Thailand to launch its own shipping company and aims to become biggest shipper once Strait of Melaka bypass opens.

In a bid to become less dependent on foreign shippers, boost trade capabilities and reduce transport costs, Thailand is planning to launch its own national shipping company in June 2022. Paired with the Strait of Melaka bypass open once more, the sovereign country has ambitions to become the biggest player in global logistics.

Since the start of the Covid-19 pandemic, exports have been a bright spot for the Thai economy and according to Saksayam Chidchob, Transport Minister of Thailand told Bloomberg that the shipping line can increase security and support the country’s ambition to become a logistic hub.

Saksayam mentioned that previously during the pandemic, “we were facing container shortages, so a lot of our goods couldn’t be shipped and some products would have perished.”

According to Bloomberg, Thailand’s commercial vessels contribute to less than 10% of its international freight. The country earned 57.4 billion baht from shipping in 2020, but it had to spend almost 10 times that.

The article added, “a reliance on foreign vessels increases costs, hurts trade competitiveness and exacerbates disruptions in times of crisis, as seen now during the Covid-19 pandemic with global shipping beleaguered by delays and backlogs at ports.”

“Thailand had a state-owned maritime investigation company from 1940 to 2011, but the government won’t be reviving it. The new firm – for now dubbed Thai National Shipping Line – will instead be run as a private company to allow flexibility, with the government owning 49% through the Port Authority of Thailand,” Saksayam said.

Saksayam added that the company will rent vessels and have units ranging from transport to maintenance.  “Apart from minimising reliance on foreign ships, goals include increasing tonnage to support trade growth and handling strategic goods and energy products to ensure economic and national security.

“The first service the new Thai logistics firm will tackle is domestic freight routes linking Bangkok and the highly-industrialised eastern coast to the southern region via the Gulf of Thailand,” Saksayam said. “Regional and international routes will be added later and should benefit from the planned Strait of Melaka bypass that is expected to be completed as early as 2027.”

Read the full article here.