FEASIBILITY STUDY OF MULTIMODAL TRANSPORTATION OF CASSAVA PRODUCTS IN THAILAND: SYSTEM DYNAMICS MODELING

Abstract

Thailand is one of the world’s top export countries, sharing 72% of the global shipment, mainly in the agricultural and industrial products. Being a major logistics hub in ASEAN, Thai government has initiated several projects to support the transportation of people and goods. Road transportation is a major mode of goods transportation in Thailand. However, it incurs the highest logistics cost compared with water and rail modes. The use of multimode transportation is, therefore, considered to lower the logistics cost and reduce the environmental problems. This study examines the feasibility of multimodal transportation of cassava products in the long-term utilizing the system dynamics modeling approach. Six saving elements, including 1) saving in labor cost, 2) saving in fuel cost, 3) saving in carbon dioxide tax, 4) saving in truck rental cost, 5) saving in reimbursement cost, and 6) saving in accident cost, and four cost elements, including 1) handling cost, 2) tariff cost, 3) product return cost, and 4) product damaged cost, are considered in the dynamics model. The simulation results reveal that at the initial years, the net cash flow is negative due to high investments in double track system. Once the project continues, the savings increase. It is found that the project is feasible when it is continued for 10 years at the internal rate of return of 13.69%. The sensitivity analysis results also show that the saving in truck rental cost and the product damaged cost are two key elements in the multimodal transportation, as they highly affect the internal rate of return of the project. The developed dynamics model of multimodal transportation of cassava products can be used as a guideline for transportation companies and government to plan for their multimodal transportation to reduce logistic costs and achieve benefits in the long term.