Interview: Sutthinan Hatthawong
How is Laem Chabang Port continuing to increase in capacity and throughput despite dropping Thai exports?
SUTTHINAN HATTHAWONG: Despite the fact that the global economy, and indeed many Asian economies, are not performing well at the moment, we are forecasting a 5-8% annual growth in throughput at Laem Chabang Port annually. The most positive factor for the growth of the port comes from the automotive industry, which has long been Thailand’s main export product, and we are recording export increases consistently year-on-year. In 2015 automotive exports grew to 1.3m units to Europe, North America, Australia and other economies, and accounted for a large percentage of the port’s throughput expansion. Other industries, such as consumer goods including clothing and food products – are indeed recording reduced numbers due to shrinking demand from major markets such as China, as well as increased competition from the growing economies of neighbouring countries. However, the growth in automotive exports and Thailand’s competitive advantage in manufacturing automotive parts and assembled units with high efficiency is helping to mitigate weak performance from other sectors.
What measures are being taken to ease congestion around Laem Chabang Port?
HATTHAWONG: Currently the vast majority of cargo arriving at Laem Chabang Port is transported further into Thailand by truck. Large amounts of infrastructure investment are being committed to bolstering the road network around the port to ease congestion, especially during peak hours. We are now working to connect the port directly to National Highway 7, with the process under way to expand the number of lanes the highway supports from four to 14, as well as expanding the connecting road inside the port itself from four lanes to seven. Furthermore, bridges are being constructed to eliminate intersections that cause port congestion in Thailand’s busiest ports, all of which is anticipated to be completed by the end of 2017.
In terms of the rail network, we are developing the Single Rail Transfer Operation project, which is anticipated to increase the rail cargo capacity at the port from 400,000 to 2m twenty-foot equivalent units (TEUs), further reducing road traffic. On the technical side of things, a rail-freight x-ray scanning terminal was introduced at the port at the beginning of 2016, the first of its kind in South-east Asia and intended to smooth the Customs process. When x-raying cargo on trucks, containers are randomly screened at a rate of 5-10%, while the rail-freight scanner automatically images all cargo passing through. Thus, this initiative will reduce TEUs by 1.6m the cargo that needs to be manually scanned.
How is the Port Authority of Thailand preparing for increased regional competition?
HATTHAWONG: Reducing logistics costs remains the major factor in maintaining competitiveness, and Thailand remains the best positioned nation and port of entry into the Greater Mekong Sub-region. That being said, we do not necessarily want to compete with our ASEAN Economic Community neighbours, but rather to support one another’s economies through increased trade. Reduced costs benefit all in the region, so if industries can find cheaper manufacturing and transport elsewhere, so be it. The key is to raise and maintain the same shipping standards and efficiency levels across ASEAN in order to reduce logistics costs and boost the bloc’s broader competitiveness in the Asian and global context. Thailand is cooperating with its neighbours to share expertise, as well as with established economies, including Japan and China, to exchange techniques through our Friendship Agreements.
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