ASEAN to build better transportation & logistics network, here are the challenges
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Kontan Online - ASEAN bakal bangun jaringan transportasi & logistik yang lebih baik, ini tantangannya
12 December 2024
Kontan.co.id – Kuala Lumpur. ASEAN is working to enhance economic growth and trade in the region by improving transportation and logistics networks.
According to Channel News Asia (CNA), this enables member countries to safeguard themselves against rising geopolitical and economic risks.
However, observers note that the trade bloc still faces significant challenges. Member countries need to streamline customs procedures and reduce bureaucracy.
"In ASEAN, we have achieved this excellently," stated Malaysian Transportation Minister Anthony Loke, emphasising that the group's open sky policy will enhance regional connectivity.
He added that with regard to the maritime sector, there is a plan to digitalise ports in the region to facilitate information sharing and improve competitiveness.
"The railway network is also important. For now, the missing link has been addressed, particularly between Laos and China," he added.
In June, the first journey of the ASEAN Express cargo train service, which connects Malaysia to China via Thailand and Laos, was launched.
The journey was supposed to take only eight days, but it ended up taking nearly two weeks due to changes in track size and customs procedures at the border.
In railway transportation, the size of the track refers to the distance between the two rails. There are several different standard track sizes worldwide, which can hinder the operation of an extensive railway network.
This issue arises at the border between Thailand and Laos because the track size in Laos differs from that in Malaysia and Thailand. As a result, each container must be lifted with cranes onto a different track.
Loke also emphasised the need to reduce bureaucracy.
"This benefits all parties," he stated. "Eliminating barriers not only benefits a single country but also the region as a whole."
Leverage each other's strengths.
Thailand stated that it is ready to enhance international connectivity.
For example, the project involves expanding the double-track railway network.
This project also aims to construct a bridge in southern Thailand that will connect the Andaman Sea to the Gulf of Thailand.
Thailand's Deputy Prime Minister and Transportation Minister, Suriya Juangroongruangkit, stated that the main project, scheduled for completion in 2028, is intended to create a new international trade route and reduce ship travel time.
"Currently, there is a lot of congestion in the Malacca Strait," he stated. "We predict that, in the future, many shipping routes will experience delays or require queuing. Having a bridge would provide an alternative route."
However, the industry player stated that infrastructure alone is not sufficient.
"The question is whether they can make it seamless and affordable," stated Ruben Emir Gnanalingam, Executive Head of Westports, which manages the largest listed port in Malaysia.
"If not, you cannot market it or promote it as an alternative because it will be more expensive," he added.
Experts told CNA that countries in Southeast Asia must come together to benefit from economic integration.
"If you look at ASEAN countries, they are united. Yes, there is ASEAN centrality. However, they also compete against each other," stated Chris Humphrey, Executive Board member of the EU-ASEAN Business Council.
"They compete against each other to attract foreign direct investment (FDI) and in trade. We must ensure that, instead of competing, we leverage each other's strengths," Humphrey added.
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