Thailand Plans New Private Shipping Line

October 2021

Bloomberg has reported that Thailand is planning to launch a national shipping company in 2022 in order to enhance its trade capabilities, reduce transport costs and become a bigger player in global logistics.

According to Thailand’s Transport Minister, the shipping line can support the country’s ambition to become a logistics hub, as well as increase commercial security, which was challenging to ensure during Covid-19 as the country faced marked container shortages.

The country is heavily reliant on foreign vessels. Thailand’s commercial vessels contribute to less than 10% of its international freight. The country earned USD 1.7 billion from shipping in 2020, but it had to spend almost 10 times that.

The new entity, expected to commence operations in June 2022, will be run as a private company to allow more flexibility, with the government owning 49% through the Port Authority of Thailand. It will rent vessels and have dedicated units ranging from transport to maintenance. Apart from minimizing reliance on foreign ships, key objectives include increasing tonnage to support trade growth and handling strategic goods and energy products.

Importantly, the company will benefit from the planned Strait of Malacca bypass that is expected to be completed in Thailand in 2027, linking the Indian and Pacific Oceans, and bypassing one of the world’s busiest shipping lanes between Indonesia, Malaysia and Singapore. The project involves building seaports on the eastern and western coasts of Thailand and linking them via a 90-kilometer highway and railway.

(Source: Bloomberg)

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