NCL International Logistics PCL (NCL) is a logistics service provider whose services include planning, management, and providing solutions for customers to ensure the shortest time and lowest cost of the freight forwarding process from the origin to the destination. The Company’s revenue structure, classified by services, as shown in the Company’s consolidated and separate financial statements is as follows:
International transport management
- Sea Freight Service
- Air Freight Service
- Other Services from NCL
- Domestic Freight Transport by Trucks Service
In the year 2011, the Company started rendering domestic freight transport services by tractor heads and trailer trucks in order to (1) extend its range of services for its existing customers using the Company’s international transport services and (2) to expand its business using its expertise in logistics services to serve customers that need freight forwarding in the country. In 2015, the Company has 65 tractor heads and 98 trailer trucks. The trailers trucks are available in both skeleton frame, which are used for carrying containers, and flatbed, which are for carrying containers or cargo directly. The Company forwards goods en route from factories to loading points for exportation, from the loading points for importation into factories or other destinations in the country, and from origins to destinations in different countries, as required by customers. The Company’s existing service points are as follows:
- Service point in Had Yai : This service point is situated in Had Yai district, Songkhla.
- Service point in Surat Thani : This service point is situated in Phunphin district, Surat Thani, which offers both short and long-distance transport service. The short-distance transport takes not over one day, which involves delivering goods from factories in Surat Thani to ports or railway stations within the same province or to ports in the southern region, such as the Phuket Port. The long-distance transport takes more than one day, which involves delivering goods from factories in Surat Thani to Bangkok or other provinces and sending goods from destination provinces or nearby provinces back to the southern provinces.
- Service point at Rama II : Located at Rama II, Bangkok, at present there are both short and long distance services; short – distance service such as the service of empty containers to pick up the goods at the factories in Laem Chabang area and pick up the goods from the factories to Laem Chabang Port, Klong Toey Port. For long – distance service such as the service of empty container to pick up the goods in Central and East of Thailand then deliver the goods at Laem Chabang Port and Klong Toey Port.
In early 2016, the Company decided to separate domestic transportation business, by co-establishing joint ventures with high potential outsiders who specializes in the transportation business as well as long experience and can also expand major customers base to the Company. Newly established Company is SSK Inter Logistics Co., Ltd. ("Joint Venture Company" or "SSK") The Company used the working capital of the Company and transferred assets which are all truck heads-trailer trucks as capital investment in the joint venture to reduce the burden of expenses; both cost and depreciation of the Company, and to optimize cost management, and also encourage the Company to have stable, sustainable growth in the future. One more shipping service point is set up:
- Saraburi Service Point : Located in Kaeng Khoi District, Saraburi. The majority of the merchandise are construction material. Currently, transportation services are available for both short and long distances.
*At present Surat Thani service point. Rama 2 Service Point and Saraburi Service Point were transferred to the operation of SSK Inter Logistics Co., Ltd.
The Transportation business under the joint venture has operated for one period of time and it appears that the economic is slowdown resulted in sales volume of cement or using cement trucks not enough for the expense. As a result, both parties decided to sell the cement trucks to decrease the impact which would happen in the future and canceled the joint venture in August 2017 as following.
- Sale the assets which are tractors and trailers parts which using for cement transportation. There are 48 tractors and 55 trailers parts to the other party at book value to achieve maximum benefit to SSK as the price is higher than in the market price which is compared with book value (Reference to the market price of the second hand cement truck; comparison the types and the similar of age, as of May 31, 2017).
- Payback by decrease the capital to another party for 12,125,720 shares at the par value of 10 Baht (par value set from the beginning), in total 121,257,200.00 Baht and the accumulated loss of such investments from the commencement of the business until May 31, 2017 as the proportion of investment for 17,430,400.84 Baht based on the proportion of remaining shareholders as of May 31, 2017.
The purpose of this capital reduction is for restructuring of SSK’s shareholders. Prior to decrease the capital, SSK management is required by the proportion of joint venture; the two parties must jointly manage and have equal power. And after the capital reduction, NCL will become a major shareholder and the management is unilateral. This will result in more streamlined work and management and to reduce the cost of cement truck about 0.78 million baht per month and other administrative expenses about 2 million baht per month, after the capital reduction did not affect the business of SSK because of the remaining assets are tractors and trailers that the Company has experience and expertise. The Company also has the executives who are experience and expertise in this business for more than 20 years. The management team has a policy of expanding its customer base to meet increasing demand for transportation of agricultural products and consumer goods and consider that there is a better adaptation and resulted in the increasing of the Company’s revenue.
SSK Inter Logistics Co., Ltd. had decreased the share capital on August 15, 2017, which resulted in SSK becoming a subsidiary of the Company which is effective since the date as mentioned above onwards and increase one more transportation service point as below.
- Romklao Transit Service Station : Located at Romklao Bus Terminal, I.C.D Road, Lat Krabang District, Bangkok. Most of the materials are used in construction; electrical, spare parts are currently available for both long distance and long distance transport. Currently, there are available for both; short and long distance services.
Domestic transportation of the Company Group, a part from the transportation by tractor and trailer under SSK Company's operations, the Company has also started to invest in the pickup truck business. In order to expand the scope of services to customers who want to move their goods in the country by road with pick-up truck with expertise in cargo handling services of the Company, which can support the expansion of our shipping business. The Service Point located at Bangsaotong District, Samut Prakarn Province. Currently, there are available for both; short and long distance services.
Alternatives for operators: the case when the exporter/importer operates shipment on his/her own and the case when the exporter/importer uses NCL’s logistics services
The services deal with managing the flow of goods from the loading point to export from Thailand to destinations in over 180 countries, covering all the major trade routes across the world, as well as managing the flow of goods transported from other countries to the unloading point in Thailand. The Company renders both sea and air freight services. The Company has no freighters; however, to serve its customers it can arrange to use them as well as containers from freight operators, i.e. shipping lines or airlines. Furthermore, the Company coordinates its services with its trade partners in different countries to manage the flow of goods from ports or airports in these countries to its local destinations. Income earned from the services constitutes the Company’s major revenue. In 2016 and 2017, the Company’s revenue from international freight transport equated to 911.28 million baht and 914.88 million, respectively, which represented 90.12 and 92.54 percent of the overall revenue, respectively.
The Company’s international freight transport services can be divided according to the following transport modes:
1. International sea freight transport: Currently, the Company renders sea freight transport services across five continents, namely Europe, America, Asia, Australia, and Africa, which cover main ports of major trade areas in over 180 countries. Sea freight transport can be divided into three types as follows:
- Full container load (FCL), which is suitable for customers with a large quantity of goods in hand, where it is economical to rent a whole container solely for their goods without having to share the container with other customers. The Company will find different sizes of containers according to the needs of the customer, provide shipping lines in line with the Customer’s schedule and requirements, and serve as a customs broker and goods issuance agent.
- Less than container load (LCL), which is suitable for customers with fewer goods for transit, the quantity of which is not economical to warrant the renting of a whole container solely for their goods. The Company will gather goods from individual customers and allocate loading space in the reserved container, and then it will calculate the space and place the goods suitably for their types and requirements of each customer. This is to ensure that each customer’s goods are put in the same container safely and are delivered on time at the lowest cost. However, since the majority of the customers are operators rendering freight transport services as the Company, they have the abilities to handle their own customs documentation on their own.
- Shipper Owned Container (SOC): The Company will provide the empty containers for customers to contain their own goods, not necessary to wait for the containers from the shipping agents. In some shipping agents who have no containers to service their customers, the Company will be provided the containers for their customers instead.
- Rental container cargo service: The Group will rent the containers for further renting to customers who provide transportation management services as well as the Group.
2. This is a fast mode of transport, which takes a shorter time to transport goods to destinations compared to sea freight transport. However, as it bears a higher cost, it is suitable for transporting perishable or temperature-sensitive goods, such as fresh fruits and vegetables, goods with that are high value or need special care, e.g. gems and gold, as well as goods with a low weight and quantity that require fast delivery, e.g. documents and printed materials. The Company finds an airline according to the customer’s schedule and requirements and serves as a customs broker and a goods issuance agent. Currently, the Company is able to provide air shipment services to over 180 countries.
3. Other services: The Company provides services concerning customs formalities and relevant documentation, and serves as a goods issuance agent. The services require experts in customs formalities and regulations pertaining to importation and exportation so that the customers can comply with relevant laws in each country and receive or send goods on time.
At present, the Company has two international freight management offices at its head office in Bangkok and its branch office in Hat Yai, Songkhla. In the end of 2014, the Company invested in NCL INTER LOGISTICS (S) PTE. LTD., based in Singapore in order to provide international freight management services from Singapore to destinations in different regions. The main target is America, Asia and Europe. In early 2017, the Company invested with LEGEND SHIPPING PTE LTD, based in Singapore to establish a subsidiary, Legend Shipping (Thailand) Co., Ltd. In order to provide international freight management and empty container services to customers. In late 2017, the Company invested in LEGACY ASIA CAPPITAL PTE. LTD., based in Singapore in order to provide container rental service as well.