Cross border transportation for CLMV region.

Growth of the GMS trade

The Asian economic community expects to strengthen Thailand’s positioning as the key transportation hub for the Greater Mekong subregion (GMS), according to a study by Solidiance.
Indeed, Mickaël Feige, responsible for the country of Solidiance, believes that the AEC would increase the trade of the Kingdom with the surrounding countries: Myanmar, Malaysia, Laos and Cambodia but also countries like China and Vietnam.

Thailand has gradually benefited from reducing import duties on products shipped to LTVC countries in comparison to non-alcoholic beverages, motorcycles, tires, soap and cleaning products. Thailand’s cross-border trade with Myanmar, Laos and Cambodia, which represents 20, 14 and 9% of the total in 2012, is expected to grow tremendously in the coming years with a growth rate of about 30%.
This opportunity should benefit logistics operators in order to extend their activity to neighboring countries. This liberalization of the AEC logistics sector will benefit both Thai investors and several other Asian countries. To survive this competition for the ACS, small logistics companies with fewer than 50 trucks in circulation should either become outsourced business units of global enterprises or strengthen to form a wider network.

Ranking of the most used roads for Import/Export:

According to the study, R9 is the axes most used by logistics companies among the 4 major routes connecting Thailand and other GMS countries, as shown by these percentages:

– R9: 41.18% (GMS)
– R3A: 21.57% (Chiang Rai-Laos-Kunming)
– R1: 15.69% (Sa Kaew-Cambodia-Vuong Tao, Vietnam)
– R3B: 7.84% ((Chiang Rai-Myanmar-Jinghong, China)

The R9 road is very used as it allows to connect Mukdahan to Vietnam (Danang) passing through Laos in two days (510 km) by road while it takes 15 days by ship.
The main products that Thailand exported to its neighboring countries via cross-border trade in 2012, a quarter represented natural rubber, computers and parts accounted for 5%, diesel 4% and automobiles and parts 4% as well.

Natural gas was ranked first among Thailand’s cross-border imports with almost one third of the total:
– Natural gas: 30%
– Electrical machinery and parts: 9%
– Computers and parts: 9%
– Copper products: 5%
– Data, audio and video recorders: 4%

Thailand is one of the major logistic player in ASEAN

ASEAN is a potential market which represents about 600 million consumers. It is composed of: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. Thailand uses the policy of “three economic rings and five commercial bridges”. This strategy aims to derive great benefits from the country’s geographical position in Southeast part of Asia.

The five commercial bridges are composed of several roads that can accommodate important transport flows to neighboring countries. They include the North Gate, Thailand, Myanmar, Laos and southern China; The northeast footbridge, connecting Thailand to Laos, Vietnam, southern China and East Asia; The eastern gateway connecting Thailand to Cambodia, Laos and Vietnam; The West Gateway linking Thailand to several BIMSTEC countries, particularly Bangladesh, India and Myanmar; And the southern gate, connecting Thailand to Malaysia, Singapore and Indonesia.