International Finance

Container shortage disrupt supply chain in Thailand

Thailand container shortage_IFM_Image
It is estimated that the country had a shortage of 1.5 mn containers in 2020

Container shortage is disrupting the supply chain in Thailand as carriers prioritise neighbouring countries such as China or Vietnam, media reports said. It is estimated that Thailand had a shortage of 1.5 million containers in 2020. To deal with the container shortage problem, the government in Thailand has promised to subsidise import fees for empty boxes for up to six months.

With regard to the container shortage problem in Thailand, Ghanyapad Tantipipatpong, chair of the Thai National Shippers’ Council (TNSC) told the media, “Thailand receives less space and container allocation because shipping lines have given priority to China and Vietnam. They have a more competitive advantage and are willing to accept higher freight rates from the lines. This directly impacts Thailand’s available space and equipment, despite the extremely high freight rates and surcharges we have to pay.”

“At the same time, import shipments to Thailand are subject to additional peak season and equipment imbalance surcharges, including a $500 charge from China. The high demand for transpacific cargo has created a domino effect on other trades. Thai shippers are also struggling with vessel delays, rollovers, and cancellations. Exporters can’t properly forecast the accurate sales volume they commit to their customers. Some have had to break contracts, while others have shipped with a loss to fulfill the order confirmation or pay a penalty.”

Thailand-based logistics startup Flash Express raised $200 million in a new financing round in October last year. The funding round was led by PTT Oil and Retail Business Public Company  Limited. Durbell and Krungsri Finnovate, two other top conglomerates in the Southeast Asian country, also participated in the round.

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