Mr Chanthone Sitthixay presents a gift to Khunying Sudarat Keyuraphan.

Lao logistics connectivity ‘a boon for Thai entrepreneurs’

Thanaleng Dry Port, Laos’ integrated logistics centre bolstered by rail connectivity, offers lucrative opportunities for entrepreneurs, the port’s operator has told Thai business executives.

Director of Mission We Course, Khunying Sudarat Keyuraphan, on Wednesday led a Thai business delegation on a visit to the dry port and its associated Vientiane Logistics Park in the Lao capital Vientiane, to assess the opportunities offered.

Open for service since December 2021, the dry port is a converging point between the Laos-Thailand and Laos-China railways and forms an important trade gateway between Southeast Asia and China, the world’s second largest economy with a market of about 1.4 billion people.

This connectivity has transformed landlocked Laos into a land link, with connections to countries in the Mekong region and beyond.

“Land link now happens,” Thanaleng Dry Port’s Managing Director, Sakhone Philangam, told the guests, who came to Laos for the Lao-Thai business forum.

The multimodal dry port, which also functions as an international border checkpoint for freight, has handled rail and rail-to-road cargo shipped from Thailand via Laos to China’s Chongqing, Shanghai, Guangzhou, Shenzhen and more.

The trade route links to the China-Europe rail network that extends to Duisburg in Germany, taking only about two weeks to move cargo from Southeast Asia to Europe, as opposed to 45 days by sea.

“Rail transport is a very good option to link Asean to Europe,” Mr Sakhone said, referring to the Association of Southeast Asian Nations (Asean).

According to Xinhua, the China-Europe freight train service that began operations in 2011 offers a secure and reliable trade link between Asia and Europe, transporting a variety of goods ranging from IT products and automobiles to wine and coffee beans.

With rail connectivity now in place, Thailand appears to reap significant benefits brought by rail transport, which reportedly cuts logistics and transport costs by about 30 percent compared to road when shipping cargo to China.  

Durian exports from Thailand, a major supplier of farm produce, to China through the China-Laos Railway grew by 365 percent in the first five months of 2023, thanks to the shorter transit time and advantages under free trade agreements, the Bangkok Post reported. 

Thailand's fruit exports to China have increased considerably since the Laos-China Railway came into operation in December 2021.

To better facilitate the shipment of farm produce, the dry port’s developer is working with Chinese authorities to build a sanitary and phytosanitary (SPS) centre at the logistics park to issue certification in Laos that would enable certified goods to enter China.

Chairman of the Vientiane Logistics Park Co., Ltd., Chanthone Sitthixay, said great opportunities are foreseeable given that Thailand’s Isaan region, which lies on the opposite side of the Mekong River, engages in high-value trade with China. 

The Vientiane Logistics Park and Thanaleng Dry Port are part of the Lao Logistics Link (LLL) project, which links the above-mentioned trade route to markets in the Pacific region.

A bird’s-eye view of Thanaleng Dry Port.

The LLL project also includes the Vung Ang seaport in Vietnam’s central Ha Tinh province, a planned railway linking the seaport to the dry port in Vientiane, and a planned dry port in Khammuan province through which the railway will pass.

Within about a half day, cargo shipped from Vung Ang can reach Hainan, China’s southern island province which is slated for development, according to Xinhua, as a globally-influential high-level free trade port by the middle of the century.   

With such a shorter trip, Mr Chanthone suggested that goods from Thailand’s Isaan region no longer need to go through the Strait of Malacca, but can take this new route instead.

“It is just a half day away from us,” Mr Chanthone said.

The planned Vientiane-Vung Ang railway, whose construction is expected to start at the end of next year and be completed in eight years’ time, will provide more cost-effective services, thus bringing greater opportunities once it is operational, he told the visitors.

Vice President of the Lao National Chamber of Commerce and Industry (LNCCI), Mrs Chanthachone Vongsay, also accompanied the Thai delegation on a tour of the dry port.

By Advertorial Desk
 (Latest Update October 6, 2023)