Southeast Asia Outlook 2024

Southeast Asia Outlook 2024: Opportunity Beckons

CUSHMAN & WAKEFIELD

BOX ARTICLE: THAILAND’S PROPOSED KRA LAND BRIDGE

A PLAN IN THE WORKS

THAILAND

WHAT’S HAPPENING?

Chumphon Port Future: 13.8m TEUs

Thailand has announced plans for two deep-water ports in Chumphon (expected 13.8m TEU) and Ranong (19.4m TEU) provinces, which would be linked by 90km of highways, railways and pipelines. Ships carrying goods made in Northeast Asia would unload their cargoes in Chumphon which would then be whisked to the other side by trucks and trains, while vessels laden with wares from western Asia and Europe would do the same at Ranong. As a result, shipping companies can bypass the increasingly congested Straits of Malacca where a quarter of the world’s traded goods pass through. The project is expected to cost at least US$28 billion and targeted to be completed by 2040. • Potential time savings for shipping: Based on Thai authorities estimates, shipping companies can save 4 days sailing time and reduce transportation costs by 15%. • Benefits to countries such as Vietnam, Philippines, Taiwan, China, Korea, Japan due to the shorter route. • Gamechanger for Thailand: Expected to increase Thailand’s GDP to 5.5% per year and create 280,000 jobs. Thailand will become an important node in global supply chains. • Execution is key: Double-handling of containers would increase logistics complexities and costs. • Zero-Sum Game but the pie can expand: Risks to countries such as Singapore and Malaysia, as some ships are diverted. Though that said, according to OECD forecasts, maritime trade volumes are set to triple by 2050, and this could create sufficient demand for new ports. X X IMPLICATIONS

PHILIPPINES

CAMBODIA

VIETNAM

Ranong Port Future: 19.4m TEUs

Port of Singapore 2022:37.3m TEUs Future: 65m TEUs

BRUNEI

Port Klang 2022: 13m TEUs Future: 19.4 m TEUs

MALAYSIA

EXISTING ROUTE

SINGAPORE Strait of Malacca

INDONESIA

Source: Business Times, Cushman & Wakefield Research

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