Thailand tries 2-prong strategy to get perishables to China

Thailand is bypassing supply-chain roadblocks to deliver its perishables – mainly agricultural and food products – to China, its biggest market in Asia. Since Thailand shares no border with China, perishable goods like fruit and vegetables have traditionally been sent from Thai farms and warehouses by truck, going through either Vietnam or Laos. Ships and planes are also used, but the Covid-19 crisis has wrecked global logistics, causing border delays, fewer flights and difficulty handling items that aren’t suitable for sea vessels.

This month Thailand began a 2-stage system, trucking products to Vietnam, where they’re moved into containers on trains, which complete the deliveries to China. It sounds simple, but it’s a first for Thai shipments, according to the vice minister for agriculture.

“Transporting by rail is now cheaper and faster than by truck, so we have essentially reduced overall costs and delivery time. This could become a new system for our shipments. We can build on this idea and export more products at lower cost.”

Currently, there’s no direct train route between Thailand and China, but the plan to connect the two countries via rail is in the works.

China is Thailand’s number 2 export market after the US, according to data from the Commerce Ministry. About 80% of farm products from Thailand are normally transported by land to China. Tropical fruits like durian, mangosteen and longan are among the crucial, and most vulnerable, items.

Exports to China increased 15.3% by value in May year-on-year, compared to a 22.5% drop in total exports. Thailand’s economy, heavily reliant on trade and tourism, is facing its deepest contraction in more than 2 decades, with the Bank of Thailand predicting gross domestic product will shrink by a record 8.1%.

SOURCE: Bangkok Post