Lao, Malaysian dry port operators ink deal to explore new trade route

Operators of Laos’ Thanaleng Dry Port and Malaysia’s Perlis Inland Port are set to explore and establish a new cost-effective trade route following the signing of a deal by the two sides in Vientiane last week.
The Managing Director of the Lao dry port, Mr Sakhone Philangam, and Group Managing Director and CEO of Mutiara Perlis Sdn Bhd (MPSB Company), Mr Wan Ahmad Azheed Wan Mohamad, signed Memorandums of Collaboration (MOC).
The signing took place during an official visit to Laos by Malaysian Prime Minister Datuk Seri Anwar Ibrahim on June 26-27.
Prime Minister Sonexay Siphandone and his Malaysian counterpart, who brought business executives with him, witnessed the signing.
The MOC aims to establish a new integration and road-rail-road connectivity network between the two Southeast Asian countries, the Thanaleng Dry Port Co., Ltd. said.
It is envisaged that the new trade route will not pass through seaports in Thailand and the Malacca Strait but overland instead. The planned multimodal transport node route will also connect to India, Middle East countries and Europe via a sea route.
The new trade route aims to “reduce transport costs”, the Lao company said.
Once it comes into service, the new trade route will add fuel to the Customs Transit Systems of Asean – the regional bloc of 10 countries in Southeast Asia that includes Laos and Malaysia. This will benefit and enable landlocked Laos to ship goods through many Asean countries using a common electronic customs clearance form.
The new partnership will enhance Laos and Malaysia’s bargaining power when it comes to negotiating with other countries on the opening of new trade routes with those countries.

Prime Minister Datuk Seri Anwar Ibrahim suggested that the relevant parties work with the incoming Thai government to support and realise the new trade route.
The Lao and Malaysian port operators will work closely with and seek supervision from the relevant state authorities and governments of both countries in developing the new trade route and bargaining for rights in the Asean arena.
The MOC will also seek to establish a network for sharing expertise relating to dry ports.
The two sides will work together to formulate regulations on the management and facilitation of road-rail-road transport, as there is currently no particular legislation governing this scenario.
To move things forward, a taskforce will be formed by the two sides to work on the issue in detail and ensure that the new regulations align with relevant bilateral and multilateral agreements.
During the Malaysian Prime Minister’s visit, the Lao National Railway State Enterprise and Malaysian Railway, Keretapi Tanah Melayu Berhad (KTMB), signed a similar MOC.
The new partnerships between the two ports and two railway companies come as Laos is increasingly becoming a transport and logistics connector linking Southeast Asian countries, China and Europe.
The convergence of the Laos-China and Laos-Thailand railways at the Thanaleng Dry Port plays an important role in this enhanced connectivity.
Through the Laos-China Railway, which is part of the Belt and Road Initiative, and the China-Europe rail network, cargo sent from Southeast Asia can reach Europe in about two weeks as opposed to 45 days by sea.
To learn about the opportunities on offer, Malaysian Minister of Foreign Affairs Dato’ Seri Diraja Dr Zambry Abd Kadir, who accompanied his Prime Minister to Laos, on June 26 visited the dry port and its associated Vientiane Logistics Park.
On the same day, top executives from the Malaysian port and railway companies also visited the Lao landmark dry port and logistics project.
The Malaysian executives said the two ports would complement one another. They expressed the hope that through their cooperation, the future movement of cargo will be better facilitated and faster.

By Times Reporter
 (Latest Update July 4, 2023)