contributing to the backlog: staffing, lack of equipment and storage space, and cargo tracking systems that are no longer sufficient for the job scale.
The delays have set off a whole disruptive chain of events. Cargo that once cleared within a day of landing is now stuck for days, sometimes weeks. In some cases, staff can’t find the goods at all.
The damage goes beyond operations and into the wider economy. Choodech said exporters risk lost business and the trust of overseas partners. The structural cost could be more significant as Thailand risks losing regional competitiveness.
According to THE STANDARD WEALTH, the fallout has reached other airlines. Singapore Airlines has stopped accepting Thailand-bound cargo until 12 November, because its belly-hold cargo is handled through Thai Airways’ warehouse. The embargo was announced in Singapore and has not yet been officially reported in Thailand.
Now, the Airports of Thailand (AOT) has stepped in to coordinate discussions with government agencies, cargo operators and freight forwarders to manage and clear the backlog at Suvanabhumi Airport. At present, it’s been reported that over 1,000 cargo lots are awaiting release, amid a growing backlog of 700 to 800 pallets waiting to be cleared and unpacked.
In response, Thai Airways has laid out four measures:
- Backlog Clearing: Bringing in more operational staff and extra forklifts to speed up sorting, storage, and delivery.
- More Space: The Airline is working with AOT to set up temporary storage to manage congestion.
- Tracking Management System: Bringing in a warehouse management system to cover the process holistically, from sorting to storage and delivery.
- Continued coordination with AOT: A joint effort to use AOT’s Cargo Clearhouse system to speed up deliveries.
Key Takeaway
Thai Airways will be tasked with seriously addressing the structural challenges that will continue to impact on-ground work, especially during times of unusual activity or disruption. Systems, technology, and sufficient storage space will need to be deployed if the airline continues to meet demand across sectors that are poised for growth.
