The new wave of the COVID-19 outbreak caused Thailand's economic slowdown as well as high uncertainty. The Thai economy was projected to expand by 3.0 percent because Thailand confronts baht appreciation, comparing with competitive countries. As a result, Thailand is unable to compete on export prices, especially agricultural products and products using domestic raw material. Besides, the export sector and the logistic industry are affected by an unforeseen crisis: the empty container shortage using in product shipment. The International Sea Freight accounts for 90% of total transport. Therefore, the container shortage problem cause delayed delivery, which severely affects manufacturers, exporters, brokerage firms, wholesale businesses, and retail businesses.

During the COVID-19 outbreak, several countries in Europe and United States had rolled out lockdown measures.  As a result, the domestic manufacturers were temporarily closed, and there was no product export. Meanwhile, the demand for imported products had risen, especially from Asia. Besides, Chinese exporters who use more than 200 million containers per year wanted to expedite the product deliveries to customers before the long break during the Lunar New Year. As a result, Thai exporters had to pay higher service fees to compete for containers with China and Vietnam. Vietnam uses an estimated 13 million containers per year; meanwhile, Thailand uses an estimated 10 million containers per year. It’s disrupting the supply chain in Thailand as carriers prioritize neighboring countries such as China or Vietnam. However, China's and Vietnam's economies had quickly recovered at the top of the world. Therefore, they can export products rapidly than other countries. As a result, many containers were piled together in China and Vietnam, waiting to be exported. The effect of container shortage is high container rental price. Normally, the rental cost of a 40ft container is 2,500 USD per container, but at the beginning of the year 2021, it increases to 9,000-12,000 USD per container, and it does not include the freight charge that has increased as well. As a result, the export cost increased significantly.

In term of solving the problem, the Cabinet of Thailand has approved the solution guideline to the container shortage problem  (to subsidize import fees for empty containers) with a credit limit of 389 million baht as followed; 1) Bangkok Port consider reducing the burden of empty containers through the Bangkok Port by using the database of December 2020, which is 1,760 TEU at the rate of 1,000 baht per TEU for 3 months (January - March 2021), including operating expenses of approximately 5.28 million baht; 2) Laem Chabang Port pay a discount to import entrepreneurs at Laem Chabang Port by paying a discount at the rate of 1,000 baht per TEU for 3 months (January - March 2021). The Port Authority of Thailand (PAT) estimates the volume of empty containers passing through Laem Chabang Port approximately 128,000 TEU per month, with total operating expenses of approximately 384 million baht. The Cabinet has assigned the Ministry of Transport and related parties to assess the cost of operation and the benefits, which the exporters will receive, including finding a solution about the funding used in the implementation followed the guidelines.

The Thai Rubber Association expects that all agencies involved in the domestic and foreign will accelerate the solution to the problem of container shortage in maritime transport to return to normal circumstances as soon as possible.

Mr.Chaiyos Sincharoenkul

President

The Thai Rubber Association