Developing the Thai rail system, connecting freight routes between the EEC and China

Freight forwarding

Currently, the transportation of goods between the EEC and China mainly uses sea and road because the railway still has limitations in its use, with most routes still being single-track railways.

The dual-track railway is currently being studied and prepared for bidding on the Khon Kaen-Nong Khai-Vientiane route, and private operators are being sought to operate the Laem Chabang-Nong Khai route. It is expected to open for service in 2026. The Bangkok-Nakhon Ratchasima high-speed railway is still under construction, and the Nakhon Ratchasima-Nong Khai-Vientiane route is currently being studied and designed. It is expected to open for service along the entire route between 2029-2032.

The launch of the Laos-China railway project is an opportunity for Thailand to develop the Thai rail system to connect to China, especially the freight route with the EEC.

The Laos-China railway project is part of China’s Belt and Road Initiative. On December 2, 2021, Lao PDR Laos is preparing to launch a service on the Lao side connecting Vientiane and Kunming, China.

It will help transport passengers and goods between Laos and China and within Laos itself more conveniently, quickly, with lower costs and attract more trade and investment.

Important export products on this transport route include electronics and electrical appliances, and agricultural products such as durian, longan and mangosteen.

The rail connection between EEC and China will benefit and increase Thailand’s trade and investment potential in many dimensions, including:

1. It helps reduce transportation costs per ton by more than 32% to more than 50%, depending on the transportation patterns on the Thai side, such as transportation by truck, the cost will be reduced by 32%, while single-track and double-track trains will be reduced by more than 40%, and high-speed trains, which are the same size of track, will be reduced by more than 50%. In addition, rail transportation takes only 0.5-1.5 days, which is faster than roads that take 2-3 days and seas that take 5-7 days.
2. It provides more options for shipping goods to China and on to Europe via the rapidly expanding China-Europe New Silk Road, with transit times more than double that of sea travel, taking only about 15 days. Vietnam has already started operating the Hanoi-Belgium route via this route. It also helps spread the risk of the Covid-19 outbreak due to delays and disruptions in maritime transport.
3. Attracting investment in EEC due to its higher transportation potential at lower cost

The development of this rail system will help push Thailand to become a logistics hub of ASEAN by accelerating the promotion of rail system usage in Thailand, connecting the Laos-China railway, along with accelerating the development of related railway projects to be put into operation quickly.

Along with increasing service efficiency, developing an electronic customs formality system that is linked to foreign countries.

Source: Bangkok Business