Why regional ports are unfazed by Thailand’s ‘land bridge’ plan

Double handling and processing at both ends will add to hefty transport costs

NEW STRAITS TIMES

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By Sarajun Hoda Abdul Hassan

Thai Prime Minister Srettha Thavisin has revived an old proposal to transport cargo in containers across the Isthmus of Kra, in southern Thailand.

The plan includes the building of an oil and gas pipeline

As the shallow draft (depth) at Songkhla in southeast Thailand is not conducive, he has proposed the construction of a 90km land bridge – a road-and-rail route, no longer a canal – further north

The route would link Ranong in the west with Chumphon, in the east, about 500km north of Songkhla. Estimated to cost $28bn, this land route will link the Indian Ocean with the Pacific.

The shipping fraternity in Malaysia was abuzz with this proposal. Analysts wondered how it will affect ports in Penang, Port Klang and the Port of Tanjung Pelepas.

Rubber, wood, furniture and tyres are the main cargo from southern Thailand. But the volume is negligible and there is no guarantee the land bridge will provide better connectivity.

Penang Port’s excitement that the spillover effect will benefit Penang is misplaced. As vessels grow larger, Penang Port, limited by its own draft, has become a feeder port. Larger vessels cannot call at Penang Port and feeding the land bridge will only increase the transit handling cost.

The only remaining option is for it to continue providing feeder services to nearby ports and connectivity to mother vessels. These ports include Port Klang and the Port of Tanjung Pelepas in Malaysia, as well as ports in Singapore and Jakarta.

Not surprisingly, even shippers and others in Thailand are not convinced. The financial and technical viability of the land bridge is being questioned.

Moreover, cargo transiting through this land bridge will have to bear the hefty costs of double handling and processing at both ends. Discharging the cargo from the ship and shunting it to the land bridge will add to costs. Then there is the ship berthing cost – a few hundred thousand dollars per vessel – on both sides of the land bridge.

Upon arrival at the other end, transporters will again incur costly ship berthing costs. The cargo or 20-foot-long containers will have to be stacked and stored till the ship for the next destination arrives, which can take 5-15 days or perhaps more. Delays would mean extra costs.

With the existing efficiency and productivity in Westport (in Port Klang) and Singapore, the whole land bridge idea will prove futile. It will still be cheaper and faster for cargo to transit through these two mega-ports to their final destination.

No wonder Westport and Singapore Ports are unfazed by this land bridge idea.

Sarajun Hoda Abdul Hassan, an Aliran executive committee member, has extensive experience in the shipping and freight-forwarding sector.

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.
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