In 2023, the sea freight market is expected to maintain growth rates similar to those of 2022, driven by China’s COVID-19 restriction lifting and increased global demand. UNCTAD anticipates global seaborne trade to grow by 1.4% in 2023, with a further acceleration to 2.2% and 2.3% in 2024 and 2025, in line with the global economic recovery. For Thailand, Krungsri Research predicts sea freight market growth of 1.0-1.5% in 2023 and 2.0-3.0% in 2024 and 2025. Several factors contribute to this outlook:
-
Global Economy: While the global economy may slow in 2023, it is expected to rebound in 2025, driving demand for goods and, consequently, sea freight services.
-
Thai Economy: Thailand’s economy is forecasted to grow by 3.0-4.0% annually, driven by a recovery in tourism and strong consumption. Exports may contract temporarily, but an improving global outlook will boost Thai trade, especially in key export markets like China and the ASEAN region.
-
Infrastructure Development: Government plans for maritime infrastructure development, including projects in the Eastern Economic Corridor (EEC), will enhance logistics networks and facilitate quicker and easier goods distribution. Tax incentives for foreign investors may lead to more production bases in Thailand.
-
International Connections: Agreements with sister ports, such as Laem Chabang’s partnerships, and China’s Belt and Road Initiative will create new sea routes, increasing demand for sea freight services.
Despite these positive factors, sea freight operators may face challenges:
-
Falling Freight Charges: Due to supply chain improvements, slow global economic expansion, and an oversupply of shipping capacity, freight charges may return to pre-COVID-19 levels.
-
Increased Competition: As players extend their services and overseas companies enter the Thai market, competition will intensify, putting pressure on freight charges.
- Industry Segments:
-
Containerized Shipping: Stronger demand is expected from construction and e-commerce industries, driving growth in consumer, industrial, agricultural, and agro-industrial goods.
-
Bulk Cargo: Demand for commodities, construction materials, and food and agricultural goods is projected to increase.
-
Tankers: Growing consumption of oil, gas, and LNG products in transport and industrial sectors will drive demand for tanker services.
Challenges for the industry include the Russia-Ukraine conflict’s impact on oil supply, increased competition from overseas shippers, rising costs to meet international maritime standards, and delays in government-backed maritime infrastructure projects.
Overall, while the sea freight industry faces challenges, it is expected to grow, driven by various economic and infrastructure factors, although operators may need to adapt to changing market dynamics.
