Cargo Come, Cargo Go

Recently Thailand struck a deal with Bangladesh to set up a shipping line to and from Ranong Port. What will the shipping line between Bangladesh and Thailand mean for the Port Authority of Thailand (PAT)?

The cooperation was initiated between the Port Authority of Thailand and the Embassy of Bangladesh. We have just started working together and discussing how we are going to decrease the transportation costs. We have sent our staff to inspect the Ranong area to see how feasible the project is. In the near future, we will send persons to observe the Bangladeshi side as well. Typically, cargo or shipments from Cambodia or China have to pass through Singapore to get to Bangladesh; therefore, we are trying to have a shortcut that goes through Thailand instead; it is cheaper and faster. However, it is under study because there are many items we need to look at. We should approve everything before we can say if this proposed route will definitely cut costs, although at this stage everything suggests that it will.

Laem Chabang is boosting the capacity to 18 million TEUs per year. What is the strategy behind that?

Normally, we have 80% from the ports of Thailand exported from Laem Chabang, which is growing every year. We expect that in the next six to seven years, our capacity will almost hit the maximum; therefore, we have to plan ahead to build the market. Our plan for Phase III of the development is to serve larger vessel, which requires a deep-water port. Therefore, with this development we have to think big. An upgrade to Bangkok Port is also under planning in a bid to upgrade all of the facilities and services offered by PAT. Improving IT systems and security, likewise, plays a big role in our development plans as it increases efficiency, which is crucial in this business. In each of these stages, we will try to include the private sector for investments, not only to raise funds but also because private-sector investments also encourage greater efficiency in any redevelopment.

To what extent will the AEC help boost demand?

For now, we have just begun the AEC; therefore, it is a little difficult to forecast now what is right or wrong. However, as a government policy, we have to explore ways to become more engaging with the neighboring economies. One thing that the AEC will definitely help spur on is better connectivity through our collective transportation systems. At this early stage all that we can do is monitor policies introduced by each of the governments and asses how they will contribute to better integration and more opportunities. In Thailand, the government is trying to adjust its policies to support business interests along the country’s borders. If we fail to account for these regions, they will become neglected by investors. The ports need to look at how to serve the investors in all areas to reduce their costs in transportation. Now, we are studying how the Port Authority of Thailand will help investors cut their costs or to start a new business in the five special economic zones, which have been set-up by the government. In this regard, we have to ensure that we are accessible, efficient, and affordable.

What are your expectations for the year ahead?

We should have a growth of about 5% in exports in 2016 but, in the worst case, maybe about 4%. Frankly speaking, the export volumes have not decreased, but the total revenues of our exports are down. Looking forward, we hope that these factors will help Thailand become a major hub for logistics in the region. If we think of the hubs in the maritime sector, we cannot exactly compete with the likes of Singapore or Hong Kong because of our location. For example,we don’t have the shorter routes of marine transport. However, we can certainly aspire to be a hub amongst the integrated ASEAN markets.