Rail freight between China and Thailand presents significant growth opportunities, fueled by the increasing number of Chinese companies establishing factories in Thailand, according to LEO Global Logistics, which is listed on the MAI.
“As more Chinese companies set up factories in Thailand, it will benefit our rail freight business,” stated Kettivit Sittisoontornwong, CEO of LEO Global Logistics.
The company launched its rail freight operations in the second quarter of this year. It has observed that most of the cargo traveling between China and Thailand is oriented towards Thailand, reflecting data that indicates a trade deficit for Thailand with China.
However, Mr. Kettivit did not disclose the exact percentage of rail freight being transported from China to Thailand.
In 2023, China emerged as Thailand’s largest trade partner, with a total trade value of $105 billion, resulting in a surplus of $36.6 billion favoring Beijing, as reported by the Commerce Ministry.
Mr. Kettivit noted that while rail freight costs are generally higher than those of sea freight, he believes that the Chinese government’s initiatives are encouraging firms to opt for rail transport. He mentioned that significant subsidies are typically offered by the Chinese government to promote the use of rail links.
“At present, we are shipping EV spare parts, ore, and electronic goods such as TVs,” said Mr. Kettivit.
The company projects that rail cargo revenue will constitute 10% of its total revenue this year, with aspirations to increase that figure to 15% by next year.
In addition to its freight operations, Mr. Kettivit announced the opening of the company’s third storage service branch on Rama IV Road in Bangkok, backed by a 75 million baht investment. This project aims to cater to small and medium-sized enterprises, condominium residents, and e-commerce vendors in the region.
Furthermore, the company is evaluating opportunities for expansion at its existing branch in Chinatown, which predominantly serves European tourists. Mr. Kettivit indicated plans to establish two more branches in the Bangkok Metropolitan area by 2025.
