Laos-Thailand railway to launch freight transport service in few months

VIENTIANE (Vientiane Times/ANN) - The Laos-Thailand railway link is expected to begin operating a freight transport service in the next few months following the completion of a container yard at the Thanalaeng Railway Station in Laos in March.

Lao authorities are working with their Thai counterparts to launch the freight service by October, a senior official of the Railway Department said yesterday.

The Thai authorities need to get approval from their cabinet to allow them to operate the freight service across the border into Laos.

Currently, the 3.5-km Lao railway line connecting Vientiane with Thailand’s Nong Khai province is used only for a passenger service using a Thai train. The Thai railway’s freight service currently terminates in Nong Khai.

The two sides can take the next step only after the Thai cabinet grants approval for the freight service. The governments of Laos and Thailand inked an agreement on railway transport cooperation in 2008, covering both passenger and freight transport.

To offer a freight service, a memorandum of understating (MoU) needs to be worked out and signed to finalise details such as logistical procedures, the official said.

“The MoU has been drawn up and once the Thai cabinet grants its approval, we expect we could proceed with the work with Thai authorities,” he said.

“We expect the MoU could be signed in September and we could begin operating the goods transport service in October. Let’s see if everything goes as expected.”

Once operational, the railway line will transport goods from Vientiane to Laem Chabang Port in Thailand’s Chonburi province. The distance from Vientiane to the seaport by road is 693 km.

The transport of goods by railways could cut costs by 30 per cent to 50 per cent of the current charges for road transportation, the Deputy Director General of the Lao Railway Department, Mr Sonesack N Nhansana, told Vientiane Times recently.

The Lao government intends to turn Thanalaeng railway station into a dry port as part of interconnectivity efforts to convert Laos from a landlocked to a land-linked country. This will also help cut the high transportation costs and boost trade and investment.

Freight costs between Vientiane and Bangkok Port (a distance of 640 km) range from US$1,233 to US$2,088 per 40-ft container, according to studies carried out in 2016 by the Japan External Trade Organisation (JETRO).

The cost of transportation between Vientiane and Laem Chabang Port (a distance of 693 km) is US$1,333 to US$2,088.

Freight transport costs from Laos to Yokohama Port in Japan were the highest among 13 cities, according to another 2014 survey by JETRO. Shipping costs for a 40-ft container from Vientiane to Yokohama Port were almost US$2,500 in 2014 and 2015, followed by the US$1,500 it cost to ship freight from New Delhi to Yokohama Port.

Shipping costs from Hong Kong, Shenzhen and Taipei to Yokohama Port were the lowest, at less than US$300.

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