Workers struggle as Chinese investments transform Thailand’s logistics industry

Worasit Yodtongkhaw began working as a delivery driver in 2020, when the coronavirus pandemic propelled a surge in online shopping, but he says declining pay and grueling conditions could force him to park his truck for good.

Worasit, 42, who is based in the northern Thai city of Chiang Mai, works long days, hauling goods for a major logistics company.

“I spend more than 12 hours on the road daily,” he told BenarNews. “Sometimes I have to deliver heavy items like refrigerators and tractor tires. If my truck breaks down, I have to cover the repair costs myself.

“When I started, the pay was better. The company covered vehicle rentals and fuel costs separately,” he said. “But now, those are bundled into the per-package rate, which has significantly reduced our income. Many experienced drivers have left for other jobs.”

His workload compounds the financial strain. Worasit delivers 30 to 40 packages a day for 30 baht (U.S. 89 cents) per package.

“I’ve applied for other jobs, like municipal driving positions,” Worasit said. “If nothing changes, I might have to leave logistics altogether.”

Thailand’s logistics industry – the process of transporting, storing and receiving goods – has seen a dramatic transformation in recent years, fueled by a surging demand for e-commerce and substantial foreign investment, particularly from China. While this growth has enhanced services and expanded market coverage, it has put immense pressure on delivery workers who bear the brunt of rising competition and cost-cutting measures.

According to a 2024 report by the Ministry of Digital Economy and Society on Thailand’s digital outlook, 40% of Thai internet users shopped online at least once a week. The National Economic and Social Development Council (NESDC) reported that road freight volume had reached 428 million tons in 2023, while 2024 figures were expected later this year.

The industry’s competitive nature has driven logistics companies to enhance their services. This benefits online retailers such as Chonticha Nakaghasien, 33, an entrepreneur in Bangkok.

“The competition among logistics providers has been great for us,” Chonticha told BenarNews. “Couriers now offer better coverage, faster deliveries and even doorstep pickups, which make my business operations much smoother.”

RELATED STORIES

EXPLAINED: Why Thai analysts are wary of China’s rising influence

Thai manufacturers scratch their heads as cheap Chinese goods flood market

Thai workers hope for better pay in 2024

Foreign investments

Major players in the Thai logistics market include state-run Thailand Post, which generated 20.9 billion baht ($622.6 million) in revenue in 2023, and private firms including Kerry Express, Flash Express and J&T Express.

Many private companies are backed heavily by foreign investors, particularly from China – as of last August, foreign direct investment in Thailand’s logistics sector totaled 39.3 billion baht ($1.1 billion). While investors from China led the way, other funding came from the Netherlands, South Korea, Japan and Hong Kong.

Last month, Jirut Wisaljit, director general of the Department of Land Transport, addressed concerns about Chinese investors.

“Regarding Chinese investor businesses, we must consult with relevant agencies from both the Commerce and Finance ministries to find ways to regulate and prevent disadvantages to Thai logistics operators,” Jirut told reporters.

He noted that about 8,500 trucks from Chinese manufacturers are registered in Thailand. 

Beginning in 2013, Chinese firms began investing in truck production in Thailand under brands SINOTRUK, CAMC and FOTON. In December, FOTON opened its first manufacturing plant outside of China where it is to produce 1,800 trucks per year to start with 80% to be delivered in Thailand and 20% for export, according to the Land Transport Association of Thailand.

Workers, meanwhile, report deteriorating conditions as companies prioritize profit.

“Delivery drivers are being squeezed to the limit,” said Worasit, the driver in Chiang Mai. “The pressure to deliver more packages faster is constant, but our pay and benefits keep shrinking.”

Worasit explained that while his daily earnings range from 900 to 1,200 baht ($26.80 to $35.75), the cost of fuel, vehicle maintenance and other expenses leaves little for savings.

“Drivers are treated as expendable,” he said. “The companies don’t cover our costs, and when there’s a problem, it’s the drivers who suffer.”

Labor advocacy groups have highlighted exploitative practices.

In November 2024, a major logistics firm faced allegations of underpaying workers after switching to a GPS-based distance calculation method, according to Thai media. The groups claimed the change reduced drivers’ pay by as much as 5,000 baht ($149) per month and led to widespread dissatisfaction.

The situation has ripple effects on the broader economy.

Chiang Mai barista Kamarawan Thongchai, 26, said delays in deliveries because of driver shortages have disrupted her business.

“When packages don’t arrive on time, we lose both time and money,” she said. “Sometimes I have to pick up items myself, which is inconvenient and costly.”

Meanwhile, the growing dominance of Chinese investors in Thailand’s logistics and e-commerce sectors has raised concerns about market consolidation and long-term economic implications.

Dolawat Suntasuk, a researcher at a local think-tank, The Glocal, warned that the integration of Chinese capital across these industries could undermine local businesses.

“Chinese firms are not just investing in logistics; they are also dominating e-commerce platforms,” Dolawat said. “If they control both the supply chain and the marketplace, it could stifle competition and make Thai businesses overly reliant on Chinese systems.”